I am a firm believer in the power and effectiveness of direct mail as a source of motivated seller leads. Frankly, I’m not as convinced that the ROI is as strong for identifying cash buyers with direct mail compared to other methods, but for motivated sellers? It rocks.
As I set things in motion for my upcoming direct mail campaign this week, I thought to myself “Direct mail is awesome, but what would I do if I didn’t have $300-400 per month available to spend on this and only had $100 per month?”
While some of you may be saying “I don’t even have $100 to do this each month and in fact I haven’t done a deal yet!”, I’d challenge you to figure out a way to get it. Be creative. Eat out less. Get $1 DVDs from the kiosk instead of hitting up the movies a couple times a month. You get the idea. Then once you’ve done deals, don’t be too stingy with the marketing budget. You see that it works…increase it gradually if you have the funds to do so and watch your business grow!
Let’s get back to the matter at hand. First, its important to note that United States Postal Service postcard stamps will run you 28 cents a piece (or $28 per 100 postcards), and first class stamps for letters are now 44 cents or ($44 per 100 letters).
With that understanding, if I had a $100 monthly budget, I’d do the following:
- Decide that I will only spend money on seller leads and will do free marketing strategies for buyer leads until I have a property under contract to assign to an investor (then I might spend money on some bandit signs to place near the property). Note: If you’re looking for free strategies, check out BP blogger Steph Davis’ Three Easy Ways to Build a Wholesale Buyers List part 1 and part 2.
- Buy a lead list immediately — as many leads as I can get for my $100. I could focus on all kinds of leads (free and clear, foreclosure, absentee owners, probate/inherited homes, etc.), but obviously I would choose the best lead lists for my particular investing strategy. I would only choose one type of lead.
- Avoid postcards because they have a lower response rate which means a greater need for volume. With click2mail.com, I could send out about 240 black & white postcards on yellow stock with my $100. A generous 5% response rate (with a killer postcard) would only give me 12 or 13 calls. Sure, I might get a deal from that, but there are better options.
- Send out either yellow letters or typed letters with handwritten envelopes. I would do them myself at first rather than outsource the task if I was working towards my very first deal. This way I can save money to send out more letters. With $100, you can send out about 225 of them (less when additional supplies are needed) but your response rate can be upwards 25-30% for your same $100!
- Identify property scouts (aka bird dogs) who are entrepreneurial and willing to spend at least $25-50 a month on marketing for leads. I would reward them handsomely for leads they brought me that resulted in deals (this is a page out of Nick J.‘s book). Now I’ve just increased my marketing budget at no cost to me!
For those of you who have experience with direct mail, what would you do? Let’s provide plenty of helpful tips to those getting started with limited budgets!
Related posts:
- Integrated Marketing – Part II: Maintaining Leads & Drawing New Prospects
- Following Up On Leads: the Most Important 15 Minutes You’ll Ever Spend
- How to Generate Quality Real Estate Leads
- Holiday Season Debate? Should We Stop Marketing or Continue Marketing…
- Furnishing Your Home Office on a Shoestring Budget
Article Author: Shae BynesShae has written 51 articles for us.
Visit Shae's Website: http://www.goodfaithinvesting.com
Shae Bynes is a real estate investor in Sunny South Florida. On her blog, GoodFaithInvesting.com, she provides helpful tips and an inside look at her real estate investing adventures -- obstacles, failures, & successes!
Joshua Dorkin
{ 18 comments… read them below or add one }
Wow! I get mentioned in the BP blog! That’s awesome! All those bribes are starting to pay off
I could write a post showing you how to spend less than $100 a year on your marketing for sellers. Instead of going after sellers all by yourself, recruit 5-10 people to do it for you and your fishers net just got a lot bigger bringing in more ‘fish’. Great stuff though. I think if I ever had to go back to marketing myself, I’ll have to come back to posts like these to figure out how to do it.
Shae great article! Very “do-able” marketing ideas on the tightest budget. These days investors need all the edge the can get. Thanks for the ideas.
Hi Shae,
Very cool article. I honestly enjoyed reading it very much.
I have an interesting perspective because I am a Canadian Investor investing in Canada. I have a lot of peers that are trying to use many of the strategies that are talked about on BP, but to no avail yet. The Canadian real estate market is really different.
Regardless, I really enjoy posts like this because I get to read about what strategies are being used in the States. They are totally different from Canada.
Thanks for the article Shae.
Regards,
Neil.
.-= Neil Uttamsingh´s last blog ..The Secret to Relationship Success =-.
Thanks for the comments fellas!
Nick, I’d love for you to do a post on that….will look out for it!
Neil, thanks so much. I’ve really enjoyed witnessing the adventures of Julie & Dave following Ron LeGrand’s system in Canada. I’m not sure if you’re doing the yellow letters as well, but all I can say is that all are trailblazers — you’ll deal with all the hiccups but eventually it will pay off big time.
.-= Shae Bynes´s last blog ..Forgetting the basics =-.
Great write up Shae. I have yet to try direct mail out yet, but if I do in the future I will defiantly head back here for a reference. I enjoyed reading this post. Thank you!
.-= Chris Guthrie´s last undefined ..If you register your site for free at =-.
This is really an incredible post Shae. Thank you for lining out different things that can be done on a budget. I’m trying to put together my first yellow letter campaign and I wondered what the cost involved would be. Good luck with your direct mail campaign and let us know how it goes.
.-= J. Lamar Ferren´s last blog ..Matt Scott [Video] Reveals Why You Might Not Make It In Real Estate =-.
Thanks Chris and Lamar! Lamar, hope you get 30% responses on your yellow letters! By the way, I had mine outsourced using CheapYellowLetters.com. They don’t have minimum orders unlike many of the other companies. Of course you can also hire someone to create the letters and address envelopes, etc. for 50 cents or less per letter.
.-= Shae Bynes´s last blog ..No email, no fax, nothin’? =-.
Yes Shae, im very interested in adding the yellow letter to my marketing strategies this year. the for reaffirming that it does work:)
Hey Ron, definitely do it. I think you’ll find it to be worth your time and money for sure. The key to direct mail is CONSISTENCY. Don’t just mail out one month and be discouraged if you don’t get a deal…keep mailing.
.-= Shae Bynes´s last blog ..No email, no fax, nothin’? =-.
will do shae and thanks for the advice:)
I’m interested in starting some direct mail marketing but always had the mindset that I had to spend upwards of $1,000 a month to be effective. This blog made me realize I can start out slow with as little as $100 out of pocket, which will give me a head start on something that I thought I wouldn’t be able to do until a few months from now.
Great article Shae!
Hi Chris, YES you can absolutely get started now. No reason to wait. Sure, having $1K a month will get you a lot more phone calls, but start with where you are, stay consistent, and grow incrementally as you can. Wish you the best!
Thank you so much Shae!!! it is very awesome. This is a good way to keep your momentum with lower cost marketig too!!!
My pleasure, Nikki! Thanks for reading.
Awesome stuff, Thanks Shae!
@Nick you have a book? What, how could I not know about this and where do I get it?!
Happy to help, Amy!
Just thought I would mention … yellow letters we sent a year ago are STILL generating calls. And the best part is that the calls that come in now are people serious about selling their house. We went and looked at one two days ago. We couldn’t come to an agreement on price but I think that they will probably call us back in a couple of weeks because they have to sell by December 1st and the timeline could get tight for them pretty quickly… anyway … the yellow letters didn’t generate the same TYPE of motivated sellers that it does in the US but it works VERY well in Canada too. Shae – this post is awesome. I don’t remember reading it earlier this year so I’m glad you posted it in your newsletter last week.
I work in Canada Toronto and I’ve seen similar results. Has anyone tried using any of these lead generation companies? We have AgentLocator here but I wonder how good their leads are?
Thx.
J