How much do you spend on marketing per deal?

Question

Hello everyone,

I posed this question on another forum a couple of days ago but got no responses. Just realized that it was posted in the wrong forum. Hopefully I'll get more responses here.

On average, how much do you spend on marketing to get a deal with the marketing strategies that YOU are employing?

I know that this question is subjective and that there are a slew of variables that can affect the results that you are getting but it would be helpful to get a ballpark figure from you guys.

Looking forward to your responses!

Michael Quarles · Answer

@David Beard

Great question....  In the old days I found it was make 9 offers get one deal. 3 appointments a day. However now I require the seller to make me an offer. Thus I spend little time getting the deal... All the calls go to a live person who ask the basic questions and from the sellers response a deal is made or not.

The time to do the meet and greet then go to escrow and sign, then do all of the disclosures is about 2 hours. Maybe an hour to get the cashiers check and another hour to put the new on back into the bank.. I turn the deal through the MLS within 45 days

This business isn't difficult if you set rules in place and don't deviate.

Michael Quarles · Answer

Elio L.

How much is spent to consistently buy deals will average 8-12 percent of the  gross profit dollar in the beginning.

There are other factors that come  into play as you spend those dollars consistently. You'll find that due to repeat, referral and TOM that your marketing dollar will decrease considerable and that your returns will be in the low 20 times multiplier.

With this said there are many ways to jump start a career with limited dollars for marketing. Cold calling, meet and greeting, and on purpose prospecting to your COI will go a long way towards success.

The key to a successful business is marketing. Its the only reason Budweiser will spend millions next Sunday promoting the purchase of a product that we have already bought.

If you study marketing and search for the why and look at how its done on purpose then implement it into your business your see dramatic results.

Good luck..

Jim Ludes · Answer

Yeah Elio, it really depends on the type of deals you're going after and the type of marketing you're using. Like Brian mentioned, there are tons of variables.

Here's one of my off-line example sending over-sized postcards to entire zip codes using bulk mail.

• 5,000 post cards mailed
• 3 to 9 calls
• $1,100 in marketing cost
• 1 deal completed

I sent a total of 15,000 (5,000 x 3 mailings) post cards and each time I acquired 1 deal, (1 major rehab, 1 paint & clean-up, and 1 wholesale).

Dev Horn · Answer

I'm going to be brutally honest ~ It is getting more expensive to generate motivated seller leads. It really depends on the market - cost per deal is much higher in LA, Phoenix, etc. as you would expect. To throw a range out there - it can easily cost $500 to $2,000 in marketing to get a deal. Here's a way to back into some meaningful metrics for you: >> Use 1 deal in 20 leads as your basis. >> How much marketing do you need to do to generate 20 calls? Of course, your mileage may vary, but I hope that helps gets you headed in the right direction! <<==>> “You will face many defeats in your life, but never let yourself be defeated." ~ Maya Angelou

David Beard · Answer

I was getting ready to begin a wholesaling venture with a partner, and had $1,000 in marketing cost per deal in my head as a benchmark, so great to see that this is reasonable.  I expect the "value" of each deal to be $5,000 to $8,000, whether as a wholesale or as a rehab keeper.

A related question is how much time will a reasonably skilled wholesaler/negotiator, who is using an effective marketing campaign, use to get to that deal (assuming a service is used to create and mail the marketing pieces).  20 phone calls, 3 property views, some followup calls, all culminating in one deal?  35 hours?  I assume some variance by campaign type:  probate, absentee, equity

Elio L. · Answer

@Michael Quarles

Solid info from you all. Thanks alot.

Brian Gibbons · Answer

"whole slew of variables"

Wholesaling and marketing

-depends on many aspects that @Jerry Puckett can answer, but FREQUENCY and BRANDING is important.

WE BUY HOUSES @Dev Horn could answer that too, as well as @Michael Quarles

IMHO I think wholesaling depends on marketing money and specific location.  If you are broke, it is tough.  Hard to work well in every market too.

Seller Financing and Free and Clear Houses/No Equity Houses

-is a different animal.  There's 20 million No Equity Houses for Sub2 and Lease Option Assignments.  Buying on Owner Financing for Free and Clear Houses is a great idea.  Exit strategy is rent out long term, or rent to own.

Mike S. · Answer

@Jim Ludes  thanks for sharing the hard data on your campaign I was wondering what parts of LA you were targeting on those 3 campaigns? and was the basic message of the oversize postcard?

Jim Ludes · Answer

Yeah Mike, you're welcome! Actually these 3 campaigns were targeting a lower class area of Sacramento.

You can take any letter you use for marketing and put it on a post card. You can even use the content on your website.

My message was about how the homeowner didn't have to hire a real estate agent to sell their house and go through the long, expensive and complicated process. We could buy their home today with no fix-up cost, no real estate commissions to pay, and no closing costs.

Then I told them to call me to learn more or visit my website to fill out the form.

Jim Ludes · Answer

Hey David, when I first started I handled all aspects of acquiring properties myself.

If you're going to answer all the calls yourself, ask the pre-qualifying questions, do the due diligence, make follow-up calls, meet with qualified sellers, and then go to the closing, I would say 10 hours, (give or take), per deal from start to finish is a good rule-of-thumb.

Of course there are many variances and the more automated you make your acquisitions process, the more time you'll save.

Out of the 5,000 post cards sent, I got 3 to 9 calls, 1 or 2 motivated sellers that would meet my buying criteria, and 1 that would turn into a deal.

How much do you spend on marketing per deal?

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