Real Estate Marketing

The No. 1 Strategy I Use to Find Bargain Properties

Expertise: Real Estate Investing Basics, Personal Development, Landlording & Rental Properties, Real Estate News & Commentary, Business Management, Flipping Houses, Real Estate Deal Analysis & Advice, Personal Finance, Real Estate Marketing
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I want to talk to you about the number one strategy that all of my companies use to find absolute bargain properties.

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For those of you who don’t know me, I am proud to say that I moved to the United States several years ago from Australia. And to date, I have been involved in the closing of hundreds of real estate deals. In fact, I shoot for a couple hundred properties a year. And in buying all of these properties, the best strategy that I’ve used all along is yellow letter campaigns.

Related: This Simple Advice From Warren Buffet Guides Me to Deals No One Else is Finding

How We Send Effective Yellow Letters

Now, the way we structure these yellow letter campaigns is quite simple. We send a very basic yellow letter. We like to target absentee homeowners and folks residing in their properties for 20+ years. We do this because the likelihood of these guys picking up the phone and wanting to sell their houses is the highest out of any demographic you can choose.

What the letter consists of is actually very basic. One letter that we have states, “I was riding my bicycle through the area, and I saw your house. I might be interested in buying it. I’m a cash buyer. If you’re interested in selling it, give me call.”

Another example of a letter we use is, “I was driving my car through the street, and I saw your house. I’m a local investor who’s a cash buyer. I can close quickly. If you’re interested in selling your house, give me a call.”

What we have found is that those two basic topics will get us the most call backs.

With yellow letters, you don’t have to get too complex with the topic of the actual letter. What you have to become is consistent sending out these yellow letters. So, you have to send them out on a weekly or monthly basis in order to get the best return on your investment.

phonecall-communication

Concentrate on the Phone Calls

Where you really have to start working hard is once you start getting those phone calls. I know that most of you out there don’t have three, four, five, or 10full-time employees like I do, so you’re going to have to do the legwork yourself. It’s also going to take a bit of time to set up the systems where you can put this on autopilot.

What I suggest you do is get ahold of some of the wholesalers in the forums, because the wholesalers really know how to send out these yellow letters and how to set the system on autopilot. Personally, I like to take every call live, and if I’m not able to take it live, we just let it go to voicemail and call back.

Related: 3 Deal-Making Tactics That’ll Help You Find (& Close) Real Estate Transactions

You’re going to have to get really consistent with sending out these yellow letters and be prompt at calling these folks back. The longer you wait to call back, the more likely you are to lose the lead. Now, keep this rationale in mind: For every 5,000 yellow letters that we sent, we get around 300 call backs.

My buy criteria is very stringent, so we will only buy around one to two properties from those 5,000 yellow letters. What tends to happen is over the coming months, we will buy another two to three properties just based on the fact that sometimes someone doesn’t call us immediately. They see the letter at a later date on their dining room table, so they call us.

Or maybe we can’t get in the property immediately. It also takes a bit of time to negotiate and whatnot. That’s why we don’t get those immediate purchases; we get those purchases at a later date.

So, once again, the rule of thumb is 5,000 yellow letters to get around 300 call backs. Over a period of around two to three months, we tend to buy around five properties.

I’m telling you—you can buy absolute bargains doing yellow letter campaigns. I don’t know any other strategy where you can find better or cheaper properties.

A lot of these folks want to sell their houses now—they want an exit, they want cash, and they don’t want to list it through a real estate agent. Of course, make sure the title is clear and that you’ve inspected the property prior to purchase. Good luck!

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If you guys have any other methods of finding awesome deals where you can buy absolute bargain properties, I’d love to hear from you.

Leave your comments below!

Engelo Rumora, a.k.a."the Real Estate Dingo," quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate al...
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    Alex Hamilton Property Manager from Baton Rouge, LA
    Replied over 2 years ago
    Interesting, and have used such strategies. However, every house is for sale at the right price. The real problem is the “Bargain” you talk about and how to get the money to buy.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks for your comment Alex, Work your A$$ off and save as much money as you can before you get going. Took me 4 years of laboring before I saved $50,000 and got started in real estate. Much success
    Michael Byrd Real Estate Agent from Lehigh Acres, Florida
    Replied over 2 years ago
    Great read ! I am curious as to what different sources you used to generate your list for absentee owners and for homeowners who haven’t moved in 20+ years?
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Michael, We buy lists from online providers. Much success
    Kris Patel Investor from Arroyo Grande, California
    Replied over 2 years ago
    I got similar letter, but 3 rd time was a charm. Called and sold not only one but 2- 4 plex’s. Only condition was, he had to sell his building for 1031 X. it worked, both of us happy.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Awesome Kris, I’m glad for your success. Keep up the great work.
    JL Hut Investor from Greenville, Michigan
    Replied over 2 years ago
    Yellow is my favorite color.
    Kris Patel Investor from Arroyo Grande, California
    Replied over 2 years ago
    It was yellow in my case too.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    I just had someone post on my YouTube channel that pink worked for them also lol Might give that color a try 🙂
    Andrew Allen Investor from Austin, Texas
    Replied over 2 years ago
    You describe your buying criteria as “very stringent”…just curious, what is your buying criteria?
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks for your comment Andrew, It’s specific to our market. We need to buy certain properties, in certain areas for a set price that need a certain amount of work hehe I know, it sounds fluffy but it would make more sense if I sent you a detailed email about it. Let me know if you can supply any deals in Ohio Much success
    Chris Rosenberg Rental Property Investor from New York City, NY
    Replied over 2 years ago
    Nice article. I recently started a mailing campaign. Do you think it’s better to put in the letter that you must buy the property at a fair discount, to reduce calls from tire kickers? Or the more phone calls the better?
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Chris and great question. The more calls, the better in my opinion. Get good on the phone and negotiating and you will do well. Much success
    Roberto Valencia Residential Real Estate Broker from Stafford, Virginia
    Replied over 2 years ago
    You said 5,000 letters. Is that weekly, monthly? and are those send to the same group? What is the budget for a campaign like that?
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Roberto, Monthly. We mix it up quite a bit with the zip codes and seller criteria. If you want to completely outsource the campaign and do nothing in-house it costs around $1.15 per letter We use YellowLettersComplete.com Thanks
    Cornelius Charles Investor from Oxnard, California
    Replied over 2 years ago
    Hey Engelo. Since you only have two letters, does that mean you are only doing one or two touches?
    Engelo Rumora Specialist from Toledo, OH
    Replied over 2 years ago
    Thanks Cornelius, We will send out 2-3 yellow letters to the same list over 2-3 months. No “sexy” method/message just consistency. Have a great day
    Cornelius Charles Investor from Oxnard, California
    Replied over 2 years ago
    Nice. thank you for the response.
    Goziem Ononye from New York
    Replied 4 months ago
    Nice advice, whats your monthly budget on the letters being sent? Sounds like its about $5,750/month (if you're sending 5000 letters and it costs 1.15 per letter right ?)
    Engelo Rumora Specialist from Toledo, OH
    Replied 4 months ago
    Thanks mate, It depends. You can always control the amount. Sometimes we send more if we are short on inventory. Much success
    Kariann Bowles from Seattle, Washington
    Replied 4 months ago
    Thanks for your article, do you use an attorney or a real estate agent to handle the purchase? Can this strategy work with financing?
    Engelo Rumora Specialist from Toledo, OH
    Replied 16 days ago
    No we don't. We go through a title company. Most sellers want cash on hand so for the best deals you will need to pay cash. Much success
    Max Dunevitz
    Replied 4 months ago
    Hello Mr.Rumora! Question for ya: you mentioned that you target "absentee homeowners and folks residing in their properties for 20+ years." How do you go about acquiring that data? Thank you!
    Engelo Rumora Specialist from Toledo, OH
    Replied 16 days ago
    Usually the yellow letter provider will have such lists. Much success
    Brad Shepherd Syndicator from Austin, TX
    Replied 3 months ago
    Lots of list brokers. Check out listsource.com for one.
    Jared Sawyer from The Dalles, Oregon
    Replied 4 months ago
    Thanks for the article!
    Engelo Rumora Specialist from Toledo, OH
    Replied 16 days ago
    My pleasure. Thanks for your comment
    Bryan Lee
    Replied 17 days ago
    I absolutely agree to these recommendations! Especially when you said for every 5,000 yellow letters that you sent, you received 300 call backs. I've experienced this metric as well.
    Engelo Rumora Specialist from Toledo, OH
    Replied 16 days ago
    Thanks Bryan, Much success