We do some internet marketing that generates 35-50 seller leads a month in the Columbia, SC area. This is about 2 hours away from Charleston, SC. We have bought property up there, but about 95% of our portfolio is in Charleston.
Out of area deals (properties that are 2 or more hours away) bring an entire different dynamic to the table. Fortunately, we have done well on our out of area deals, but the last two were a pain. A 2 month renovation took 6. We had a local realtor’s help in valuing one of the properties and it turns out that he was a little on the optimistic side. Not good for us!
Soooo, I have a lead source that I know is valuable but don’t really want to buy any more properties that are a couple hours from home. Turns out that I have a friend in Columbia that also buys houses. I thought to myself, “How can I create a hands off cash flow and take myself out of the equation? Here is what we worked out.
My friend is responsible for all marketing expenses. It is completely up to him to make all decisions in reference to every deal. All that I am asking is $1,000 per deal paid at closing when it’s purchased. Based on my friend’s experience, he thinks one deal per month is quite conservative. And my friend is getting a great deal! The cost per lead/cost per deal is low comparative to a lot of our marketing efforts.
This is the first month with our new arrangement so we will see what happens. BUT, I am expecting at least $1,000 per month once he gets going. Not bad for a hands off no sweat off my back cash flow!