All Forum Posts by: Dev Horn

Awesome, @Reese Penning - I just sent you the rest of the course and the sample contracts!

By the way, BiggerPockets community, another 100+ of you have requested the course from us since we made this offer back in February!

There are a couple of investors in my market that are in the paper every time all the time. I've wondered about their ROI.

Older folks still use the Yellow Pages and read the newspaper, and they are a good group to target because they could be:

1) Downsizing
2) Moving to assisted living
3) Moving in with kids/family

Plus, their properties often need to be updated/rehabbed.  This profile of the newspaper reader correlates well to our business.

There are 3 core (paid marketing) strategies to consider:

1) Direct mail
2) Outdoor (signs)
3) Search marketing (Google AdWords)

Big investors use all 3.

Letters can work well, but broaden your thoughts on what you might send.  I like YellowLetters.com because they offer a wide variety of pieces from letters to postcards to zip letters.  You'll find you can mail twice as many postcards for the same $$.

As far as outdoor, you might check to see if there are new electronic billboards in your market.  Those are cool because you can buy the number of views that matches your budget.  And of course, bandit signs are an option but I bet they are "illegal" in and around Orlando.

Best of luck to you!

Sorry, but that is simply not the real metric.

If you know how to do AdWords, your lead quality can be very good.  An experienced investor (like Ryan) will convert about 1 in 20 to a cash purchase.  A real estate agent can list about 5 out of 20.

Let's say it's $100 per lead.  20 leads to get a deal = $2,000 cost per deal.

Of course, all local markets vary, but if you're orders of magnitude above that, you are doing it wrong.  =)

We've had an REI lead gen service for over a decade that spends over $1M per year on AdWords, so YES it works.

In our business, you'll need to throw out a pretty big net as far as your area on AdWords, probably St. Louis County, just to get enough lead volume.

You'll find that certain keywords (e.g., "sell my house fast") cost $10, $15, even $20 a CLICK.  You can set your budget at $10 a day and miss out on the more expensive clicks.  I like a $20 per day budget at least.  Once you get your campaigns really dialed in, you can set it on $500 a day (i.e., unlimited) because there will be a limit to how many searches meet your criteria on a given day.

It can take 5, 10, even 20 clicks over to your landing page to get a form filled out.  If you're doing well, you can get forms filled out for maybe $75 each (cost per CONVERSION).

You can set up a simple account, but you'll soon learn that MATCH TYPES and AD GROUPS are very important to getting your lead quality up and your cost per conversion down.

Wish you the best!

OK, I'll answer the question.  You need a chicken (cash buyer) in order to make an egg (deal) because no deal happens without CASH.

So, Step 1 - get involved locally (via local events and online - BO, MeetUps, etc.) and FIND CASH BUYERS that can bring money to the table.  You don't need 100 of them but you need more than 2 (people that are ACTIVELY buying, rehabbing, financing, etc.).

Step 2 - Do your marketing and find a deal.  You are offering CASH not the offer to go find a buyer - that's what real estate AGENTS do.  If you are not promising CASH and a closing in 10-14 days, you will be beaten in the market by people that are.  But it is your CASH BUYERS who can deliver on this, not you.

Step 3 - (Do your research, negotiation, etc. and ) Get the deal under contract.

Step 4 - Contact your Cash Buyers with your offer to assign the Purchase Agreement.

Step 5 - Assign the deal to a Cash Buyer.

Step 6 - Collect your assignment fee (and get your EMD credited back) at closing.

Step 7 - Rinse & repeat.

“The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.” - Unknown

Hi @Jay Hinrichs.  In the example above, I was talking about my discussion with an absentee owner (lived in AZ, house in TX) who owned an inherited house that had been vacant (but maintained) for 2 years.

But sure - anytime you're a landlord, you can get burned on a rental - locally or in some other location/state, etc.  Depends on a lot of factors.  But the calls I get from "tired landlords" are often:
1) Owners of properties that got trashed by the renter that just left
2) Older guys that are just getting tired of the "rehab-rent-rehab-rent" cycle that often occurs with rentals, especially if they are in the "lower rent" (read: sketchy) areas of town where they're not attracting renters that watch a lot of HGTV.

I think you let this one go, in the spirit of good will.  Otherwise you will be dragging this guy into the title office kicking & screaming.  Or, having lawyers call him to threaten him with legal action.  All that stuff sucks.

Let him off with the agreement that he will give your business cards to 10 of his friends.  Empathize with his situation and ask how you can help, beyond letting him out of the deal.  If he feels like you did him a solid, good chance he will become an advocate for you, rather than your foe in a legal battle... (Also a good chance he'll come back to you when he CAN sell the house.)

“A good name is more desirable than great riches; to be esteemed is better than silver or gold.” ~ Warren Turner

There is certainly a market for higher priced homes, but they do present some challenges to RE investors in that the capital required could be used to fund multiple smaller deals, so there is an opportunity cost, and as Will says, figuring out ARV & repairs on a million dollar place can be a challenge. If you're off by 10%, it could be a $100,000 error vs. a $10,000 error on a low-cost 3/2/2 rental unit.