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How 11 Expert Investors Would Spend $500 and $5,000 Per Month To Get Motivated Seller Leads

Updated 6/26/2016 to include what we do with our marketing.

I got a wild hair and decided to ask 11 investors (actually I asked more than 11, but these 11 that responded are the coolest and most knowledgeable... by far) how they would spend $500 per month on marketing and also how that would change if they had a war chest of $5,000 per month to spend on marketing for leads... which become deals... which become big profits that can be reinvested into more marketing and more deals!

First, have you joined our private FlippingJunkie facebook group? Come network with us!

How We Buy Houses in San Antonio with Our Marketing Budget

Melissa and I spend most of our budget for buying houses on two methods: direct mail and a San Antonio focused house buying website: Danny Buys Houses. We buy houses in San Antonio, TX and send postcards and letters only to buy houses there and some surrounding areas like New Braunfels, Seguin, Schertz, Cibolo, Boerne and Universal City. Our marketing focuses on a message that makes it clear that people can sell their house fast in San Antonio without hassle. Not all sellers are looking to stop foreclosure. They just want to sell quickly without having to make repairs to the house.

A Big Thanks to All House Buyers That Contributed

These guys didn't hold back and share with you the exact things they have done and continue to do to get great deals. For that I want to personally thank them.

Yours truly even learned something from these incredible responses. I'll stop talking now so that you can see how these guys are so successful and how you can use the advice to do the exact same thing.

Mike Simmons

JustStartRealEstate.com

How would you spend $500 per month on marketing to get leads?

If I had $500 per month to spend on marketing I would spend it on two things. Number 1- I would try to maximize my money by buying a list of approximately 800 names.

Number 2- I would mail those 800 names a postcard. The message on the postcard would be something simple like "Hi my name is Mike, I am interested in buying your property at 123 Any Street. Please call me at your earliest convenience!"

Those two things combined will cost about $500.

The criteria that I would use for choosing which list to buy is age and equity. I would filter the list to include only people over the age of 45, and only houses with 50% equity or more. The reason why I filter by age and equity is that in all of the deals I have done over the years, virtually none of them are with individuals under the age of 45. In fact, it wouldn't even be a bad idea to filter it for anyone over the age of 55. Most sellers I deal with are older. The reason why I use equity as my other criteria is for obvious reasons. It's difficult to do deals or to buy properties significantly undervalued if there's no equity available in the property

How would you spend $5,000 per month on marketing to get leads?

If I had $5000 per month to spend on marketing I would honestly do exactly what I did when I had $500, just 10 times more! I know that may sound overly simplistic and maybe not super exciting, but it is exactly what I did when I started wholesaling. I actually started with about $500 a month. I mailed a small list postcards until I did my first couple of wholesale deals. Then I use the proceeds from those deals to do more marketing. Each month I increased my marketing with the profits made from the deals the month before.

At some point you may to want to investigate the feasibility of buying bandit signs, using yellow letters, and other marketing techniques, but honestly you can run a very successful business doing nothing but postcard mailings. In my business, postcard mailings comprise about 80% of the money I spend on locating and acquiring properties. I feel it is the most effective and cost efficient way to generate leads.


Mark Ferguson

InvestFourMore.com

How would you spend $500 per month on marketing to get leads?

Contrary to many people in the flipping world I get most of my leads from the MLS. I have ten flips at the moment and every one of them was bought from the MLS. I am in Colorado in one of the hottest markets in the country as well. While I do have direct marketing campaigns, I find the MLS to be more time efficient for me. If I had to start all over with $500 a month to market to sellers, I would focus on the MLS with two strategies.

1. I would spend the money getting my real estate license if I knew I was going to be a serious investor for the long haul. I would use the money for MLS dues, board fees and still have money left over every month. I would use the left over money to network with other investors in the area. I would take them to lunch, network with attorneys, accountants and other professionals who may know people looking to sell houses. I would then drive for dollars and use some of the money to send letters to vacant or distressed properties. This strategy is assuming I would be getting the leads for flipping or rental. If I was strictly a wholesaler I may shy away from the MLS.

2. If I did not want to become an agent or was not sure about investing in real estate yet, I would not get my license right away. I would use that $500 a month to find the best agent I could. The best agent for an investor is not someone who has the most experience or clients. Quite the opposite an investor wants an agent who is ambitious, but not too busy or proud to submit a low offer here or there. You want an agent with enough time to check the MLS multiple times a day for you, drop everything to show you houses and write contracts. Most agents are too busy to handle what a true investor needs. Most agents also will not give that type of service to any old investor off the street. I would use that $500 to buy lunch for your agent and even give them a bonus when they get you an awesome deal. Nothing will impress an agent more than seeing a bonus from the buyer they were not expecting. I would also use the drive for dollars and networking angle since it is very affordable.

How would you spend $5,000 per month on marketing to get leads?

If I had $5,000 to spend on marketing I am a serious investor. For me I would definitely get my license, spend my time learning how to find deals the fastest and then start a direct marketing campaign on top of that. Direct marketing is not my favorite thing to do; mailings, answering calls etc. I would hire someone to do the mailings for me with that money and possibly answer the phone or screen callers for me as well. As an agent if the buyers are not interested in selling to me, I could possibly list the house for them as well. I would mail to the absentee owners and inherited list. As for using post cards or letters, I would test each one to see what kind of response I get. Some work better in different markets based on what your competition is doing.


Brandon Turner

BiggerPockets.com

How would you spend $500 per month on marketing to get leads?

If I had just $500 to spend, I would fill up my gas tank for $30, get in the car, and start driving. One hour every day for 30 days. During that time, I would cruise every street doing "driving for dollars," taking note of any house that looked abandoned. I would look for tarps on the roof, long grass, boarded up windows, etc. I would then come home and find the names/addresses of those owners and spend the rest of my money sending letters to those individuals.

How would you spend $5,000 per month on marketing to get leads?

If I had $5000 to spend on marketing, I might do direct mail, but because that's such an obvious choice, I'll add to that. I would hire someone I trusted to do the driving for dollars AND answer phone calls for me (cause I hate that and I'm busy) I would offer them a piece of any deal I got, maybe 15%. I would then send out the direct mail messages with a Google Voice number that rang their phone, not mine. I would train them to walk through a script with the motivated sellers who call. My assumption would be that $5,000 would get me roughly 5,000 letters mailed (list, printing, & shipping - because my assistant would be doing the printing/mailing... so it's cheaper.) I'd send to 1,000 people, five times - once every other month. So, over the course of 10 months, 1,000 people would be hit five times. If I received a 5% response rate on those 1,000 people, that's 50 phone calls. If I could close 2 of those, with a minimum "flip" profit of $25,000 each... that's a $50,000 total pre-tax profit on a $5,000 marketing spend. (or if I was wholesaling, if I could clear $5k on each deal, then it's a $10k profit on a $5k spend... still good in my book.) I'd pay my assistant his/her 15% and move onto the next deal, pouring 100% of my profit into marketing for the next one.


Sharon Vornholt

LouisvilleGalsRealEstateBlog.com

How would you spend $500 per month on marketing to get leads?

When you talk about marketing, you are either going to have to spend your time or your money to get results.

If you only have $500 to spend on marketing, that’s not a lot of money so it’s mainly your time you will be spending.

First of all, I would get some bandit signs. and I would be very selective about where I put them. I would recommend staying in areas that had houses that were a bit older and were below the median price for your area. With older houses you have a better chance of picking up properties from motivated sellers that need more deferred maintenance and updates. You don’t want to be in newer areas.

The cost for 100 bandit signs at a company like “SignsOntheCheap.com” you will set you back about $89 for 100 signs which is not bad at all.

Next I would create a plan for going to all of the networking activities I could attend at no cost or at a low cost like your local REIA. Networking at your REIA will bring you a number of benefits. There are always investors there looking to sell their deals, and often they will provide seller financing for you.

You will also find cash buyers for any deals you might manage to land. Become a master at networking.

You need a website. No excuses. While you won’t get an immediate return on your monthly investment where deals are concerned (which should be under $100 a month), you will get something no amount of money can buy; instant credibility. Potential motivated sellers will check you out online before they ever pick up the phone to call you guaranteed! If you don’t have an online presence they won’t think of you as a real business; you will be invisible to this new breed of motivated sellers. I would recommend that you go with one of the “done for you” websites. You can have one up and running in no time. There are a couple of great choices including LeadPropeller.

This is hardcore, but cold calling is free. Find a Realtor that will give you a list of expired listings. If you have trouble with this one, offer to split the deals with them for their help with the list and comps.

Remember to think about the “big picture”.

FSBO’s are also readily available to you. Get on the phone each night for a set period of time like an hour or two, take a deep breath and make those calls. I know someone that made 30K after just a couple of nights of doing this.

You still have about $300 a month left and I would use this direct mail sent to probates. When you don’t have a lot of money, you can get a pretty big bang for your buck if you are selective with the estates you mail to. This will involve your time when it comes to figuring out how to get the leads in your area, but it will be worth your time and effort. There are over 3300 counties in the US so the process for getting the leads is different everywhere. Start by calling your local probate court and ask them if they can tell you how you can get a list. Choose a number of probates that you can mail to every 30 days. The key to this is to mail EVERY month.

Also, I only mail computer generated white letters to probates.

If you do these things you should have a deal or two before you know it.

How would you spend $5,000 per month on marketing to get leads?

If you have $5000, that is a whole different ballgame. You still need a website, you can still do bandit signs if they are effective in your area (hire this out) and you should always be networking.

When it comes to your website you need to take it up a notch. Having a blog component is critical to getting your site ranked quickly on Google. Your goal with your website should be to become a trusted source of information for folks. If you have things of interest they will keep coming back for more and one day when they have a property to sell, you will be the “expert” they remember.

So you’re not a writer? No problem. You can hire someone to write articles for you. Another thing you can do is to Google “Local events in your city” and come up with events that would be of interest to your target audience AKA motivated sellers. Post those on your website. I’m talking about summer events, holiday events, art fairs etc. Linking to these types of articles are also great for helping get your website ranked.

You can also concentrate on creating videos for your site just using your smart phone. The ideas here are endless.

  • Do walkthroughs of your properties
  • Before and after videos
  • “How to videos” such as how to install toilets, change faucets, install countertops etc.

Remember that you have skills and knowledge that most of the population doesn’t have.

  • Cost effective landscaping tips
  • Staging tips

Like I said, video ideas are endless no matter what your investing strategy and they will help solidify your expert status. It’s also a good idea to have check lists and things like links to the utility companies.

Remember most of the people that end up on your site will be moving at some point. Become the “go to” investor for information in your area.

All of these things are savvy ways to market your business at very little cost to you.

Now at this point you still have most of your money left. I would devote this to direct mail, and to hiring someone to answer your phones and to follow up with all of your leads. I can guarantee you that if you’re spending this much money on direct mail marketing your phone will be ringing off the hook.

The last thing you want to happen is for these leads to come in at such a volume that you can’t do the proper (immediate) follow up. Your job is not to spend your days answering your phones, but to take those leads and put deals together.

I would use Listsource.com to get absentee owner lists. Where you live will determine how many leads will be available to you. I would definitely add probates to my direct mail campaigns. They are one of my favorite niches. Remember you will be adding new names to your list every month, so in 9 to 12 months you will have a pretty big list.

Other lists folks like to work are code violations, properties with tax liens, and pre-foreclosures to name just a few. You can do a lot of direct mail when you are spending under 50 cents (total cost) for a postcard. Letters will cost you a little more, but you can also generate probate letters in house and send
them out to be hand addressed, folded and stuffed.

One thing I wouldn’t use it for is PPC or “Pay per Click” until you really know what you’re doing. You can dump a lot of money down that rabbit hole without getting any results.

Let me know if you are using any of these ideas in your business.


Mike Hambright

FlipNerd.com

How would you spend $500 per month on marketing to get leads?

$500 - Direct Mail
Direct mail is the foundation of leads for all real estate investing, unless you have an inside relationship that can benefit you. There is no silver bullet of copy, postcard vs. letters, etc., so it's best to track your performance to hone in on what works best.

How would you spend $5,000 per month on marketing to get leads?

$5000 - Still Direct Mail
No matter what market you're in, $5000/month in marketing really isn't all that much. Certainly not enough to move into any other media in a meaningful way. That said, networking is key in this business, and spending your time meeting other investors (that you may buy from or sell to) at REIA Club meetings, showings for wholesale deals and other events will go a very long way in this business.


Jason Bible

HoustonHouseBuyers.com

How would you spend $500 and $5,000 per month on marketing to get leads?

Marketing is like the gas pedal on your car. You can put it to the floor and accelerate quickly. However, you need to ensure that ALL of your systems are in place to reach your destination safely. Before unleashing a marketing plan you need a business, finance, and people plan. Once you developed these plans you can move onto developing a scalable marketing plan. Note that your biggest challenge is credibility. So ensure that your marketing plan has a healthy dose of credibility.

First let’s build a marketing budget. We have found that

We buy a house for

$3,000-$5,000 in direct marketing spend

- Billboards, radio, DM, PPC, door hangers, etc.

60 hours of FOCUSED marketing work

- Driving for dollars, MLS offers, bandit signs, networking, etc.

How many houses CAN you buy this month?

What is your goal? How many houses do you want to buy, this month, this quarter, and this year? That should give you an idea of where your marketing budget should be.

We have had tremendous success with direct mail campaigns. We find them easy to implement and very easy to scale. Pick a zip code you would like to invest in. If you are not full time in real estate I highly recommend you pick zip codes between your house and place of work. That way driving to and from the office can be used to meet with potential sellers.

Once you have picked a zip code, select the type of house and seller you would like to buy from. For example someone 55+ years old, house build before 1950, which has owned the house for 20+ years. You can pull this data from your county records or ListSource. We use both. Break up your direct mail campaign by monthly budget. We typically send 4 different mail pieces per campaign.

The key to a successful marketing campaign is consistency. DO NOT MEASURE YOUR RESULTS BASED ON RESPONSES! I can’t tell you how wrong this is. Your phone not ringing does not mean that your marketing is poor. Note that it takes some time for your marketing to start working. It typically takes 3-6 months to start seeing good leads, typically you should have a deal based on the numbers above. Good luck and buy some houses!


 

Bonus: Click Here to Download My Top 5 Motivated Seller Marketing Methods Guide pdf that will show you, in awesome detail how to use 5 different marketing methods to generate great leads consistently.


Jerry Puckett

MarketLikeAWholesaler.com

How would you spend $500 per month on marketing to get leads?

First, go make some business cards and start telling EVERYONE who you are and what you do. You can generate quite a few leads by inserting your business into all of your contacts consciences. Your goal is not just your contacts, but their entire sphere of influence as well; their friends, relative, co-workers....all of them.

Next, I’ve always gotten the biggest bang for my buck through Direct mail. I only use letters for a variety of reasons, but mostly because Postcards, greeting cards and zip type letters are so much more expensive. They have a smaller price tag per piece, but cost you dearly in your call volume making you buy more of them to get the same results you get from a letter, which gets the highest response rate period.

If I’m only spending $500 a month, I need to concentrate my efforts. We don’t do this to try to come up with some uber targeted concise list that no one else is mailing to....no such animal exists. An uncomfortable truth is that no matter how you parse a list, ultimately what all investors are looking for is the same, a steep discount. Creative financing aside, what that requires is for the owners to have enough equity to sell at a discount. We make educated guesses as to who may be motivated, but the reality is that everyone with equity is on someone's list and they're all getting mailed to.

What I mean by concise is a smaller easily definable sub set of names that is manageable. You need to have a system in place so that you can consistently follow up. You may have heard that 80% of your deals will come after the 5th touch, but the corollary to that is that 25% of your entire business will come from following up with people who told you “NO” the first time. Here are some examples of smaller manageable niches.

  • Driving for Dollars (D4$)
  • Probates
  • Code violators
  • Evictions
  • Absentees in one or more zip codes

Code violators and Evictions are somewhat time sensitive and you’ll only get one or two shots at best before it’s time to move on the next batch. Absentees, D4$, and Probate are the types of leads that work best with multi touch campaigns (mailing every month to the same prospect). You will need to scout around and see what kind of data is available to you.

Between these two activities, you should be able to generate enough leads to get you started. With marketing, more is more, so you’ll want to increase your marketing budget every chance you get to ramp your business up to the next level.

How would you spend $5,000 per month on marketing to get leads?

If you have $5000 to spend per month on marketing that tells me you are already doing a fair amount of business no matter what your model is.

No one spend that without having a good idea of what they are doing. Some of the players in California that I know are spending 10k a month or more on nothing but direct mail. But they also have other systems, other channels open.

I personally have seen exponential growth in anyone’s campaign where they are mailing over 2000 pieces per month. With a 5k budget, I would devote at least 3k per month to direct mail. In order to get a quality list of that size, I would mail to at least two different lists:

1. High Equity Absentees (40% or greater equity, length of residence 5yrs and up, valued 15% above median and less for starters)

2. High Equity Owner Occupants Aged 65+ (40% or greater equity, last sale date 15 years and back; LTV 5 to 50 % - because with this group I do not want free and clear)

With the rest of my budget I would:

  • Utilize Business card strategy
  • Get a BiggerPockets.com pro account
  • Find and Fund some “apprentices” to extend my reach
  • Find and use a good CRM (the best ones usually have a monthly subscription fee)
  • Get and maintain a Lead Propeller, Wix or Word press site (given in order of ease of use depending on your tech savviness)
  • Outsource my lead calls to a VA (that I would personally train and script – I find all of my VAs on Biggerpockets.com) or find a service like Pat Live to triage callers.

Whether it’s 500 or 5000 some things remain the same. Tell everyone what you do, reach out to those who are most likely to be in some sort of distress, follow up, follow up, follow up. As your business grows, learn to outsource more mundane tasks like marketing to free up more of your time for deal making.


Jim Huntzicker

Real Estate Investor Academy ®

How would you spend $500 per month on marketing to get leads?
First of all I would make sure I use the first 2 months of the $500 budget and get MLS access to have that as a deal source. Once you are in the MLS, finding the deals is VERY low cost because it is FREE! But after that I would focus on 1 direct mail campaign and for me, that would be probate letters. You need to get very good and be very consistent at one form of direct mail before you introduce another type of campaign. Probate from direct mail and estate sales from the MLS are my 2 favorite kind of deals.

How would you spend $5,000 per month on marketing to get leads?

First of all, if you are spending $5K a month you better have all your ducks in a row because if you do it right your phone is going to ring like crazy! That being said, I would spend most of it (75% or so) on online marketing like search engine optimization (SEO) and custom websites for specific markets I buy in. I would be doing targeted facebook ads and banner ads. If you get back to this type of lead quickly (within minutes preferably but no more than 2 hours),usually they have not spoken to another investor yet.

The rest I would spend on direct mail letters and postcards (test both in your market to see what works best). Again, I like probate but I have also had a lot of success with absentee owners, free and clear and inherited properties lists. Those are the lists I have seen the best results with in my market.


Seth Williams

RETipster.com

How would you spend $500 per month on marketing to get leads?

I would find a county that would sell me their delinquent tax list for $250 or less. Once I had the list, I would spend plenty of time sorting through the data, making sure the information is VERY well targeted to include only the recipients who would be highly motivated to sell the exact types of properties I'm looking to buy. I would then take the remaining $250 and send out 500+ postcards to this list with a direct mail campaign. If executed correctly, I would expect to close anywhere from 2 - 5 deals through this process.

How would you spend $5,000 per month on marketing to get leads?

Assuming the county is able to provide the information to me in the right format (so it's relatively easy for me to sort through and make sense of), I would do the exact same thing as I would with a $500 budget. The only difference is that I would be willing to spend up to $500 for the list (up from $250), I would send out twice as many mailers and I would be 100% sure to have a top notch real estate investor website in place, ready to handle a much larger volume of motivated sellers. The website would be a very important component (it needs to look good, ask the right questions and be easy to navigate), because it would allow me to handle many more leads and close a lot more deals without chewing up all of my time. Without the right website, my capacity would be severely limited.


Justin Williams

HouseFlippingHQ.com

How would you spend $500 per month on marketing to get leads?

If I only had $500 to spend each month I would focus on buying strategies such as door knocking, driving for dollars, cold calling, investment clubs/networking, and things like scouring the MLS/Craigs list etc. The $500 would go towards gas, meeting fees and maybe I would even have enough to put up a hundred bandit signs. I refer to these things as "Brute Force" activities. They take a lot of time and you really have to get your hands dirty and grind it out but if you stick with it long enough you will eventually get deals.

How would you spend $5,000 per month on marketing to get leads?

If I had $5,000 to spend on marketing I would spend it on things such as direct mail, Internet marketing, and other more costly but not as time consuming items. I know you asked for specifics but I really am not a specifics guy type person. I would basically give it to someone on my team who was over marketing and say go try out all of these things and test, tweak, and focus on what is working best. We would approach it from more of a "What does it cost us per deal" type scenario. IE if it cost $2,000 to get a deal that makes us $10,000 on a wholesale or $20,000 on a rehab then we are good to go.


Nick Ruiz

AlphaHomeFlipping.com

How would you spend $500 per month on marketing to get leads?

$500/month - Since I'm obviously on more of a limited budget, I would buy blank white signs from walmart, and buy a big sharpie marker, and write a simple "cash for homes" type of message and blanket my target areas with these signs EVERY month, and I'm sure that quality leads will start to come in.

How would you spend $5,000 per month on marketing to get leads?

$5,000/month - Since I have a stronger budget for marketing, I would use a small portion (maybe $300) for bandit signs…I would use about $700 on putting ads in small local publications…
I would use the remainder on direct mail ($4,000). I would mail to absentee owners with equity and also owner occupied with equity with old purchase dates. I would try to hit 3000-5000 recipients per month with a variety of postcards and letters.

Key Takeaways

Top Marketing Methods

  • Direct Mail
  • Real Estate Investor Website
  • Bandit Signs
  • MLS

How to make it work regardless of budget:

Regardless of budget, the key the success in getting deals is not giving up. You simply need to understand that this is all a numbers game and, as you can see by some of the numbers mentioned, it can cost a good amount of time and and money to get the number of leads in to land some deals. But, those deals can generate enough money to pay for much of your marketing for several months or even a year.

That's the key. It's easier said than done. Most investors feel the nagging fear that they are throwing money into a black hole in the beginning. The results are slow to trickle in, but once the machine gets going, it starts to feel like a flood.

I'll leave you with that. Don't give up.

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Tags: Marketing, Getting Started