I am a firm believer in the power and effectiveness of direct mail as a source of motivated seller leads. Frankly, I’m not as convinced that the ROI is as strong for identifying cash buyers with direct mail compared to other methods, but for motivated sellers? It rocks.
As I set things in motion for my upcoming direct mail campaign this week, I thought to myself “Direct mail is awesome, but what would I do if I didn’t have $300-400 per month available to spend on this and only had $100 per month?”
While some of you may be saying “I don’t even have $100 to do this each month and in fact I haven’t done a deal yet!”, I’d challenge you to figure out a way to get it. Be creative. Eat out less. Get $1 DVDs from the kiosk instead of hitting up the movies a couple times a month. You get the idea. Then once you’ve done deals, don’t be too stingy with the marketing budget. You see that it works…increase it gradually if you have the funds to do so and watch your business grow!
Let’s get back to the matter at hand. First, its important to note that United States Postal Service postcard stamps will run you 28 cents a piece (or $28 per 100 postcards), and first class stamps for letters are now 44 cents or ($44 per 100 letters).
With that understanding . . . here’s:
How to Market for Real Estate Leads on a $100 Monthly Budget
- Decide that I will only spend money on seller leads and will do free marketing strategies for buyer leads until I have a property under contract to assign to an investor (then I might spend money on some bandit signs to place near the property). Note: If you’re looking for free strategies, check out Three Easy Ways to Build a Wholesale Buyers List and part 2.
- Buy a lead list immediately — as many leads as I can get for my $100. I could focus on all kinds of leads (free and clear, foreclosure, absentee owners, probate/inherited homes, etc.), but obviously I would choose the best lead lists for my particular investing strategy. I would only choose one type of lead.
- Avoid postcards because they have a lower response rate which means a greater need for volume. With click2mail.com, I could send out about 240 black & white postcards on yellow stock with my $100. A generous 5% response rate (with a killer postcard) would only give me 12 or 13 calls. Sure, I might get a deal from that, but there are better options.
- Send out either yellow letters or typed letters with handwritten envelopes. I would do them myself at first rather than outsource the task if I was working towards my very first deal. This way I can save money to send out more letters. With $100, you can send out about 225 of them (less when additional supplies are needed) but your response rate can be upwards 25-30% for your same $100!
- Identify property scouts (aka bird dogs) who are entrepreneurial and willing to spend at least $25-50 a month on marketing for leads. I would reward them handsomely for leads they brought me that resulted in deals (this is a page out of Nick J.‘s book). Now I’ve just increased my marketing budget at no cost to me!
For those of you who have experience with direct mail, what would you do? Let’s provide plenty of helpful tips to those getting started with limited budgets!