Resources

Facebook Advertising for Real Estate

We recently ran a small advertising campaign on Facebook for one of our listings. The objective of this campaign was to drive foot traffic to weekend open houses so we were very specific about our targeting criteria (location, age, interests, etc) and the results were somewhat interesting that I would like to share with our readers.

As many of you know, social media advertising landscaping is constantly changing. New platforms and technologies have made it easy for small businesses to run effective campaigns with small budgets and without needing much help. Advertising costs are typically impacted by competition, industry, audience and a long list of factors so it is important to analyze each campaign and understand results. It is also very easy to get frustrated with these type of campaigns given there are many industry terms (reach, viewers, etc). In the end, the only metric that I consider to be important is "Cost Per Desired Action". The desired action in our use case was for ad viewers to be redirected to our listing on Redfin. Many real estate agents agree that Redfin has become a favorite with many home buyers so we intentionally wanted to send traffic to Redfin to make it easy for people to schedule for the open house. 

Placement: 

We decided to budget $300 and run these ads every Thursday-Sunday for the weekend open house until the listing went under contract. Luckily, the listing was only on the market for 25 days so we spent less than $250 in Facebook ads but still produced a decent amount of data for analysis.  For a short time (3 days), we also experimented with ads on Instagram so I've combined these results together.  Following is our total ad spend by placement: 

Costs Per Placement

*Desktop was so small that it doesn't even show up on the chart.
  • Mobile News Feed: $207
  • Desktop News Feed: $0.11
  • Instagram Feed: $40

As you can see, 84% of our ad budget was spent on mobile feeds which is really not that surprising given how most people consume Facebook on their mobile devices these days. The Instagram campaign was only active for two weekends so these results are slightly skewed but I do expect Instagram to perform as good as Mobile if not better in future campaigns (more on that later below).  

Clicks:

Next, let's look at the number of clicks that we received from each placement: 

Website Clicks Per Placement

  • Mobile News Feed: 668
  • Desktop News Feed: 2
  • Instagram Feed: 46

Again, not surprisingly mobile dominated the number of clicks that we received but I wonder what our final results would've been had we ran the Instagram ads for the entire campaign. 

Costs Per Action:

Here is where things get interesting. Those two measly clicks that we received from desktop cost us about 5 cents in average each which is relatively cheap. Instagram on the other hand is super expensive in comparison. 

Average Cost Per Action

  • Mobile News Feed: $.31
  • Desktop News Feed: $0.055
  • Instagram Feed: $0.87

The median cost is a bit misleading given the way costs trend throughout the campaign but $1.15 for each Instagram click might not be the best use of of our budget.  My theory is that since Instagram advertising is new and there is a significant interest from advertisers to place ads in this platform, prices are going to stay high for a while until ad inventories level with demand.

As of now, Mobile seems to be the most affordable placement for us at $0.31 per click and we will probably only ran ads exclusively on mobile from now on and not bother with desktop since fewer users are accessing Facebook via desktop than ever before. 

A Word of Caution

Once again, these results are based on our advertising only. This is not meant to be a universal report on the state of Facebook advertising and results are going to be certainly different for each campaign.  The bottom line is that the landscape is constantly changing and you must study each campaign performance reports to determine the best possible placement for your ads. 

What results are you seeing? Is mobile becoming a preferred placement for you, too? Have you experimented with other social media platforms? 

25 of the Most Common Rehab Mistakes

On Thursday May 19th, we hosted a hard hat tour at our recent development project in Petworth. We were joined by 15 of our friends from the DC, MD & VA Real Estate Investing Meetup and had a chance to provide a detailed walk through of the project and share insight into our acquisition, financing, construction and design process of this row house project. We broadcasted portions of the tour live on our Facebook page so feel free to watch, share and comment!

One of the questions that repeatedly came up was around common mistakes that many developers and flippers make while attempting to acquire and redevelop residential properties.  We've certainly made some of these mistakes so we decided to compile a list of what we consider 25 of the most common home flip blunders.  This is obviously not a full list and might not apply in all cases but should serve as a good starting point. 

  1. Relying only on the information provided by the agent/wholeseller regarding the property without an independent verification. 
  2. Failure to check tax and lien records prior to acquisition.
  3. Not understanding property's zoning and its implications.
  4. Failure to obtain tenant rights and agreements prior to acquisition. 
  5. Relying on development estimates and after repair values (ARV) provided by the selling party.
  6. Failure to complete a thorough inspection and engineering report on the property. 
  7. Not getting bids from multiple general contractors.
  8. Insufficient budget for construction costs.
  9. Not having a contingency budget for unanticipated construction items.
  10. Underestimating overall project timeframes.
  11. Failure to understand permitting process, costs and timeframes. 
  12. Not working closely with an experienced architect and designer from the start to maximize property's potential and use. 
  13. Not having the general contractor and architect selected and in-sync with each other prior to acquisition. 
  14. Failure to agree on a SOW/contract with the general contractor.
  15. Not having a gap loan or reserved cash until the first construction draw is funded. 
  16. Making last minute changes to architect drawings without understanding implications. 
  17. Failure to display all the construction permits onsite. 
  18. Failure to make acquaintances with neighbors and the community.
  19. Not reviewing budgets on a weekly basis with the general contractor/project manager. 
  20. Failure to plan ahead with material purchases to keep costs low. 
  21. Not marketing in the neighborhood in the search of the next property/lead. 
  22. Failure to create a buzz with "Coming Soon" signs, flyers and events. 
  23. Not engaging with several active local agents to understand market conditions and ideal listing price. 
  24. Not staging the property.
  25. Low budget and unprofessional listing photos. 

 

 

Reading Resources for Beginner Real Estate Investor

There is no denying that when it comes to finance and investing; there are a lot of things to learn and real estate investing is no different. Thankfully; there are a ton of smart people in this industry and handful of online resources that are available to inspire and educate us. This is indeed one of the hot topics in most of the meetups and networking events so I figured I'll share few of the sites and blogs that I follow: Bigger Pockets -  This is absolutely one of my favorite websites to visit in general. Every beginner real estate investor regardless of their status and experience should have an account with BP and contribute to the community as much as possible. Biggerpockets is also a great place to meet other local Real Estate Professionals and network around.

Just Start Real Estate - My partner Jason recently put me to JSRE and since then I've been hooked. I particularly enjoy Mike's weekly podcasts and usually download them to my phone so I can listen while driving around or at the gym.

Struggling Investor - I've recently added Struggling Investor to my reading rotation and I've found it to be genuine and useful. The author of the site; Scott does a great job of detailing his investing and marketing strategy and I've already picked out a couple of new ideas from it.

A Student Of The Real Estate Game - I found this site a few months ago by doing a random Twitter search and I've been amazed by the amount of the information that is available there. Joe Stampone is a young real estate professional in NYC that now runs an investment trust with portfolio of $400M and covers everything from business to entrepreneurships and commercial real estate.

Fundrise Education -  If you are a geek just like me and want to know about all the new innovations and technology advancements in real estate; then this is a great blog to follow. Fundrise is truly one of the game changers when it comes to crowdfunding transactions and I always look forward to their posts.

Obviously there are a lot more resources available online than these five sites and I am always looking to add more quality reading materials to my list. Do you have any favorites worth checking out?