My marketing rule of thumb

I have a math question for ya: How much direct mail should you send out to consistently close at least 5 deals per month?

Okay, so I admit there are a lot of variables in the answer to this question… and I actually got this question from a student who texted it to me on my podcast hotline.

So, to start, you should know this—if you’re just beginning as an investor, you’re going to have to do A LOT more direct mail marketing than a more seasoned investor who’s been around for a minute.

And let me be clear here…

Hear me now, newbies: Your marketing must be big, intense and consistent

Later, HALF of all your deals will likely come from the follow-up you do—from ‘old’ leads… meaning, when you follow up with additional postcards, calls and texts… half of the people who previously said no will finally be ready to say yes.

So, eventually your mailings won’t need to be quite as large.

But this shows you that follow up is SO IMPORTANT.

And, I firmly believe that when you’re getting started, you should re-invest 100% of your profits back into your marketing. And, you’ll likely spend about $1k in marketing per deal.

We’re in the marketing business, folks.

So, back to the initial question… there isn’t an exact answer I can give you about how much marketing to send because it depends on where you are in your investing career and which market you are investing in.

Meaning, you’d have to send a LOT more mail if you’re in the San Diego market than I do in the Midwest.

But, here’s my general rule of thumb when it comes to marketing…

If you want to do 5 deals per month, I say you need 40 leads per deal.

5 x 40 = 200

So, you need 200 leads to do 5 deals per month. 

And let’s say your average response rate is 2%… 200 divided by .02 = 10,000.

So, you’d need to send 2,500 postcards per week (10,000 per month).

Still with me?

Good, because here’s the best part…

If you average $5k per deal and you do 5 per month, you’re looking at $25k per month in profit. Not too shabby. Not too shabby at all.

Consider this too: For every 100 leads you get, you’ll make 10 offers, and of those, 1 will likely get accepted.

But please remember…

  1. Every market is different.
  2. If you’re sending out 10,000+  postcards, make sure you have a system in place to handle all those lead calls that will come in… and that you are equipped to do proper follow up.

The fortune is in the follow-up.

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