Facebook Ads for Real Estate Agent and Lender Sponsors

Last week Tammy and I sat down and drew a very crude version of the following flow chart on my white board in my office. I'll probably end up teaching an entire class on this in the future.

ads-flowchart

With the intention of making 2017 even better than 2016, we determined that getting more people to our local real estate investor classes was the best goal we could focus on.

I sat down with a couple spreadsheets containing data from our local real estate investor classes and the transactions we did in 2016. I'll loop back to the ads above, but I'll share with you some of the data that made us decide to focus on some Facebook ads.

Background for Assumptions: My Investor Club Numbers for 2016

First, there were 257 unique people that joined our investor club in 2016 with a free membership by registering on the meetup website.

Second 153 of the people that joined in 2016 attended a class in 2016. That means that 153 people attended out of 257 that joined or about 59.53% of the people that joined actually attended a meeting.

Of the 153 new people that joined in 2016 and attended a meeting this year, between 10 and 13 bought at least one house with us. These are transactions that we would not have had without our investor club. Side note: some of these new members for 2016 did more than one transaction with us in 2016 so the numbers are even a little better.

Back to the main point of going over my investor club numbers with you: why did I say between 10 and 13 bought at least one house with us? Can't I just give you a straight answer. Turns out, not really.

When I did my numbers, I came up with 10 new 2016 investor club members that bought at least one house with us in 2016. However, when Tammy looked at our spreadsheet of transactions, she came up with 13. Why the discrepancy?

Turns out, Tammy and I have different opinions about people that would not have done a transaction with us if it was not for our investor club.

I did not include people that we had met outside the investor club but that joined our investor club and consequently did a transaction with us. Tammy included them.

For example, Tammy had a friend she knew outside the investing world. That friend brought her husband to an investor meeting in 2016 and he bought a home in 2016 after attending a number of investing classes. I did not count that person in my numbers because I felt that was really a personal referral. Tammy makes a strong argument that our client would not have bought a home with us if he did not join our club and attend classes so that should count. Hard to argue against that, but I have opted to use the more conservative 10 versus 13 that Tammy came up with.

Getting More People to Join Our Investor Club

After seeing our numbers for the year, I made an case to Tammy that we should focus on getting more people to join NCREIG, so that more people attend classes (good for a number of reasons), more people will become clients and ultimately buy more properties.

I determined that getting someone to join our email list to get more information about real estate investing is sort of like someone joining meetup to get more information (via classes) about real estate investing. One of my best friends makes a point that someone joining your mailing list to get information about real estate investing is probably not the same quality (I think he'd argue that it is lower quality) than someone signing up for our investor club on meetup. More on that in a bit.

So, my thought was to get more people to request information about real estate investing then follow up with them to get them to attend an investor class and let the class convert a percentage of them to buyer agency clients and a percentage of them to actual buyers that close on homes.

We know that for every 257 people that join our investor club, we do (at least… see discussion above) 10 transactions that year.

So, if I want to do 50 new transactions a year from our investor club, I need to add 5 times 257 to our investor club membership…. that's 1,285 new people joining our investor club. I made a leap of logic and said… let's get (at least) 1,285 people to join our mailing list by requesting information about real estate investing and then build a relationship by inviting them (each week) to our live, local investor classes. Let the classes do the work of converting a percentage of them to buyer agency clients and then a percentage of those to home buyers that close on homes where we are paid.

A side note on the 50 new transactions: these are IN ADDITION to the transactions I am already planning to get from repeat purchases from Nomads and other investors plus transactions from normal sphere of influence and referrals.

One could argue that my best friend is right and that getting someone to sign up on meetup to join the investor club (for free) is not the same as getting them to request information on investing in real estate or Nomad specifically (a special report, a checklist, access to a recording of the previous class, etc). So, should I get twice as many people to a mailing list to make up for the difference in quality? Should I get 10 times as many people to make up for the difference? I don't know… yet.

Let's look at some numbers, implement it, improve on it aggressively over time this year and see how we end up in 2017.

Acceptable Costs

What is an acceptable cost to grow our business in 2017 with this? That's been a topic of debate in our business for quite some time. 2016 was very, very light on advertising and marketing dollars spent to do the business we did. I'd be surprised if we spent more than $500 per month total.

But 2017 is different.

In 2017, we expect to do a certain amount of business without spending any money… I was having lunch with a good friend of mine who is also a local real estate agent and we discussed that if Tammy and I just kept doing the classes without doing any additional marketing or chasing any clients to get business we might do 20 transactions a year. I personally thought this was optimistic, but both my friend and Tammy made pretty strong cases that it would be true.

So, if we can generate 20 transactions without spending any money, would I be willing to invest 100% of the commission on the first transaction into acquiring a new client that is likely to do a number of transactions (maybe 9 or more) over the next decade with me? In other words, would I be willing to invest $8,000 to get $8,000 back in the first year and then $72,000 over the next 9 years from that client? I think the answer for me personally is yes.

So, I could argue that I'd be willing to pay up to the full commission I'd earn to get a Nomad client that buys a home.

Using our numbers above, we'd need 1,285 people to join NCREIG to do 50 transactions. This is the number assuming that the quality of someone requesting info about real estate investing is the same as someone joining our investment club. Which may not be true… more on that in a bit.

If it takes us 1,285 people to do 50 transactions, we'd need to have 25.7 or about 26 people respond to our ad and enter their email on our squeeze page and get on our mailing list. Of those, about 59.53% will attend a class. That means that of the 26 people that join our mailing list, I am estimating that about 16 of them will try a live investor class in person to see what we're all about.

And of the 16 that attend a class, about 2 will ask to work with us a their Buyer's Agent and of those about 1 will actually buy something in the first year.

Of course, as I mentioned above, there were some folks that did more than one transaction and there's the discrepancy between Tammy and I and how we think we should count people (she thinks we should count 13 and I think 10). With Tammy's numbers, that means we should do about 1.5 transactions for getting 16 people to class. With the actual multiple transactions added back in, it gets even closer to 2 transactions per 16 people.

However, getting back to my friends point that the quality of someone signing up for meetup is different than someone signing up to receive info on real estate investing. If we doubled the number, that means we'd need to get 2,570 people on our mailing list to get 50 transactions. That's 52 people for each transaction. If they turn out to be 10 times less valuable, than we need 260 people to do 1 transaction. I don't think that's likely.

So, we could use 26 people, 52 people or 260 people depending on whether you want to use real numbers (and assume that people on an email list are the same as meetup joins) or you want to say they're half as good or 1/10 as good. How much can we afford to pay then, to acquire a person on the list? I'll assume first that I'm willing to pay $8,000, a full commission, to acquire a client.

  • 26 people – $308 per person on my mailing list
  • 52 people – $154 per person on my mailing list
  • 260 people – $31 per person on my mailing list

So, this cost to get someone on my mailing list is a combination of two parts:

ads-flowchart-facebook-ads-and-squeeze-page

Here's a table showing a couple of possibilities for what my squeeze page must convert at to achieve my cost per opt-in with a given cost per click from my Facebook Ads:

squeeze-page-conversion-rates

As you can see above, if I can afford to pay $308 per opt-in and I am paying $2 per click, I can have a conversion rate on my squeeze page of .649% (less than 1%) to still hit my acceptable number.

On the other hand, if my friend is right and getting someone on my mailing list is NOT the same as getting them to sign up for Meetup and it costs me $2 per click on my ads, then I better be converting at 1.3% on my squeeze page if they're half as good or 6.452% if they're only 1 tenth as good.

Of course, the cheaper my clicks are to the squeeze page, the less good my squeeze page needs to be at converting. If it costs me only 40 cents per click (instead of $2), it is 5 times better… I can afford to only get a 1.29% conversion on my squeeze page even if the people signing up on my mailing list are 1/10 as valuable as someone signing up for meetup directly.

Practical Considerations: Cash Flowing Ad Spend

Here's a real practical consideration… if I spend $8,000 the first week of January, 2017 and I get the 26 people I need to do a deal, it may take 6 months to actually get the $8K back in commission. It could lead to me spending 50 times $8,000 or $400,000 and waiting to get it back. Not going to happen.

So, my plan here is to invest heavily up front and re-invest heavily as I get money back in.

Realize too, these numbers I have been discussion are maximums that I would be willing to spend. In an ideal world, I spend 50 cents a click, get a 5% to 10% squeeze page conversion rate and end up paying $5 and $10 per opt-in.

If that is the case, I'm out of pocket:

  • If I need 26 people to do a transaction – out of pocket between $130 and $260 (per transaction)
  • If I need 52 people to do a transaction – out of pocket between $260 and $520 (per transaction)
  • If I need 260 people to do a transaction – out of pocket between $1,300 and $2,600 (per transaction)

If that is the case, I'm probably willing to fund $10,000 per month knowing that (if it takes $2,600 per transaction), I am doing almost 4 per month. Squint really hard and 4 per month looks pretty close to 50 transactions per year.

Facebook Ads

ads-flowchart

We plan to run a number of different Facebook Ads advertising a specific report, recorded class, checklist, list of properties, strategy, free access to class, etc…to find local people in our market who raise their hand and request information on investing in real estate.

Here are some of the ads we plan to test:

Special Reports

I may choose to make the titles sexier for selling the special reports, but these are some triggers for me (and you).

  • How to use real estate to retire
  • How to find amazing deals
  • How to find properties you can buy with nothing down
  • How to find properties you can buy with little down
  • How to generate positive cash flow with rental properties
  • How to quit your job and live off your real estate investments
  • And I should add many, many more to this list over time…

As I test these, I will be creating the ads, testing them myself (and sharing the results of what my money produced) and preparing the special reports that I'm happy to share and allow sponsors to use.

Checklists

  • Tenant Screening
  • How to Avoid Vacancies
  • How to Find Amazing Deals
  • How to Buy Cash Flow Properties
  • How To Raise Money To Do Deals
  • And I should add many, many more to this list over time…

Investing Strategies

Only advertise the strategies you're OK with with clients on. For most of us, that will be Nomad, Nomad with Lease Option Exit, Multi-Units, Little Down, Nothing Down and Buy and Hold. Some folks might be willing to add in Fix and Flip.

  • Nomad
  • Nomad with Lease Option Exit
  • Fixer Uppers
  • Buy and Hold
  • Fix and Flip
  • Multi-Units
  • Creative Finance
  • Little Down
  • Nothing Down

Previously Recorded Class Videos

  • Each class that we have a video recording for, make an ad that tries to sell people trading their email to get access to the recording of the class.

Access To Free Live Class

  • Each upcoming new class that we're going to do, make an ad on Facebook (and Google AdWords) to get people to trade their email to get a free ticket to attend live. Remember, classes are usually free anyway so this is just another way to get people to attend live classes that I am teaching.

Not Just One Thing… Do All of Them That Work

Just because we find out that marketing “XYZ” special report works, that does NOT mean we should exclude doing other special reports that have numbers that are also acceptable to us. In fact, we should—for stability and scale reasons—do ALL marketing that works.

ads-flowchart

Facebook Ads and Google AdWords: Problems and Solutions

Once I create a number of Facebook Ads and Google AdWords ads and I am running them, a couple things can happen. Here are some of the likely challenges and possible solutions.

Problem: Not getting enough clicks on the ads

Possible solutions:

  • Improve call to action
  • Improve ad headline
  • Improve who I am displaying ad to
  • Improve offer
  • Change displayed URL
  • Change video or photo

Problem: Clicks too expensive:

Possible solutions:

  • Improve call to action
  • Improve ad headline
  • Improve who I am displaying ad to (narrow geography/demographics, expand geography/demographics)
  • Improve offer
  • Change displayed URL
  • Change from pay per click to pay per impression
  • Change video or photo

ads-flowchart

Squeeze Pages

We plan to run a number of squeeze pages (at least one for each different deliverable that we advertised above).

Squeeze Page: Problems and Solutions

Once I start getting traffic to my squeeze page here are some of the problems and possible solutions for fixing the problems…

Problem: Not getting people to sign up once they go to the squeeze page

Possible solutions:

  • Improve call to action
  • Improve squeeze page headline
  • Add testimonial(s)
  • Change button color
  • Change button text
  • Change URL of squeeze page
  • Change page design
  • Add/remove video
  • Use long form copy or short form copy for squeeze page
  • Sweeten the pot with additional content in offer

Drip Emails: Problems and Solutions

Once I start getting people on my email list and receiving my drip campaign, here are some possible problems and some possible solutions…

Problem: People unsubscribing early and often

A certain percentage of people opting out is normal and expected. But if it gets out of hand, here are some possible solutions:

  • Decrease frequency
  • Improve initial Facebook Ad, Google AdWords Ad and Squeeze Page to better deliver on those promises with my email series
  • Add more content to email instead of linking to content
  • Change subjects
  • Change URL used in emails
  • Change email provider to improve deliverability
  • Change email design (more visually appealing or more text based)
  • Remove upsell after initial squeeze page

Broadcast Emails

ads-flowchart

I will be sending the following broadcast emails to real estate investors on my mailing list:

  • Monday/Tuesday: Invitation to free, in-person live investor class that week with the topic and benefits of what they'll get out of it. I do two live classes a week (the class I teach for you on Thursday is my Tuesday class). I also offset the schedule by six months and teach again on Wednesday.
  • Wednesday: Email letting them know the recording of the live class from last night (Tuesday's class) is available for clients to watch.
  • Thursday: Email letting them know the recording of the live class from last night (Wednesday's class) is available for clients to watch.

Sponsors' emails might look like this:

  • Before Thursday: Invitation to free, in-person live investor class that week (Thursday night's class that I will teach for you) with the topic and benefits of what they'll get out of it.
  • Friday: Email letting them know the recording of the live class from last night (Thursday's class) is available for clients to watch.

Broadcast Emails: Problems and Solutions

Problem: People unsubscribing early and often

A certain percentage of people opting out is normal and expected. But if it gets out of hand, here are some possible solutions:

  • Decrease frequency
  • Improve initial Facebook Ad, Google AdWords Ad and Squeeze Page to better deliver on those promises with my email series
  • Add more content to email instead of linking to content
  • Change subjects
  • Change URL used in emails
  • Change email provider to improve deliverability
  • Change email design (more visually appealing or more text based)

Improvements Over Time

I'll be improving on this page over time.

  • I'll probably end up teaching a class or several on various aspects of it.
  • Class on Facebook Ads (how to do them, what they say, audience selection, etc)
  • Class on Squeeze Pages (how to do them, what they say, services, etc)
  • Class on various lead magnets (bribes to get people to join lists)
  • Class on email broadcasts to opt-ins
  • Class on math of all of this
  • Post up actual ads and results

  1. REAL ESTATE BROKER: Setup Lease-Option Search Page on JamesOrr.com
    If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease Option, then setup your search page on JamesOrr.com.

    Talk to James to have him show you this and get it set up for you.

    Mark this task complete when it is setup or if you decide you're not doing this.

    Analyzing DealsASAPFirst Meeting: Analyze DealLease-OptionMarketingOptionalTenant-BuyersUltimate Nomad ChecklistWeek 2

  2. Customize your Lease-Option Search Page on JamesOrr.com
    If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease Option, then after James sets up your search page on JamesOrr.com you will want to customize with your specific investing criteria.

    Mark this task complete when you've customized your Lease Option Search Page on JamesOrr.com.

    Analyzing DealsASAPFirst Meeting: Analyze DealLease-OptionMarketingOptionalTenant-BuyersUltimate Nomad ChecklistWeek 2

  3. Setup custom domain name for your Lease-Option Search Page on JamesOrr.com
    If you're going to allow your Tenant-Buyer to select any property from the MLS where you'd buy it and then offer it to them on a Lease-Option, then after James sets up your search page on JamesOrr.com you may want to purchase and setup a custom domain name for it.

    The custom domain name will allow you to use that domain name on your marketing and have it URL frame the page James set up for you.

    Ask James and he can usually get you a domain name and set it up for you for about $10 per year.

    Mark this task complete when you've purchased a custom domain and had it set up for your Lease-Option Search Page on JamesOrr.com.

    Analyzing DealsASAPFirst Meeting: Analyze DealLease-OptionMarketingOptionalTenant-BuyersUltimate Nomad ChecklistWeek 2

  4. Partnership Optional: Create Partnership Explanation Video
    Consider creating a Partnership Explanation Video for possible partners to watch to see if they'd be interested in being part of the Partnership.

    Mark complete if you decide not to make the video or once you've made the video.

    MarketingPartnershipsPartnerships - SetupUltimate Nomad ChecklistWeek 3

  5. Determine your Photographer
    You will want a Photographer to take professional photos of the property while it is vacant before you move in if this is a Nomad property or before a tenant moves in if this is a partnership purchase or a non-owner-occupant purchase.

    We recommend that you have photos taken right after you close before you move in in almost all cases. You will use these photos when you're marketing the property to rent.

    Ask your Real Estate Broker for a recommendation.

    Mark this task as complete once you've decided which Photographer you will use to take photographs of the property after you close.

    Dream TeamDream Team - Post-ClosingDream Team - Pre-ClosingMarketingUltimate Nomad ChecklistWeek 12Week 64

  6. Review Fair Housing Act
    Review Fair Housing Act before writing your ad to make sure you do not violate any laws.

    https://www.hud.gov/sites/documents/DOC_11870.PDF

    Be sure to check for any updates or modifications to this act.

    Advertise Property for RentMarketingPrepare to be a LandlordTenant ScreeningUltimate Nomad ChecklistWeek 43

  7. Review "Tenant Buyer Sales and Marketing" Recording of Live Class
    If you have not recently watched the recording of the live presentation of "Tenant Buyer Sales and Marketing" you should review it:

    https://RealEstateFinancialPlanner.com/tenant-buyer-sales-and-marketing/

    Advertise Property for RentLease-OptionMarketingTenant-BuyersUltimate Nomad ChecklistWeek 43

  8. Place directional signs to property
    Place up directional signs to direct people toward the property you have for rent or on a rent to own.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 56

  9. Place "For Rent" (or "Rent To Own") sign in yard
    Place your "For Rent" (or "Rent To Own") sign in the yard.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 56

  10. Write Property Ad
    Write ad for Tenant and/or Tenant-Buyer using photos you took from when it was vacant.

    Include date available, monthly rent, number of bedrooms and bathrooms, property features, info on the kitchen appliances, whether there is a washer & dryer in the unit, just the hookups, or none of the above, parking details, etc. Be sure to highlight attractive aspects of the property such as easy access to major roadways or pool access.

    Review the ad to make sure you are not discriminating and are in compliance with the Fair Housing Act.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 55

  11. Be prepared to answer your phone
    Once you start marketing, be prepared to answer your phone.

    As you market, prospective Tenants and Tenant-Buyers will expect to be able to reach you.

    If they can't reach you that sets the wrong tone for the start of the relationship. You come across as an unresponsive landlord.

    If you do miss a call, call them back as soon as possible. If prospective Tenants and Tenant-Buyers email or text you, reply quickly.

    Answer prospective Tenants and Tenant-Buyers questions. It is normal for them to ask questions that are already addressed in the ad. I believe most people don't actually read stuff (including your ad) and they're looking at a number of different properties.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 55

  12. Post "For Rent" (or "Rent To Own") ad on Zillow
    Post your "For Rent" or (or "Rent To Own") ad on Zillow.

    Mark this task complete when you've posted the ad.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 56Week 57Week 58Week 59Week 60

  13. Post "For Rent" (or "Rent To Own") ads on CraigsList
    Post your "For Rent" (or "Rent To Own") ads for the property on CraigsList.

    Mark this task complete when you've posted your ad.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 56Week 57Week 58Week 59Week 60

  14. Post "For Rent" (or "Rent To Own") ads on local rental websites
    Post your "For Rent" (or "Rent To Own") ad on other local rental websites.

    For example, in Northern Colorado you may also want to post an ad to NorthernColoradoRentals.com as well.

    Mark this task as complete when you've posted ads to these other websites.

    Advertise Property for RentMarketingUltimate Nomad ChecklistWeek 56Week 57Week 58Week 59Week 60

  15. Review "Tenant Buyer Sales and Marketing" Recording of Live Class
    If you have not recently watched the recording of the live presentation of "Tenant Buyer Sales and Marketing" you should review it:

    https://RealEstateFinancialPlanner.com/tenant-buyer-sales-and-marketing/

    Lease-OptionMarketingTake Calls from TenantsTenant-BuyersUltimate Nomad ChecklistWeek 43

  16. Class Watch "Tenant Buyer Sales and Marketing" Recording of Live Class
    Watch the recording of the live presentation of "Tenant Buyer Sales and Marketing" available on:

    https://RealEstateFinancialPlanner.com/tenant-buyer-sales-and-marketing/

    ClassesLease-OptionMarketingTenant-BuyersUltimate Nomad ChecklistWeek 43

  17. Sponsor Read "Facebook Ads for Real Estate Agent and Lender Sponsors"
  18. Sponsor Read "100 Ways to Get a Nomad Client in the Next 12 Months"
  19. Sponsor Read "Lease Option Ad for Property Listed in MLS for Clients"
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