HELP Discouraged flipper with dismal direct mail campaign results

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HELP Discouraged flipper with dismal direct mail campaign results

Matt Turcutto
Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes

I recently started a house flipping business (although I'm not sure how good of a business it is since I have yet to flip my first house). After researching for I can't tell you how many years and after what seemed like a decade of analysis paralysis, I am finally taking action. 

On 2/15/2017 I sent out the first batch of white, typed letters. I sent 370 letters. Turns out I misspelled my website and screwed up the return label, but did end up getting a few calls. Each week thereafter I sent another batch until the fifth week when I sent the first list again. I eliminated anyone who bought 2016/2017. 

List 1 was simply my neighborhood. I figured if a deal was going to happen in my own immediate neighborhood it should be me that knows about it before anyone else. Like all my lists, I pulled the list of names and addresses from the title office. 

List 2 was a list of Tax Delinquent homes in areas I wanted to buy. 361 names in all.

List 3 was a combined list of probate and homes that had a Notice of Default filed (I live in CA). 93 combine here.

List 4 was a specific neighborhood I wanted to target. It has no HOA, was built in the 1970's, is in the $600-700k starter range (I live in OC), and is a place I feel has long-term value. 272 homes here.

Since I didn't get list one mailer one back, I have no data, but I do know I had a 4.71% return rate (insufficient address and the like) on list 2, 9.68% rate on list 3 and 1.84% rate on list 4 during the first mailing. The next mailing to the same addresses provided 1.36% return rate on list 1, 2.10% on list 2, 4.3% on list 3 and 0% on list 4 (I corrected each mailer as it came back and before I sent out the next batch). This is returned mail rate, not response rate.

As far as response rates, I received most calls during the first mailer (contrary to what I have read). List 1 generated 12 total calls among all the mailers for 3.3% response rate. List 2 got me a 3.4% response rate. List 3 I received zero calls, and list 4 got me one call at 0.4% response rate. 

List 2 was the only one that got me an actual lead. I submitted a verbal offer and was rejected immediately for being too low. Most calls I got back were, "Who are you? Is this a scam? Why would I want to sell? Don't send me anything else? etc." Each letter costs $0.59 each including postage since I printed everything at home ($0.01 for paper, $0.05 for ink, $0.06 for envelopes, $0.01 for labels, $0.47 for postage from Costco).

I wanted to find a way to do more so I bought 5,000 postcards on VistaPrint and sent my first batch out 4/3 (to list 1), 4/7 (to list 2) and will send list 3 & 4 tomorrow (4/12). So far I've not gotten one singe call from the postcard which surprises me. The letter phone calls came mostly 1-2 days directly after mailing. Postcards cost me $0.37 each with postage ($0.03 for the postcard, $0.00 for ink, $0.01 for labels, $0.34 for postage from Costco).

This brings me to today. I am finding a declining response rate with each supplemental letter I send. I'm told after 5-6 letters is when you get most responses, and I'm resolved to complete 5 letters/postcards before I call it quits, but I'm currently feeling very discouraged. The first two mailings were letters, the next two were/are going to be postcards, then I'm going to finish with a letter.

I have already found my next list of people I want to target. I think I've been doing it wrong in the sense of hitting entire neighborhoods. This next list is a list of 2,300 absentee owners in the 4-5 cities I want to buy in with houses below the $8-900k price I want to stay below. 

My problem is two fold. ONE: I am discouraged from the dismal results from the few thousand I already spent. I'm questioning the success of direct mail altogether. Perhaps my Orange County, CA market is too saturated and there are no deals left to be had? TWO: I don't know if I have it in me to commit to the thousands a proper 2,300 absentee owner list will require of me. I'm already kind of all in and although I could cough up the money for this second list, it would pretty much drain my funds that I've earmarked towards this venture rendering my real estate flipping dreams dead. 

Thoughts/Words of Encouragement/Ideas? 

#WhatTheHeckHaveIGottenMyselfInto

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Cornelius Garland
Wholesaler · Charlotte, NC · Member since 2015 · 398 posts · 679 votes
9y

@Matt Turcutto You've received some great suggestions, and I want to offer my input because you're not too far way from achieving success. Your persistence has gotten you this far, and I'd hate to see you quit after you've come this far. I did read a few things in your initial post that should be tweaked immediately. Firstly, I think your main issue are your lists. You're not focused on the right zip codes and prospect group, which is why your message isn't being well-received. I always qualify my target zip codes and check how many cash sales there were in the previous six months. If there are 100 cash sales in one zip code and only four in another, I'm going to go with the zip code that has 100. The reason being is because there is a lot of investor activity in the zip code with 100 cash sales. The prospects are already getting mailed to by investors so they know the benefits of working with you, and these will likely be blue collar areas with a lot of homes with equity. It may take some time to qualify the zip codes at first, but you'll thank yourself later. You want to use List Source to pull all of the cash sales in your target area and choose the zip codes with the most cash sales to market to. 

Secondly, I don't think your number of leads per list is large enough. While you may be targeting over 1,000 individuals per month, you're not focused enough. Rather than doing four separate lists, I would focus on one or two and hit those consistently. The smallest campaign I ever ran was a list of 390 names and that was a very specific neighborhood that had a lot of dilapidated homes. I typically aim for at least 1,000 prospects per campaign. I would suggest discontinuing the first and fourth lists, unless there have been a crazy number of cash sales. Also, if you haven't filtered by equity then your list is essentially worthless as a cash buyer. Not having equity filters on your lists is like shooting in the dark. These homes could be upside down or only have 10-20% equity, and you won't know until the prospect calls you.

Lastly, I want to touch on your marketing piece. You should really do yellow letters, or at least have your typed letter in an invitation envelope with "handwritten" font to increase your open rate. While you may not immediately close on these deals, it will at least initiate the conversation and you can followup with the leads. Every one of my deals, except for one, came from consistent followup.

I think your biggest issue is the lists you are targeting. If they're not solid from the start, your whole campaign will fail. Direct mail can work; however, it requires research and not deviating from what's worked for other investors. I spent about five solid months intensely studying the BP forums back in 2015 before I sent out my first letters, and I'm glad I waited. I was on a very tight budget, and we really only had one shot to get it right. Thankfully, we were able to pull a deal from that campaign, and we haven't looked back since. I know you're discouraged, but if you want to invest in real estate for the long haul, then this will be the first time of many that you spend money and not see an immediate ROI. I was definitely breaking even in my first year because I was learning and spending money experimenting with what works.

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  • Bob Okenwa
    Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    @Matt Turcutto

    Direct mail is a marathon and definitely not a sprint. You should be thinking in terms of months and not weeks. Secondly, there is not a one size fits all theory to direct mail. You will need to experiment with different sized letters, different colored pieces of paper, different colored envelopes, handwritten-looking letters, etc. It takes most people a while to find a marketing campaign that works for their area. 

    Sending letters every week should be cut back to monthly or biweekly mailings at best. The goal is to get people to consider calling you without them feeling harassed. A lot of people will call and tell you to take them off your list as they do not wish to be bothered. Also, you may need to alter your message as well. You should double check your targets to make sure your targeting people who have equity and most importantly focusing on those who should be motivated to sell. Your message needs to provide them a call to action and you should be clearly be presenting yourself as someone who is solving a problem. Of course this is easier said than done, but it is possible. Not sure what your message is, but I've seen flyers that explain the numerous problems that mailer can solve such as taxes, foreclosure, etc. without specifying the one thing you know they are having trouble with as some people will see such direct targeting as invasion of their privacy although such information is public record. Keep the message general, short, and to the point.

    Have you tried driving for dollars yet? This may help you get a more precise kind of target as this may lead more directly to absentee owners, people behind on taxes, vacant properties, etc. 

    1Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Matt Turcutto Having been a former Orange County resident you're hitting a market where people generally have money.  They were able to qualify for the loan and at some point had amassed 20% down for a pricey property.  I'm not sure those are the people that are going to find value in selling (at a discount) to a quick-close cash-buyer (presumably, you).  They can afford to wait for 2-3 months while the home sells for a "retail" price.  There have been times (like when the sub-prime mortgage implosion happened) where there were a lot of issues and those mortgage processors, originators, etc. went from making great money to zero.  But I don't think that's happening now and hasn't happened at any point in since then.  Net result, it's a tough market.  

    3Reply
  • Charlie Nghiem
    Austin, TX · Member since 2016 · 42 posts · 13 votes
    9y
    Matt Turcutto I think your getting discouraged way too soon. I don't know if you have read the book "Real Estate Rehab Investing Bible" during your analysis period, but there is a good chapter in there about direct mail. One thing that sticks out is mailing campaigns run at least 6 months, doing a mailing once a month with each list. Which means you don't know if a campaign is bad, until you finish the campaign. Also, before you start a campaign, figure out your budget, and mail accordingly. If you have $1200 campaign budget, you have $200 /mo to spend on post cards or letters. It also looks like you want to change your focus after the second month. In a podcast with Sam Craven, I believe, he also did a campaign and got some good leads and changed something after month 2 and the calls stopped, so he changed it back and the calls came in again. Someone correct me if I'm wrong, but his regret was not running the campaign all the way, or tweaking it too much too soon. I also would add the point of doing direct mail is getting your mail piece in front of the right people at the right time. Someone who is distressed will see your letter every month, but not do anything until their circumstances change. That could be month 4, 6, or 11 of a campaign. I'm sure that there are way better experts here that can elaborate.
    2Reply
  • Charlie Nghiem
    Austin, TX · Member since 2016 · 42 posts · 13 votes
    9y
    Wanted to add that if you have limited funds and an absentee list of 2300, you might want to refine those lists to mail out to the best prospects. Out of the 2300, who has done an eviction in the last year? Who has more than 60% equity. And there may repetitions where you might be mailing out 20 letters to a single investor who owns 20 properties. That will cut your list down significantly.
    2Reply
  • Shell W.
    Atlanta, GA · Member since 2017 · 24 posts · 8 votes
    9y

    Hello @Matt Turcutto,

    It will all work out well for you. Stay optimistic. If this process works for others, why wouldn't it work out for you? Also, I agree with @Charlie Nghiem. Just because the name appears on your list doesn't mean you have to mail to them. Take your time, vet your list and mail to the best possible prospects. This will save you money for sure. Keep us posted :)

    0Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Bob Okenwa thanks for the advice. I think/know you're right. I need to keep going but am just feeling down. 

    Just to be clear, I'm sending letters every week but they're to different lists. I hit the same list once a month and am on month 3/5. 

    1Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Charlie Nghiem how does one find out if they've had an eviction lately?

    0Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y
    Andrew Johnson is the answer give up in Orange County or are there better ways to find deals? I live in Orange County and grew up in Orange County. I know OC like the back of my hand and I believe in the long term viability of this market which is why I want to invest here but I really don't know what to do at this point.
    0Reply
  • Account Closed
    Real Estate Agent · Los Angeles, CA · Member since 2017 · 120 posts · 36 votes
    9y
    Matt Turcutto I would also recommend finding a printer that will mail for you. My printer in LA is significantly cheaper than the prices you mentioned (but that's his agent pricing). If you want his email/contact info let me know.
    3Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Matt Turcutto I wouldn't say "give up" as much as "manage expectations". You need to hit the people with the right message at the right time. My perspective is that disproportionately less people in Orange County will have a "right time" than a similar cohort in the Inland Empire or the South Side of Chicago. Mostly because "right time" is usually related to financial hardship (the value of an immediate cash-buyer over getting a "retail" value through conventional methods). Alternative Idea: You have a 3% response rate. Have you looked at the data on those properties that got responses for any trends/similarities? Age of home? Size? Approximately value? Narrower neighborhoods within your target cities? How long the current owner has owned it? I'm sure you can think of 50 other variables. Hopefully it's not completely random and can help you target better for next group.
    1Reply
  • Cornelius Garland
    Wholesaler · Charlotte, NC · Member since 2015 · 398 posts · 679 votes
    9y

    @Matt Turcutto You've received some great suggestions, and I want to offer my input because you're not too far way from achieving success. Your persistence has gotten you this far, and I'd hate to see you quit after you've come this far. I did read a few things in your initial post that should be tweaked immediately. Firstly, I think your main issue are your lists. You're not focused on the right zip codes and prospect group, which is why your message isn't being well-received. I always qualify my target zip codes and check how many cash sales there were in the previous six months. If there are 100 cash sales in one zip code and only four in another, I'm going to go with the zip code that has 100. The reason being is because there is a lot of investor activity in the zip code with 100 cash sales. The prospects are already getting mailed to by investors so they know the benefits of working with you, and these will likely be blue collar areas with a lot of homes with equity. It may take some time to qualify the zip codes at first, but you'll thank yourself later. You want to use List Source to pull all of the cash sales in your target area and choose the zip codes with the most cash sales to market to. 

    Secondly, I don't think your number of leads per list is large enough. While you may be targeting over 1,000 individuals per month, you're not focused enough. Rather than doing four separate lists, I would focus on one or two and hit those consistently. The smallest campaign I ever ran was a list of 390 names and that was a very specific neighborhood that had a lot of dilapidated homes. I typically aim for at least 1,000 prospects per campaign. I would suggest discontinuing the first and fourth lists, unless there have been a crazy number of cash sales. Also, if you haven't filtered by equity then your list is essentially worthless as a cash buyer. Not having equity filters on your lists is like shooting in the dark. These homes could be upside down or only have 10-20% equity, and you won't know until the prospect calls you.

    Lastly, I want to touch on your marketing piece. You should really do yellow letters, or at least have your typed letter in an invitation envelope with "handwritten" font to increase your open rate. While you may not immediately close on these deals, it will at least initiate the conversation and you can followup with the leads. Every one of my deals, except for one, came from consistent followup.

    I think your biggest issue is the lists you are targeting. If they're not solid from the start, your whole campaign will fail. Direct mail can work; however, it requires research and not deviating from what's worked for other investors. I spent about five solid months intensely studying the BP forums back in 2015 before I sent out my first letters, and I'm glad I waited. I was on a very tight budget, and we really only had one shot to get it right. Thankfully, we were able to pull a deal from that campaign, and we haven't looked back since. I know you're discouraged, but if you want to invest in real estate for the long haul, then this will be the first time of many that you spend money and not see an immediate ROI. I was definitely breaking even in my first year because I was learning and spending money experimenting with what works.

    11Reply
  • Aaron Mazzrillo
    Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    9y

    Market, Message, Media

    Just because you can send mail doesn't mean you should send mail. You're under the very false impression that anyone who sends mail should get deals. Unfortunately, that is not how that works. Seems like you have some focus on your market. At least you're attempting to pull some semi-niche lists... but not really. No idea what your message is, but going out on a limb here and I'm thinking it probably.. sucks? would that be the right word? It is certainly causing the money to be sucked from your pocket. Media - you sent a letter and now you're planning on sending a post card. Awesome! But, so what! I get lots of letters every week. Most end up in the recycle bin in the driveway. What makes yours so special it deserves to be brought into my house? I'm going out on my second limb here and thinking... nothing! So, who is doing your copy writing? You? Eesh. Big mistake.

    Real estate investors who enter the direct mail world mostly look past the fact that they are making the decision to be investors second and direct response marketers first. If you've spend zero time studying direct response marketing, you'll most likely see zero results from your efforts. Some get lucky. Most don't. 

    FYI, it is EXTREMELY competitive at this time in the market and OC is definitely a very tough nut to crack. And, you're attempting to compete with idiots like me who send.... maybe 5,000 A WEEK to extremely dialed in niche lists. Even I get very few calls, but the calls I do get result in open escrows, BECAUSE I also spent lots of years studying how to give good phone and flying all over this country to sit in crappy seminars listening to boring people tell me how to get other boring people to read what I wrote without being so bored they throw it away.

    Let's recap; To succeed as a direct marketing real estate investor you need direct marketing skills which include good copy, interest piquing medium and a highly targeted list. You need to have solid negotiation skills. (I closed my last deal over the phone within 10 minutes of the initial call.) Once you've at least become semi-proficient in these areas only then can you complain about poor results. What you're doing is going fishing for tuna, grabbing any old rod off the rack, putting on a worm and wondering why you aint caught no fish.

    9Reply
  • Charlie Nghiem
    Austin, TX · Member since 2016 · 42 posts · 13 votes
    9y

    @Matt Turcutto Not entirely sure how it works in your area. Typically you go to the county clerk and go through the filings yourself to build your own eviction lists. These are public record, so if available, they can be viewed through online records through the county clerks website also.

    0Reply
  • Stanley Parsley
    Investor · Chandler, AZ · Member since 2015 · 409 posts · 214 votes
    9y

    wow matt

    OK

    Here is what I want you to do

    go look at 6 properties by this week end

    this is a complete walk around the property with your check sheet

    by Wednesday of next week you should have one under contract, that does not mean you are going to be able to purchase but you have it tied up

    now get you some dough at 7% and get the deal done

    youll have 60 days to complete the project

    enjoy

    2Reply
  • Account Closed
    Johnson City, TN · Member since 2014 · 586 posts · 705 votes
    9y

    I may be totally wrong here because no one else has mentioned this, but it sounds to me like you are approaching the house flipping business more like a wholesaler.  As I see it, there are four different aspects to a flip; locating, purchasing, renovating, selling. There are companies and individuals that specialize in all four aspects. As the CEO of the flipping business, you can choose to directly participate in any one of these aspects, none or all. I would first identify my strength and choose that as my initial participation point. You can enter other aspects of the business as you gain familiarity and experience. In short, if you want to get the ball rolling in this business, turn to those that are experienced in finding properties.  Wholesalers. After you find your first deal you can then choose to continue your direct market campaign.  Now might be a bad time to start in the flipping business in OC because of the crazy prices and intense competition. You may have to look to other geographic in order to get started.

    2Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Cornelius Garland Thank you for your advice and suggestions. You mentioned my list is essentially worthless if I don't filter out equity. The reason I didn't filter out equity is that I wouldn't mind a short sale or even a subject to if it made sense. I figured for these reasons, its ok if I ignored equity. 

    The fact that you gear towards neighborhood with high volumes of cash buyers make sense, but what if the areas I want to invest in (long term) are not the same areas as a lot of cash buyers. Should I change my location or my strategy. I think that's the real root of my initial question.

    2Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Aaron Mazzrillo Ouch!! A bit harsh but perhaps its true. Here's the copy of one of my emails:

    Dear First Name,

    I hope this message finds you well. I am a real estate investor and have identified your home on Street in City, CA as a home I am interested in purchasing. I understand that your investment strategies and goals change over time. If you may be interested in selling this property, please give me a call.

    I can pay cash, as-is, and close quickly. You will not have to make any repairs, post a sign in your lawn, or deal with realtors bringing buyers through. Your neighbors don’t even need to know you sold your house.

    Thank you in advance for your time and consideration.

    Sincerely, 

    ME

    Here's another:

    I am looking to buy a house. I saw in the legal notices that you are the administrator of an estate that has a house in a neighborhood I am interested in. I am familiar with estate administration and know that many times the real estate must be sold to close out the estate.

    Since you may want to sell and I am looking to buy, maybe we could work out an arrangement that works for the both of us. I can buy the house as-is and close quickly. You will not have to make any repairs, post a sign in your lawn, or deal with realtors bringing buyers through.

    Please call me so that we can work out the details. My cell phone is (xxx)xxx-xxxx.

    Sincerely,

    ME

    PS – Now may not be the time to discuss this sale and I understand. Please hold on to this letter for future use. Thank you!

    It sounds like what you are suggesting is I should abandon the campaign and focus on what exactly? You are quick to bash my efforts but offer no real solution on how I can improve? Do you think I should go to a boot camp to gain better marketing skills? I'm trying to see what solid advice you can offer. In other words, what worms should I use to catch the tuna?

    1Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Stanley Parsley You'd have me abandon the direct mail campaign and buy off the MLS then? My issues with the MLS are that most listings in my area have at least a few bidders. I submitted one offer that had 30+ buyers. My final offer was $20,000 above list, all cash and it still didn't get the deal done. That's why I attempted to find the deal before it hit the MLS as to avoid the multiple bid scenario.

    0Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Account Closed This is actually good advice. I've been contemplating whether I should abandon the direct mail campaign and contact wholesalers. My issues with that at first were simply that I wanted to a) learn the direct mail side so I could have better conversations with wholesalers b) have the ability to cherry pick deals and wholesale the rest myself c) didn't want to pay someone else for the lead if I could do it better in house.

    I'm learning "C" may not be as worth it or as true as I initially thought. I think approaching other wholesalers may be the route I need to take if I ever want to get started. I was hoping to be able to uncover the deals myself so I can pocket the wholesale fee or have the option to wholesale out myself. 

    0Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Matt Turcutto This might be another "ouch" but have you Googled yourself?  Let's say I did get your letter and I was interested.  Before calling you I'm going to Google your name.  What comes up?  LoopNet, Commercial Real Estate Investment Advisor, Wind Water Reality.  Literally NOTHING that says "I have the resources to purchase your home today".  So anyone that Googles your name is likely going to think:  

    "Great, another spam message for a realtor that will say anything to try and get me to list my house."

    Or maybe the more sophisticated person will think:

    "I'm obviously on the wrong mailing list, why would a commercial realtor want to buy (or list) my residential home?"

    Either way...trash can...

    2Reply
  • Matt Turcutto
    OP
    Developer · Laguna Hills, CA · Member since 2017 · 21 posts · 9 votes
    9y

    @Andrew Johnson This is very true. My day job is in the commercial realm. I don't know how to combat this very valid objection. In fact, as I mentioned earlier, the first mailer I sent misspelled my website. One of the calls I got was someone who tried getting to my website but couldn't. They then googled my name and found Wind Water, the company I work for. They called the line and spoke with someone about me who had no idea I had this side business. Long story short, it went all the way up to my boss which provided for an awkward conversation. 

    Is there a way to overcome this? Should I even try? Am I better sticking to selling commercial buildings? Literally these are the questions I'm asking myself which is another answer to why I posted this post on BP to begin with. Any advice is greatly appreciated. 

    Maybe because I have really good SEO on my commercial sales side, I choose to outsource the direct mail to wholesaler? This does kill me though, but maybe I need to admit defeat on the direct mail side and focus more on what I can succeed with. 

    0Reply
  • Michael P.
    Real Estate Investor · Dallas, TX · Member since 2009 · 183 posts · 153 votes
    9y

    One time I mailed letters to just 13 people all on the same street, it resulted in a purchase.

    Another time I sent letters to a hundred people all on the same street, zero calls.

    One time I sent 2500 post cards in a certain area and received 1 call.

    The point is you never know, it comes down to some luck, timing, etc.

    Did you post the contents of your letters on here for others to critique?  That might help.

    As far as being an agent, I always write something like this:  I must disclose that I am a Texas Real Estate Broker, however I have ZERO interest in listing your home, only buying it.  

    2Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Matt Turcutto At this point I would say give your chance a shot at success. Pay for Google Adwords. I can't imagine the cost-per-click would be high if it's just for people that Google your name. Likely the same for what you've named your side business. At least then you know can control the tag-line at the top with "ALL-CASH HOME BUYER" or whatever others think will work best. Getting into Adwords for "cash home buyer" is probably extremely pricey compared to just your name. You can make a Google+ profile, an AboutMe page, etc. in addition to your website. Those might get indexed faster by search engines. I'm just spitballing a few low/no cost ideas.
    2Reply
  • Cornelius Garland
    Wholesaler · Charlotte, NC · Member since 2015 · 398 posts · 679 votes
    9y

    @Matt Turcutto I didn't intend to come across so blunt regarding the equity filters. However, it's extremely important as rehabber that you have equity once you purchase. You want to add value to the property through your repairs, and this is difficult to do if the property has low equity. I'm unaware of your previous experience, but you need to be able to negotiate with the banks directly in order to work with short sales. Also, I'm unsure if you need to be a licensed realtor or broker in your state to do this. I know in South Carolina, you don't have to be licensed; however, the process can take anywhere from six months to a year.

    I've targeted the mortgage late, inherited, probate, and tax delinquent lists previously and did not use equity filters, which resulted in an abysmal ROI. If you do want to target short sales or homes with little equity then I suggest doing this strategically. In List Source, you can filter by negative equity. So if you're willing to pay above market value, then you can control how much a property owner is upside down on their home. The worse feeling is having a motivated seller call and they're significantly upside down on their property. That's what happened when I mailed the mortgage late list for several months.

    While you may want to focus on specific areas that investors aren't heavily working in, the likelihood of getting a deal may be low. I think @Andrew Johnson articulated this perfectly. The people you're marketing to generally aren't in a difficult spot financially, and the only way they would sell to an investor is if they're going through divorce or some difficult emotional situation. It is advantageous to market to areas that have lot of investor activity because your message has been broadcasted to the property owners already. It's much easier to get a property under contract if you don't have to explain the benefits of selling with an investor to the prospect. Contrarily, If you're the only investor marketing in your neighborhood, you're going to have take very cold prospects and explain the benefits of working with an investor to every single seller. My personal suggestion is that you focus on one exit strategy and master a single marketing strategy before you add on anything else. If you want to rehab homes, then I would solely focus on this and not short sales or sub-tos  This will allow you to both narrow the focus of your marketing efforts and ensure you're not becoming overwhelmed. I can only count a handful of investors, that I personally know, who run their own marketing in addition to rehabbing properties. Rehabbing is a full-time job in itself, so a lot of them outsource their lead generation or rely on wholesalers for deals. I just feel like you're trying to do too much, and it reminds me of when I first started. I empathize with you and understand your frustration. There are a lot of great suggestions on this post, and we all want to see you succeed.

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  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Matt Turcutto If you are mailing generally to the same metro area, get a mailing permit and slice your postage cost down in half. You could also look at EDDM. I'd ditch the tax list and the probate/NOD lists and hit specific entire areas. Those lists are purchased by everyone who does this so the owners are already being inundated by postcards and letters with all sorts of claims. Hitting every house in an area requires more volume but is lower hanging fruit because you are the only one contacting them.

    If you narrow down a specific list you are really interested in, change your mailer to something that stands out. I recently just ran a test mailing of 12x18 color posters of my marketing spiel in a 14x20 envelope to old expired listings in a specific area. Still waiting to see on response rate. Based on how small that list is, additionally do some cold calling a week after the mailer hits.

    Also, I'd work on your call to action in our letter. Unfortunately tons of wholesalers preach that they pay cash, quick close, etc etc, and if these owners have engaged those types before, they'll likely bundle you as just another person who can't close. 

    Specifically call out what is in it for them in the first sentence. Something like:
    "I am reaching out to you today because I am interested in purchasing your property at _____. Please give me a call/text at ________, or via email at _____ and we can discuss further.  I am prepared to offer you fair market value for your property and will provide proof of available funds to do so prior to us signing any contract. Be assured that although I am a licensed commercial agent, the purpose me contacting you is strictly to add your specific property to my personal portfolio."

    That sets the stage for who you are, and when they get other mailers from you, they'll hopefully remember this first one. I had one lady I visited who had all of my marketing materials from the last 18 months in a folder - some folks do actually save these things.

    2Reply
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