Direct Mail for House Hacking

19 Replies

Hello BP members. 

I am currently in the beginning phase of getting a direct mail campaign going targeted at 2-4 unit properties in my area. My goal is to find a property that my family (myself, wife, and two babies) can house hack to cut down on our living expenses (obviously). 

I was hoping that some other forum members who did direct mail campaigns for house hacking could chime in with how they approached it. I did a search and have read dozens of posts talking about driving for dollars, sending personalized thank you notes, etc.  I would love an open dialogue with someone who has done it, tried doing it, or thought about doing it, that can help us both improve. I'm currently planning on hand addressing all envelopes (my list is about 400 properties, starting small) and signing all the letters. I have a quick and to the point message (placed below) and would love some feedback. I tried to keep the sense of urgency while stating that this is something more personal than just a wholesale type situation (which may or may not add value I guess we'll see). 

Thanks!

James

"Hello,

I am interested in buying your property at <insert address>. My name is James Schindler and together with my wife I will be purchasing ONE 2-4 unit property, in AS-IS condition, in the next 30 days to raise our daughters in. If you are interested in selling please call me at <insert google voice number>.

Thanks!

James"

I love the hustle, keep it up! I think hand addressing all the envelopes and signing the letter is a great move.  A tip that I received from one of the Bigger Pockets' books was to include a family picture at the bottom of your letter.  By doing so, it makes the reader understand that they are talking with a real person, humanizes the conversation.  Lastly, I don't see the need to say "ONE 2-4 unit property".  Good luck!

Hi @James Schindler , the more personalized your marketing the better. I went through a couple companies that had handwriting font and it's pretty obvious that it's not handwritten so great call on writing the addresses yourself (be ready for some hand cramps!). It would be best if you could handwrite all the letters, but with 400 contacts that would take days and days. I like @James Schindler recommendation of putting in a photo of your family on the letter (I think Brandon Turner wrote the article that he's referencing). You might also consider putting your wife's name down as well so it reads "James & ______" to make it even more personal. 

Additionally, if you really want to find a deal this way you'll need to keep on marketing to these people. I would touch them once per month and be prepared for it to take a year to find your deal. I know someone who purchased a triplex to house hack in Everett, and he's also a real estate agent who specializes in multi-family deals so he knows what he's doing and the Seattle area market really well. If you're interested I'd be happy to DM you his info.

@Chace Fraser That is a good idea. I will put down her name as well and also make her get hand cramps by signing/writing :P I'd love to get in touch with your friend. I have one other contact who bought a triplex, but it was out of dumb luck and less strategy. Thanks!

@James Schindler Hey James! Sounds like we’re in a very similar situation right now. I’m just a bIt further south in Edgewood, WA. My wife and I are looking to house hack as well, hopefully purchasing within the next year and raising our kids (#2 due in november) while building some equity and preparing for future investing. I’ve thought about trying direct mail, and I appreciate you posting your question, I’ve learned from the responses so far. I’d be interested to learn how it goes for you. Also any information on how you gathered information for your list would be much appreciated. Good luck to you! Josh

@Josh Palmer good luck to you Josh, with both parenting and finding a property! I got my list from listsource.com and figured out what parameters I wanted to use via a lot of research and common sense. I'll keep ya posted!

@James Schindler I am planning on starting a very similar DM campaign with the idea of buying one 2-4 unit a year, possibly to house hack as well. When you got your list back from listsource did you have to find the property owner’s mailing address by cross referencing county tax records or is there some easier way? 

Originally posted by @Ryan E. :

@James Schindler I am planning on starting a very similar DM campaign with the idea of buying one 2-4 unit a year, possibly to house hack as well. When you got your list back from listsource did you have to find the property owner’s mailing address by cross referencing county tax records or is there some easier way? 

 The list actually gave me the mailing address (I assume whatever was registered in the tax payments, as well as the property address). 

@James Schindler Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money. So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs. How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

@James Schindler Good luck with your house hack search! I am planning to house hack once I get my debt down and have more money for reserves... Would love to know how this direct mail campaign turns out!

Originally posted by @Caleb Heimsoth :
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 Caleb, why would you recommend against this? If the goal here is just to acquire one property every year or two I would think that a relatively smaller campaign with a low response rate would have a good chance of achieving that goal. I know a large scale is the way to achieve major results but if the goal is to just find one discounted property every year or so, then maybe a small campaign would work? My worry is that I will waste $6k and 12 months. 

I ask because I value the opinions you give and I'm planning on implementing a similar strategy as the OP, only I most likely will not be house hacking but I'm open to it. The idea, of course, is to find a property that I could buy at a discount, add value through rehab, then refi. I'm assuming the OP's plan is similar since he's looking off market. My plan is to spend about $6k per year on the marketing with the goal of purchasing one property within 12-18 months. That boils down to about 600 letters a month. So with a 1/2 to 1 percent response rate it would be maybe 3-6 calls a month. I figure if I can get one deal at 20% below market it would be well worth it. In my market (Salt Lake City) the price range for a decent Fourplex is 400-600k and rarely do any of the listings on the MLS even cover PITI with a 20% down payment.

Originally posted by @Ryan E. :
Originally posted by @Caleb Heimsoth:
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 Caleb, why would you recommend against this? If the goal here is just to acquire one property every year or two I would think that a relatively smaller campaign with a low response rate would have a good chance of achieving that goal. I know a large scale is the way to achieve major results but if the goal is to just find one discounted property every year or so, then maybe a small campaign would work? My worry is that I will waste $6k and 12 months. 

I ask because I value the opinions you give and I'm planning on implementing a similar strategy as the OP, only I most likely will not be house hacking but I'm open to it. The idea, of course, is to find a property that I could buy at a discount, add value through rehab, then refi. I'm assuming the OP's plan is similar since he's looking off market. My plan is to spend about $6k per year on the marketing with the goal of purchasing one property within 12-18 months. That boils down to about 600 letters a month. So with a 1/2 to 1 percent response rate it would be maybe 3-6 calls a month. I figure if I can get one deal at 20% below market it would be well worth it. In my market (Salt Lake City) the price range for a decent Fourplex is 400-600k and rarely do any of the listings on the MLS even cover PITI with a 20% down payment.

If your goal is to buy investment property this may work for you.  The OPs goal is to buy a househack which is going to be difficult if it needs a lot of repairs.

As far as your strategy goes it could work but I think your expected response rate is high.  There’s another thread from yesterday the guy mailed 4900 letters at once and got 2 calls.  I’d expect 20 plus calls to get 1 deal.

So likely your annual budget is a percentage of what the big players spend on this stuff per month.

I have bought multiple properties for about double what you’ll spend on direct mail.  I would argue it’s better to spend that money on a property then direct mail.  I find off market deals to, but I network and don’t use direct mail.  Works just fine (and is free) if you’re just doing a couple per year. (Which is what I’m doing)

Originally posted by @Caleb Heimsoth :
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 @Caleb Heimsoth thank you for your reply. I was much more of a skeptic when I started looking at the list, thinking the same thing. I had a bit of a mindset shift from the strictly business to the personal side after multiple conversations about how many wholesalers/investors are sending out their postcards etc to every single person in my market. I live in the greater Seattle area, and as i'm sure you're well aware it's extremely hot. The place I am planning on marketing to is primarily owner occupied, as the town is currently catching up in appreciation compared to the rest of the area.

I am hoping to capitalize on the personal aspect that i'm not going to be tearing down your house to build town homes. I am not worried about the amount of work needed as i've been in construction for the last 4 years, and have seen people get financing on homes that shouldve been boarded up/torn down. Seattle is a weird market.  As well as for financing, as worst case scenario I have a large line of credit as well as a few private sources I can use to get it financed.Is that for everyone? No of course not. Is it going to get me into some decent conversations with home owners? I think so. I guess we'll see! I'm also planning on doing postcard mailers to the same list with different contact info and more of a wholesaling approach to see if I get a better response rate. Thanks for the input!

Originally posted by @Kevin Zolea :

@James Schindler Good luck with your house hack search! I am planning to house hack once I get my debt down and have more money for reserves... Would love to know how this direct mail campaign turns out!

Thanks Kevin, I'll keep you posted on how it goes. We're sending out the first batch this week. 

Originally posted by @Caleb Heimsoth :
Originally posted by @Ryan E.:
Originally posted by @Caleb Heimsoth:
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 Caleb, why would you recommend against this? If the goal here is just to acquire one property every year or two I would think that a relatively smaller campaign with a low response rate would have a good chance of achieving that goal. I know a large scale is the way to achieve major results but if the goal is to just find one discounted property every year or so, then maybe a small campaign would work? My worry is that I will waste $6k and 12 months. 

I ask because I value the opinions you give and I'm planning on implementing a similar strategy as the OP, only I most likely will not be house hacking but I'm open to it. The idea, of course, is to find a property that I could buy at a discount, add value through rehab, then refi. I'm assuming the OP's plan is similar since he's looking off market. My plan is to spend about $6k per year on the marketing with the goal of purchasing one property within 12-18 months. That boils down to about 600 letters a month. So with a 1/2 to 1 percent response rate it would be maybe 3-6 calls a month. I figure if I can get one deal at 20% below market it would be well worth it. In my market (Salt Lake City) the price range for a decent Fourplex is 400-600k and rarely do any of the listings on the MLS even cover PITI with a 20% down payment.

If your goal is to buy investment property this may work for you.  The OPs goal is to buy a househack which is going to be difficult if it needs a lot of repairs.

As far as your strategy goes it could work but I think your expected response rate is high.  There’s another thread from yesterday the guy mailed 4900 letters at once and got 2 calls.  I’d expect 20 plus calls to get 1 deal.

So likely your annual budget is a percentage of what the big players spend on this stuff per month.

I have bought multiple properties for about double what you’ll spend on direct mail.  I would argue it’s better to spend that money on a property then direct mail.  I find off market deals to, but I network and don’t use direct mail.  Works just fine (and is free) if you’re just doing a couple per year. (Which is what I’m doing)

Another thing I forgot to add is, this could completely fall flat and get 0 responses over the next 6 months. I guess time will tell. I am going to be spending very little, as we're hand writing all of the envelopes *which are free from a local printing company that has nice extra envelopes*, and the letters are going to be printed and signed. So every batch is going to cost ~150 bucks to send out for postage. I wont count the printing costs as its all going through my business' printer and I can pretend it didn't happen :P 

I am curious, if you were in my shoes and in this market, what would your strategy be to get into a property that I could house hack and make worth while? High prices make it difficult here, as each unit is going to run ~200k for a rent of ~1300 or so if you go on market. 

Originally posted by @Caleb Heimsoth :
Originally posted by @Ryan E.:
Originally posted by @Caleb Heimsoth:
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 Caleb, why would you recommend against this? If the goal here is just to acquire one property every year or two I would think that a relatively smaller campaign with a low response rate would have a good chance of achieving that goal. I know a large scale is the way to achieve major results but if the goal is to just find one discounted property every year or so, then maybe a small campaign would work? My worry is that I will waste $6k and 12 months. 

I ask because I value the opinions you give and I'm planning on implementing a similar strategy as the OP, only I most likely will not be house hacking but I'm open to it. The idea, of course, is to find a property that I could buy at a discount, add value through rehab, then refi. I'm assuming the OP's plan is similar since he's looking off market. My plan is to spend about $6k per year on the marketing with the goal of purchasing one property within 12-18 months. That boils down to about 600 letters a month. So with a 1/2 to 1 percent response rate it would be maybe 3-6 calls a month. I figure if I can get one deal at 20% below market it would be well worth it. In my market (Salt Lake City) the price range for a decent Fourplex is 400-600k and rarely do any of the listings on the MLS even cover PITI with a 20% down payment.

If your goal is to buy investment property this may work for you.  The OPs goal is to buy a househack which is going to be difficult if it needs a lot of repairs.

As far as your strategy goes it could work but I think your expected response rate is high.  There’s another thread from yesterday the guy mailed 4900 letters at once and got 2 calls.  I’d expect 20 plus calls to get 1 deal.

So likely your annual budget is a percentage of what the big players spend on this stuff per month.

I have bought multiple properties for about double what you’ll spend on direct mail.  I would argue it’s better to spend that money on a property then direct mail.  I find off market deals to, but I network and don’t use direct mail.  Works just fine (and is free) if you’re just doing a couple per year. (Which is what I’m doing)

Thanks for the reply! Yes, I would much rather spend all available money on actual property but when I'm looking at a 400-600k range with the idea of finding an off market "deal," I think it will be money well spent....as long as the deal can be found and the equity spread created. I agree that a .5% response rate may be a little high but I'm expecting to have to mail consistently for 12-18 months before finding an actual deal.

The conclusion I keep coming back to is that I need to find better deals. Better than what's on the MLS and better than what the wholesalers in the area are putting out. I have strong confidence that the Salt Lake City market will grow and I will be looking back 20 years from now wishing I bought everything I could have (even with the market being so high). I strongly believe that even if I buy a cash flow negative property here, it will be positive within a few years. That being said, it's not something I am willing to risk without a large equity spread and the property would need to at least cover PITI, maintenance, and property management.

When you say that you are spending about $12k for a property are you talking down payment and rehab or that's what you have in the deal after adding some value and cashing out? Or are you just buying houses in the 50-60k range?

Originally posted by @Ryan E. :
Originally posted by @Caleb Heimsoth:
Originally posted by @Ryan E.:
Originally posted by @Caleb Heimsoth:
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 Caleb, why would you recommend against this? If the goal here is just to acquire one property every year or two I would think that a relatively smaller campaign with a low response rate would have a good chance of achieving that goal. I know a large scale is the way to achieve major results but if the goal is to just find one discounted property every year or so, then maybe a small campaign would work? My worry is that I will waste $6k and 12 months. 

I ask because I value the opinions you give and I'm planning on implementing a similar strategy as the OP, only I most likely will not be house hacking but I'm open to it. The idea, of course, is to find a property that I could buy at a discount, add value through rehab, then refi. I'm assuming the OP's plan is similar since he's looking off market. My plan is to spend about $6k per year on the marketing with the goal of purchasing one property within 12-18 months. That boils down to about 600 letters a month. So with a 1/2 to 1 percent response rate it would be maybe 3-6 calls a month. I figure if I can get one deal at 20% below market it would be well worth it. In my market (Salt Lake City) the price range for a decent Fourplex is 400-600k and rarely do any of the listings on the MLS even cover PITI with a 20% down payment.

If your goal is to buy investment property this may work for you.  The OPs goal is to buy a househack which is going to be difficult if it needs a lot of repairs.

As far as your strategy goes it could work but I think your expected response rate is high.  There’s another thread from yesterday the guy mailed 4900 letters at once and got 2 calls.  I’d expect 20 plus calls to get 1 deal.

So likely your annual budget is a percentage of what the big players spend on this stuff per month.

I have bought multiple properties for about double what you’ll spend on direct mail.  I would argue it’s better to spend that money on a property then direct mail.  I find off market deals to, but I network and don’t use direct mail.  Works just fine (and is free) if you’re just doing a couple per year. (Which is what I’m doing)

Thanks for the reply! Yes, I would much rather spend all available money on actual property but when I'm looking at a 400-600k range with the idea of finding an off market "deal," I think it will be money well spent....as long as the deal can be found and the equity spread created. I agree that a .5% response rate may be a little high but I'm expecting to have to mail consistently for 12-18 months before finding an actual deal.

The conclusion I keep coming back to is that I need to find better deals. Better than what's on the MLS and better than what the wholesalers in the area are putting out. I have strong confidence that the Salt Lake City market will grow and I will be looking back 20 years from now wishing I bought everything I could have (even with the market being so high). I strongly believe that even if I buy a cash flow negative property here, it will be positive within a few years. That being said, it's not something I am willing to risk without a large equity spread and the property would need to at least cover PITI, maintenance, and property management.

When you say that you are spending about $12k for a property are you talking down payment and rehab or that's what you have in the deal after adding some value and cashing out? Or are you just buying houses in the 50-60k range?

That’s downpayment and closing costs.  I would implore you not to buy cash flow negative property.  That’s a good way to lose your shirt when the market inevitably dips sometime in the near future.   

Originally posted by @Caleb Heimsoth :
Originally posted by @Ryan E.:
Originally posted by @Caleb Heimsoth:
Originally posted by @Ryan E.:
Originally posted by @Caleb Heimsoth:
@James Schindler

Are you mailing investors or are these primary house owners? Anytime someone gets overly personal about their family or what not, that screams they have little money.

So if you’re mailing to investors that’s gonna be a potential obstacle. Also what financing would you use? If you say as-is condition and use fha or some other conventional type loan they may not lend on it if there’s a lot of repairs.

How much money is this gonna cost you to mail? If it’s a lot I would recommend not doing a lot of this. Your response rate will likely be very small.

 Caleb, why would you recommend against this? If the goal here is just to acquire one property every year or two I would think that a relatively smaller campaign with a low response rate would have a good chance of achieving that goal. I know a large scale is the way to achieve major results but if the goal is to just find one discounted property every year or so, then maybe a small campaign would work? My worry is that I will waste $6k and 12 months. 

I ask because I value the opinions you give and I'm planning on implementing a similar strategy as the OP, only I most likely will not be house hacking but I'm open to it. The idea, of course, is to find a property that I could buy at a discount, add value through rehab, then refi. I'm assuming the OP's plan is similar since he's looking off market. My plan is to spend about $6k per year on the marketing with the goal of purchasing one property within 12-18 months. That boils down to about 600 letters a month. So with a 1/2 to 1 percent response rate it would be maybe 3-6 calls a month. I figure if I can get one deal at 20% below market it would be well worth it. In my market (Salt Lake City) the price range for a decent Fourplex is 400-600k and rarely do any of the listings on the MLS even cover PITI with a 20% down payment.

If your goal is to buy investment property this may work for you.  The OPs goal is to buy a househack which is going to be difficult if it needs a lot of repairs.

As far as your strategy goes it could work but I think your expected response rate is high.  There’s another thread from yesterday the guy mailed 4900 letters at once and got 2 calls.  I’d expect 20 plus calls to get 1 deal.

So likely your annual budget is a percentage of what the big players spend on this stuff per month.

I have bought multiple properties for about double what you’ll spend on direct mail.  I would argue it’s better to spend that money on a property then direct mail.  I find off market deals to, but I network and don’t use direct mail.  Works just fine (and is free) if you’re just doing a couple per year. (Which is what I’m doing)

Thanks for the reply! Yes, I would much rather spend all available money on actual property but when I'm looking at a 400-600k range with the idea of finding an off market "deal," I think it will be money well spent....as long as the deal can be found and the equity spread created. I agree that a .5% response rate may be a little high but I'm expecting to have to mail consistently for 12-18 months before finding an actual deal.

The conclusion I keep coming back to is that I need to find better deals. Better than what's on the MLS and better than what the wholesalers in the area are putting out. I have strong confidence that the Salt Lake City market will grow and I will be looking back 20 years from now wishing I bought everything I could have (even with the market being so high). I strongly believe that even if I buy a cash flow negative property here, it will be positive within a few years. That being said, it's not something I am willing to risk without a large equity spread and the property would need to at least cover PITI, maintenance, and property management.

When you say that you are spending about $12k for a property are you talking down payment and rehab or that's what you have in the deal after adding some value and cashing out? Or are you just buying houses in the 50-60k range?

That’s downpayment and closing costs.  I would implore you not to buy cash flow negative property.  That’s a good way to lose your shirt when the market inevitably dips sometime in the near future.   

Yes. Definitely agree. Which is why even though I’m highly confident in the long term market outlook, I’m not willing to buy a cash flow negative property. Hence the need for to source my own deal.