We came into the pursuit of the real estate investing dream with very little money, but lots of big ideas and tons of head knowledge.
At the core, we’re marketers, and have always been drawn to learning principles of direct response advertising, internet marketing, social media, and anything that can be tracked, measured, and optimized for increasingly higher performance.
We believe that, whether you’re partaking in real estate investing or as a real estate agent, your primary role is that of a MARKETER. Even more than that, in this day and age, a MEDIA company (more on that in other posts).
So, rather than spending our time right out of the gate trying to raise private capital from individual investors, or acquiring hard money loans, we found a way to access more than $100,000 to invest in things the aforementioned funding sources wouldn’t event allow.
Besides, we had virtually zero verifiable income, which is something even an aggressive hard money lender needs to see (it’s only fair to prove you actually have the ability to make monthly payments on their loan before you realize your profit after flipping the property).
Then we found out about a way to get a bunch of unsecured credit on a stated income basis (removing the need to verify income).
Remember how I mentioned “optimization” when talking about direct response marketing? There really is not higher form of leverage and potential ROI than smart marketing, applied to a business you own and operate. Where else could you literally get a 10x, 20x, or even 100x return on your investment?
As awesome as flipping houses is, you’d be hard pressed to get that kind of ROI from an individual deal (unless you use other people’s money (OPM), thereby giving you a potentially infinite ROI).
Let’s say your average net profit (after expenses but before income taxes) per flip is $30,000.
If you figure out a way, through trying, testing, and tweaking marketing and advertising campaigns, to get one of those deals for every $1,000 you invest in __________ (direct mail, Facebook ads, Google AdWords, etc.), you have just created a 30x, or 3,000% ROI.
Now, your ROI on the deal, itself, will probably be lower. Let’s say you fronted $10,000 for a hard money down payment, earnest money, etc. Your ROI on the deal, itself, is about 3x, or 300%. Still awesome, but the marketing, itself, provided the astronomical ROI.
Actually, this should be incredible news for wholesalers! What is a real estate wholesaler’s job, other than to be a great marketer and negotiator, and find and secure deals for other investors to do the fixing and flipping? A wholesaler can benefit from the massive potential ROI on the marketing side, and not even have to take on the risk of rehabbing and reselling. Now that is leverage!
There is much to be said about classic direct response strategies and principles, as well as the use of modern media to deliver certain messages to certain target markets/customers. In a future article, we’ll talk about direct response marketing legend, Dan Kennedy’s 3-part checklist for every campaign:
- Your Market (who)
- Your Message/Offer (what/why)
- Your Medium (where/how)
Ok, back to OUR story…
The bottom line is we decided it would be a much better way to launch our business(es) by investing in high-ROI marketing activities, as well as providing capital for us to leave our jobs (go ALL-IN) and create opportunities and leads before figuring out how to best handle them.
Resources suddenly become available once you create opportunities. Funny how that works.
So, we pursued funding from a program called Funding For Flipping, which collaborates with several different banks and lenders to get clients approved for a handful of credit lines, which can all be converted to cash, and used for anything.
Within about 21 days from our initial phone consultation, we had a good portion of the $120,000 in cash in our bank account. The rest was sitting on credit lines, ready to be used later.
So, here’s the deal. We don’t want this to be a sale pitch, but we do want to make this resource available to you if you want it. It could be really beneficial to you.
Yes, we do make a small referral fee if you go through the program, but it’s only because we know it works, and can endorse the program, first hand.
Is the program perfect? of course not. It’s cheaper than hard money, but it’s more expensive than getting a loan at your bank, assuming your credit and financials are excellent. But it’s more about access and flexibility. No one is going to ask you what you’re planning to do with the money. No one is going to make you submit a bunch of financials or references.
Anyway, if this is something you’d like to explore, we recommend you just request information from them, directly.
Go to FundingForFlipping.com, enter your email address, and you’ll get sent a bunch of information about how the program works. Whenever you’re ready, you’ll have the opportunity to request a no-obligation phone consultation and get pre-approved. That’s the best place to ask detailed questions about your situation, the program, and any concerns you may have.
We are not consultants for Funding For Flipping, so we’d ask you not to direct your questions to us. We have our own businesses to run, but are happy to share our testimonial and point you in the right direction. For what it’s worth, they are an Accredited and A-Rated company with the Better Business Bureau.
Here’s to your success in being properly funded to take advantage of new opportunities… optimization… and profitability!