OfflineA Marketing Plan - The Thing That Makes Deals Happen!
by Ben Innes-Ker
You’re a Real Estate Entrepreneur or Investor, and you’re out there in the market place looking for deals. I have a question for you.
Are you doing a bit of advertising and just hoping that a deal will fall in your lap, or are you operating in a way that makes certain it will happen. If you don’t have a process for making sure deals happen, you don’t yet understand the importance of having a marketing plan.
The sad fact is that even after all their training, less than one percent of all real estate entrepreneurs and investors actually have a marketing plan. Even though it’s very simple, don’t underestimate its power.
The Most Important Thing About Marketing is to Have a Marketing Plan!
1) It’s a concrete result you put out for your mind to seize on and strive to achieve.
2) It allows you to clarify exactly what you want to achieve in the coming 30 days.
3) It allows you map out the activities needed to achieve that plan.
4) It allows you to plan in advance to delegate off the lower paying activities, so you don’t end up doing them.
5) It allows you set time deadlines, to hold others accountable so everything gets DONE!
6) It results in you being free to concentrate on your highest payoff activity: Making Offers on Great Deals!
7) You have a business that operates consciously, not by accident.
More people fail in real estate because they simply do not have a plan or goals. You should have a detailed marketing plan of what you want to accomplish and how you are going to accomplish it.
And, don’t be vague, either. Things like, I want to make more money than I can ever spend, and I want to be rich, and I want to make $10,000 a month, are not plans. They are too vague, and they won’t help you get there. Be as specific as you can possibly be.
In planning for monthly revenue, try to put your money goals in cash income, not gross revenue. I know gross revenue is what you’re used to thinking in, but cash is obviously more important. It’s what you take to the bank, and it’s what pays bills.
First, examine your current numbers. More than 80 percent of all real estate entrepreneurs know how many houses they are buying each month, but they don’t know where those houses came from and how many leads they had to process to develop them into the single deal. And, this is a deadly sin.
You Simply Must Know How You Are Currently Doing
You should know:
1) The total leads that call each month (each week is more manageable),
2) Where those leads come from,
3) How many “qualified” seller prospects (i.e. those that you are willing to invest follow-up in if they don’t sell now; they have motivation, you are interested in the house.) you get each
month,
4) The ratio of total to qualified,
5) The number of deals you close,
6) The ratio of closed deals to qualified leads – for each lead source
7) How much you make from each seller,
How much it cost you to acquire a new seller.
With this information you can look at your current resources, look ahead, and then plan out what you want to have happen. The number of deals you want to do, the amount of money you want to make.
For example, let’s say you are bringing in around $10,000 a month and your average deal gives you $5,000. Yes, I know that’s low, but for the sake of example. That’s two deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or $5,000 a month. And let’s say that you want to double your net income next month.
You will have to get twice as many deals to double your business. Goal? Four deals a month, or one a week.
Let’s say you currently get one deal a month from a classified ad, and one deal a month for mailing expired listings. But, you get ten qualified calls a month from his classified ad and 10 qualified prospects calling a month as a result of mailing expired listings. So, you currently close ten percent of your prospects.
First, you can improve on this situation by improving that twenty percent closing ratio. By improving your closing ratio by things like more precise targeting, the present lead-flow would stay the same, you’ll get your same twenty real prospects and achieve your goal of doing four deals next month.
But assuming that’s not something you have control over right now, the other way to double your income in the next month is to double the number of qualified prospects you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40.
Your plan to get forty qualified prospects would need 10 to come from expired listing mailings, 16 to come from flyers in target neighborhoods, 4 from business cards handed out everywhere, 6 to come from signs placed in the ground at high traffic count intersections, 10 to com from classified ads that drive people to the website. Total: 46 prospects. Cool! That’s six to spare.
With this number of leads coming in you have what is needed closed four deals and reach your goal of doubling your net income. Actually, it’s more than doubling because your fixed expenses don’t increase with the income.
You should have a monthly plan. Schedule thirty or forty minutes out of one day to make up your monthly plan and see how you did last month. Schedule this time and keep to it. Don’t do any work or take any calls during this time. Keep it strictly for planning. If you do this and you allow yourself to get into the whole spirit of planning, and making things happen on purpose, you will easily double your income in twelve months.
Your Monthly Plan Should Include The Following
1) A goal for total net income.
2) A goal for number of deals signed up
3) A goal for number of appointments made.
4) A goal for number of qualified, interested sellers.
5) A goal for total number of leads.
6) Average net income from each deal.
7) The number of prospects you have to generate to reach your goal.
A detailed plan to generate the number of prospects you need. Your plan doesn’t have to be typed out or put into a computer. It can be handwritten on paper. It doesn’t have to be pretty.
Scratch pad plans are good enough. The important part is that you do a plan every single week and keep on top of things.
This is a simple thing to do, but it is just as easy to not do. Blowing it off is the equivalent of you absolving yourself of responsibility for your business. On the other hand, taking the time to think through your goals each month, both for income, and marketing activity, then committing them to paper will make things start happening by plan and put you in control of your business.
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
I just finished writing my marketing plan for the lender to fund and its great... if i may say so myself
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Anita,
Thanks for including this article. This is perfect for where I'm at right now and will definitely be using this within the coming days/weeks. I will be able to utilize the info on the marketing plan perfectly with my partner(s) and with my wife. You're awesome!
Jeff
tell me exactly HOW to get a HARD MONEY lender to take on your(my) DEAL? i guess i would need to lock up the property first right? SULLY.
YOUR HERO, SULLY
I just got off the phone with my new lender and I am going to give you his info. call and talk to him and let him tell you how they wrk.
Jason Latimer
Investor Relations
5230 Las Virgenes Road, Suite 285
Calabasas, CA 91302
310.395.0010 | p
310.395.0130 | f
www.anchorloans.com
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
so i guess i'll give your lender a call even though he's half way around the world for me,lol, cause i live in PA, were like light years away from each other. SULLY.
YOUR HERO, SULLY
sullly i thought you were in cali too
Anita
******************************************
TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Jason Latimer
Investor Relations
5230 Las Virgenes Road, Suite 285
Calabasas, CA 91302
310.395.0010 | p
310.395.0130 | f
www.anchorloans.com
Talk about small worlds.. "Action" Dan Harrington. I had no idea he was in RE OR that he was a laawyer.
I had heard about action dan myself
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
BTW... It's hard money. Short term (~1 year) and higher interest rates (10-13.99%).
So more suitable for flips (or at least rehabbing and then putting long term financing in place).
Details are here: http://www.anchorloans.com/faq_borrowers.html
and rehabbing is just what i am using it for. Flips and rehab
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Andrea,
I have a friend that just contacted them through the Free Press Ad. He has been bombarded w/ phone calls and emails from them. Not to say it's not a legit company, but anything that is supposedly so good and is that aggressive in pursuing someone makes me skeptical. I haven't had a chance to research them for myself as much as I'd like yet. Let me know if you find out more or if anyone else has any feedback.
In Success,
Jeff
It's nice to have someone from the Eastern time zone on here that is posting in the morning when I'm looking.
Give it a couple of days and see if the calls/emails continue. I'm just curious if it was just this one guy or if they do that all the time.
I understand wanting to have access to all the investors. I also understand the hesitancy and wanting to make sure you're doing the right thing. That ability to do your research before jumping on a "seemingly" good deal could save you in your investing career. Again, let me know if you get any more info from them or anyone else here. Curious about them myself - know what ya mean Vern.
Just as an Fyi this is the comment I got from my buddy about them in an email:
"I talked to a guy on the phone who is really pushy and you can tell he's reading from a script. He calls me twice a week now and leaves a message. The company looks ok from the website, but for $495.00 to start up, and a pushy script reader, I'm not too impressed at this point. But I plan to keep my eye on it."
My client and I never had a marketing plan.
However I once had a partner that had a plan but he did not work the plan and he want on disability (a fake disability) and I want on with my accounting practice.
some People have no plan
Some Have a one page plan
Some have several pages.
I like the one page if I did one.
Joe trevison
I reread it. it is marketing plan which is totally different than a business plan. Marketing plan are more important than a business plan I am not sure. They both have their places.
Joe trevison
Great post as usual! I have Ben's marketing tools downloaded from a course I bought, don't ask... LOL! Let me know if you need anything specific.
Elena
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
I will do that. But you might just post a few blanket things up here for other to get some ideas if you can.
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Just as soon as my head stops spinning from being promoted to the inner circle!! I just got PM'd that Dean's sending lil o' me a gift! Wow, I feel like I'm at the Grammy's! What a great way to start off the week, not to mention what an HONOR it is to be classified a Superstar like the great ones here... Let me gain my composure and I'll get right on that.
Elena
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
You were highly recommended. And I am so glad you made it.
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
As I stated in the original post you needed that following in your marketing plan. I use various methods for marketing over the last month or so and my most effective was FREE AD advertising listing my website address to gain further info. I have had over 300 hits on my website in the last 3 weeks alone and 121 calls from ads on sites such as CL.com and th free papers. I have made offers on a total of 23 properties in the last 30 days and purchased and/or flipped or assigned 5. So a good marketing plan works.
Your Monthly Plan Should Include The Following
1) A goal for total net income.
2) A goal for number of deals signed up
3) A goal for number of appointments made.
4) A goal for number of qualified, interested sellers.
5) A goal for total number of leads.
6) Average net income from each deal.
7) The number of prospects you have to generate to reach your goal.
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Let me just ad, that I've found that I can advertise on a Sunday and get maybe one or two responses. Then on Wednesday I'll repost the same ads and get a ton of responses! So test different days, different ads and do it continuously. The results will amaze you and this way you'll know what works and when, stick with what works!!
Remember, you can place the same ads if you post them with different email accounts. ;D
Elena
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
and repost the same ads continuously throughout the day by just changing it up a little and adding a few asterisks or something like that.
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
I've tried that and got an error message saying similar posts. But hey, I'll give it another try... Thanks A!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Anita, Great post!!! as usual. I will also check out anchor loans and see if I can get a better deal with them than the current one I am using for the Desert Shores property. THANKS!!! for sharing this.
Joetrevision, in another life, I have done many business plans. I call it the "mapquest" for your entire business. Your marketing plan is a very important component of your business plan. Your business plan is what you need to take your biz from point A to point B (the shortest and best way to get you from where you are to where you want to be). It is like taking an ocean liner out to sea with the goal of going to the UK from NY. If you don't have a navigational plan, you could get lost in the big vast body of water you must navigate and get to Japan instead.
In contrast your marketing plan, which should support your business plan, should serve as your action plan, the nuts and bolts of your RE investing activities. The marketing plan should be the hows, the whys and the wherefores of leveraging current market conditions, lending practices, etc. to create a win/win deal for everyone concerned.
Because we are in the RE investing biz, I would give a biz plan the following components:
1) An executive summary. This is where you state in general terms what you wish to accomplish in your business. The components of your business plan must support your general statement of objectives.
2) As discussed in Anita's post, GOALS are very important!!! Over the years, I have found the following acronym helped keep me in line when executing my plan. Goals must be SMART!!!
S - SPECIFIC
M - MEASURABLE
A - ACHIEVABLE
R - RENEGOTIABLE
T - TARGETED
I am sure others have their interpretations of the same SMART goals, but this is my own rendition of them. I found that they work for me. You can also come up with one that works for you.
My goals are always specific. I also set up benchmarks for them (standard cost/profit for each type of RE). I make sure they are achievable, meaning they are realistic and I renegotiate them depending on changing economic times, market conditions, lending practices and other factors that influence our business (economic indicators will help with this). They are also targeted. This is very important because in some less desirable areas, profit margins may be less attractive because of the additional cost of security that may not be needed in the more desirable areas.
3) A profit plan (sort of like standard job costing). I am sure in your line of work, this is commonplace. Anita's post touches upon this in the marketing plan discussion. I call this benchmarking. If you know how much money you want to make on a condo, or TH, or a 3/2/2 SFR, or a 24-unit multi-family, etc., etc., etc., if a property falls short of your "standard" or "benchmark" for profits, you either say NO or look at other non-$$$ considerations, eg., you want market penetration, or establish a foothold in the development, or just want to show business partners you have the demonstrated ability to pull RE investing off profitably, etc., etc., etc.
4) A marketing plan which Anita's post covers and I will not belabor here.
5) If you envision your business growing within a short time frame (1 - 3 yrs), a staffing plan to help with the overflow. The staffing plan should also provide for clear and concise descriptions of the quality of business partners you will be using in your business, their roles and responsibilities. This section should also include their professional expertise and educational training.
This may be a truncated rendition of business plan prep. Your local library should provide you with detailed info on the subject. It is good to keep in mind though that you should not be bogged down with the biz plan prep at the expense of your RE investing activities.
As the top gun on our leader board (anitarny) has shared, time and time again . . . "there is nothing better than taking action to achieve your goals". Even if you stumble and fall, you always learn something, and, as you have found, the discussions in these forums are great teaching aids.
Charpie
That was GREAT!.. I will add your reply to my stash of things to take note of. Very professional stated as well. Thanks for the insight
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Elena
Contrats! It's a nice feeling huh....you deserve it!
Don't Wish the Past, Create the Future! - DH
It's an awesome feeling! I am honored that everyone here believes in me, it's made a such a difference in my confidence!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Thanks again for your very kind words.
You set a very high bar for the rest of us, but I urge you to keep doing it because you help push us forward in our learning process. Our collective successes, no doubt will be due in large measure to your very generous and informative posts.
I join the chorus of everyone singing Dean's praises for creating this forum that you so effectively use to impart your knowledge to newbies like me. More importantly, I just marvel at your generosity of spirit despite your own health hurdles. Unbeknownst to you, I have a little postit sticky on my computer that reminds me the "pain" I am going through learning rehab estimating is nothing compared to your triumph over ca. The sticky simply says, "ANITA TRIUMPED OVER CA, THIS IS ONLY REHAB" in bold black letters{*_*} and it gets me through the process big time!!!
I am guessing the Half Shell house in Desert Shores is mine because after 258 days, there is no offer on the table. I am submitting mine on Mon. If I did my due diligence right, I will net $56K on it if I do the rehab or flip it for $15K if the owner agrees to let me assign it.
The million dollar estate I am eyeballing for a ready buyer looks very promising. The owner has thrown the kitchen sink with it. She reduced the price by $111K and is now selling it subject to owner financing for a 10% DP. I am reworking the numbers to make it attractive for a very low interest rate permanent financing to replace the owner's loan. Since this is going to be used by the buyer as a board and care facility (assisted living for seniors), it has a good chance of qualifying for a Federal sponsored, State of Nevada administered program at 1 - 2% interest. How cool is that!!! I just have to check and re-check the numbers with other assisted living sites around the valley.
My net on this million dollar house may not be proportionally greater than the Desert Shore house. This is because I need to set up a lower threshold percentage-wise than a 3/2/2 SFR in the Northwest to establish credibility with the State office that funds projects like this. Moreover, the buyer has set up a 501(c)3 corp for the project. The combo of state funding and a non-profit corp. limits my ability to make bigger money off it. However, if I am successful, the chance of threepeat is greatly enhanced because there is a great need in the LV valley for housing like this for seniors who have no family in the city.
Charpie
NOW THATS WHAT I AM TALKING ABOUT!!
THINK B...I...G...!!!
I am so proud of you. You guys are MY inspiration. I have Deans picture on my bulletin board over my desk next to the page my son wrote me about the 4 steps to being a real estate millionaire.
I look at him everyday and I KNOW that if he could do it, then so can I. Then on the side of my computer screen is my oncologist business card, there to remind me that no matter how tuff it gets - I have been through worst and I am still HERE!
So fee me when I say, we live to succeed, because I could have died and failed a long time ago, but I have bigger things in store for me and even larger things ahead...and so do you!
Char you put a smile in my heart today and I thank you forever for it!
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Absolutly fantastic it will pay off whatever you do, good going.
I just want to post this as a side note. Today I got an email from my banker requesting a copy of my marketing plan. It was a good thing I had a solid plan available. I sent it right over. I am trying to open a business line of credit (new one) from BOA.
Anita
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TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"