Hire a part-time assistant and have him/her do all the day to day chores that is probably eating up 5-10 hours a week of your time. Many of you are probably wondering where to get the money but keep this saying in mind: if you don’t have an assistant, you are an assistant. Remember, when you are focusing on a key money making activity, such as flipping houses, you can earn hundreds, even thousands of dollars per hour (when you structure these deals correctly using creative financing, you don’t even have to use your own cash or credit). (more…)

For the beginner, going to a live event is a great way to jumpstart your knowledge and program your subconscious mind to accept that you made the right decision to be at the event. For the advanced investor, going to a live event allows you to refine ideas that you may already be doing. Rock and I had several Eureka moments in the 4 days we were there. Plus, we met 2-3 folks which we estimate we will do significant business with in the short and long term.

On another note, Rock and I enjoy teaching real estate investing because it really challenges us to break each process down and then finding out whether it’s repeatable and also whether it can be improved on.

In almost all major cities, there’s the major paper that is almost always the monopoly. In Atlanta, the major paper is the Atlanta Journal Constitution, and it has the highest classified ad rates in the country (often higher than The New York Times). Thus, using newspaper advertising to generate leads cost effectively often requires some creativity.

Instead of advertising in the major paper, spread your budget across many community newspapers. This allows you to test the cost and quality per lead without breaking the bank.

We have have gotten a lower cost per lead at the same quality by using community newspapers. While the readership of each community newspaper is lower, the lower ad cost allows you to run the ad more frequently, and the increased frequency over time over time leads to more calls.

When flipping houses, the best leads are often in the community newspapers because a person in distress is most likely not be able to afford the rates of a major newspaper.

This single tip can save you thousands or even thousands of dollars as you continue through your real estate investing career.

Recently, were were paid $4,500 by the seller to buy the house. Why did the seller pay us? 3 reasons:

• The house had little equity
• The buyer was sufficiently motivated because he wanted to preserve his credit. Never underestimate how much somebody is wiling to do to preserve his credit. You probably already know that having poor credit can result in higher payments for a car and other goods but in the worse case scenario, it can now cost a person his job because major employers are now using the credit score to determine whether or not to extend employment.
• We simply had the guts to negotiate with the seller and ask to be paid to buy the house. Most investors would have walked away because the deal didn’t have enough equity

This technique, getting the buyer to pay you to take the house, can make an otherwise unprofitable deal financially attractive.

This is often done to save on marketing costs. Unfortunately, this is a case of being penny wise and pound foolish.

When you are flipping houses, you can make $5,000, $10,000 or more per transaction so definitely do the right the right thing and invest appropriately for buying and selling.

One of the key factors that affect the effectiveness of a marketing campaign for flipping houses is focus. The message for buying a house is very different than the message for selling a house. By putting both messages on the same medium (business card, sign, ad, etc.), this creates a lot of confusion in the prospect’s mind. A confused prospect never takes action.

The only exception to this is when you are printing a flyer. You can safely put a message for buying on one site and then another message for selling on the other side. Avoid putting both messages on the same side!

Thus, when producing any form of marketing, make sure it’s either targeted at buying OR selling, not both. The cost will be more, but the response rate will far outweigh the additional costs incurred.

1. # of inbound seller calls: the lifeblood of any business is qualified leads and an incoming call is a lead that is very qualified. The amount of money you make is directly proportional to the number of incoming leads and the next metric (% of of deals closed).

2. % of deals closed: once you have incoming leads, you need to track how many deals you can convert to deals. This metric allows you to determine the quality of leads as well as your ability to close. You can have a high number of leads, but if the quality of each lead is low, then you need to increase the quality of each incoming lead (in the previous issue, we discussed how to use direct mail to increase the quality of your leads). A significant factor in how many deals you can close is how well you understand the basics of real estate law (also known as real estate paperwork). That is, how well can you explain the paperwork to your buyers and sellers (we provide custom paperwork in our investing courses).

3. ROI on marketing dollars: this measures how effectively you are spending your marketing dollars. On average, we spend $600 to $700 to generate a lead that we can convert to a deal. This is a total cost which includes labor costs (remember that we outsource most of our tasks, advertising costs, supplies [postage and handling]).

With these metrics, you can easily put together a marketing plan to do as many [or as few] deals as you want. Remember, due to creative financing when working with real estate (especially when flipping houses), it’s quite common to get 10 to 20 times your initial investment (that is, 1,000% to 2,000% on your investment dollars).

Here is a quick comparison between the different marketing methods that we teach our clients:

* Signs
+ Quick
+ Cheap and easy to implement
+ Scalable
- Not targeted
- Quality of leads may be low

* Newspaper ads
+ Easy
- Expensive
- Not targeted

Direct mail
+ Targeted
+ High quality of leads
+ Scaleable
- Complex
- Time consuming
- Expensive

Overall, direct marketing, when done properly, will generate leads with the highest profits (on average, $10,000 extra per deal). There are too many reasons to elaborate here but the most important one is that you can target the leads. This is not a trivial feat and require you to carefully select (and build) your list.

Keep in mind that these methods work the same regardless whether you are flipping houses, doing lease options, short sales, or any form of creating financing.

We have asked our buyers why they called on our signs and they shared that they felt more comfortable working with a homeowner than a corporation because they were afraid that a corporation wouldn’t be able to give them a good deal on a house.

However, we are not advocating that you handwrite each and every sign. Instead, make one handwritten sign and then ask your printer to copy the sign. This allows you to have the benefit of a handwritten sign with the benefits of mass production.

We have seen handwritten signs generate more than double the number of incoming calls compared to printed signs. Given that we make at least $10,000 per deal (using creative financing), this is a huge gain!

Don’t overlook this tip because it is so blantaly simple. With real estate investing, as with many other things in life, it’s the simple things that often make you the money.

With that in mind, before you acquire your properties, focus on building a robust list of buyers who are ready to move. This minimizes your holding costs and more importantly allows you to cash out quickly.

As one real estate instructor is fond of saying: buying a house before you have a ready buyer lined up is like taking Viagra and hoping for a date.

Building a buyers list requires a systematic approach that includes a marketing plan (i.e., how long should the campaign be, what tools to use, etc.) and tools to manage the list. When you are starting out, you can keep this information on a clipboard, but we recommend you use an automated tool like our Web sites to ensure you never lose a buyer lead (which can cost you $20,000 or more).