So, I've been at this DM Campaign for a few weeks and I'm starting to feel like I am in over my head. I have mailed out about 550 mailers and have yet to have gotten a call from one. I am posting on Cragislist every day for both buyers and sellers and I've gotten one call from a seller that didn't work out.
I still have the other half of my list to mail, so I know I haven't even hit the maximum capability of my initial push but I at least thought I'd get a call. I don't care if they were even duds, 100%, I'd at least feel like my message is falling on listening ears.
I know that my original push was going to be very slow. I don't have the money to mail 1000 people at once so I broke it into 100's, mailing the first 300 with most of my budget and mailing the rest of them a week at a time, stuffing and stamping myself (and yes, handwriting envelopes too).
I'm just having one of those moments where I feel like there's too many different angles to approach this thing, I'm moving too slowly, and I'm going to burn out before I even get in.
Let me start by explaining my strategy thus far.
For mailers to the original 300, I sent postcards from vistaprint about 21/2 weeks ago. Since then, I've mailed about 250 more people with typed letters stuffed into handwritten envelopes.
Additionally, I mailed about 100 houses I got on D4$. On Craigslist I am using templates I got from Investorcarrot and a real estate investment course I took through a local REIA. It is 4 aimed at buyers and 4 at sellers. I rotate them every day around 6pm so I'm at the top of the list when others are getting off of work.
That's it. Can I get some advice or at the least some cheerleaders???? I could use a pep-talk this morning.
When you plant a seed it does not just start bearing fruit. It takes a while just for the sprout to come out of the ground.
You wish you had just calls. How long do you think that would last before that would not be enough?
Very true Mark. Very true.
Hello @Benjamin Barredo !
Don't feel defeated just yet! There are a few factors that can explain why you haven't received any calls yet, but the biggest one is that it is early on in your campaign.
You said "I'm just having one of those moments where I feel like there's too many different angles to approach this thing, I'm moving too slowly, and I'm going to burn out before I even get in." Trust me, we have all been there, even if we don't want to admit it. We want instant results and when we don't get that we get frustrated. I've been there! Sometimes just a deep breath, a smile, and a pep talk in the mirror helps.
It might help you to remember what to expect in respect to the response rates. If you haven't seen this before, here are the average response rates we have seen based on our customer feedback as well as our own mailings throughout the years:
Yellow Letters- average response rate of 8%-9%, all kinds of calls (angry calls, curious calls, tire-kickers, quality calls)
Postcards- average response rate of .5%, mostly quality calls.
Zip Letters- average response rate of 2%, mostly quality calls. (Great for follow ups)
Greeting Cards- average response rate of 2%, mostly quality calls. (Great for follow ups)
Also, remember that follow ups are key as the average person takes 3-5 touches before picking up the phone to respond.
Keep on moving forward and keep your chin up!
Numbers taught in business school show ONLY a 1-3% return on direct mail and that includes all forms of replies - - like get lost. :sigh:
It's a known as a low percentage approach.
@Benjamin Barredo , my investment model has been a live-in flip, so I'm not looking for volume. But I send extremely targeted letters to very few people.
I find my targets through walking for dollars, so let's look at that portion of your process.
How do you determine whether or not to mail to them? Do you do any research on the home itself once you identify it as a target?
I walk my neighborhood with my kids, and when I see a home that needs improvement, I write down the address. I'm a real estate agent, so I have really easy access to public records through the MLS. I look up every address to see when it last sold. If it sold within the last two years, I don't bother sending a note. If is isn't owner-occupied, I don't send a note.
Once I get my list narrowed down to long-term owner occupants, I send a letter, telling them I would like to buy their home, and if they are ever interested in selling, I'd like to buy it. I disclose upfront that I am a real estate agent, but that I'm not looking to list it for them, I'd actually like to buy it.
My market doesn't support lowball offers, so I also reassure them that I'm not looking to steal the property from them, that I'm paying market value for the property.
I give every single way I can think of to contact me, including a phone number that I answer every time it rings, email and physical address.
I print these letters out on the computer because my handwriting is like a kindergartener, and sign with a blue ink pen to show that it's hand signed. I hand write the envelope, and put their actual name on it, rather than Occupant or Homeowner.
I have a ridiculously high percentage response rate, because I took a lot of time and I look like I sent it to one person, rather than a more generic letter.
I think it's better to look at direct marketing as a 6-month campaign rather than 6 sets of 1-month mailers. You can't look at any 1 set of mailers and determine if it's a success. I personally would not judge and results until you get to the finish line (end of the 6 months).
I just sent my first mailer last week, 2,557 mailers and have received one phone call so far over the weekend from it. I'm not hitting the alarm button until I have hit the 6-month mark and spend my budget of $10k on the whole thing. We have to be willing to fail, lose money, etc. Part of the game :) Best of luck and keep me posted on your progress, I'll do the same.
@Mindy Jensen Great information. Thanks.
For my driving for dollars, I write down the address, take a few pics (if it's vacant I might peer into the windows and walk around it) then I go home and research it's history and owner information through public records. I look at last sales date and price but I don't have a criteria I am just looking to see if it has had some history of increasing in value. I split the lists up between absentee and owner occupied and mail them both. I sent them handwritten yellow letters but recently I switched to typed and printed letters with the same message but I don't sign it so I'm going to steal that idea if that's okay. I do handwrite the envelopes and include the actual names. I write about 100 a night when I can. I'm about to mail the second portion of my list from online (I split the 978 into thirds, trying to mail each third every two weeks which will bring me back to the first third in about six weeks).
I have decided that I'm going to be stricter about my mailings. Whether it's D4$ or a paid for list from a list-source.
Why do you only mail houses that haven't sold in the last 2 years? Is that for a little equity? Why not absentee?
Do you mail the same message to all of your homeowners? Would you use a different message for absentee vs occupied?
Has anyone ever cold-called? I started to and then realized a lot of the numbers I was getting from Intelius.com were disconnected and old. But now I'm thinking of cold-calling FSBO's I find on realty websites or from my D4$. If you have done some cold-calls, how did that go for you?
@P.J. Bremner I wish I had 10k to spend, I would have a lot less doubts. I had like $1200 to spend on direct mail and spent more than half of that just mailing half of it. So now I'm buying 200 stamps and mailing about that a week.
$10,000 over a 6 month period is $1,666.67 per month, not far off from your budget. I used some of my budget to buy the list ($450 for 2,557 leads) and my first mailer was about $1,300 to mail each lead with a post card. You only buy the list once, so that expense isn't there the following month. My plan is to postcard 3 - 4 times, yellow let once (much more expensive) and then post card for the 6th. Since I run several other businesses at the same time, I paid a premium to yellowletters.com to print and ship them, but if I was on more of a budget, I could get them printed for less than half + whatever the postage is. You can buy a laser printer, extra ink cartridges and paper for less than $150 all in. You can print them yourself and buy bulk mail rates from the post office if you go over a certain amount. I suspect if I did everything myself for this round, I would have shaved off $300 - $400 for the job. That would put you well within your $1,200 budget and mail to way more than 1,000 people.
Driving for dollars is great if you have the time to do it. It's also smart to think more long-term and look at what you can do to SCALE so that when you have success and have more money than time, you can still grow. Driving or dollars has no ability to scale unless you are paying others to do it for you.
I've been in many sales jobs before I went into real estate investing. Cold calling SUCKS. lol Just make sure you have the mental fortitude to handle all the pissed off people yelling at you and hanging up. Very low success rates, BUT there is still some success there to be had I have no doubt. It just makes me wonder about the opportunity cost of your time in making the calls. Could you do something else that has much more value for your time? Probably, but maybe you're amazing on the phone and can woo those disgruntled folks into your corner! If you go that route, I would set a goal for calls to make each day and stick it out for a couple of months before you make any judgements on it. Ignore all results (other than how many calls you make each day) until you have enough data to substantiate your gut feelings on success or failure of this method.
Also, there are services that will dial these numbers for you, even calling multiple numbers at a time, and then they call you immediately when someone answers and transfers it to you. Something to think about.
How "targetted" is your mailing list?
Depending on that, your expected response rate may only be in the tenths of a percent, meaning you need to send thousands just to get one response.
Unless you are accustomed to dealing with large sums, I'm sure you'd find losing $10K on a direct mail campaign quite unpalatable.
I use a mail company called Corefact, http://www.corefact.com expect to get about 1-2% return, but you have to stay at it. I mail monthly, and this system seems to work for me. It's all about your expectations. Good luck.
@David Dachtera Yes I wouldn't enjoy that. I am mailing absentee owners with equity in Knoxville, TN. SFR, built 60-99.....that's about it. I think it's a little too broad but we'll see. I'm also posting on Craigslist for buyers and sellers. Then there's the D4$ which I must admit I don't do enough of. I have only got about 80 names so far.
I think I'll mail this list 8 times like @P.J. Bremner suggests before I give up on it. If I don't get a call back though after the third mailing, I might get another list, zip code specific. I'm also going to get a probate list from the courthouse and start mailing it. I want to hit Tax Liens and Code Violations but I'm having a hard time finding out where to get that information. I want to do the leg work. I don't have $1200 a month to spend either. I had $1200 - period - and it was just to help me start plus get an online presence and a bunch of business cards. I also made 2 shirts with the messages "I buy houses" for out in town and "I need cash buyers" for the REIA meetings. Then I bought some stuff for the family so I spent about $700 on the business.
Any suggestions on how to get those code violations and tax lists? I don't want to pay for it unless I have to pay the city/county for it but if I can do my own legwork and get the list I'd rather do that. Until I close a deal and have a payday that I can fuel marketing and sources with, I want to go the "free" route as much as possible.
I misunderstood what you said about the budgeting. I think your best bet might be doing very targeted mailings then, because from my experience with pricing out mailers is that if you can't send 1,000 at a time (ideally actually you want to be at 2,500) then you get no economy of scale. For example: I priced a mailer out for 500 mailers, 1,000 and 2,500. The price difference total between 500 and 1,000 was literally like $40... it was ridiculous. Then the price difference between 1,000 and 2,500 was about 1/3 more expensive. So I got 1.5x MORE mailers for only 0.33x more cost. Above that point it didn't make much difference. If you're doing everything yourself, then perhaps you can get the costs down. If you don't already have it, I would recommend going on Amazon and getting a laser printer that isn't too expensive, get some paper and an extra ink cartridge or two. You can set everything up yourself, go to the post office near you and ask them mailing pricing if you do X amount of postcards, X amount of letters in envelop, etc. and see if they have different pricing at different volumes. Find that sweet spot and hit em every month hard :)
Like I mentioned before, be more focused on your efforts (how many you send, phone calls you make, doors you knocked on) and less focused on the results (how many deals you make). Once you have enough data under your belt and experience with everything, then you can make adjustments to your process and find out what works, what doesn't and adjust. You got this man, keep it up!
@P.J. Bremner Great advice. I'm going to do that.
Any suggestions on a good printer? Why a laser printer? Is it cheaper than a ink when accounting the actual cartridges of ink? I was going to buy an HP InkJet but now you got me halting. I just looked at laser printers and they have some office size ones for like $120. That's completely doable.
I'd like one that I can feed envelopes into as well. I still want to handwrite the address of the target owner but having to write the return takes up just enough time to make the process grueling. It takes me about 1 minute per envelope to write the mailing and return addresses. Stuffing them with my business card and the letter takes no time at all. Like 20 minutes to stuff 100. It's the envelope that eats up time. I thought about ordering one of those return address stamps. I thought about stickers but they're pretty expensive when you're buying thousands. Again, cost down as much as possible.
I was wondering about the post office. I have a memory of someone going into a post office and dropping a bunch of letters held together by a rubberband onto a scale and paying for that. I don't remember if they had stamps or not.
I run an Amazon store that sells about 4,000 items per month and I do 100% of my printing for that business on a crappy $55 printer I bought online lol So I have to print item labels for each item, shipping labels for the boxes sent, packing lists, etc. so I go through a lot each month. The reason I use a laser printer is that they are meant for high-volume usage and print WAY faster. The toner (ink cartridge equivalent for the other kind of printer) is much cheaper from what I remember. I'll send you a link for what I bought:
$54.99 for the laser printer lol Can't beat that!
$17.99 for 2 toner that handle 2,600 pages each (full document size, probably closer to 5,000 postcard sized print jobs)
Paper will just depend on what you are sending out. If you don't buy most of your business supplies on Amazon, you are throwing money away (unless you have a local supplier that is cheaper, but highly doubtful).
What type of paper do you use for postcards?
Also, what about color? My wife wants a printer for photos and such. I'd like to have a little color in my marketing pieces too. I would assume their more attractive and appealing....thoughts?
The only vote that counts is the one who votes with their wallet. In this case, a qualified seller.
I started mailing to property ushers in foreclosure in 1978. Yes, there will be periods when no calls are received.
You are at the point that 99.9% of people who "try" real estate get to: a couple weeks and no bites. Not unlike fishing, you'll never catch gush unless you have a line in the water (marketing).
There's more to direct mail than sending out an occassionsl, erratic postcard or letter.
Perhaps revealingly, it's starts with having a great list. A great list consists of prospects who are pre-qualified and predisposed to do business with you. Understand that there's a difference between a "cold" list and a response list. Your list make be a crappy list of property owners that some list provider sold you or included as part of a package deal.
You'd gain much knowledge by first getting a small list of property owners with equity in foreclosure. Go door knock and just talk to them like people. Don't try to sell them, just learn what they see as their problems and worries and make mental notes.
Research direct response marketing. Read Dan Kenedy, Jay Abraham and others.
Apply what you learn to your letter campaign. Work a smaller, refined list of quality prospects. Remember the job if your nail piece is to get the prospect to open, connect with the message and compel them to take a single action like call you. Your job us to sell the next step on the phone.
If you are part of the .01% of marketers who are willing to exoerience the discomfort of failing and persistently mailing then tweaking their campaign, then you know that you are merely testing what would and doesn't.
Test, test, fail, fail, next, next, next.
I used yellowletters.com so they selected the materials. I sent a mailer to one of my rentals as well to track when they would drop and to spot check the work. It looks like standard card stock (like 3x5 cards thickness, yellow color). My personal opinion is to get the laser printer for your mailers and use it exclusively for black and white stuff. I sent my mailer in black and white. Think of it like this... If you're fighting a war, do you give your foot soldiers each a $10 millions dollar cruise missile? No, you give them a rifle ($1,000) and some 5.56 ammo ($1 per round or whatever). There is a time and a place to "go all out" but mass mailer marketing is probably not the place in my opinion. My gut says that 99% of the people that get them, toss them immediately without looking at it, so all that money would be wasted. You just want a quick message in front of the widest audience and fishing for that low-hanging fruit so go cost effective. I may be wrong on this because I don't have tons of experience in real estate marketing, but I have tons of experience in other business types of marketing and it's a similar idea.
Get a separate printer that can do high quality color stuff for the wifey.
**UPDATE** Got 4 calls so far, 2 are looking for $1M+ for the tiny home on a huge lot, 1 asked to be removed from the mailer list because she is a wholesaler that markets as well lol and the last one is a great lead. Inherited property, owner tried to fix it up but gave up halfway through and just wants out. Appointment set real soon, hopefully it works out :) Hang in there man, yours is coming soon too!
Good luck on that @P.J. Bremner . You seem like a great guy and deserve all the success you bust your $*s for.
@Benjamin Barredo , I was in your shoes for a majority of this year.. I just felt like I was spinning my wheels. I didn't know what I was doing, I thought it was a huge waste of money to mail to the same list over and over. I was buying lists, mailing them 1 maybe 2 times, and moving on to the next. I wasted a lot of money that way. Learn from my mistakes.
To simplify a long story into two major lessons:
1) A Quality List Is The Foundation Of Your Marketing. Upfront cost isn't everything. You can get a terrible list for really cheap or a very targeted list but it will cost you a little upfront money. The more targeted the better.
2) Have A Dedicated Marketing Budget! Don't believe the gurus! This is not a "no money business". If you can't afford at least $500-1000 a month for your marketing budget for the next 6-12 months... then wait, save, and then implement your marketing. You need to stay consistent, and hit a QUALITY list at least 5-7 times. That takes resources.
I'm still learning, I love reading, listening, and watching to increase my knowledge. I know what you're feeling, don't give up. Be the 5% that tough it out and make it to the other side. I did my first deal last month and am now working on my second deal just a few weeks later.
Keep us updated on your progress.
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