How to Get Started with a Direct Mail Marketing Campaign for Your Real Estate Business

20

Direct mail is the lifeblood for marketing. Without it you will have no deals and thus no business. After numerous requests on the forums I have decided to write the ultimate guide that will help you design a successful marketing campaign, whether you are a real estate agent, land lord or rehabber. With that being said, lets dive into what it takes to create a successful marketing campaign from step A to Z.

Consistency

Before anything else I must stress, the most important factor when it comes to marketing is to be consistent. To be consistent you need to design a marketing budget. Figure out what you can comfortably afford to spend every month on direct mail without fail.  You don’t want to put yourself in a position where you initially spend $1,500 a month, only to find 3 months in you can no longer afford to do so.  By being consistent you will “touch” each prospect a certain amount of times through the year. By doing so you are creating brand awareness and keeping your company on top of their mind if they have a trigger event.

Related: Marketing for Real Estate Leads on a $100 Monthly Budget

The List

It all begins with having a quality list. Before you begin marketing you need to understand exactly what type of property youlist-2 are looking for and mail to prospects that meet specific criteria. Something I like to call “laser focused shotgun marketing.” You are not just blanketing a zip code and hoping for the best, instead you are mailing to a large number of leads with specific criteria . Perhaps you are a landlord looking for properties in a certain zipcode that are 3/2/2s 1200-1500 sq ft and built after 1965. With the right list, you can do that. If you are looking for motivated sellers that need to sell at a discount you need to figure out what sorts of groups you will target whether its marketing to: probate, absentee-owner, preforeclosure, code violations, or driving for dollars when generating your list. Perhaps you are a realtor and want to announce your new listing to the neighborhood. It entirely depends on your goals as to what type of list you select and ultimately mail to.  I pull my list in December and mail them for a whole year. Once December comes up again I pull a new list. However, if your criteria is the same or similar,  you will still have overlap and many people will continue to receive mail from you, which is not a bad thing.

The Message

The message on your marketing piece is very important whether you are utilizing yellow letters or postcards. People need to be more willing to put their message out there and be accepting of it, don’t try to hide it, especially investors! You buy houses at a DISCOUNT for CASH and can offer a QUICK CLOSING in most cases (unless a title issue springs up or the seller requests a closing further out). There are NO Realtor commissions appraisals or any of that mess. Get that message to the right people and it has appeal, I promise you. People try to manipulate response rate using all sorts of tricks from variable data to handwritten fonts.  Again, you want people to contact you for the right reason. Your marketing piece should do some upfront filtering for you. Some people on here talk about how you need to field 30-50 calls to get one deal. That’s ridiculous and its likely because they are not using a clear marketing message and consequently having to field more unqualified calls.

Response Rate

This is a metric that is often discussed at length in the forums. My personal thoughts: who cares about response rate? I would rather get 8 calls a month, 4 of which turn out to be deals. I have enough going on and the last thing I want is to be sorting through tons of unqualified leads. An 83% response rate isn’t meaningful or impressive if they are all unqualified and unmotivated leads. What would you rather have, an 83% response rate with a bunch of tire kickers that generates no deals, or a 2% response rate and 3 houses under contract? I think you know the answer to that.

Choosing your Marketing Piece

Personally I dislike Yellow Letters (YL) because they typically incentivize people to call for the wrong reason. The potential client is curious because they have what appears to be a genuinely authentic hand written letter. Furthermore, many yellow letters use a template such that you appear to be a person searching to buy a home. Again, this will produce many leads, but for the wrong reason, often unqualified. Postcards allow you to cast a wider net because they are much less expensive and easier to produce and outsource.

However, real estate is local, and YL may very well be worth using in your market.  At some point you may want to perform a split test and see what produces for you. Some zip codes may be more sensitive to post card vs yellow letter even. The leads you are trying to generate will also hinge on which marketing piece you should use. If you are trying to do sub2 or lease option, YL may very well be the letter of choice as they generate the most call volume. However, for high equity motivated sellers I always use post cards.  For probate leads you probably want to use professional white letters. Ultimately, YOU CANT CREATE MOTIVATION so quit trying to manipulate it. Again, we are working on the sellers time frame not yours. That’s why you continue to mail them through the year as you will read more about below.

The Marketing Snowball:

Direct mail marketing initially starts out rather slow. You may receive few, if any, calls your first mailing or two. The end goal snowball-2is to market enough consistently on the front end that you are regularly generating leads on the back end. I like to call this the marketing snowball. Sadly after the first few mailings is when most investors quit. They don’t give the marketing snowball enough time to grow or nurture it by consistently mailing prospects every month.  In the early stages of marketing things start rather slow; however, as you consistently begin to touch the same prospects through the year you will begin to build a critical mass.  Once you have been mailing for a decent amount of time (6 months to a year) you will start generating leads regularly. You may find someone calling you about a house they want to sell from a post card you sent them over a year ago. Or perhaps someone that has no interest in selling you there home, but may give your post card to a friend who does (I have had this happen several times). You never know, so keep mailing.

Related: Real Estate Investors: Do You Have a “Shock and Awe” Marketing Package?

Putting it All Together

Remember, as I noted earlier, the amount of mail you send out is completely dependent on your marketing budget and how much YOU are willing to spend for at least 6 months without getting a deal. Again, figure out how much you can COMFORTABLY spend every month. Let’s say that’s $1,000. Next choose your marketing piece. We will use post cards in this example. For printing and postage fulfillment its we will say its .40 per post card.  If you’re using yellow letters it will probably be closer to $1 per a letter. Whatever marketing budget you decide upon, make sure you STICK to it. Come up with a budget for 1 year to 6 months and mail them rain, sleet or snow. Calls or no calls.

Here is how it looks in practice:

Your monthly budget / cost per marketing piece. Lets plug in our numbers.
$1,000 / .40 = 2,500 post cards you can send each month as per your BUDGET. If your budget is $250, who cares, spend that consistently and persistently and you will find deals eventually. And guess what, when you do you can put that money directly into your marketing budget and scale your business accordingly.

Personally, I like to form 3 groups for mailing: Groups 1, 2 and 3. Use list source or whatever you want to generate this.

  • Group 1 = 2,500 unique leads (for example probate)
  • Group 2 = 2,500 unique leads (for example pre foreclosures)
  • Group 3 = 2,500 unique leads (for example code violations)

So that means you will need 7,500 unique leads sum total (Group 1 + 2 + 3) from your list generation service.

Mail each group on rotation:

  • Group 1 – Jan
  • Group 2 – Feb
  • Group 3 – March
  • Group 1 – April
  • Group 2 – May

…etc. through the rest of the year rotating the list based on the amount of groups you have.

If you follow the above plan each group will be “touched” by your marketing piece 4 times through the year. This is critical. You are establishing an identity and the seller may not be ready to sell the 1st, 2nd or even 3rd time you contact them. However, as you “touch” them more often you will begin to see a higher yield in the amount of deals produced. Remember circumstances change through time ,that’s why you’re mailing them throughout the year.

Other popular mailing schedules are using 4 groups total for example:

  • Group 1
  • Group 2
  • Group 3
  • Group 4

The advantage to this method is you are casting a wider net and have a large number of prospects to market to. The disadvantage is they will only hear from you 3 times a year on rotation.

Another popular mailing schedule is to mail the same list every 6-8 weeks. The advantage to this approach is you will constantly be on your prospects mind and create brand awareness since you are marketing to them so often. The down side is, since you are mailing the same group every 6-8 weeks , the total amount of leads you will be leading will be much less. You won’t be able to cast as wide of a net.

It all comes down to personal preference on selecting a mailing schedule. What’s more important is being consistent with the mailing schedule whatever you decide upon.

In Conclusion:

You must be consistent with your marketing, don’t give up 3 months in, if you do you might as well not mailed anything at all.  I hope you found some new ideas in this blog post that you can use to implement in your own business. If you have any questions please leave them in the comments below and I will do my best to address them.

Snowball Image Credit: Kamyar Adl
Paper Image Credit: Jonathan Aquino

Subscribe to our mailing list

* indicates required Email Address * First Name Last Name

About Author

Chris discovered his passion for real estate early on working for a land developer and enjoys helping others along on their journey. In addition to flipping houses, Chris operates as a licensed Realtor in the Dallas Fort Worth area.

20 Comments

  1. This article is amazing! Thank you so much. Last year I started as a wholesaler and I didnt like it that much, so I decide to become a real estate agent and become a buy and hold investor. I did learn how to use listserv and mail merge, but this advice is golden. I will do this to market myself. Where can you go to create flyers/postcards and also how does this work when you walk into USPS, do you create an acvount with them since you will be mailing a lot?

    • Chris Feltus

      Hey Jordan,
      Thanks for reading. I would recommend utilizing any of the major mail outsourcing companies such as click 2 mail, post card mania etc. The only time I use USPS is for professional white letters I email to probates, so no bulk discount or anything of that nature. The major mail outsourcing companies will give you a discount proportionate to the mail volume you are sending.

  2. From everything I’ve heard, the list is the critical thing. I imagine you’re not just mailing to every absentee owner in the state – how do you narrow that list down?

    • Chris Feltus

      Yes the list is important, as I noted in the post. You need to figure out what type of properties you are specifically looking for. If you are looking to buy for yourself, what is your criteria specifically? If you are looking to wholesale figure out the bread and butter type of properties that will be easy to assign at the right price because they have a large buyer pool (usually 3/2/2 1200-1500 sq ft)

      If you need to buy houses utilizing the 70% “rule”, then you need high equity. Properties with higher equity usually have older deed dates. For example I typically select properties that have a deed date of at least 20+ years back. Other variables you can use to filter down and narrow the list would include year built, square footage, zip code, city, exterior type, pool y/n etc. You can find numerous data providers for this information. If your not familiar with the data providers I would recommend making a post on the forums.

      Hope that helps.

      • Chris,
        Thanks, I understand the need to narrow down homes to those that you are interested in buying. I was asking more about parameters to use to narrow the list to more specifically target motivated sellers.

        • Chris Feltus

          You can’t really target a list of motivated sellers that need to sell RIGHT NOW. Its more of a process, you need to continually mail to them, so that when they are motivated they will remember to call you. Either by mailing them consistently, or happening to send them a mail near the time of the trigger event.

          However some lists tend to be more motivated than others for example: delinquent taxes, code violations, probate, inheritance etc. Most of these already have underlying reasons for the owners to sell and usually at a discount. But again I must stress, there is no list that you can purchase that contains people that need to sell at a discount RIGHT NOW.

      • Or deed dates near in between 2005 and 2009 if you want low to no equity deals for subject 2 or lease option. Today with everyone with equity dreaming of sugar plums and top offers, it may be easier to service low equity folks who know they are in a bad situation and are willing to sell via a non-traditional means like subject 2 or lease option. High equity sellers aren’t necessarily the easy sales!!! Well unless if you are a retail buyer with a ton of cash. LOL

        So what type of seller has a time problem? Equity with a crushing need to sell in a few weeks is one type of seller. Can you target a list for this problem?

        I don’t think NOD, late on mortgage payment is a great list anymore. Banks are too willing to do workouts or shortsale.

        • David Briley on

          I’m getting ready to do a mailing to tax delinquencies in my city. Anybody have suggestions for letter content and to YL or not?

          Also read somewhere else that brightly colored stamps help increase the chance of the letter getting opened. IDK if that’s true, but can’t hurt.

  3. you should also have to work very hard on leads, emails, contacts, real estate is all about local properties. For instance there is not point of sending a Dubai based listing email to a person who is living in Antarctica until and unless you are sure that he is willing in overseas investment. Def, you can increase your chances only if you work constantly on your contacts and further demographic factors like income, lifestyle, assets owned etc.

  4. Karin DiMauro on

    Great blog, Chris! Very thorough.

    I have a few follow-up questions:

    How do you perform a split test? We are about to embark upon a YL campaign, but I have no idea if that’s the right message for our audience. We were actually leaning toward postcards but are starting out with YL b/c of the availability of some coaching and pretty detailed help in dealing w/seller calls (thank you, BP networking!). Bottom line: we are not yet convinced of the efficacy of YL’s, but how can we tell for sure?

    How many calls do you typically field before you land a deal? (You said 30-50 is “ridiculous,” but what do you consider more reasonable?)

    Do you include a website on your mailings? I’ve heard various opinions on this – essentially, whether it attracts tire-kickers or gives you a leg up b/c of a bump in your credibility.

    Thanks again!

    (P.S. Anyone know why my Gravatar disappears when I come to the blogs? I can be logged in to BP and then I come to the blogs and it vanishes.)

  5. How much “junk mail” do other members of bigger pockets receive?

    I receive six to 10 pieces of mail each week depending on what “guru” is in town. Lot’s of yellow letters, lot’s of “I’ll pay cash for your home. Quick Close, 7 days or less.”. Add that to all the Realtor letters and postcards it becomes overwhelming. Unless my market is strangely unique… which I don’t believe it is… It’s completed flooded with investors and real estate agents begging for listings.

    Some of the biggerpocket members probably get hundreds of letters per month. More doors = more junk mail.

    There has to be a better way to find deals.

  6. Nice article, Chris. I’m always interested in hearing others’ insight about direct mail marketing. I especially like the thought of throwing the response rate out the door…if you’re getting more motivated callers, so be it. I find my response rate to be dismal, but when people call they’re either about ready and just need more information or ready to move forward pretty much right away. I’ve been more consistent this year too with DM so I’m looking forward to the snowball effect.

    • Thanks Tracy. Yes stick with it and be consistent. That’s really the number one thing that separates a mediocre or dismal DM campaign from a very successful one. When in doubt keep mailing.

  7. Jerry Puckett on

    Nice article Chris. You sure have learned a lot in a relatively small span of time. I do somewhat disagree with you on one small point; fielding 30 to 50 calls to get a deal is not at all ridiculous. So much depends on where you’re at in the learning curve, your personal negotiation skill, your ability to do your due diligence properly. I just find that a pretty wide blanket to be throwing over an issue that a whole lot of folks new to this are going to be looking at.

    In addition, I’m not one of those who believes in wasted calls. I want more calls. My network is big enough to handle almost any exit strategy you can imagine. I chose early on not to narrow my focus. I understand what you mean by qualified call, but my only qualification is do you have a house for sale. Many do not hit that narrow mark that most wholesalers look for, but I consistently make an extra 2 to 3k per month (more than enough to cover my marketing budget) just for sending those leads elsewhere with a phone call or email.

    The ones that don’t have houses for sale? I turn them into bird dogs. Nothing goes to waste. Just sayin’

    • Hey Jerry,

      Thanks for the nice words. Yes I agree with you actually. You should try to monetize every lead that comes in if possible. Especially if you are licensed as a realtor, if you are, the potential for each lead will be much greater. The unmotivated sellers that are looking for closer to retail value can list.

      • “Monetize every lead”

        What are folks finding for their response rate. What percent of the responses are actually leads for an agent to list? What are such leads worth if you wanted to sell the lead to an agent? I hear we can sell leads but not get a commission cut.

  8. How about tipping mailing services that are folks are using. I’m trying to get a small post card mailed, 5.5″x4.25″ 2 sides, variable data to put the house address in the message.

    1) feed back on this size having ok response rate or just go to the larger size? You have A/B testing data?

    2) which service? click2mail.com vs yellowletters.com so far yellowletters.com website cost for 1k postcards is $0.42 for color (some red font)

    3) What text goes over the address to get it to forward or will the post office forward automatically. Guess it will, it’s address correction that could be an option..

  9. Curt, I personally use Postcardmania. Others on the forums sometimes like to use click 2 mail as well, or yellowletters.com

    Different sites will have different bulk rates, not only that but varying paper quality as well. You need to select one that fits your needs and your budget, only you can answer this question.

    Do you mean “and or current resident” appended to the individuals name that receives the mail? As far as I am aware nothing will flag the mail carrier to forward the mail automatically unless the recipient themselves have placed a forwarder with the USPS notifying them of an address change.

    I wouldn’t worry about size, really I think its splitting hairs. The most important thing is to be consistent with your marketing efforts. Having a flashier card, a different envelope color or a unique stamp isn’t going to translate to meaningful results in my opinion. However, being consistent will.

  10. Chris,

    Great stuff. New to the wholesale thing but in my market San Francisco, it might be good to partner on deals at list price with brokers looking to sell more home. If I could bring them a lead that turns into a deal and it closes I make my money from that.

    Love to get your throught on that way of brokering deals.

Leave A Reply

css.php