Posted by Killer Joe on April 13, 2005 at 08:16:05:
Hi Kim,
IIRC is a term ‘dealmaker’ uses for a shortcut for “If I Recall Correctly”.
BTW, a home run response rate for a mailer is 1.2%. I have actually recieved a 4% response to an offer to attend a one day seminar I put on years ago (not RE related). I mailed out 4000 postcards and had 160 people show up. That kind of response is very rare.
KJ
How much prep is required before brokering notes? - Posted by Chris Moyer
Posted by Chris Moyer on March 31, 2005 at 03:18:58:
I’ve been watching those real estate infomercials, and thinking about real estate investing for years, but I think I might finally be really to take the plunge. It’s only been lately that I have considered note brokering. I can apply myself and work hard. Now I’m wondering, realistically, how long should I study before I start telling people that I buy notes? I mean, should I start telling people right away that I have access to millions of dollars of corporate money, and that I can pay them cash for their note, or should I study the basics, buy a course, read a few more books, and get proficient on the financial calculator before getting out in the field? I’m anxious to start, but of course, my state California requires a Real Estate License. Do I really need this? And if I do, could I start out as a Note Finder, and work with another investor and split the profits or receive a finder’s fee. I guess I wonder what it means technically to be a broker legally? Maybe the distinction between Note Finder and Note Broker could be blurred with no legal ramifications? Thanks to anyone who can respond.
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.
dealmaker
Re: How much prep before brokering notes? - Posted by Kim
Posted by Kim on April 04, 2005 at 11:32:05:
Wow! Your response doesn’t feel very positive or encouraging for anyone that is new at this. Do you have any suggestions for newbees that wouldn’t make us feel like giving up before we even start?
Re: How much prep before brokering notes? - Posted by dealmaker
Posted by dealmaker on April 04, 2005 at 15:53:14:
OK, I re-read your original post, and re-read my answer. If you re-read my original answer you’ll see the part about researching the archives.
You asked what I thought, I told you. Or I could’ve told you to “go for it”. I just figure that telling you that is for people who want your money, I don’t do that.
I’d suggest the $3,000 or so you’ll quickly spend on note brokering might be better investing in learning “Lonnie deals”.
dealmaker
Re: How much prep before brokering notes? - Posted by Kim
Posted by Kim on April 04, 2005 at 18:25:52:
I will look up the “Lonnie Deals” - is his info at this site? What is IIRC? I would like to look up that post you suggested was a good one to read. Thanks!