Mailing to pre-foreclosures

27 Replies

I was wondering if conducting a mailing for pre-foreclosures is an effective technique? Is this more effective then door knocking?

Pam - You're really talking about the flip of a coin here. One might be better for some people, and vice versa. Either should prove to be effective, as long as you're persistant. Keep at it, and you'll begin to see some success!

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I have found knocking to be the most effective but if I get one deal every two months off all my mailers it more than balances the costs. Also mailing creatively is key. Try sending mailers in colored envelopes. I like mine to look like party invitations. Most pre-foreclosures in my area receive about 25 mailers within the first few days of publication so I want my envelope to stand out, as well as my mailer.

Good Luck!

Originally posted by "vainvestor":
I have found knocking to be the most effective but if I get one deal every two months off all my mailers it more than balances the costs. Also mailing creatively is key. Try sending mailers in colored envelopes. I like mine to look like party invitations. Most pre-foreclosures in my area receive about 25 mailers within the first few days of publication so I want my envelope to stand out, as well as my mailer.

Good Luck!

good idea to use different envelopes.

Don't forget to handwrite their address on the front of the envelope. That way it looks more like something sent from a friend and will surely be opened.

I have the lists. Now, are there other ways to go about obtaining pre-foreclosure listings other than mailings and knocking on doors? What other strategies would you suggest? I'm in the New York City area if that helps. Thanks!

Ok, I'll post my methods here & see if anyone even reads it. lol

Opinions:
Door Knocking - Terribly time consuming and represents the least chance for a deal. On the plus side, it helps you to identify the characteristics of abandoned houses.

Calling on Phone-
This method yields only about 30% as far as listed numbers. The ones you do talk with, usually end up calling you names you may have to look up. They tend to bring your mother into the insult-fest.

Mailing-
BY FAR the best way to market to foreclosures! Not with the intention of reaching the owners still living there mind you. The ones that respond are just gravy.
The intention is to have the post office tell ME where the [size=18]ABANDONED[/size] houses are, for just .39 cents!!!
[size=12][/size]Abandoned owners have no emotional ties left and once you find them, nearly 100% of the time they will sell for payoff. Here is a list of steps you must take to be effective:

[b]1- Plain white legal size envelope.
Bright colors piss owners off as they think that you are bringing attention onto them. Like the mailman doesn't know??? lol
2- Regular 1st class stamp
A metered stamp looks non-personal.
3- HAND WRITE name & address and don't list "or current resident"
In fact, have a female do that part. In DFW women get a 50% better return rate than men. Less intimidating.
4- Return address must be a home, street address and NOT a PO Box or work address. Also, do not put your name on it. If they see a name and they don't know you... it gives them a reason to not open it.
5- Have a stamp that says, "RETURN SERVICE REQUESTED"
This is the major one. Even though it is a 1st class letter, the post office is slow to return letters without it. Usually 15% of all the foreclosure houses are abandoned. In fact, 30% of the time the post office will return the letter with their forwarding address printed on the envelope!
Simply the best chance you will give yourself.[/b]

Following these steps should get you between a 2% and 8% return call rate on top of 10-15% returned letters to follow up on. Just make sure the letter you write is good. But that's another thread.

Good luck,
jim

dfw, I read your post. Great tips! Thanks for your input, I will start marketing to these folks and see what I can drum up. And of course I am willing to respond here again once I know what my response rate is...

I agree. Knocking on peoples homes that are in forecosure doesn't seem wise. Of course, I'm a new investor who hasn't closed a deal yet, but if I were the homeowner I would feel humilited, offended and frankly pissed off. The homeowners are under a great deal of stress. Living in Texas I would think knocking on their doors would be a good way to get shot. :D

Forgot to mention, after spending big bucks on a preforeclosure seminar in how to find and contact the people, doorknocking was not in the top 5, it was a last resort and not highly recommended. The big point that was made is to make it a campaign,don't write just one letter, but follow up with subsequent letters. The longer this happens, the more likely you will find a deal because the borrowers have exercised all of their options and the sense of urgency may finally kick in. When it does, you want to be sure, they know your name.

Christy,

First off... the first deal is the hardest. If I can offer my advice.... don't let your emotions get involved in any deal and DON'T QUIT! Not suggesting you were going to but, once most investors find out that investing is actual work and not yachts and palm tree's, they quit.

I have to say that I don't think it's a efficient idea to send multiple letters to an owner in foreclosure. One should do the job. Hand write the name/address and hope for the best. If they don't call.... you have lost nothing. Keep in mind that between 40 and 50% of the owners will file for bankruptcy. Those statistics are still changing after the October 17, 2005 law change. So you are going after an owner in a highly competitive market.

I have to ask.... How much is "Big Bucks" and what state are you in?
Just curious really.
Keep in mind that while there may be big differences in seminar costs, even the bad courses have something to offer, If you end up making money or more importantly... SAVE money due to something you learned from the course, you are ahead.

Keep posting

PS.... The getting shot in Texas is no lie. One of my students, a harmless, 60 year old, soft spoken guy had a homeowner in a well-to-do part of Dallas come to the door with a gun! Just be careful & use common sense.

Jim Watkins
www.dfwmentor.com

Jim,

thank you for your advice. I think I agree with the one letter deal. I'm in the Houston area and with you being in Texas as well, one letter is all we really have time for since I only find out about the preforeclosures once an NOD has been filed. When I say big bucks, I mean $25,000 or more. Maybe that's aiming too high?

Yesterday I had a call from a homeowner who said they wanted nothing but $500 to aid in their moving costs. I had done a little due diligence before sending the letter and estimated they had about $60,000 in equity. That was only based on the foreclosing lender's balance. I have no idea if there were any other liens. The problem was, she called me at 11:00am and the sale was yesterday. It wastoo late for me to do anything for her.

You had me ready to tell you to call me ASAP.

Welcome to the foreclosure world!!!! The owners seem to wait until the last minute at which point it's virtually impossible to do anything.

The good news is you really had no deal at all until you obtained a payoff from the lender and/or trustee and had title run.

You didn't say what the value of the house was though. $60,000 equity in a $100,000 house is a slam dunk. Now a house valued at $500,000 with $60,000 equity is almost a sure loser. ALWAYS go on percentages and don't fall in love with equity in dollars. (I know you didn't ask but thought it might be helpful anyway.)

TTYL

Jim Watkins
www.dfwmentor.com

Hi All,

Does anyone have a good letter that has work for them? To send to people that are already in forclouser. Is their a time fram that is better then others to send send out a letter?

Any help would be great!

Mark Balaban

Originally posted by "thedfwmentor":
You had me ready to tell you to call me ASAP.

Welcome to the foreclosure world!!!! The owners seem to wait until the last minute at which point it's virtually impossible to do anything.

The good news is you really had no deal at all until you obtained a payoff from the lender and/or trustee and had title run.

You didn't say what the value of the house was though. $60,000 equity in a $100,000 house is a slam dunk. Now a house valued at $500,000 with $60,000 equity is almost a sure loser. ALWAYS go on percentages and don't fall in love with equity in dollars. (I know you didn't ask but thought it might be helpful anyway.)

TTYL

Jim Watkins
www.dfwmentor.com

The sales in the neighborhood were between $130-$140 so I was basing that on the most conservative of $130,000. I hear you about not getting involved, but do you know how bad I wanted to scream "Why didn't you call me last week?" Ugh!!!! Well, at least I know my letter works. I had only sent out 7 letters for that call. Today, I sent out 75 so we'll see what type of response I get. If I find another deal with at least 30% profit, I will definitely call. :D

Originally posted by "nobull":
Hi All,

Does anyone have a good letter that has work for them? To send to people that are already in forclouser. Is their a time fram that is better then others to send send out a letter?

Any help would be great!

Mark Balaban

Mark, I don't mean to be rude but if your normal grammar & spelling is the same as in your post, my suggestion would be to have someone else write your letter.
VERY few owners will respond to a letter with those flaws.

Overall though, I used nearly two dozen letters over the years. They need to change with the market & people. And strange as it may seem.... you never will "know" your audience. Owners in foreclosure are a very fickle bunch.

I have purchased many books on this subject and I do have some form letters from the books that are a good base. You should always tweak them and make them your own, but if anybody would like me to fax a couple, I can. Just PM me. My only condition is that if you're in the Houston area, tell me so I don't send you the one I'm currently using. I just sent them out in the past couple of days and a few last week so I can't tell you any response success stories as yet, but I don't want us sending the same letter to the same people. That would just be tacky. :lol:

Originally posted by "Christy":
I have purchased many books on this subject and I do have some form letters from the books that are a good base. You should always tweak them and make them your own, but if anybody would like me to fax a couple, I can. Just PM me. My only condition is that if you're in the Houston area, tell me so I don't send you the one I'm currently using. I just sent them out in the past couple of days and a few last week so I can't tell you any response success stories as yet, but I don't want us sending the same letter to the same people. That would just be tacky. :lol:

thank you very much for your fax. I am fairly new to this business, I've established good connections with the major bank in the area and trying to approach the pre foreclosures owners offering them to save their credit and list with me. Is it the right tactic to approach pre foreclosures?...

What do you mean "list" with you? Normally, people buy the homes, but I guess it depends on your state and the foreclosure timeline. If you have enough time I guess you could list it.

Don't forget that the easier it is to get the information, the more competition that there will be for the business. Absolutely, investors are in competition with Realtors for the preforeclosure market. If a homeowner signs a listing contract with an agent, the bank will many times agree to consider a short sale and delay the auction of the house to see what the market response is. I have sat in sellers homes with them and informing them about what is happening to them in this process. Many times they have a pile of mail from investors AND Realtors all trying to "solve" their problem.

Originally posted by "ProHabber":
Don't forget that the easier it is to get the information, the more competition that there will be for the business. Absolutely, investors are in competition with Realtors for the preforeclosure market. If a homeowner signs a listing contract with an agent, the bank will many times agree to consider a short sale and delay the auction of the house to see what the market response is. I have sat in sellers homes with them and informing them about what is happening to them in this process. Many times they have a pile of mail from investors AND Realtors all trying to "solve" their problem.

Realtors are useless to an owner in foreclosure (in Texas, this is a 21-day process). I say this because of the time frame involved. I don't know many everyday people that can get all the required inspections done, arrange for the mortgage and close, within 21 days in the real world.
Doing it within 21 days is near impossible. So unless a Realtor has a cash buyer on hand... I look at a Realtor on a sinking ship, directing people into the engine room. They simply can't help an owner in this scenario.

I totally disagree about the lender agreeing to a short sale once it is in the foreclosure process. At that point the lender is at the end of their rope with the owner and is very unlikely to bargain.... and if they do, you have to prove that the owner is getting NO MONEY out of the deal.
A short sale is extremely likely if they are a junior lien-holder and the 1st lien-holder is the one that has filed the foreclosure. My experience has been most junior lien-holders will accept ten cents on the dollar to release the lien.

One other note on short sales:
If the loan is an FHA or VA..... forget it. Their requirements to short sale are just ridiculous. One of them being, they will not discount more than 18%. They never have been able to tell me if that is After Repair Market Value or As-Is.

To the person that suggests they can "Save thier credit," That's total BULLS**T.
Nothing personal against you but, by the time an owner reaches foreclosure, their credit is shot to Hell. Even if you do stop the foreclosure, they are still 6+ months behind in their mortgage and that info won't drop off their credit report because you stopped the sale.
If I can share what an irate homeowner told me when I was new.....
"Son, how the %#*@ is saving my credit going to keep the roof over my head?"
You need to keep in mind that most owners want to remain in their house (that's why Bankruptcy rates are so high because that will keep them in the house longer).
If you approach asking them to sell..... you are facing near-impossible odds.
If you approach with useful information about the foreclosure process and what options they may or may not have.... you stand a reasonable chance to gain their trust, bring them from denial to acceptance and hopefully... they will realize that selling may be the best chance they have and you are first in line.

I want to note that while I disagree with ProHabber on his opinions of short sales, I am in agreement with him on nearly all of his advice he has given on this website.
He is one of the VERY few investors that has figured out that the best way to make money is to be genuine about helping people. The end result is people will recognize that and he will excel.
Most investors see buying houses as a business. Yes, it IS just business BUT, it is a business about PEOPLE.

Try that approach & I promise you..... you will do well.

-Jim Watkins
www.dfwmentor.com

Hey guy's

I'm new to the site and I had a quick question about mass mailing. I've been sorting through the lis pendens and been sending out letters to selected area's all within 30 miles from my house. I just downloaded act 2005 to help me hold my contacts. Is their an easier or more automated way to produce many letters an denvelopes and mail them? Is their a servie that I can use ro software I should be looking at. Any help is appreciated.

Thank's

Shawn

Shawn,

If you are looking to personalize each letter, you can do this with Microsoft Word. Search under the Help function for "Mail Merge".

I would highly suggest hand writing all of the envelopes. If there are too many to do by yourself, then pay someone to hand write them for you. Also, include a hand written return address and a real first-class stamp on the envelope as well. You want your mailing to look like a personal letter to the owner, not another piece of junk mail.

thank's Alot Prohabber,

I'm glad I found this site,I have been reading for days straight and I have noticed your posts have been very Informative.

Shawn

Originally posted by "thedfwmentor":
You had me ready to tell you to call me ASAP.

Welcome to the foreclosure world!!!! The owners seem to wait until the last minute at which point it's virtually impossible to do anything.

The good news is you really had no deal at all until you obtained a payoff from the lender and/or trustee and had title run.

You didn't say what the value of the house was though. $60,000 equity in a $100,000 house is a slam dunk. Now a house valued at $500,000 with $60,000 equity is almost a sure loser. ALWAYS go on percentages and don't fall in love with equity in dollars. (I know you didn't ask but thought it might be helpful anyway.)

TTYL

Jim Watkins
www.dfwmentor.com

Is there a general percentage that you use to rule out which properties are keepers/losers?