3 Logical Ways to Re-Invest Your Profits

Scott CostelloAll, Blog, Featured 8 Comments

One of the reasons why my wife doesn’t mind to much my real estate investing is I try to spend as little of “Our” money as possible.  I will admit it does make it tough.  For sure we would have more deals if I could send out more letters, but that just isn’t going to happen.

That is why it is very important to reinvest as much of your profits as possible back into your business.  Not only that but you need to be smart about where the money goes.

For me there are three logical ways to invest my real estate investing profits…Sending out more letters, outsourcing and education.  I chose to put my profits from our last deal into one of these areas because I thought it best fit my long term goals.



Send out more Direct Mail letters

My first thought was to put the entire profit towards sending out more letters.  It’s a great option and will most likely yield results right away.  Putting an extra $3,000 into our direct mail budget would increase our marketing budget by over 50%.  As well as reaching more leads, the extra money would also let us send additional mailings to each lead.

Breaking down the numbers…

@ roughly 50 cents per mail piece, we would be able to send out 6000 more letters.

We get roughly, a 5% response rate to our probate list.  That equals about 300 more calls.

Of those 300 calls, we’d probably get about 60 leads that were motivated.  That’s 20% of the calls (good or bad, I don’t know)

Of those 60 leads of various motivations, one of them will probably turn into a deal.

That is what our history is telling me.  Those numbers are surely worse then the average investor and something we have to figure out or wholesaling is not going to work.

The problem with putting money into direct mail is that it’s a one time only affair.  Once the money is spent, and the direct mail has been sent out I have to get a deal from those letters or the money was wasted.  I don’t like that idea right now for us.  It is sort of like going all in on a hand of poker when you only have 2 pair.


Outsourcing Your Tedious Investing Tasks

The idea with spending money on Virtual Assistants or hiring someone local to do some work is my ultimate goal.  Doing this would free up my time and allow me to concentrate on running my business instead of working in it like I have been.

The question that comes to my mind, and maybe someone has an opinion on this is…is it worth it when you have a hard cap on funds. $3,000 is not a lot of money and will go quickly if I hire a virtual assistant, or hire out the direct mail.  Probably no more then 4 to 5 months.  Again I am going all in and hoping to get a deal before the money runs out.

What I decided to do was put that money towards my website.  The great thing about building your presence online is that everything you do to improve your website builds upon all the other things you’ve done.  For instance…

  • Get content created for your website, that content is always there to be found by motivated sellers.
  • Pay someone to improve the SEO on your website and building of backlinks from other sites results in your site showing higher in search results.  Each backlink gives your site more power.
  • Each and every page/post on your site focuses on a new keyword.  Over time you will have a giant web of pages that attract motivated sellers searching for a wide range of ways to sell their house fast.

Specifically I am putting my profits towards my websites SEO and creating great, keyword focused, content.  Unlike direct mail, my optimized website will always be out there, passively generating leads.  The great thing is that as the site grows and rises in the search results I will be getting more and more leads.  I get 6 to 10 a month now, but by this time next year I should be getting upwards of 30 leads per month.

I found the person I’m  using for SEO on biggerpockets.com through my friend Jerry Puckett.  Before I go out and recommend this person I want to see the entire process through for about 6 months.  I really like what he has done so far.  In the mean time if you are looking for a virtual assistance to help out your business you can find some at the below resources…

Virtual Staff Finder – This is a great place to go for a full time VA.  Someone who will only work for you.  It costs a bit more but from what I hear the quality of the VA’s are top notch.  The company was founded by Chris Ducker who I’ve heard on a few podcasts and he sounds legit.  You can read more about him on his blog, ChrisDucker.com.

Elance and Odesk are great places to go to find someone for a specific project.  Say you want to have a website built or find someone who can clean your lists for you.    The idea is you use part time VAs for tasks that are easy to do but just take up your time.  Some other ideas of what to use a part time VA are…

  • Putting together flyers for selling a house you have under contract
  • Building lead lists from tax records or some online resource (some probate offices put the files online)
  • Put together statistics about an area you want to invest in ( Rentals vs Owner Occupants)
  • Create lists of cash buyers in certain areas
  • Get you a list of all the Realtors In an area
  • Create a list of all the small banks in your area
  • Organize your leads or enter all your leads into a new management system you have
  • design a logo or letter head

Many Virtual Assistants will do things for very cheap compared to what you could find here in the US.

Yellow Letters – From everything I hear on bigger pockets is that this company does a great job on it’s yellow letter marketing.  They are a full service company, meaning they will do everything for you.  Prices vary and are definitely more expensive then doing letters yourself.  The plus side is, for people like me with little to no time, it might just be worth it.  One of my plans for next year is to test this company out.   The owner, Michael Quarles is a very active member of Bigger Pockets which I like a lot because I know where to find him.


Spend Money on Education

Another great way to re-invest your money is to spend it on yourself.  Now I’m not talking about buying yourself a new toy…I am talking about education!  I like to pick out one thing I would like to learn each year that will help my business.  Keeping it to one thing helps me maintain my focus on my current items while adding one new tool to my belt.

Here are some things I’ve spent money on in the past years that have help me gain knowledge and advance my business…

  • Bought marketing books to help me refine my marketing material
  • Bought Ron Mead’s Probate course
  • I’ve gotten my real estate license
  • Hired a coach to help me through some of my early deals

I would spend much more on education, but I’ve found that I’m a big sucker for the “Shiny Object”.  So what I have found works best for me is to keep the learning to one new thing per year.

Scott Costello
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Comments 8

  1. Nice post! I recently hired a VA to do a lot of my mundane tasks, but I haven’t been feeling real great on how much work he’s been doing. I feel like he might be working for other people as well, but billing me for full time. Ugh! And thanks for the BP Shout out! You know we love that!

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      I’ve heard that has been an issue with other people using VAs. Some firms have software that does screen captures of the VA’s computers when they “Punch In” which is suppose to help you monitor when they are actually working. I don’t know how well that works though…it would be good to hear from someone with experience.

      I’d much rather pay someone a lump sum for the job rather then an hourly rate. That would avoid your situation. How did you find your VA?

    2. Brandon – You may not be giving him enough tasks to stay busy. Also, you may want to check out VA staffing services that are credible and can be vouched for. As we discussed, a lot of the big time internet marketers love to use Chris Ducker’s VA staffing services.

      Excellent article, Scott. Thanks!

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        Thanks for the comment Ian!

        When I’m ready for a serious VA I’m definitely going to give Chris Ducker’s staffing service a try. It might be more expensive but well worth it in my opinion.

  2. Scott,

    I think SEO is a great investment for you. Nothing beats the passive leads generated by your web-site.

    I love waking up in the morning to a new lead that a seller filled out on my web-site at 3 in the morning!!!

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  3. Yes, yes, yes on the education. The market and ways to market yourself are always changing with new trends emerging. So important to stay on top of this!

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      So very true Jessica. There two types of education in my book, the kind that keeps you up to date with the market that you are playing in. Then there is education regarding new strategies, marketing ideas and such things.

      One is necessary the other is “new shiny object”. 🙂

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