First wholesaling campaign on Oahu, HI : Thoughts and detailed analysis
Hello fellow wholesalers,
As a rental property owner, I decided to venture into the mystical world of wholesaling. I wanted to spend about $3500 initially, track my progress, and see what I would come up with. Will send out to ~800 folks x 4-6 mailings. I will update this thread every month or so for learning and tracking purposes.
I am sending handwritten, yellow letters, to in- and out-of state absentee owners in a single zip code. The ratio of in to out of state is about 8:1. This area has a mix of great rental condos which I am intimately familiar with and lots of SFHs, which I am not totally sure how many are rehabs vs. turn key condition.
After nearly through the first mailing, here are the results:
1.83% response rate (person called me). 0.17% positive response rate (seller wanted to sell). 2.8% Return to Seller.
Does that RTS seem high to you guys? I knew this would be challenging but concerned at the lack of motivated sellers. The market is definitely hot here and so are the number of realtors per capita (everyone and their mother is/knows one).
Given the above, I would love to learn from the more experienced folks, maybe some words of encouragement, or when it would be a good idea to go to a different town assuming the above continues. I am aware that the margins in Hawaii are likely to be better, but I was under the impression I would be able to make more offers and help someone out, but can't really do that if so far few are interested.
Hi Andrey. That response isn't too far off the mark. 2-4% is about normal but 1.83% is in the same neighborhood. If your budget allows, you may want to expend to a couple more zip codes. If not, then make sure your target zip code is around the median selling price or slightly lower -- don't go for the million dollar mansions.
Keep it up - the key to marketing is CONSISTENCY. Most people who fail fall off after the first round of mailers - you're already ahead of the game by knowing you'll mail multiple rounds.
Aloha Andrey,
I don't recall if you attended the last REI MasterMind meeting here in Honolulu, but we had a detailed discussion about this, with many of the investors weighing in on their marketing results. Feel free to bring this topic up again during the open forum segment at Tuesday's meeting.
Carpe Diem!
~Michael
Originally posted by @Michael Borger:
Hi Andrey. That response isn't too far off the mark. 2-4% is about normal but 1.83% is in the same neighborhood. If your budget allows, you may want to expend to a couple more zip codes. If not, then make sure your target zip code is around the median selling price or slightly lower -- don't go for the million dollar mansions.
Keep it up - the key to marketing is CONSISTENCY. Most people who fail fall off after the first round of mailers - you're already ahead of the game by knowing you'll mail multiple rounds.
Thanks Michael for the encouraging words. Is that a typical RTS rate, or seems abnormally high? I am trying to find out where/how the leads were obtained from my yellow letter source.
Originally posted by @Michael Mazzella:
Aloha Andrey,
I don't recall if you attended the last REI MasterMind meeting here in Honolulu, but we had a detailed discussion about this, with many of the investors weighing in on their marketing results. Feel free to bring this topic up again during the open forum segment at Tuesday's meeting.
Carpe Diem!
~Michael
Aloha Michael, I most certainly will. See you there!
@Andrey Y. That's actually not a bad rate. Of course, different lists will have different rates, but that's part of the direct mail game. I also find that sometimes the post office just screws up and you just need to resend. Pay attention to the yellow labels on the returns -- sometimes they'll actually show you a more current forwarding address for your target recipient.
Quick numbers after first mailing (800 in- and out-of-state over 6 weeks)
Response rate: 3.0%
Motivated sellers: I would say 1 total so far. Someone who needed to sell in 30 days or less for a 1031 exchange; didn't hear from him after first call. Another lady where I went out to the property and talked with her, I suspected she just wanted someone to chat with, I was right.
RTS: 4.0%
I have literally made about zero offers so far (there was little else besides "I want full MLS value"). This is what kills me.
I am myself just closing on a rental condo (off MLS) in the same town I am mailing to. If the rentals are good enough for me off the MLS, maybe its not the best place to find "motivated landlords". Although the mailing broadly hits higher equity owners of both SFHs and condos.
Does anybody have any suggestions moving forward? I'm all ears.
@Michael Borger I will definitely be doing multiple mailings as you recommended. @Nasar Elarabi Thanks guys!