BiggerPockets

Originally posted by Rudy Centeno

I read on a post that 99% of FSBO's are a waste of time to find a wholesale deal. What should I be concentrating on.

I hate to throw a generic statement but it depends on your area. For example, in my area at the moment I'm not mailing to a list (which can be VERY effective if you buy the right list) I'm driving around and finding vacant, boarded up distressed properties. To find those types of properties you may have to drive an hour or more out of your area as lots of parts of the country don't have neighborhoods with boarded up houses everywhere. I'll spend a couple hours a day and write down addresses as I go, then when I get back home I go on the county site and figure out who the owner is, when they bought and the details of the house.

With that info I'll figure out comps and pick the absolute best deal and send them a letter. I'll send letters to the other ones too, but I send a different letter. Everyone goes about things differently and you will to once you find what works for you. In the last 2 weeks I sent out 4 letters, not 400 but 4. Of those 4, i've already received phone calls from 2 owners. Of those 2 I will get one deal which I'm VERY happy with.

Another option is to buy a list (list source dot com or other sites have them). With that list you can send them a letter or postcard and try to find a deal. The key is to hone in to a list of sellers that NEED to sell. Out of state owners with boarded up properties NEED to sell in most cases while out of state owners with average homes that are vacant may not NEED to sell, but may call anyway to see if your deal is worth their time. By sticking with distressed properties I find that the level of motivation is much more real and the sellers NEED to sell asap.

Sorry for the long answer to your short questions, hope that helps.

Jeff

Rudy-

Its probably not that far off, but that doesn't mean you should avoid them. FSBO are a great way to do creative deals, like sub2, lease-options, owner financing. Present them with multiple offers and you'll have a better success rate.

Originally posted by Justin Schnettler

Rudy-

Its probably not that far off, but that doesn't mean you should avoid them. FSBO are a great way to do creative deals, like sub2, lease-options, owner financing. Present them with multiple offers and you'll have a better success rate.

That's a great point. They may not be good deals for a typical wholesale but they can be good deals with other techniques.

Jeff

Originally posted by Joshua Dorkin

Great illustration, Jeff! Thanks for sharing. I'm sure others will find the letter useful. It is a nice approach.

Thanks Josh, I'm happy to help.

Jeff

I got a call like that the other day for the postcard I send out. I plan to reword it. She thought I was invading her privacy because my post card mentions foreclosure and now the postman knows she's in foreclosure. She didn't care it was public record already. She took offense to it.

Originally posted by nationwidepi

I have seen similar letters in the past and remember someone's comment about it.
Basically they stated that the letter called the homeowners home a "fixer" and implied it was in run down shape. While that may be so, it may not be the opinion of the homewoner and therefore they could take offense.
Now, that said, I have no idea what percentage of homeowners who would take offense to that, but I thought it was noteworthy. What do you all think?

Will,

I agree that some people will take offense to it. I think the reason it is working for me is because these are homes that I have seen and verified that they are in really bad shape. I don't think this letter would work well if sent to a list of homes that you have not seen. The homes that I'm marketing to right now are eyesores to say the least.

That said, some people may still take offense to it so choose your words carefully. I have a deal in the works with a lady that is out of state and has not seen the home in a few years. She knew it was bad, just not sure how bad. They had tenants that did not pay rent for 9 months and thrashed the place. Fortunately she did not take offense to it and just wants to sell.

Jeff

1-2% is a pretty standard response rate for any type of mass mailing and those rules hold pretty firm if you call or go door knocking - although I have seen a higher rate of return on the door knocking - assuming you present yourself well!.

3-4% is pretty rare and not really sustainable.

So assuming a 1% return isn't the waste of time that you might think it is - what can be a waste of time is:

- dealing with homeonwers who are not really motiveated to sell
- homeowners who are talking to 100 of yoru competitors
- homeowerns who lie to you (tell you there isn't a second but you find one - what else are they lying about?)
- homeowners that are getting divorced and they care more about hurting each other then working out a deal
- tracking down an absent homeowner (meaning spending hours and hours and hours on this)
- lonely people who just want to talk

And on and on and on - lots of time wasters in this biz but 1% isn't.

Use the letters that Jeff posted - make your own - use a combination - and test test test - see what pulls better for your area. Send out 4 different letters and see which one gets the best response rate.

Post cards are a double edged sword - I have had many complain to me about their privacy - but they are the cheapest - so it is give and take.

Thank you all for your replies.

Originally posted by Scott M.

1-2% is a pretty standard response rate for any type of mass mailing and those rules hold pretty firm if you call or go door knocking - although I have seen a higher rate of return on the door knocking - assuming you present yourself well!.

3-4% is pretty rare and not really sustainable.

So assuming a 1% return isn't the waste of time that you might think it is - what can be a waste of time is:

- dealing with homeonwers who are not really motiveated to sell
- homeowners who are talking to 100 of yoru competitors
- homeowerns who lie to you (tell you there isn't a second but you find one - what else are they lying about?)
- homeowners that are getting divorced and they care more about hurting each other then working out a deal
- tracking down an absent homeowner (meaning spending hours and hours and hours on this)
- lonely people who just want to talk

And on and on and on - lots of time wasters in this biz but 1% isn't.

Use the letters that Jeff posted - make your own - use a combination - and test test test - see what pulls better for your area. Send out 4 different letters and see which one gets the best response rate.

Post cards are a double edged sword - I have had many complain to me about their privacy - but they are the cheapest - so it is give and take.

One more thing I want to point out is that Scott's success rate above is accurate and seems to be a pretty typical response rate.

The numbers I posted are real (4 letters sent, 2 replies) but not likely to continue. I feel that my success rate with these letters is not a matter of luck but a matter of how I came about the homes in which the letters we're sent. They we're all sent to homes that have been vacant for a long time (one of them has been vacant and boarded up for at least 3 years, another one more then 5) and 2 of them had owners out of state (my favorite).

I think my letter, if used properly could give other people success as well but it is by no means the only letter you should be sending. Even with the success I've had with it, I still continue to try other methods to find something that works better.

Jeff