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Developing Your Marketing VS Buying Leads

Published on Friday - October 07, 2011

As the owner of a new real estate investing business it can often be difficult to know where to start with marketing and lead generation.

There are a lot of marketing channels and advertising options for promoting your real estate investing company but is it smarter to just buy leads instead of building complex marketing systems?

There are clearly advantages to both. Buying leads offers instant real estate investing business, can definitely shorten your cash cycle and rocket your speed to market. However, of course there are many different types of real estate investing leads of various quality levels. You will find penny lists which can be mailed to or cold called. You can find many Internet lead options ranging from a few dollars to over $100 and can even choose to have appointments set for you. Buying real estate investing leads can be very attractive and profitable but you do need to carefully evaluate your closing ratios and plan for getting hit with the odd batch of bad leads. Also remember that the more you are willing to pay the more exclusive they should be and the higher your closing ratios should be.

On the other hand developing your own marketing and sales funnel for your real estate investing business will enable you to build your own following and can mean building a longer lasting business that can support itself. However you do need to make sure that you calculate the true cost per closed deal and constantly pursue the highest ROI. For example sending out direct mail might sound cheap at around $1 per piece but once you breakdown all the expenses and figure out how many closed deals you have the true cost may be as high as $300.

So which is the right way for your to go with your real estate investing business? Keep in mind that diversification is always wise.

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