How to Get Started in Real Estate with $500 a Month
Most people who want to be real estate investors often forget they are essentially starting a business, and to start a business, sometimes it costs money. For some, having boatloads of cash just isn’t their current situation. For others, it’s finding out how to properly use the money they have to grow their business.
You can get started by deciding to invest just $500 a month into your business to get things going. This is the one thing an investor can do if they haven’t got a clue on where to start. Focus on building up a budget that will allow you to invest $500 a month and then you will focus those efforts on one thing and one thing only.
Marketing
Leads are the most important aspect. You can have the fanciest website, the nicest business cards, you can even have a team full of savvy investors willing to fund your every deal. The problem is…..you need a deal. Without a deal, all the others things are in vain and unnecessary.
With every cent of that $500 you are going to attempt to tell the entire world (or your neighborhood) that you are a real estate investor and that you are looking to help those who have found themselves in a distressed situation and need to sell their home fast!
So what type of marketing you might ask? Direct Mail, Facebook and Instagram ads to start.
Direct Mail
A very popular marketing technique by sending homeowners mailing pieces that advertise that you are buying homes in the area. Typical mailers look like this:
This is a very GENERIC version of how a mailer can look. It will be up to you to stand out from the competition as there is a good chance someone else is also sending mailers to the same homeowner. A good marketing hack is handwriting the envelopes of your mailers to make them look more like an invitation than a solicitation piece. Handwriting your envelopes increases the open rate.
$500 a month should be able to get you around 750-1,000 mailers depending on the type of mailing piece that you select. There are a handful of individuals you can send your mailers to such as absentee owners, probate listings, and pre-foreclosures. Pick 2-3 lists and start mailing!
This tactic is the easiest way to get your phone ringing with individuals who are looking to sell their home. At that point, it’s just about going on appointments and scoping out the best deal to place an offer on.
One quick word of advice, if you’re going to send mailers, I highly suggest you identify where you want the returned mail to go. With any list, I automatically assume a 10-15% return rate from mailers in which the address was “incorrect” or the mail forwarding system failed. You may want to open up a PO box in your area. Having all the inevitable return mail coming to your main address will be overwhelming. (Like Harry Potter and the Sorcerer’s stone)
Facebook and Instagram Ads
Social media marketing has been receiving attention from marketers who are looking to get a solid ROI on their marketing dollars spent. Your Facebook ads can draw eyes to your website where you advertise your services of buying distressed property. Below is a basic example:
Again, it will be up to you to find out how to stand out from the competition. Maybe you’ll use videos, infographics, and other forms of marketing. $500 can get you in front of 10’s of thousands of Facebook profiles. Your goal is to have individuals contact you directly or go to your website and input their information for you to contact them. Your message is the bait and the paid Facebook/Instagram ads are your fishing rod. You can go fishing, but if your hook doesn’t have appealing bait, the fish won’t come. You also can’t just throw bait without a fishing rod – you’ll just be feeding the fish but not catching them.
Your ads and your message go hand in hand. Your message will be important as well as the intensity in which you promote your business.
Building your sphere of influence – Bonus “marketing” strategy
This is a different form of “marketing” but one that shouldn’t go overlooked and to be honest, you might not even need to spend anywhere near $500 a month considering you’ll be tapping into the individuals that you already know, like, and trust.
Nonetheless, tapping into your sphere of influence may not be the easiest thing. As you look around you, there may not be many friends or colleagues that are investing; that’s ok.
You can begin by spending money, on gas, to get you in front of the individuals who can help you make major moves in your real estate investing career. Whether that’s at networking meetups, taking experienced investors out for lunch, or even helping them run their business. As you continuously promote your name and what you do, eventually you’ll close your first deal. After closing your first deal, the real estate investing gods can now deem you worthy of being able to take down multiple deals. At some point, the individuals that you connected yourself with will ironically start bringing deals to you instead of you going out and searching for them.
Here’s a quick tip, find a handful of investors who are doing a massive amount of deals. They’ll be able to help you with everything that you need: deal analysis, funding, rehabbing, refinancing, etc.
They are also a good source of deals! Meaning, sometimes, these investors can have multiple projects going on at once and have either run out of funding or don’t have another contractor team available. Instead of letting the deal just fall by the wayside, they’ll usually wholesale it to another investor. Your job is for you to remain top of mind when those investors run into that situation!
All that to say….
There are 3 qualities that make up the perfect real estate investor: They have Hustle, Knowledge, and Money.
The good part about real estate investing is that you don’t have to be “perfect” and therefore you only need 2 out of the 3 qualities to get started and excel. What you lack, somebody else will excel.
This article just happens to discuss what you can do if you did have a little money to start with. Marketing will get your phone ringing with leads. From there, you’ll be able to analyze opportunities and inevitably pull the trigger on your next deal. Whichever strategy that you choose, stick with it, analyze your results, make the adjustments, and continue to put yourself and your services out into the world.
Doesn’t matter if it’s physically or digitally!