Hey guys I want to start wholesaling. I have taken courses and become educated on the whole process, but I’m still not sure about the money needed to go into this. I know postcards work and buying lists for sites like listsource.com and others. But I would like to know how many homes must I mail postcards to on a monthly basis and how much this would cost. I also know that bandit signs are great for finding motivated sellers but I have read conflicting opinions on whether they work or not. I personally have about $1500 saved to start the marketing process and besides wanting to know average costs, I would like to know how to best appropriate my funds. I guess my greatest fear is investing the money on a marketing campaign which yields no motivated sellers and then being worse off than when I started.
I’m a recent college grad and I know real estate is what I want to do. I live in Houston, TX. I would greatly appreciate your input.
mailers always make the phone ring. keep the message short and direct. just use your public records instead of buying something from a list company. one of my first deals was actually from simply walking around a condo complex and posting cards on people doors saying “i am a local investor looking to purchase a unit in this area. i can handle any amount of work needed on a property. please call me”. posted 300 of those with scotch tape. got 5 calls. 1 deal and 1 very close to a deal. this was years ago and i always tell people they have no clue how close deals are to their own front door.
You’re off to a good start with your decision to begin with wholesaling. That, and lease options are the best way for the new investor.
As for marketing, be sure to market within your budget. It makes no sense to go broke before you even get started.
A lot of investors will tell you that for every 100 properties you look into (aka every 100 post cards) you will get X amount of leads, 3 or so serious prospects and you will end up buying 1 property (I read this from Dolf DeRoos - one of the Rich Dad series authors). An investor friend of mine also here in the Houston area pays $300 per year to be a member of a pre-foreclosure site that I think is completely worth it. He just recently sent 300 mailings and got about 15 calls and is buying 3 properties (I don’t think it always works out exactly 1 for every 100 but in this case it did, and in a lot of cases it’s close). He mostly does subject to and some lease option on these. He also has a pretty substantial wholesaling list built up so he has no problems finding investors to wholesale to. That is something I am working on building.
Definitely build a buyers’ list first: that also gives you an idea what type of properties these buyers are looking for. I send periodical surveys out to my buyers to get a feel of what they want.
Advertising is not going to cost much at all: I believe in bandit signs put in strategic places (like Home Depot) with catchy phrases. Also a website squeeze page, Craigslist ads, and networking with other wholesalers and investors (local investors meetings - bring lots of business cards.) I have built a great buyers’ list with very little to no money (probably less than $100.)