Could you critique my marketing/deal flow strategy?

[Nicholas Testa]

Hello! I'm Nicholas, I'm a rookie wholesaler and I've yet to get my first deal. I have a very very small starting budget, essentially I'm going for no more than the $150 a month mark. would you critique what I have planned and tell me where I can improve?

I found that deal flow is essentially a function of how much marketing I do, since i have such a small budget i have to be very efficient with my marketing, so I'm using a "targeted" list. I'm licensed so i compiled the list from a tax/property info database available to us in Texas, so i can save from buying list on listsource. the list is all absentee owners, 3/2, 1970-2000, no recent mls records, price range from 80k to 200k. I've cleaned the list up so that I only kept the ones in good neighborhoods. 

at this point my list is around 130 properties. I read that the best way to get a deal done is being persistent and hitting the same leads around 3-4 times and i should get at the very least a 1% response rate.

at around 25 letters a week, i can hit 100 properties a month. I'm looking for a better job at in phone sales (t-mobile, att, verizon, sprint) so that i can make more and up my budget. if i get a job at one of these places i can go from 100 letters to 500+ letters a month easy.

so at 500 targeted letters a month, at a 0.5% response rate, i should at the very least get 1.5 deals done or so a month. maybe averaged out to about 15 deals done by the end of the year.

does this sound accurate and plausible?

now assuming i get the better job (i'm currently at starbucks making less than $8 a hour) I'll have money left over to do more marketing. I was considering investing about $15 a day on Facebook ads. so around $450-$500 a month. can you think of something better or more efficient that i could use that same amount on?

this is strictly for my getting started in wholesaling. my goal is to get at least 10 deals done in wholesales so that i can have enough money and have learned enough from shadowing investors to flip my first house, preferably in a subject-to situation but will most likely be using hard money.

sorry my post is a little messy, but essentially I'd like for you to tell me what I'm doing right, what I'm doing wrong and what I could do better?

I really appreciate your time and advice!

Nick

[Jeff Rappaport]

@Nicholas Testa

I applaud you for taking some initiative!  I know for a fact you can make this business work starting out with a small budget.  Many BP members will tell you it won't work or you are wasting your time.  Don't believe them!  Believe in yourself!   I will tell you that it won't be easy and you should leverage your time to make up for your limited budget.  

Sending letters/postcards to absentee owners is fine.  However, almost every wholesaler is doing the same thing.  You will need to stand out.  Make sure your message gives sellers a reasons to call you - guaranteed offer in 48 hours, pay top dollar, etc.  Following up 4-6 times is a must!

As far as spending your time to make some money. I am a firm believer that if you become really good at one of three tasks you will always make money in this business. First, finding the deals! You will be doing that with the letters/postcards. You might also want to try some flyers as door hangers in areas you want to buy. How about driving neighborhoods and locating distressed and vacant houses. You may have to track down the owner but it typically comes with less competition. You may want to call or email realtors and property managers and let them know what you are looking for. Keep reminding them. Let them know if they bring you a good deal he/she can get both sides of the commission. You could be calling FSBO and rental ads. They are not usually typical wholesale deals but once you understand the wonderful world of owner finance and lease options you can wholesale those as well.

Second, finding buyers!  I am not talking about the same buyers that are on everyone's list.  Although not a bad place to start.  I am talking about placing ads online, using Facebook, Linkedin, BP etc. and really prescreening what they are looking for.  Did you know you can make money right away with buyers.  I am currently wholesaling a land development project in Idaho and need a developer to come in and buy this project.  I am willing to pay someone $150K for bringing me a buyer.  Start networking and really get to know what they are looking for.  You can work with other wholesalers that will gladly pay you for bringing a buyer for their deals.  

Third, raising private money!  Not hard money although there certainly is opportunity there.  I am talking about reaching out to everyone in your personal circle (never know who has money) and let them know you can make them a significantly better rate of return on their money than what they are getting from the bank or stock market.  I am talking 6-8% interest secured by real estate.  Very secure!  Don't do this one without looking into the guidelines and laws of your state about whether you need to be licensed.  

I know, there is a tremendous amount to learn!  However, you can make money ( a lot of money) if you focus on one aspect and become really good at it!  Hope this helps you and I wish you the best of luck!  By the way, don't ever discount how important education is!