How much does your marketing budget impact your campaign?

[Craig Moore]

Hi BP,

New investor here and I've got a question here and would like your help/advice. I am beginning the process of wholesaling because I need more starting capital to start buying multi-families in the Boston area. Here's my question:

How much does your marketing dollars make a difference in your success/deal rate as a wholesaler? I have an example:

Person A has $1,000 to spend a month outside of his regular job and outside expenses to send out letters, etc. 

Person B has $5,000 to spend a month outside of his/her regular job and outside expenses to send out letters, etc.

Is person B, having $4K more in marketing dollars, more likely to get a deal than person A? Rhetorical in nature, yes, but I guess my question really is, how much money should you be putting into your marketing campaign? Person B inevitably can send out more letters, but at what rate can we expect him or her to succeed than Person A? 

As I am gearing up to send out letters, (aiming for 1K a month), I just would like to hear how much people are spending and what they are experiencing as a result of whatever budget they have set. Thanks for the help and I hope I made sense with this post.

[Jeff Rappaport]

@Craig Moore I think you need to be careful about your numbers.  Marketing is all about testing to see what is working.  It differs in every market.   I can tell you in my market the response rate is less than 1%.  Also keep in mind that the response rate includes angry homeowners who want to be taken off of your list.  Some may not even own the home anymore.  It really depends on your list and how good it is.  If everything was equal the person who spends the most on marketing will get the most deals.  However, everything is not equal!  What lists are you mailing to?  What message are you sending?  How often will you follow up?  Will you answer the phone live? Can you or someone else do a good job of prescreening the sellers?  Can you structure various offers to fit the homeowners needs?  All of this will come into play in terms of your conversion rate.  In my opinion, I would rather have 5 good calls out of a 1000 that I can convert to a deal than 30 calls that can't be converted.  Many investors think there marketing is not working because they did a mailing and did not get a deal.  There may have been a deal in one of those calls but you have to know what to do with them.  Always start out smaller testing different mailings until you start generating some income.  Then take some of that income (15%) and put it toward increasing your marketing.  Good luck and let us know how it goes!