Marketing to Motivated Sellers

On today's podcast episode I talk about marketing to motivated sellers. The main difference between new real estate investors, and expert real estate investors is the willingness to spend money on marketing. And this really boils down to understanding marketing costs and how marketing to motivated sellers really works. The first thing that you need to understand is cost per lead. If I mail out 10,000 postcards at a cost of 42 cents per postcard then my mail campaign cost me $4,200. If I get a response rate of 1/4 of 1 percent then that would work out to be 10,000 x 0.0025 which is 25 leads (sellers). If I spent $4,200 to generate those 25 seller leads, then my cost per lead is $4,200 divided by 25 which works out to be $168 per lead. So with that marketing campaign my cost per lead is $168. If after speaking to those 25 sellers, only 10 are truly motivated to sell and I decide to go on 10 seller appointments then the cost per seller appointment is $4,200 divided by 10 which is $420 per appointment. If I can close 1 out of 10 appointments then I would be able to buy 1 house and my cost per contract (house) would be $4,200. If I could buy 2 houses out of the 10 appointments then my cost per contract would be $2,100. Currently this is what our average cost per lead looks like for the past 30 days Pay Per Click $236 per lead Facebook Ads $78 per lead Direct Mail $203 per lead I find the most consistent deals to be from direct mail and pay per click (Google Ads) A good acquisitions rep can close one out of 7 to 10 leads. An average acquisitions rep can close one out of 15 rep. And a not so great acquisitions rep can close one out of 20 leads. If your average lead cost is $200 and it takes you 20 leads to close a deal then your cost per deal is $4,000. If you are good, you should be able to bring your cost per deal down to half of that. I have found that on average most deals cost around $3,000 to $5,000 once you factor in everything. If you add in overhead and payroll then that number can go up to $6,000 or more. But if you are just starting out, and you don't have overhead and staff you should be able to get a house under contract for a marketing spend of $5,000. So to be conservative, you should be willing to spend $5,000 to generate a deal. Let's look at it another way. If you are buying houses to fix and flip or keep as rentals from wholesalers that are marking a deal up $20,000 or $30,000 then you are paying $20,000 or $30,000 more for that house. You just don't feel it because you didn't spend the money in marketing to generate the contract. But if you had spent $5,000 to get that same house you would actually have saved yourself $25,000. That is how you should be looking at it. That's not to say that you shouldn't buy from wholesalers. You should buy any good deal you can find. But you will find more deals at better prices if you are marketing to motivated sellers directly. Do you want to be competing with every other cash buyer out there looking for deals from wholesalers? Or do you want to learn how to get deals yourself? At the end of the day, regardless of whether you are wholesaling, buying rentals, Airbnb's or fixing and flipping houses you are better off marketing to find the deal yourself since you will eliminate a lot of competition. And if you are going to be marketing to motivated sellers, then you need to understand that there is a cost to generating a contract. And you should be willing and able to spend that marketing money to generate those deals. If you are just starting out and you don't have a marketing budget yet then use guerilla marketing methods like bandit signs and driving for dollars to generate your first few deals. OUR REAL ESTATE TRAINING PROGRAMS If you are brand new to real estate and want to learn more about our real estate training programs, investing in real estate, buying rental properties, wholesaling real estate, and fixing and flipping houses then please register using the free webinar training links below: FREE WHOLESALING TRAINING https://www.lexlevinrad.com/webinar FREE FIXING AND FLIPPING TRAINING If you want to learn how to fix and flip houses, I have a free fixing and flipping houses training webinar at this link: https://www.lexlevinrad.com/fixandflipwebinar DON'T FORGET TO SUBSCRIBE TO THIS PODCAST TO BE NOTIFIED OF UPDATES SUBSCRIBE TO MY YOUTUBE CHANNEL http://www.youtube.com/lexlevinrad?sub_confirmation=1 CONNECT WITH ME ONLINE http://www.lexlevinrad.com http://www.facebook.com/lexlevinradrealestate http://www.twitter.com/lexlevinrad http://www.instagram.com/lexlevinrad http://www.linkedin.com/in/lexlevinrad http://www.pinterest.com/lexlevinrad http://tiktok.com/@lexlevinrad/ DOWNLOAD A FREE COPY OF MY BOOK ON WHOLESALING BANK OWNED PROPERTIES For more real estate tips about property investment, investing in real estate, and how to start wholesaling, download a FREE copy of my best-selling book "Wholesaling Bank Owned Properties" at https://www.lexlevinrad.com

Om Podcasten

Do you want to learn how to buy rental properties, wholesale real estate and flip houses? Join Lex Levinrad on the Investing in Real Estate Podcast and learn how YOU can get started investing in real estate today. This podcast is full of ACTION PACKED information and CONCRETE ACTION STEPS that you can start taking TODAY to learn how to start investing in real estate, buying rental properties, fixing and flipping and wholesaling houses. Join Lex as he talks about EVERY TOPIC related to INVESTING IN REAL ESTATE including wholesaling, locating deals, finding properties, flipping properties, hard money lenders, online auction sites, marketing for motivated sellers, building your cash buyer lists, deal structuring, fixing and flipping, buying and holding real estate long term, buying rental properties, buy repair rent and refinance, and investing in Airbnb. Lex has trained thousands of students from all over the world how to invest in real estate. Lex has personally flipped over 1,000 houses and he can teach you the one thing that everyone is looking for - FINANCIAL FREEDOM. Listen to Lex interview some of his successful students who have quit their jobs and now flip houses for a living. If you want to get MOTIVATED and INSPIRED by people who are actually flipping houses RIGHT NOW, then LISTEN TO THIS PODCAST. Lex will also introduce you to some of his real estate friends and he will interview some of the biggest wholesalers and flippers in the country. You will learn from the experience of real estate investors who are doing deals every single day, investors who are literally doing thousands of deals. Listen to this podcast so YOU can learn how to achieve massive results investing in real estate. If you want to learn how to invest in real estate and how to find, fix and flip houses for a living (and maybe even quit your job) then SUBSCRIBE TO THIS PODCAST.