4 Tips To Developing A KILLER Marketing Strategy For Real Estate Investors
Updated: Feb 26, 2019
Have you ever wondered how to create a marketing plan for your real estate investment business?
Well, if you haven't, you should probably get on that.
As a real estate investor, we all know that there are two key components to a successful business. The first component being financing (if our strategy calls for money) and marketing.
Your really splitting hairs determining which activity is more important but for the sake of this post let's go with marketing (because you can produce a profit without financing but you can't produce a profit without marketing)
These two activities are also very difficult to be successful hence why they are the most important activities to find success in.
Every successful marketing strategy has a plan that is well thought out, implemented, tested and executed over a specific time period. Developing a successful marketing strategy gets you half way to success. The other half comes from successful iteration, consistency and commitment.
Let's go over some tips that could possibly separate the successful investor from the "want-to-be" investor.
1) Determine Your Niche
This should be done prior to the development of your marketing strategy. Before we put together our marketing plan, we need to know which niche we are going to focus in. By understanding who you are as a real estate investor, having a clear perspective, point of view and a passion, you will be in a better position to develop a successful marketing plan. The niche that you choose will determine how you approach certain aspects of your plan, your buyers persona, target area, demographic, type of properties etc. So the first step in developing your marketing strategy will be to have a good understanding of your vision as a real estate investor.
Buy And Hold
2) Develop Specific Activities/ Mediums
Before we start to develop our budget, we like to think about how we are going to reach our customers. We like to have a good understanding of the possible activities we can choose from that will best fit our specific niche. We want to have a good breakdown of our inbound marketing (medium) and outbound marketing (medium) and the different activities within each of these mediums in order to develop our plan to reach out customers. The more creative you get with the first step of listing out the potential activities for these two mediums, the better/more creative plan you will put together (possibly separating yourself from the competition). Let's go over a quick working example of this exercise.
Business Ad Placements (Diners, Laundry Mats)
Lead Magnets (Ebooks, Infographics, White Papers)
On site Content Marketing
Social Media Marketing
It will be important to begin narrowing down your inbound/outbound activity list to test and implement after you have created a good starting list to work off of. Remember, the plan that you first put together will be the plan that you test and execute over a certain period of time. You have to stay consistent with your plan and test it over a certain period of time to see the results of the specific plan. What we want to avoid (at all costs) is trying something out once and giving up on it. This results in lack of success and lack of understanding of how marketing truly works.
3) Creating A Marketing Budget
We here this question a lot, how much do we need to spend on marketing to get the results we are looking for?
This is a very subjective question and depends on a couple of variables. The marketing budget/spend for your specific business will depend on your current activity in the business (how much profit your generating or if your just getting started). A simple, short cut tool that some marketers work off of is creating your marketing budget off a % of your total gross profit. For example, if your company generated $100,000 in gross profit (EBITA) you typically will want to spend anywhere from 5-9% of this amount on marketing (for the year).
Let's get a more detailed look into creating a marketing budget. When it comes to creating our budget, we need to know our numbers.
A) What is your average profit per deal?
Now this is going to depend on the niche(s) that you work in. We need to know on average how much money we are going to make on each deal we move forward with. If you are a house flipper, you need to know that you are going to make $20,000 on average per deal. If you are a wholesaler, you need to know that for every deal, you make $5,000. If you are just starting off, study your market, make some phone calls and find out what your competition is making per deal.
B) Average # of leads before you close a deal?
So, how many leads does it take for you to generate before you actually do a deal? For every market & medium this may be different, but for the sake of this post, we want to know the average number of leads you need to produce before you close a deal. If you do not know how many leads it takes for you to produce a deal, it will be very difficult to produce an accurate marketing budget.
C) What is your conversion rate?
So how many mailers do we have to send out to get a lead? Are we sending out 1,000 mailers to get 100 leads, if that is the case we have a 10% conversion rate (would be a great mailer). For our inbound efforts, how many site visitors does it take to produce a lead. Do we need to get 15 site visitors to produce 1 lead (or 15 people to visit our site before 1 person fills out a form)
Let's go over a quick working example.
Let's say that we are house flippers and we average $25,000 per deal in our market. So if we close 1 deal, we are expected to make about $25,000 on that deal. Let's work backwards now. How many leads do we need to generate before we can close that 1 deal? In our example, it takes us 20 leads to do one deal.
So now we know that we need to generate 20 leads to make $25,000.