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The home on this video was discovered from a direct mailing piece that I mailed out to a listing of motivated sellers. I mailed out 15,000 postcards on this mailing and bought 3 homes. So my common was 1 home per 5,000 postcards mailed. My value of mailing the postcards is 34 cents per postcard so my advertising value per home acquired was $1,700. This will likely sound like so much to you. However take into account that I flipped this home for $30,000 and I flipped one other home from this mailing for a revenue of over $80,000. The third home I’m conserving as a rental and it has over 30,000 in fairness. So from this one mailing of 15,000 postcards (that value $5,100) the revenue is round $140,000. Now take into account that not each mailing that I do is that worthwhile. What skewed the earnings on this one was the large $80,000 revenue from the repair and flip. A extra reasonable expectation could be a revenue of $10,000 to $15,000 per wholesale and a revenue of $25,000 to $30,000 per repair and flip. Even when I wholesaled all 3 homes for simply $10,000 revenue per home that may be a revenue of $30,000 on an funding of $5,100. Would you spend $5,100 to make $30,000? It’s actually simply primary math.
Right here is a few primary postcard math so that you can perceive junk mail higher:
RESPONSE RATE (LEADS)
You need to be capable of get at the very least a 1/2 % response price on postcards mailed. That’s individuals calling you (leads) primarily based on you mailing them a publish card. Observe that your response price largely is determined by the record that you’re utilizing. Should you use a very good record you may get nearer to 1% and even greater. Our response price averages between 1/2% and three/4%.
You need to be capable of EASILY set a 20% appointment ratio. A 20% response price implies that you’ll go on an appointment for one out of each 5 telephone calls (leads) that are available in.
HOUSES THAT YOU BUY
You need to be capable of purchase AT LEAST 1 home for each 5 appointments you go on. That’s 20% of appointments ought to end in a deal.
This can largely depend upon whether or not you might be wholesaling or fixing and flipping. Should you supply the deal immediately from a motivated vendor, then you’re the ONLY PERSON with that lead.
You need to be capable of get at the very least a $15,000 revenue on a wholesale deal and at the very least a $25,000 revenue on a repair and flip. I’m utilizing an ARV of $190,000 which is our market.
ACTION STEP ONE
Determine your price range and what you might be snug spending (you can begin out with as little as 250 postcards every week).
It’s primary math. For instance let’s say you might be simply beginning out and your price range is $340 a month and also you mail out 250 postcards monthly.
Give your mail home a listing of two,500 names and inform them you need them to mail out 250 postcards per week for 10 weeks till they’ve mailed all 2,500 individuals.
In case your response price is 1% then 2,500 postcards = 25 calls
These 25 calls (leads) ought to end in at the very least 5 appointments (20%)
and people 5 appointments ought to end in at the very least 1 home that you simply purchase (20%).
Assuming it value you 34 cents per postcard, your value to mail these 2,500 postcards could be $850. Should you purchased one home and wholesaled it for $15,000 revenue then your web revenue after accounting for the price of postage could be $14,150
The issue is most new traders are afraid to spend cash mailing postcards. And junk mail is only one technique to purchase offers. There are various different methods.
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