Re: How much prep before brokering notes? - Posted by dealmaker
Posted by dealmaker on April 04, 2005 at 11:01:13:
I’d say the most important preparation is reading the archives on this site, and possibly other, similar sites. IIRC there was a really good post about this subject within the past week.
After you’ve studied the archives the next steps and most important, the next COSTS are: You have the cost of the course. I’m not sure but let’s just say it’s approximately $100. I’m sure it’s more, I have a rough idea of what it costs to produce and air infomercials.
Then you have the cost of getting the lists of note owners from the County Clerk, or recorder of deeds or whatever it’s called in different jurisdictions. Again, I’m pretty sure there’s lots of posts on this subject in the archives. You might be able to get that list for free, but I doubt it.
Then you start mailing postcards to those people. With your computer and some software and some cardstock you can probably produce a decent, eye catching postcard for a few cents each. Let’s say $.04/each and you produce 10,000 (I picked that number for a reason), or $400.
Then you mail them to your list. The ones that I receive have $.25 postage on them. So to mail 10,000 of them will cost you $2500.
So far you’ve got about $3,000 in the program. That’s assuming you can get the names for free and the course only costs $100.
Now I don’t recall the exact numbers, but from my marketing class in grad school I believe direct mail programs that yield above ONE TENTH OF ONE PERCENT are considered HOME RUNS. Or maybe the director of marketing for one of the HUGE (is there any other kind) gasoline marketers told us wrong.
Let’s be generous and say you get A WHOPPING ONE HALF OF ONE PERCENT response to your postcards. That would mean that for your $3,000 expenditure 50 people are going to call you back. I’m not sure what kind of conversion rate those postcards yield, but the 15-20 that I receive each week yield ZERO PERCENT.
However, knock yourself out if you’ve got an extra $3,000 burning a hole in your pocket and enjoy licking stamps.