HELP Discouraged flipper with dismal direct mail campaign results

OP

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

9y

@Brian Egr Perfect advice. Thank you. I didn't even think of removing my last name. I know that will be something I immediately do and will have benefit day 1. I have already gotten the hilarious voice messages calling me all kinds of names. Coming from commercial real estate sales, I was not phased by the name calling and angry calls but when someone googled my name and ended up talking to my boss and the head of the company, I knew something had to be done differently.

Thanks for the encouragement. I think I'm going to finish the campagin I set out to do, and I will try one more time to mail to a new 2,300 absentee owners list 5 times (postcard, letter, letter, postcard, letter). If I continue to achieve dismal results, I will hang my direct mail hat up and try to buy from wholesalers.

Carlos Altamirano

Investor · Los Angeles, CA · Member since 2015 · 325 posts · 75 votes

9y

Hey @Matt Turcutto

Are you doing any online marketing? I drive thousands of targeted people to my website through Facebook Ads, and have over 100 online citations that direct visitors to sire. I am getting better at Optimizing my website, and have a VA always posting ads on CL, which result in calls. I have back links as well. Not even spending a fraction of what direct mail costs. For now, I am sticking to online marketing, it seems that every address has been mailed by some flipper or wholesaler numerous times.

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Cory BinsfieldPro Member

Financial Advisor · Duluth, MN · Member since 2012 · 156 posts · 194 votes

9y

Why are you focused on flipping?

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

@Aaron Mazzrillo any kind of marketing with no sales skills to back it up is simply folly.

OH and I got a mint bright Hen on the last run of the year LOL

@Matt Turcutto sounds like your cashed up and can actually pay cash and not looking to flip contracts.

get Property RADAR app and start following trustee sales .. show up and bid. now there are crazy bidders sure.. but there is usually 10 to 20% equity in all sales that happen at the court house steps even in the OC>

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Account Closed

Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes

9y

@Matt Turcutto I feel your pain. :-) I sent out 5,000 postcards once and I got one call. That was a total waste of time and money and boy was it discouraging. I did a post on BP a couple of weeks back on a very successful mailer that has made me a million dollars, literally, over the years. I'll try to find it and re-post. Might be useful for someone, but the OC is high end & I think @Andrew Johnson is probably right. When I sent it to Top Neighborhoods I got little response (some, but nothing like the bread & butter neighborhoods). In the long run, if you are going to rely on mailers, it's probably going to take going to Temecula or someplace like it to get the response and make the numbers work.

https://www.biggerpockets.com/forums/223/topics/215784-preforeclosure?page=1#p2650282

Account Closed

Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes

9y

@Matt Turcutto I was able to find my post. Here is most of it with the link for the rest.

My letter made me a Million Dollars.

I Titled it "7 ways To Avoid Foreclosure" with me buying the property as option 3 so I didn't look too self serving. I used legal size double window envelopes at $50 per 500 and had the message show through in the top window. I sorted the database for the zips I wanted and I mail merged the names and addresses.

The letter was one side of one page printed on 24# paper printed and tri-folded at Staples so the address showed out the window when inserted. I mailed on mondays so they got it on wednesday or thursday so it didn't compete with the thick monday's mail. I put a 1st class stamp on the envelope. I sent out about 500 every week. Yep. It cost me about $1 per mailer. So, I spent about $500 per week advertising. My wife and I would watch "Flip this House" while we stuffed and sealed and stamped. I was one of the highest users of services at Staples and I have a platinum discount. I had my cell phone number on the insert and picked up the phone every time it range regardless if it was 7:00am or 10:00pm

I would ask "which item number do you have an interest in?" and direct them in that solution. Obviously, if they said #3 I would schedule a meeting at the house with all owners of title present.

If they said any other item number, I would advise them of those options as best as suited their situation and I would tell them that if they needed help, let me know or if they decided to sell, give me a call. I treated them fairly and with respect and I made a million, literally.

Sometimes I was able to help them keep their house without costing them a dime. Sometimes I would get a call back a year later from them wanting to sell their house to me. I got lots of business. But always, I was respectful of them and of a tough situation, offering honest solutions and we both benefited . . .

click on link above for rest of post.

Ken

4 Reply

Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes

9y

I'm not suggesting you do anything. In your original post you asked for "Thoughts/Words of Encouragement/Ideas?" so I picked "Thoughts" and offered you mine. It is up to you how you process and utilize.. or ignore my opinions. I will agree with the dude who said that ditty about people googling your name. I've had that happen many times and people will tell me they googled my name and they know I'm the right person to sell to.

As for your letters (more opinions are about to arrive) they are EXACTLY what I thought they would be; that regurgitated garbage everyone who pretends they are a marketer mails out thinking just because, "I have cash, I close quick, I buy As-Is, I, I, I do this, I do that, Look at me, me, me" people are going to call them up and throw deeds at them.

No USP. No call to action. No "what's in it for me?" on the seller's side.

You also need to look at your market. People in California are not morons about the value of their home. (Unlike most other states.) People here know what their house is worth because the local agent farming the neighborhood puts flyers on the door every f'ing time they sell something. It is so bad in my neighborhood I put up a No Trespassing sign by my front door. Well, for the realtors and the people selling Jesus.

So, you're trying to buy wholesale in a market that is so hot, I could put my beat up rental/probate/whatever up for sale with an agent and have it sold most likely above asking price within a few days or weeks. I know because I drove my dumb a$$ all the way to Laguna Niguel THIS MORNING to attend an open house at 10:30am on a weekday to look at a super crappy beat up rental house where the owner is asking $3,200/month and there was a LINE of cars parked down the street. At 10:30. In the morning... On a weekday. People were swarming the agent talking about how much they loved the house. And it is a dump. That right there is a hot market.

Either get yourself a new target market or get yourself a new niche within your current market. If you want to succeed at direct mail, start with The Letter Book. It is only about 500 pages long. A quick read on the subject. That should get you one or two ideas. I've got about 100 more books I can refer you to if you get through that one. Otherwise, hire the marketing out to a pro like @Jerry Puckett.

I can't give you too much more info cuz I'm looking to catch a tuna in your town and I certainly don't want to be bidding against you to land it. I need to escape this rat hole called Riverside ASAP and Laguna Niguel is where I ought to be. Or HB. I'll take either.

2 Reply

Dylan VargasPro Member

Rental Property Investor · Chico, CA · Member since 2016 · 625 posts · 336 votes

9y

@Matt Turcutto Did you take @Bob Okenwa up on his offer?

Pete Perez

Engineer/Real Estate Investor · Renton, WA · Member since 2015 · 368 posts · 120 votes

9y

Originally posted by @Aaron Mazzrillo:

.

Either get yourself a new target market or get yourself a new niche within your current market. If you want to succeed at direct mail, start with The Letter Book. It is only about 500 pages long. A quick read on the subject.

Is that by Robert Collier? I'd pick that book up and any other you recommend

OP

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

9y

@Carlos Altamirano I have not tried online marketing yet. Honestly, I've started about a half dozen websites on various subjects over the years and the whole process of running and managing a website exhausts me. I'd rather stick a fork in my eye than focus my time on SEO & SEM (although I do know there's much value in both).

The problem is I obviously don't see too much value in SEO or SEM else I'd pay to outsource it. I'm simply too cheap to outsource which is probably why I've only had a mediocre brokerage career and find myself back at working for the man.

I guess in short, my wife and I have allocated $5,000 to building my flipping business and I've exhausted half on a crappy list with an apparently crappy type.

Would you advise me spending the remaining $2,500 on better letters/list or on SEO/SEM?

OP

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

9y

@Cory Binsfield I'm focused on marketing like a wholesaler and flipping because I have a network with money who trusts me. I want to use the good 'ol OPM until I can build up my own cash to buy long term assets and escape the good 'ol rat race.

OP

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

9y

@Jay Hinrichs I did subscribe to Property RADAR in the past and actually canceled it. I attended one courthouse auction to see what it was like. I tracked the homes and found at least the houses I saw sell on auction weren't a killer-smashing-hit-it-out-of-the-ballpark deal. Plus, I don't have millions of my own money. I have to raise private equity and the private equity can act fast (a day or so) but typically wants to leverage with hard money as to boost cash on cash returns.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

Court house very rarely are screAming deals but they are generally under market. If you don't have cash then Well then it's a non starter

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

Court house very rarely are screAming deals but they are generally under market. If you don't have cash then Well then it's a non starter

JLH Capital Partners51 Review

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Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes

9y

"I've exhausted half on a crappy list with an apparently crappy type."

A better statement would be that you've invested half which taught you that you are using an already over-mailed list and sending stale copy."

You can change your list. You can change your copy. You can change both. At least you know what doesn't work.

I would start by working on your USP - Unique Selling Proposition. Get out a pen and pad or mosey on up to the white board and list reasons why someone would need/want to sell. Then, why they might sell to you or what you can do for them. In 15 years of buying houses, fast and all cash were never the issue, but maybe my lists target a different demographic. Build your copy around your USP by writing a story, not an ad.

3 Reply

Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes

9y

Forgot to mention that Property Radar is so much more powerful than looking at auctions. You are WAY under utilizing it if that is what you think it is for. That's like saying a parachute is for jumping out of planes. Yeah, that's the obvious and most widely accepted use. However, I can take you to my daughters gym and show you 15 toddlers laughing their diapers off running underneath it while their parents lift it up and let if slowly fall on their heads. I've patronized a restaurant that has one set up over the patio area to keep leaves from falling on your plate and in your drinks. There is a reason they changed the name from Foreclosure Radar to Property Radar.

Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes

9y

Originally posted by @Pete Perez:

Originally posted by @Aaron Mazzrillo:

.

Either get yourself a new target market or get yourself a new niche within your current market. If you want to succeed at direct mail, start with The Letter Book. It is only about 500 pages long. A quick read on the subject.

Is that by Robert Collier? I'd pick that book up and any other you recommend

Yeah, I like the really old books. Back when the only way to actually make contact with people was direct response. If you go to Amazon and select that book, it will give you a ton of great suggestions in the People who bought this also bought area. Another I like is The Boron Letters. Get through those two and I have 98 more I can recommend. Although some are not in print and hard to find or quite expensive to buy.

Steve Milford

Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes

9y

I send 5-second post cards. Meaning 5 seconds before they are in the recycle bin. I personally dislike spending money on them but people call me from them. And I am not consistent with it cause it's a pain to me lol. But people tell me that my card sits on their fridge until they get tired of looking at it. Now, I am a Realtor. What's my message? "Know anyone that wants to sell? Say NO to 6%. My sellers pay avr of xxxxx less to get their house sold versus using someone else. Call me anytime!" Or some version of that. My xxxxx is my running average of how much people are saving, currently $9,800. And then on the flip side I have my picture and contact info.

Steve Milford

Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes

9y

I hit submit too early lol. And I print them off of my laser jet printer from my home computer, after a mail merge onto card stock, and score them and stamp them myself. I generate my own mailing lists and sometimes use a title firm for specific demographics in the lists as well. 100 addresses takes me about 2 hours to generate; printing, scoring, stamping takes me about another hour. Aside from my time, cost is less than 5 cents per card plus postage. And I break even on them for the most part. Sometimes I get a deal every 100 or so I send and sometimes I don't. Now remember, in the last year, I sent about 5,000 cards total. So based on your results vs. mine knowing nothing else, your list isn't niche enough, and your message is too long. Study up on how to write copy, you only have a few seconds to grab attention. Everyone hates yellow journalism (showing my age here) but those headlines sell. My 2 cents.

Steve Milford

Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes

9y

Oh, I just saw this. You say you have a network that has money, then why are you direct mailing? Take someone in your network out each week and tell them what you are doing and ask them what projects they need help with. And then find them people that help them, and they will find people to help you. Read following 3 books: 1) The Go-Giver by Bob Burg. 2) Sales Bible by Jeffrey Gitomer 3) Networking on Purpose by Beth Bridges. And then take action.

Tom Ott

Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes

9y

Originally posted by @Matt Turcutto:

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

In the 21st century I'd say a direct mail campaign is very antiquated. Most people just throw those things out.

OP

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

9y

@Account Closed This is really good stuff. I think the last letter I send to my "NOD" list will include some of this language. In the future, I think I'm going to give the absentee list a try since the area I want to target is more affluent.

OP

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

9y

@Aaron Mazzrillo Alright. You've convinced me to work on my type. I'll look at Jerry's stuff and may consider investing in him. I'm also buying that letter book and am refocusing my list. You are correct. I've lived in South OC my whole life and we've always gotten the realtor comp sheets (I used to hang them on doors in high school for family realtor friends for extra money). People in my area are wise on home values.

Several people tried to get me to invest in Riverside County and I truly believe Riverside is in for a good appreciation bump in the next few years, but after talking to people like you I decided long ago I should go after the areas I want to invest in long-term and in the areas I know like the back of my hand. For this reason, I want to stay in South OC. I wouldn't mind owning rentals in South OC and I know the area super well. Why learn a whole new market just to get out of the market in a few years as part of my long-term strategy? I'm just trying to figure out how to work the South OC market most efficiently.

If you truly want to go after the tuna in OC, why don't we partner up? I have access to money and the drive to get deals. If you can bring the deals it may make sense to work together than to not "give too much more info cuz <you're> looking to catch a tuna" in my town. DM me if interested.

OP

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

9y

Originally posted by @Dylan Vargas:

@Matt Turcutto Did you take @Bob Okenwa up on his offer?

What offer is that? Driving for dollars?