In another content entitled “Is Real Estate Investing Good at This Economy? ” I wrote about whether or not it was a good idea in this economy. If you read that article, you certainly know that I follow Warren Buffet’s stated philosophy of buying while everyone else is selling. That will, in essence, be where we could be today in this economy in early 2011. Now is the very best time to start a new career in investment. The absolute best place to start can be wholesaling properties. Even though I explained what wholesaling is in a previous article, I’ll, in short, mention it here also. Negotiating a low enough handle for a seller to allow the house to be sold to an investor using a profit of at least $5000. You can easily do two or more of such every month.
To get started, we should make a plan to find vendors and buyers. You will be using the 80/20 rule for the two sellers and buyers. It will cost 80% of your marketing offline and 20% online to locate sellers. Conversely, you will spend 81% of your marketing efforts online and 20% off-line to find buyers.
You have to have the scheme to follow, or along the course, you may lose focus to get diverted by every new method or course and the program you stumble all over. I KNOW because it happened if you ask me! You have to stick to your plan soon as you are successful. Then repeat all over again. How and what do you plan? Your plan needs to be specific in addition to listing the dates and activities you will perform. To develop your plan, you should begin with what you expect to acquire, and then we can back into the blueprint from the numbers. I’ll supply you with an example, and then you can use the item to plug in your statistics.
Let’s say you want to earn $ 000 per month. The average cop happens to be $10; 000 consequently, that’s one deal every month. Statistics show us that it normally takes 20 “qualified” leads to make 1 deal. So that shows that you need to attract (marketing) 30 “qualified” sellers each month. Often it breaks down to less than just one per day. So to attract just one “qualified” lead per day to your website, you will need to gauge your advertising and marketing efforts to produce this activity level. Direct mail is a preferred marketing method; the item produces about a 1% result rate.
Now you can start producing your marketing/action plan. If will you do your first delivery? Seven mailings to the identical list (removing people who get a hold of you as it happens) will be desired. Have your new phone brand ready to accept messages or calls with your answering life, not an answering machine. You must take those calls and talk with the owners to get a real experience of their “motivation” for promotion. Honestly, you want people who have “given up” and just want out and about. You will probably waste your time (in the beginning) by partaking in people who just want to see what you offer. Don’t do it!
You begin using day one as soon as you complete your plan that should handle the first 6 months. Stay focused along with concentrating on what you need to do and acquire it done. Check off of items when you complete these people – it will give you a real impression of accomplishment to do. Strategies to help you along the way:
Your mailer should be a specific color postcard with specific words aimed at your potential sellers. This recommended target market is absentee landlords who have owned their houses for at least 10 years. You can buy all these lists online. I can present you with that information, along with the posting card colors, wording, and terminology, if you would like to partner with us to help you get your first few discounts.
You need to use a formula to look for the maximum off you are happy to make for any particular property or home. The formula starts while using market value if it was mostly fixed up with no repairs or maybe fixing to perform. The current market value of the property must also always be computed. This is another spot where you will need to either register for some internet sites to have usage of the local MLS (Realtors only), or I can help with this.
The formula could be the current market value – much less needed repairs – much less buy, sell & keeping costs – less your profit of $10 000 – less the store profit (for your finish buyer) of at least $25 000. The result is the CLEANER – the Maximum Offer Cost. You will never allow yourself to provide more than this amount. I started never!
Finding buyers is a parallel activity that starts simultaneously with your planning. Without having buyers, you have no company. Your buyer’s list is the gold. In the beginning, you can spend to use other investors’purchasers’ lists, or you can wait until your’s builds up. To build your buyer’s listing you must market to them. 85% of your efforts should be on the web, as previously mentioned. The on the web marketing is a bit unique. I will give you a brief overview.
The standard webpage is called a squeeze page. You will drive “traffic” to your landing page using various traffic-creating techniques. The squeeze page can get their name and current email address and automatically put them within your buyer’s list with your auto-responder service. If you don’t know what this is, don’t worry. It’s absolutely nothing technical and only runs for $19 a month. The auto-responder will auto-magically send the thank you email to everybody that joins your purchaser’s list. You will also schedule some other auto-sending emails over time to maintain in touch between sending house blasts to your buyers.