House Flipper · Mason, OH · Member since 2014 · 30 posts · 13 votes
In 2013 and 2014 I used direct mail to find fix-and-flip opportunities. I focused on recently inherited properties and properties with out of state owners. I got a response rate a little greater than 10% and was able to find some good deals.
I just started direct mailing again a few weeks ago, having not done any during most of 2015. The letter is essentially the same as the one I used in 2013 and 2014. It's on plain white paper and done in Word. The verbiage is the same too.
So far, the only responses I've received are from angry homeowners, telling me that they are not interested in selling and telling me not to send them any more letters.
Is direct mailing no longer a good method of finding leads? Are other people seeing similar results?
Real Estate Investor · FL · Member since 2011 · 586 posts · 360 votes
10y
@Rob Young Our #1 source for finding deals continues to be through DM. How many are you sending out each week? We send out at least 1,000 letters per acquisition agent per week. Competition has increased with DM but it has also increased with almost every other acquisition strategy. We've adapted our marketing and overall business model as the market has changed, maybe that's something you should consider too.
Keep in mind that repetition is very important. We try and hit each person at least four times a year, the majority of deals come after the second touch.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
Consumers in certain target markets are getting "marketing fatigue" by other who blindly solicite highly advertised list such as inherited and absentee owners.
You're biggest challenge is to get noticed. If you're using a standard letter, you might need to switch to an odd size, a personal size (A10) or an invitation card mailer.
You could also try a more methodical series of messages sent in sequence. Also, lumpy mail, if you list size is manageable and budget can take it.
Speaking of budget, have you ever considered what you'd be willing to pay for a lead? What you'd be willing to pay for a deal that closes?
Some years back I worked a highly targeted list that would cost me an average $1,000 per lead. I closed 20%, so my cost per deal was about $5,000. My minimum net profit was $100,000 net/net.
Developer · Andover, MA · Member since 2008 · 1k+ posts · 489 votes
10y
Rob - DM is still effective and relevant. I completely agree with @Rick H., you have to get yourself noticed as there is much more competition out there. I'm not sure if your creating your DM in-house or outsourcing, but I would create some unique looking envelopes to stand out.
Investor · Pasadena, CA · Member since 2015 · 24 posts · 7 votes
10y
@ Rob Young I agree with the other posters above. I recently sent out 100 yellow letters through yellowletterscomplete.com. I received four replies. Three were from people saying they weren't interested, one from an absentee owner who was thinking of selling. Of the three who said they were not interested in selling, I was able to have conversations with two who, by the end of the call, were interested in having me shop for other properties for them. What I like about the company I used is that they black out the list I purchased from them so that they don't mail to those on "my" list from any other investor using their service for a period of time (something like 3-6 months). Hope this helps. Good luck!
House Flipper · Mason, OH · Member since 2014 · 30 posts · 13 votes
10y
Thanks for the input, everyone. I am sending 100 letters per week. I'm trying to ramp that up to at least 200 per week.
@Braden C., how are you doing your DM marketing? Are your mailings branded (company name/logo) or do they come from you as an individual? Do the letters you send after the initial mailing look and feel similar to the initial letter or are they significantly different?