How often I should replace my list

3 Replies

Hello BP, 

I live in the Bay Area and I don't have enough money to start investing. To have more funding,  I want to start sending yellow letter as a realtor to get more listing to 500 people. 

I want to focus on equity more than 40% and the owners have live there for more than 10 years. 

Or, the second list is divorce. 

Three questions: 

1. Between the two lists, which one would be better?

2. How often do I need to pull a new list?

3. I am planning to send the letter every 2 weeks. Is this frequency too short or too long?

Thank you for your advices! 

Nhan Welcome to investing. The inventory is really low right now for a variety of reasons, but one of the bigger ones is that owners have so much equity in their homes that selling would trigger a huge capital gains tax bite. Most owners with 40% + equity have greater than the 500K exclusion for couples and 250K for singles. In cases of divorce sometimes the owners have to sell, but due to the large tax bite they often try to have one buy out the other, or agree that they keep the house till the kids finish school. It seems to me you would have your best chance with a non owner occupied owner with a lot of equity who can do a 1031 exchange and defer taxes while getting more cash flow.

@Marcy Moyer Thank you!

Follow up questions: 

Is 40% equity too high or too low?

How often do you mail out the letter? I am thinking about 2 letters a month. 

I assume that I do not need to pull a new list very often because non owner occuppied would not change very often. Or, Am I missing something? 

Nhan I don't like to mail to people I don't know more than once a month. Curious what other people think about this.

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