Direct Mail for Farming Areas in Los Angeles, CA - Question

14 Replies

Hello All My Bigger Pockets Agents,

I am a newly licensed agent in Los Angeles and I am looking for a bit of advice regarding my idea for direct mail. The book I am reading says I need 2500 people in my "haven't met" list to market to 12 times a year in order to achieve 50+ listings.

My idea is to get a list from Alesco Data and have it filtered for the surrounding cities where I live. The list will also be filtered for homeowners who have purchase 5-7 years ago and may be looking to move. I was also thinking to only search for properties that were purchased at $500k or more since the list is likely to be more than 2500 even at that point.

Once I have my list I was thinking of using yellowletters.com to put the mailings on auto pilot for three month stints or longer depending on how often I need to refresh my list of homeowners. In the mean time I will be working on my 8x8 marketing campaign to start funneling the people I "have met" into my lifelong 33 touch marketing campaigns.

Thoughts, comments and or recommendations greatly appreciated!

We often hear in the industry that it's 7 years between moves.  But in some neighborhoods we're buying from people who have been there 20+ years.  So, I wouldn't use 5 to 7 years.  I'd use 7+ years (7 to 20 or 25 perhaps).

I don't know Alesco (it looks suspiciously like Click2Mail - same terrible data search interface).  They may be fine, but I would use Listsource.com which is provided by CoreLogic - probably the single biggest data provider to the real estate and mortgage industries.

YellowLetters.com is a good choice for the mailings; they've really expanded their options for agents.  Might use postcards rather than letters to keep your costs down.  Also, agents put their pictures on the postcards for a reason.  Look for an option where you can include your headshot in the marketing piece.  You'll get more calls if people can SEE you and get to know YOU over that 12 months of repeated touches.

One more thing.  12 touches is really over-kill, so here's a strategy to consider:  You could mail to 5,000 total instead - 2,500 one month and the other 2,500 the following month, and just rotate your list between the 2.  Over the year you will touch twice as many people 6 times, which is in line with the 6-7 touches we as marketers want to achieve with our highest potential prospects.

I live in LA and receive yellow letter postcards at least once a week. I agree with

@Dev Horn use postcards (I throw out unopened letters that are unsolicited,) and put your photo on the card. 

My wife @Catherine McGinnis and I have sent thousands of mailings to two different farms over the last couple of years, mostly in the form of postcards.

Direct mail in L.A. is expensive, especially in luxury markets, and hasn't really driven any direct deals that we are aware of for us or other agents I know, but it may have helped us with branding which has led to referrals coming from one of our farms. In our farms, we're up against some heavy-hitters who do things like send pre-filled purchase agreements instead of a boring ol' post cards.

To reset your expectations, I would disregard what your book says about getting 50+ listings a year from direct mail marketing alone. The Los Angeles market revolves around relationships and so that's where the vast majority of your deals will come from.

If you're a new agent, expect that it will take a least a year of grinding before you get traction. I'd go so far as restrict your passive marketing activities and use that money towards active marketing, such as networking-related events, where you can get your face directly in front of prospective clients.

I recommend using direct mail to promote your closed deals and listings as a way to show that you are active and gaining traction in an area. This strategy will only help to support your value in your farm and sphere.

I also highly recommend door-knocking and dropping off a flyer or door-hanger, as opposed to putting all of your eggs in the direct mail basket.

From an investor perspective, I know investors who have done direct mail have had some limited success by offering "all cash" for distressed properties. You will need to get creative if you intend to use this technique for getting listings. To say you have a "cash buyer" when you really don't can get you into some trouble with the Board of Realtors (not to mention being disingenuous to homeowners).

Lastly, I've never heard of Alesco Data, but you can easily get lists for free by forming a relationship with a title rep. This should be fairly easy as they're usually easily accessible through your broker. If not, check out listsource.com which is probably one of the most definitive source of residential demographic info on every house in the country.

Good luck to you!

Hey Geni,

What is your offer going to be with your direct mail to get potential home sellers to call you?

Have you ever heard of the USPS's Every Door Direct Mail (EDDM)?  For 18 cents postage you can target whole neighborhoods, mailing oversized postcards (up to 12" x 15"... I mailed 8.5" x 11").

@Dev Horn

Great point adding the 7+ years regarding my filtering parameters! From what I have experienced Alescodata is a lot like Listsource, they only provide lists and do not have mailing services similar to Click2Mail.

Keeping cost down is always in the forefront of my concerns especially starting out, so postcards will definitely be the route I pursue. I already have some good green screen photos to use on my marketing materials like you also mentioned, looks like I’m on the right track so far.

As far as the 12 touches being over kill, I hope this is the case but I think I will try your strategy by doubling my list to 5000 and mailing to one half one month and then the other half the following month like you are recommending and if I don’t see the results I would like I market test the other strategy.

 @Joshua McGinnis

I presume the pre-filled purchase agreements instead of a boring ol' post cards are investors buying directly from home owners and not real estate agents sending pre-filled out listing agreements, just making sure I am understanding correctly?

What kind of networking-related events are there where I can get my face directly in front of prospective clients, non-investors looking to hire me as their real estate agent?

@David Hunter

@David Hunter My brokerage has given me some high level training regarding several listing strategies to help homeowners net the highest amount possible. The same thing for buyers and how I can help them get their offer accepted quickly over others and at a lower price. I was going to put something to that effect but I haven’t nailed down my exact message just yet. I like what @Jushua McGinnis was mentioning about sending success examples out to potential clients as well once that is possible.

I have heard of EDDM but never priced it out or used it. Right now I’m having trouble pulling the trigger on which neighborhoods to do so in. I’m thinking of just picking the three closest and jumping in to see what happens. The guys on here who can justify their decisions to choose markets wisely makes me jealous, so if you know anyone who can give me a few beginner type pointers it would be much appreciated.

Geni, here's a beginner tip... just pick a fricken neighborhood and go with it!!!

If you wait to find the exact neighborhood you want to target you just may be out of business by the time you decide.  Action beats inaction.

Plus, there's no law saying you can't always be on the look out for a new neighborhood tomorrow.  "Sorry!  You picked those three neighborhoods... you're no longer allowed to target any other neighborhood."  ha

You can send out success examples and have a great message, but you need an offer for prospects to respond to.

I've said this a gazillion times on here... A Home Seller's Guide is a killer lead generation magnet.  People want a low-threshold way to learn about selling their house, rather than some agent pressure them into listing (which that's what sellers are afraid of).

@Geni P.

Please don't do this:
@David Hunter  Geni, here's a beginner tip... just pick a fricken neighborhood and go with it!!!

You should choose a farm using a data-driven approach, which includes:

  • Choosing a farm with a favorable turnover rate (# of houses sold / # number of houses in the farm) (The higher the better - but understand what factors make up this number.
  • The number of agents with a stronghold in that area (usually, if there are 1 or 2 agents dominating - you are going to have a harder time getting traction vs an area where many agents are performing many transactions)
  • How big of a farm can you reasonably touch on an on-going basis (too many, and you won't be able to afford or have enough time to market, too few and you aren't casting a big enough net)
  • Where is the market headed, directionally, in your farm - farm in the path of progress

By the way, this is where having a Title Rep will come in handy because they have the data you need to perform this analysis. 

Re: pre-filled offers. They are indeed coming from agents. I know this because I've sat in the MidCity West Community Council in Los Angeles and listened to homeowners gripe about this tactic.

Joshua, good tips but the goal isn't to give Geni Analysis Paralysis.  He could be looking all day long for the "perfect" neighborhood.

He just needs to take action RIGHT NOW.  The first key to success... do something!

@David Hunter

Wouldn't a better course for immediate action be to find a title rep and start narrowing down his farm prospects instead of gambling on an area and then losing steam when it doesn't work out?

Originally posted by @Joshua McGinnis :

@David Hunter

Wouldn't a better course for immediate action be to find a title rep and start narrowing down his farm prospects instead of gambling on an area and then losing steam when it doesn't work out?

If he'll actually do it then yes.  But, it's just another step in the process.  More resistance not to do anything.  People like taking the path of least resistance.

It's better to get it going than to get it perfect.  It can always be tweaked later.  None of us would be driving cars if the car makers set out to make the "perfect" car before selling them.

Plus, even if he does find the "perfect" area to farm, if he doesn't have the right message then it still won't work out for him.

So, I say just get it going!  But... I'm also crazy and like jumping out of airplanes.

Meeting with a title rep that is well known with my brokerage today to get the data needed to feel a little proactive with my farm selection. Monday is my goal for having my first round of postcards ordered.

I will also be investing heavily in making calls to other Realtor to see if I can assist them in holding open houses and reaching out to family and friends for potential leads.

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