The Importance of a Marketing Plan in the Real Estate Investing Business
One matter to hold onto and take serious perspective when working in the Real Estate Business:
Are you executing just a small bit of marketing and promoting and just hoping and wishing that a good deal will flow in your hands, or are you maneuvering and operating your Real Estate Investing Business in a mode that makes certain that a good Real Estate deal will materialize. If you do not have a cognitive process for making sure Real Estate deals materialize, you do not yet understand the importance of possessing a marketing plan. A without a marketing plan isn’t.
The pitiful fact is that even after all their conditioning, less than one percentage of all real estate businessmen and investors actually possess a marketing plan. Even though it’s very simple, do not underrate the power of a good marketing Investing plan.
The most crucial matter regarding Real Estate Investment Marketing is to posses a Marketing Plan to begin with.
1) It is a substantial attitude you have for your intellect to grab on and strive to achieve. Attitude determines your altitude.
2) It allows you to clarify exactly what you want to achieve in the coming 30 days.
3) It allows you to map out the activities needed to excute the Real Estate Investing Marketing 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 and done well.
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. Real Estate Investing requires consistent concous effort and work.
More people fail in real estate investing because they simply do not have a plan or goals. You should have a detailed real estae 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 is too vague, and I want to be rich, and I want to make ,000 a month, are not plans. They are too vague, unclear and they won’t help you in getting there in the Real Estate Investing Business. Be as specific as you can possibly be to insure your Investment Business’s success.
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 in the Real Estate Investing business is obviously more important. It’s what you take to the bank, and it’s what pays bills and in fact keeps your Real Estate Business going and growing.
First, examine your current numbers. More than 80 percent of all real estate entrepreneurs and real estate investors know how many houses they are buying each month or quarter, 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 very dangerous and can put an end to your real estate investing career.
You Simply Must Know How Your Business is Currently Doing
You should know:
1) The total leads that call each month (each week is more manageable though you can experiement with different time periods ),
2) Where those leads come from. In any business, not just the real estate investing business, you need to track markteing efforts.
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 leads is another factor.
5) The number of deals you close in your Real Estate Investing endeavors.
6) The ratio of closed deals to qualified leads – for each real estate lead source
7) How much you make from each seller of the real estate investment transaction.
8) How much it cost you to acquire a new seller. A very important aspect in any investment business. Not just Real Estate Investing.
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 need to make in your real estate investing business month by month.
For example, let’s say for instance you are bringing in around ,000 a month or so your average deal gives you about ,000. Yes, I know that’s low, but for the sake of example let’s use these figures. That’s two Real Estate deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or ,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 investment business. Goal? Four deals a month, or one a week. Sounds like planning doesn’t it?
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 sales and investment prospects. Again, keeping track of the business aspect of marketing.
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 invesment deals next month.
But assuming that’s not something you have control over right now, the other way to double your gross income in the next month is to double the number of qualified transaction prospects that you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40. This is of course, providing that you utilze the fory leads just as efficiently, if nor more, than the twenty.
Your plan to get forty qualified prospects for a residental or commercial transaction 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 come from classified ads that drive people to the website. Total 46 real estate investment prospects. Cool! That’s six to spare.
With this number of leads coming in you have what is needed closed four good real estate 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 upyour 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 from your investment transactions. Either foreclosures, short sales, regular sales or other wise.
2) A goal for number of residential or commercial deals signed up
3) A goal for number of appointments made for potential real estate transactions.
4) A goal for number of qualified, interested residential or commercial property sellers.
5) A goal for total number of leads in commercial, residential, foreclosures, flips, short sales or other deals.
6) Average net income from each real estate deal.
7) The number of prospects you have to generate to reach your financial investment 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 a work of art, just useable.
Simple note – pad plans are good enough. The important part is that you do a plan every single week and keep on top of things and not get behind in your real property investing marketing plan.
Setting up a a marketing plan is a simple thing to do, but it is just as easy to not do, and this you need to be aware of it. Blowing it off is the equivalent of you absolving yourself of responsibility for your real property investing 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 real estate business.
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