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There’s a whole bunch of websites out there that explain the different marketing strategies real estate investors use. But let’s talk about the cost that comes with these methods, and how results can vary if you invest without doing proper research.
First, there’s a really important concept to get out of the way, that is: Cash Conversion cycles.
So, when an investor acquires a property,y they understand that it will take some time before their investment begins to bring cash flow into the business. In the same way, cash conversion cycles apply to all kinds of investments. And marketing is one of them.
There are some marketing strategies that are known for having shorter cash CCC’s, but keep in mind that these estimates are not set in stone. You could close a deal after a week with an online marketing campaign, but take months to close a deal with cold calling.
Cold calling: You don’t need a huge investment to start cold calling. If you have a phone, a calling list, and a way to track your numbers and follow-ups, you are set. How long it takes to get a deal through this method can vary. But even a small wholesaling fee will close your ccc.
Mail: Printing and sending out paper ads for your business is pretty inexpensive, and it’s a good way to get word of your business out there. It can take you a while to close a deal through this strategy, but it may be worth it.
Social media presence: The most important thing here is CONSISTENCY. Creating content in social media is completely free, and it brings attention to your business. Social media opens up the doors to potential sellers and partners.
Television and radio: This one depends on a couple of things like: channel, and time of the day. You pay a lot more when ads are shown during prime time television, or if you choose the most listened to radio station in town. However, chances are that you will get a client quicker by spending a bit more.
Email & SMS: Can be tricky to properly set up. This strategy is a bit more pricey than those in the shorter CCC category, but continues to be relatively inexpensive. Businesses swear by email and SMS campaigns, but it takes a couple of months before you begin to see cash flowing from it.
Social media advertising: We have first hand experience seeing clients get deals in the first couple of weeks after launching their SM campaigns. However, this strategy can be expensive for newer investors. While it pays off in higher quality leads, and saves you lots of time, it requires a relatively high investment.
Tiffany High does a great job at explaining cash conversion cycles. Check our podcast episode with her HERE!
Now, let’s talk about things to keep in mind when you are looking to invest in a new marketing strategy.
When you invest in marketing you must keep in mind that it will likely not be a one-time investment. Marketing investments can come up as weekly, biweekly or monthly payments in your bank account. So, as an investor you must know:
How much do you have to continuously spend on a marketing strategy so that it brings results.
How long will the cash conversion cycle be for this strategy. Meaning, for how long will you have to spend this amount of money on a reglar basis before you can see results. And BEFORE you can judge whether this strategy worked for you or not.
Do you have the money to sustain this investment. If given the worst case scenario, can you pay for this strategy for months without seeing results.
You must also beware of these 2 mistakes that stop you from producing results:
You implement your new marketing strategy with less than the recommended investment. In an attempt to save some money, less experienced investors do this. However, they fail to realize that they will likely not get the results they want.
You don’t give a strategy the needed time to show results before ruling it out. Investors who do this haven’t done research on a strategy’s CCC. They hyperfocus on the monthly payments needed to sustain this strategy.
Always keep in mind that you need to have a PLAN. This will save you a lot of headaches and disappointments if you don’t get the results you want.
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