What would you do.
What's the expected return: response>qualified>leads>deals?
What does your list look like?
What does your 1st,2nd,3rd,4th... Mail piece look like.
Current goal is to get to 1 wholesale deal a month, then work to two, then start flipping them myself.
Welcome to BP! You will love it here.
I love DM and have used it for generating leads for years.
So you have your budget all set---very good. To get the most bang for your buck I would go with pcards. @Michael Quarles has a great site where you can choose which one you like best---and he has some super choices. if you go to his profile here on BP you will see the link.
He also sells lists ;-) I love OOS (out of state) owners and free&clear lists.
Some people use the same postcard every time; others will use the same one for 4 consecutive mailings---over a period of 4-6 months and then switch. The reason for this is tracking. Another word for marketing is, wait for it, TESTING. Everything s a test to see what works best in your market.
You sound like a good goal setter. One possible deal is a reasonable target. I like to send out no less than 500 per month to start. The most important part of DM is REPEAT mailing. It is 100x better than mailing to 2k names and then not mail again for 3 or more months. I recommend mailing to your list every month or at the very most 6 weeks. If you can mail to 1k names every month so much the better!!
One other thing. DM is kinda like going to Vegas and playing the slots. Well, ok, it's a bit better than that. But I have had some mailings of 2k pieces that brought me zip, zingo, nada. Sheesh, that wasn't fun. It's all about timing and consistency.
You didn't ask but I'll say it anyway. like more targeted mail pieces---so I reeeealllly don't like the standard yellow letter. I mean really. I like handwritten name and address rather than labels too.
And if you have other questions I'm sure Michaels people will steer you right.
Best of success to you
I have talked to a couple of BP friends about this post I wrote last night. They thought I was a sales person for Michael---I am not. And they thought that I was narrow in my views. So I am writing some addendum and stuff that should have gone in the above post.
I said that about the yellow letters because I get so many junk callers with them ---people that I feel are time wasters. (my impatient flaw showing up). I know that there are other types of yellow letters than the basic ones. If I were to do a yellow letter campaign I would use one of the more targeted letters out there.
I like post cards better because the ones I use I created myself and they are cheaper than a letter. I am still a newer investor and wholesaler and make every penny work hard for me. Those who are new to DM really should work with an expert in the industry.
Let me clarify another thing ----> Yellow letters do get the phone ringing and bring good leads---I just am not patient with the "crazies" that call along with the good sellers. This is my problem not the yellow letter's fault.
As I was writing the previous post----flying through it way too fast----I forgot to mention a dear BP acquaintance that I admire and respect. @Jerry Puckett has been a huge help (really) to me and I know he has DM services also. He is very personable, and knows this industry well. He is one of the rare breed of very experienced, hugely successful investors that answers the phone and takes time to talk---wow. I am just getting ready to order a large list from him. His prices are amazing too. Jerry, if you happen to read this please forgive my error in not mentioning you n the previous post.
A good business person does the market research needed, finds out what the options are, talks with people he/she might want to work with and decides what direction to go. Then the learning process begins :-)
Best of success
Thank you so much for the double feedback. I am very interested and want to get going. When I say I have a budget of 5k that number is pretty flexible. If I can turn 5k into a deal, then my budget is 10k. An important lesson that I am learning is that you can turn money into more money, you just have to know how.
On the subject of Michael, I think if he had to pay out every time his name or website was mentioned on BP, he would be in a bad place.
One question that has come from the answers I am getting is, "how many mailings does it take to hit the law of averages?"
From a business model perspective there has to be a reliable point where you can project a minimum return.
Do you know of anyone that has the experience to chime in on that?
LOL, I wish it was that easy!!! I am being honest with you when I say that DM is an unpredictable animal. All I can share is what normally (and nothing is normal!!) happens for me. When I mail out 1000 in TODAY'S market (it was so different last year and even more different the year before) I can pretty much bet on a deal that will bring me more than what I spent on the mailing.
I am being conservative here Luke. The reason is that I have done mailings of 1-2k and gotten just junk leads. It is this way in ANY kind of marketing.
The glory, the reward comes in the REPEAT mailings. The people might not be motivated today but they may be two months from now. If you stop mailing then they are going to call whomever mailed them that month. This is no joke.
Imagine, if you will, someone has a property that has been a good out of state (oos) rental. Everything has been going pretty good most of the time. They get your postcard/letter for 3 months in a row. Then BAM life happens (in it's ugly form) and someone has a dread disease that is going to be expensive to treat. Things have to be liquidated and they see your postcard. They call . . .
The law of averages, especially in the TODAY market (much more challenging) is that IF you KEEP mailing you will get a deal that will pay for your mailings and then some. I heard from a woman that had 13 rentals out of state. She called FOUR months after my first mailing to her. She just wanted the props to be gone---now---with no profit to her. She was willing to seller finance them to me for VERY little down after she found out that she owned a little more than most wholesalers wanted to pay. Perfect!! She gets the props gone and I get some nice cash flow every month.
And I am working on 2 more seller finance deals on duplexes from 5 months ago. Now, something I didn't mention is the HUGE important detail of follow through. If you are a golfer you get this better than some. I call people that responded to my mailing every 4-6 weeks depending on their tone on the call. Its just a friendly "Hi, I'm just calling to see if you sold that house yet . . ."
omygosh, this is long. I'm darn passionate about DM.
Best to you Luke
You should not use the same type of mail piece month after month. And dont spend 5k out of the gate..
I wrote a blog on cluster marketing and the positive effects it has on return. You may find it helpful. http://buysellfixflip.com/marketing-clusters/
Thank you so much for your response. I appreciate the link to the blog. I have started. My budget is 1k/ month. It is going swimmingly! I appreciate the info.
@Luke Holcomb Just wanted to see how your marketing efforts are going in Chattanooga? I'm in Nashville and am about to start some marketing of my own. What areas of Chattanooga are you mailing to and what has been your experience so far? Did you go with yellow letters or post cards?
@Jon Mason I sent you a PM. The Mailers work... I use a mix. so far I'm about 1 to 5 for returns... Please give me a buzz I would love to talk more!
I'm looking forward to hearing the story of your experience with DM in the Chattanooga area!
@Edwin Fisher , it's ever changing but one of our mailers got a response rate north of 3%... We are looking at 5 deals total from that one, so all and all it was a good return.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.