If you’ve been involved in real estate investing for any reasonable amount of time, you probably have heard about the yellow letter marketing technique.
The Yellow Letter Explained
Here’s a standard yellow letter.
It’s been used for years and is a highly regarded marketing technique by many because of the high open and response rates you’ll receive on your mail pieces. When it comes to direct mail, the first key (other than knowing WHO to send the mail to) is to ensure that your marketing piece is actually seen rather than tossed in the garbage without even a look. The yellow letters are effective at eliciting a response from homeowners for a variety of reasons:
- The addresses on the envelopes are handwritten
- There’s a first class postage stamp — doesn’t look like junk mail
- The letter itself is handwritten (or at least appears to be even when done via computer)
- The letter is simple (it only indicates that you’re interesting in buying the home and provides a number for you to be reached)
I’ve mailed out quite a few yellow letters since the beginning of this year — not thousands, but certainly hundreds. However, despite the solid response rates and the fact that many investors swear by these letters, my husband and I have decided to stop pursuing this marketing method, at least for now.
With great response rates, why in the world would we want to stop sending these letters out?
The yellow letter elicit responses for sure, but the majority of responses in my experience have been merely curious (tire kickers/time wasters), suspicious (“Why did you send me this letter? Are you stalking me or something?”) , or angry (“Leave me the #$*! alone and stop sending me your &^%#!@ letters!”).
Maybe it’s not fair to judge this method from hundreds rather than thousands of letters.
Maybe if we just persist, we’ll find that we get enough great deals to make it worthwhile to waste time defending ourselves with potential sellers.
Or perhaps this marketing technique is better used with certain lead sources vs. others.
My opinion (for whatever its worth) is that if an investor is going to use the yellow letter marketing technique, he or she should at least consider the following:
- Pay an individual (or company) to handle the initial screening on all of the seller calls that come through to avoid the headaches and the wasted time
- Consider edits to the standard yellow letter that will provide some level of comfort to the seller. For example, making it clear you’re an investor…or saying that you’re looking for properties in their neighborhood and would like to make an offer IF they are interested in selling). The idea is to keep it short and simple, but the wording can be certainly be changed from the standard letters (for example, see this post for a yellow letter that investor and blogger Matthew Smith uses with pre-foreclosure leads).
Of course you can also just go with the standard letter as is since its apparently a proven method for many. Just be prepared for the responses you’ll get.
In the meantime, we’ve chosen to move forward with professional letters (that indicate that we are investors) with handwritten envelopes and first class stamps (which should give us the high open rate). We’ll have to see how it works out. Based on the responses over the next few months, we may revisit the yellow letter marketing, but if we do, it will definitely be with a different message.
For those who have or are currently using yellow letter marketing, I would absolutely love to hear your thoughts and comments below. What’s working for you? Are your experiences similar or quite different?
Image: YellowLettersComplete
Related posts:
- You Gotta Have a Big “Pair” to Use This Type of Direct Mail Letter
- Real Estate Mail Marketing: Pull the Right Strings
- Why I Want You To Stop Marketing Now
- Real Estate Marketing Espionage – Part 2
- What The Yellow Pages Can Tell You About The Economy
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
{ 13 comments… read them below or add one }
Hi Shae, great suggestion to add in “Hey, im an investor too!” or something like that. I also think the letter you send should tells the company size you are aiming to project. A hand written letter tends to covey a mom and pop operation, where as a typed note on letterhead may show a more professional attitude. Goood post. – John
Thanks J-Fed! I agree with your comments too….and while there’s nothing wrong with a mom and pops operation, I’d just prefer a more professional (upfront) approach. I hope some others weigh in on this!
Nice article, Shae – love the visual!
For me, I’m more of a “mom and pop” type gal. I’ve always hated the word “investor” – I just feel it has a bad connotation to the general public.
Back when I was wholesaling, I’d do another “ghetto” type note – handwritten on a small piece of paper (you know, the ones from those pads you get for free left at your doorstep from real estate agents, insurance companies, other businesses, etc. Pretty ghetto, eh?)
Though, I added I talked to their neighbor so and so and they told me it’d be best to write them (if I couldn’t find a phone number). I usually would talk to the neighbors when out in the field. It was a pain to write each letter, though I didn’t do a lot (not in bulk). I just targeted vacants – I got a really good response from them.
For me, I tend to be more personal in my approach whether it be writing a note, on the phone, etc. Some disagree and think it can be time consuming. Though, I just do what works for me.
I think everyone has a different style of doing things – there’s not one right way. What works for me may not work for someone else. And, vice versa. I guess it’s all a matter of personality and comfort level for each individual.
Looking forward to hearing more about your new letter campaign, thanks for sharing!
Hey Rachel, thanks for the comments! I actually like the “mom and pop” style of interaction with people. I really do spend time talking to sellers and building rapport. We don’t work to give off a big company vibe (not to be confused with “professional”). My struggle is with the initial communication…what I’m going to attempt is to have a personable letter (not a strictly business one) that makes it clear that I’m an investor (which you can do without using the word investor)…I don’t know if I’m making any sense although I know what I’m attempting to say
I’ll just have to blog about the letter that I am sending out. LOL!
Thanks again for sharing. I always look forward to your replies!
I’ve been going with a more professional letter as I’m not sure how probate leads would take a quick note like your example. But heck, you never know unless you try right?
Exactly…you never know unless you try. It’s all about testing and seeing what works and feels right for you. I tend to believe that the letter used in the sample works better on some lead sources vs. others….but I haven’t done enough types of lead sources to know. Anyway, we just keep plugging! I really wanted to do this post because I want to know what others have experienced.
Great article Shae!! I almost missed it because I was away last week!! Anyway … you know how I feel about the yellow letters. With 6500 mailed out we had an overwhelming response but only 2 deals. Granted, we’ve actually had 2 calls in the last week that were interesting so some people saved our letters.
But now we’re rolling out a more professional letter and we’ll see what happens. Great post!! Thanks for this. I am going to link to it next time I am talking about the yellow letters because you gave an excellent overview!!
Great article! I think you hit it on the head when you said, “The yellow letter elicits responses for sure…”
The first step in any marketing campaign is getting the phone to ring. How we handle that conversation will play a huge role in how successful we are in converting the curious skeptic into an interested seller.
Anybody know any good books on converting leads over the phone?
I agree, Zach. What we’re about to do is try a modified yellow letter that hopefully provides just enough info to filter out pissed off or “are you stalking me?” people. It’s all about testing. I heard Zig Ziglar’s Closing the Sale was a good one….but I haven’t read it yet so I can’t say if its focused specifically on conversion via phone.
This is such a great post and I think many of the previous comments capture a ton of insight. I personally have used the yellow letter on and off for the past 3+ years and have also shifted back and forth from the “big” look and the “mom and pop” look. Both have worked – but for me I feel more comfortable as an average “joe” and I think it’s less intimidating to a seller to work with an average joe just looking for an investment property than a know it all real estate professional that could make them feel dumb.
Again, though you need to find what fits for you – and like you do, that might change!
Some years ago, I worked with a mentor and he shared a personalized letter
that was compassionate to the owner, these letters were effective in getting
good leads, however I also went through the county and purchased my target
leads. These made it a bit more successful because we knew these were people
with properties they wanted or needed to sale. I have never personally used the
yellow letters.
Annette –
Just read your comment. What type of leads were you buying from the county? I’ve found yellow letters work really well. I actually tried the one above but it didn’t work well for me. Mine are much more low key and not flashy. They just simply say Dear X,
I’d like to buy your house at 123 Main St. Please call me. Sincerely, Nick 888-555-1212
Anyone else having luck with these?
I started using yellow letters about two months ago. I have mailed out hundreds too, not thousands: Mine says;
Dear XXX
If you are reading this then its a good day for us both:-)
You see I was driving around the other day with my son, Nate, and saw your property at
XXX in Louisville
I’m not sure what the situation is with it, but I want to BUY it – with Ca$h
If you thinking of holding on to it, that’s fine, but I will be buying very soon so if you want to sell- Call Me
Thanks,
Dustin
#xxx xxx xxxx
P.S. Don’t worry about fixing it up I will take care of all the repairs it may need, talk to you soon!
I’ve never had an upset caller, but I did get a call from a seller who lost his mother and he now has a house he does not need or want. The arv is $112k she owed $36k. He told me when he called he only wants to make $5k to pay off his credit card debt. I like yellow letters, and I do them “in-house” takes me about an hour and a half to do a hundred letters.
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