Posted by ken in sc on August 10, 2004 at 14:28:00:
My ad says “cash offers in 24-48 hours”, not cash. I typically make the offer on the spot, so indeed it is within 24-48 hours of the call. My offers are for all cash and typically close in a week or so. Yes, I do have cash (credit line) and most of the time I close on them myself, even if eventually I flip “as is” to someone else. Occassionally I have a wholesale buyer who can move quickly enough to close in time and then he just buys my contract and closes.
Posted by ken in sc on August 10, 2004 at 09:44:25:
OK- for all of you out there wondering how marketing works, I will once again post our real numbers. This info will hopefully help you in making marketing decisions. Of course, your numbers will be different.
We use 6 main sources to locate deals. They are yellow pages ads, mailers to people early in the foreclosure process, newspaper ?I buy houses? type ad, referrals from flippers or other sources, general flyers, and internet web page.
Here are the numbers for the year as of the end of June - half a year. Yellow pages brought in 34 calls and we closed 8 deals. Foreclosures brought in 85 calls and we closed 5 deals. The newspaper ad brought in 44 calls and we bought 6. We received 49 referral leads and bought 9. General flyers only brought 2 calls but we closed both, and the internet brought in 1 call and we bought that.
So for us, the yellow pages have been good (we are in both books total about $425 per month) and referrals are good. We get lots of foreclosure calls but close a smaller percentage. The newspaper has always been steady for me at around a deal a month. There are over ten ?I buy houses?ads every Sunday but my ad still produces. I run my ad every day, not just Sunday. At around $400 per month cost, that is a bargain. When I buy from a referral, any cost to purchase the contract or referral fee I always associate as an expense of the purchase, not a marketing cost. To me these are ?free leads?.
I spend in total around $2,000 per month for marketing. As you can see, we bought 31 properties in 6 months. That comes out to around $387 per deal. Not bad. I post these posts to show people that marketing is key. Spending money on marketing is needed to really grow into a full time business in my opinion. Note that I don?t buy from making numerous MLS offers, and I rarely buy at the foreclosure sale. That is what everyone wants to do. I like the posture of sellers coming to me for my help.
Re: Here is how marketing works - Posted by rebeccax
Posted by rebeccax on August 10, 2004 at 11:39:41:
Ken,
That was a good post. Thanks for the useful info. I am a part-time investor and use the newpaper which it looks like you have good success with. Are there any “zingers” you put in your newspaper ads to get people to call your ad vs. the competition (marketing is good, effective marketing is even better!)?
Posted by ken in sc on August 10, 2004 at 12:25:45:
You are missing the point. Advertising, properly done, will make you money. That is, if you are ready to handle the calls and make good buying decisions. Never think that advertising costs you. Brad, you say you “lost” money on an ad in the paper. You know, my ad ran every day for over two months before I got my first call. I have had several sellers tell me they saw my ad every day so they figured I must be real. If all you can do it flip deals for a 2000-3000 profit and it costs less than 500 per deal for advertising, it still works. Dont think of advertising as an expense, think of the money you lose by not doing deals the advertising will bring you.
Also use the “wallet strategy”. I learned it in the car business. Simply stated, whenever you open your wallet, hand out a business card. Put a card in every single bill you pay, and leave a card with your tip for your waiter/waitress. I’ve even left them in library books and on gas pumps. Anything to get the word out. It’s a numbers game, pure and simple.
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This is good once you have earn some. Some day I will run Ads on theater if I earn some profit.
Right now I am still recovering the lost of the past 2 paper ads. It all depends on the market.
Do you put it in the big paper or the penny saver and under houses wanted section with the rest of the investors or in the houses for sale section.I have done both for over a year and never got a call or deal from the paper.I live in a big area and there are 20 other we buy houses ads in the paper.
Ken, I hear you, and I do believe that advertising works, (Been involved with Search Engine Optimization and emarketing in the past), but I cant leave myself unable to pay emergency and misc bills (Gass, food, vet, etc)
I will be advertising, just not at your (or $2000 level) just yet. I will place that as a goal though, and not let the costs worry me, but I do have to take care of myself as well as the family (Dog) that means I have to leave at least 1k a month for myself, just in case.
I totally respect what your saying, and believe it.
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Re: Here is how marketing works - Posted by ken in sc
Posted by ken in sc on August 10, 2004 at 12:46:44:
Big paper. There is only one major paper here. There are typically 12-15 ads on Sunday and 3-4 during the week. Our area is roughly 500,000 population.
Posted by ken in sc on August 10, 2004 at 14:31:57:
I did not start my business at this level, and do not propose that you do either. You will likely grow as both an investor and advertiser together. You will find some deals using the chepaer advertising, learn plenty doing those deals, then pour some of your proceeds into more ads as you continue. I stayed with just one form of advertising for several years, not understanding much of REI and how well advertising can work. I post this information in order to get new investors to thinking about it so that there learning curve will be less than mine was.