I want to share some video to you guys. It is dec 24th, a day before christmas. During this time of the year I usually doing my goal and I just got from Mexico, spend the week with my family.
I start doing my goals and kind of reflecting the previous years.
I want to share to you a video on how to plan for your upcoming years to start Marketing. And I said on the last video, you wanna run your business like a professional. You need to know your numbers. You want to plan so you can hit the ground running on the first day of the year. You have to have a plan. Every Pro and every experience, professional wholesalers or Investors, plan the year.
So, I want to show to you the numbers. It is the basic excel spreadsheet that I learn from other cultures. This is a very helpful tool to you as you plan the upcoming year and try to budget for it and things like that.
|Desired Monthly Income||$ 40 000|
|Average Deal Size||$10,000|
|#of Deals Per month||4|
|#of leads per deal||35||varies per market and business|
|# of leads needed||140|
|Mailing Response Rate||1.50%|
|# of maliers per month||9333|
|# of mailers per week||2333|
Obviously, everyone has a desired monthly income. You have to shoot for a number that will be achievable. It is easy to say that you have a $40,000 per month. But if you don’t have a plan for it, it will be very hard to accomplish. I am giving you just a scenario. This is just numbers again for the purpose of this video I chose and hopefully, you can take this concept and apply to your business.
Let’s say you have a desired Monthly income of $40000. It can be 20, it can be 30. It really doesn’t matter but you have to make a goal so can have a plan on how to get to this goal. Let’s say you are in the market that the Average deal size is $10 000. If you are a beginner you need to come to a number. You need to ask. You need to see what other wholesalers make. If you are in a Casual market the deal size will be 5- 9000 dollars. If you are in higher end market like Fort land it is from 30-45 dollars. I have a friend that is doing it regularly. But it really depends. So, for this example let us just say the average deal size is $10,000. It means that if you are going to get the desired income you need to do deals per month.
How do you do this per month? This is the very important number. The leads per deal. How many leads you need to get in order to get one deal. This number depends/varies from the market and business. If you have a very competitive market you have a low response rate. In order to get 35 you need to market much more. If you are in a less competitive market you can at least get 20 leads per deal. It also depends on your team. If you have a very good phone person or if you have a great sales team and can close the deal, maybe they can do a deal with 20 leads. Maybe 15 but really depends. If you don’t have a number for starting up just use 35. It is not great but it is a good number.
Let us say you have 30 Leads to get a deal. It means that if you want to do 4 per month you need to times this number 4. So, it is 140 leads per month to get more deals that you get with $10 000 per deal and get $40 000 per month which is your target.
Let us say again your Mailing response rate is 1.5%. If you are in a very competitive market maybe you have .3% or less. I did one mailing in the bay area, I sent letters and I only got 5 calls. Two of them were removed from the list. It really depends on which market. The good number for you is 1.5%. If you measure the number you should know the number of leads per deal. If you are done with deals you need to know the average deal size. We just start with these numbers as a good starting point.
So, If I have a 1.5 response rate, it means I need 9333 Mailers per month to send, in order to get 140 leads per month. If you break it down you obviously need to send 9333 mailers per month unless you have 2-3 lead manager or doing it yourself. Just break it down per week. Send 2333 mailers per week and make sure you drop them consistently so you can have enough time crosses the leads that were coming because if you don’t all the mailers in one day and you don’t get back to them in a timely manner then you are just throwing money to the garbage. If you watch my previous video, there is a cost to each lead
So, let’s say the cost per month (1 postcard in 0.40 cents) .40×9333 = $37333.33333. So, this is the money or your budget you need to allocate per month.
This is no magic. You can’t expect that money unless you have a lot of time driving for dollars and being on craiglist and fsbo. That also takes time and money.
The easiest way to start to generate leads for your virtual wholesale real estate business is by direct mail.
You have to spend money initially and if you want to control the flow of leads and flow of deals, and again there are lots of missing puzzles like being good on the phone, knowing how to negotiate, but if you are just planning this is a good pace to start.
If you want to know your cost per week, just divide $3,733.33 in 4. And, that is your weekly budget.
If you have a credit card it is a great way to do it. You can have a marketing partner that will fund your marketing campaign. You gonna get them a percentage. If you have a buyer that wants to fund your marketing campaign, in exchange for first right of refusal of every deal that comes from their campaign that refunded. It is great that if you have a good reputation you will have buyers that will fund your marketing in exchange of your first right refusal and maybe you gonna pay them for some time of percentage of the deal.
These ways are resourceful and creative. But this is just a good start to plan your year. If you want to make money you need to know your numbers and make sure to measure it every month so you can adjust it. You will get better and maybe you will get 30 leads per deal that means you gonna spent less on marketing. Maybe you gonna start to increase your average deal size let us say $15 000 average size and then you can make even do less. It is now $2 133.33 cost per month. It really depends. Let us say your response rate is better because you are using better lists. So, it is now 2% you can use even less money to generate these leads. It really depends and very, very important to know your numbers. This way you can plan your year, market your card and pull off your leads and close deals. So, if this is helpful subscribe and I was starting this year one of my goal in 2017 is to spend 1-2 additional market and I am looking for a wholesaler that is doing deals in the market and want it to take to the next level.
If you want to partner with me, I would love to partner with you! If you are starting out and want to learn about it I offer coaching program just reach out to me and hopefully we can work together.
That is it for today I wanna wish you a Merry Christmas! Have a great new year! Happy holidays and have a great 2017