What to do with $300-$500 monthly budget and virtual?

Question

Hey all!I live and work in NY, but am interested in off market marketing in Cleveland, OH and Kansas City, MO. I intend to wholesale some, but the goal is to keep as many properties as possible (wholesaling to fund business operations and generate cash to invest).If you had $300-$500 to invest virtually and not much free time to cold call on your own (I'm out of the house at 6AM and back home at 7PM), where would you spend that capital? Mailers + cost of a Google Voice local number? Another strategy?I look forward to hearing your inputs!

David Ramirez · Answer

Hey @Christopher Mooney,

Many people view wholesaling as an "easy" way to build capital because of how it is portrayed on the internet but the reality is that Wholesaling is just like any other business; you need to build systems and procedures, invest in marketing, and constantly improve your team's sales and communication skills. It took me about seven months to get consistent deals and to identify the areas I needed to work on more, and I still do.

If I'm being completely honest with you, your best option given that budget is to partner with someone who can dedicate time and energy to the business and invest that money in data. Just to give you some perspective, my average price per contract for my marketing channels (meaning the amount I have to spend on a channel to secure a contract or deal) is $2,500 for SMS and $3,800 for cold calling with two VAs.Feel free to reach out if you have any questions!

Good luck

Timothy Howdeshell · Answer

@Christopher Mooney I agree with the other comments that you've received here. I do a similar strategy and invest and wholesale in Kansas City. You can get a deal...eventually, with the strategy that you're proposing (invest $500/mo.), but I question whether that would be worth your time.

Leads require either time or money to generate and are on a sliding scale. More expensive leads are generally higher quality meaning that you need less of them to do a deal. All leads require follow up, so need to factor that in as well. If you're going to do this you need to start thinking of it like a business. So let's run some numbers (these are estimates, not gospel). We'll assume $10k/deal. You need to market, negotiate with cash buyer, TC and close the deal too. So we'll add 10 hours/deal. Also, keep in mind that your sales, marketing and negotiation skills will not be great initially so these numbers are wildly optimistic. Let's look at lowest cost and highest cost lead types.

Lead source, leads/deal, phone time per lead, total time to deal, cost/lead (including overhead), total lead cost, $/hr.

Cold calling: 60, 3 hr, 180 hr. +10, $30, $2,300, $45/hr

PPC: 15, 3 hr, 45 hr +10, $200, $3,000, $127/hr

As you can see, the $/hr on this work is high, but you're either going to need a good amount of cash monthly for marketing, or a shitload of time. Yes, it can be lucrative, but how likely is it that you're going to spend an additional 10-20 hours/week and a few thousand dollars per month to try and get 1 deal? Are you willing to spend the time and money for 3,6,9 months until you get your first deal?

I'm not trying to discourage you, but just trying to be realistic. Go into it with eyes wide open if you do. It is a full time job and highly competitive.

Lastly, I'm not sure about Cleveland, but KC is very neighborhood dependent. Values can be 3x block to block so boots on the ground and local knowledge are paramount!

Best of luck!

Nick C. · Answer

I hate to be the voice of reason here but $300-500 per month is not enough to invest. And you have no time to invest either. You would have to be extremely lucky to land a deal with that budget, but more likely you'd be throwing it away. For comparisons sake the larger wholesalers are spending tens of thousands of dollars a month in marketing to land properties. They sell them by having large sales teams calling investors jamming them into properties. Even if you get a property under contact how will you sell it with no time?

You'd be better off saving up that $300-500 per month for a down payment on a property.

Dan Krupa · Answer

@Christopher Mooney the city, Western NY, or upstate? Go Bills. Reach out. I am a KCMO guy and run all of my businesses long-distance. You need someone who is already doing REI in one of those markets. You will waste money setting up a site and trying to enhance your SEO. You might get some leads but you will not close. KCMO is a place where you go, you meet people, you shake hands, and that is how you close an off-market deal.

Kyle Zdrojewski · Answer

@Christopher Mooney,

I am not a wholesaler but maybe it makes sense to partner with a local wholesaler that way you have a boots on the ground partner. I know a few wholesalers in the area I can help make some introductions if that would help.

Richard Capers Jr · Answer

@Christopher Mooney, If you want to work outside of your market then you should 100% connect with local boots on the ground that @Kyle Zdrojewski was mentioning.

Google Voice is free so no worries there. Have a list pulled from Propstream @ $99/month.  Or pull a small list from www.listsource.com.

You can make those calls during lunch or have you boots on the ground follow up with the lead list.  Spend as little as you can to get started.  Hustle a bit then figure out what systems would work best for you as you grow.

Jerryll Noorden · Answer

That is by far not enough to make a dent in.. anything.

Especially not doing lead generation with a less than 0.1% conversion rate.

Remember, it is not about "how do I make it, with what I have".

It is about, What do I need to make it.

EVERYONE seems to not understand this concept.

Angeli Ligad · Answer

@Christopher Mooney Have you considered investing in building your credibility by creating your own website?

What to do with $300-$500 monthly budget and virtual?

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