My wife and I are new to the business. We've been going at it pretty consistently for the past five months. We are combining several strategies for lead generation and direct mail is one of them. We are using a specific list for targeting vs. EDDM (via USPS).
The biggest challenges we have is establishing credibility. We tried yellow letters for the first few months, but found that the groups we're targeting did not respond well to those. So we began sending out professional white letters with logo, letterhead, etc. Envelopes are still hand-addressed, but contain our logo on the front of it.
The response has been about the same, about 0.50% response rate.
The biggest hurdle we're trying to overcome is that our company is a scam or fraudulent. We know that we're committed to integrity, but our recipients don't believe it. Just yesterday, we received an email from one of our leads, kindly requesting to be removed from our "scam" list.
What do you do in order to establish the appearance of credibility? I'm debating whether to pay the BBB-mafia in order to get their logo on my materials. Are there other agencies or organizations that you recommend joining in order to make use of their logos?
Aside from associating with agencies/organizations, what else has worked to overcome this hurdle?
Don't approach as a company. Approach as "Matthew from Minnesota-Home of Norwegian bachelor farmers".
I already tried approaching this as an individual, as opposed to a company. The problem we're running up against is that a state organization sends out letters to people in foreclosure warning them about so-called "scammers" who may contact them to take advantage.
What kind of parameters is your list targeting? What 'grade' of properties are you looking to buy? What kind of copy are you using in your sales letter?
If you are mailing to owner-occupants facing foreclosure (based on your last reply), I believe your results will be different than if you are writing to, for example, out-of-state absentee landlords with significant equity (50%+) in the property in a 'B/C' working-class neighborhood.
We're mailing owner-occupants who are in a state of foreclosure. Equity varies based on home, but we usually only go after properties with 20% or more equity based on our research.
Grade of property varies. We target geographically, not by property grade. Most are in the B/C range, with a few in the A range.
Our copy has varied. We initially started off with yellow letters, but we've since transitioned to white letters. I just finished a book on writing copy and plan to make those adjustments in my sales letter. However, I'm still left feeling like there's something else I could do in order to boost credibility.
@Matthew B., this does come up. Think about it.... If you were about to have your house foreclosed on how apt would you be to talking to a complete stranger who claims that they can solve your problem? Regardless of if you can or will, its a frightening process. Perhaps you could consider a multi-channel approach for this marketing campaign. One that does require the prospect to call you just not immediately. How about sending them to a video squeeze page where you can explain their options, talk about how you can help, maybe feature some testimonials. From there have prospects to fill out an online questionnaire or call you. Just a thought...
You are mailing to a group that has been repeatedly receiving the message - from the state - to beware of scammers. So this group concludes you probably are one. What's wrong here? THE GROUP YOU'RE MAILING TO. You are not going to overcome the state's probably multi-million dollar investment to create fear, uncertainty, and doubt in that group.
Shift to ABSENTEES with equity. They will not be suspicious and they respond better to a professional approach such as the white letters with logo, etc.
To add to @Dev Horn with absentee owners.
Think about a seller's problem that is not in a distressed state - no equity.
There are 20 million houses in the US without inventory.
1. Sub2 Offer (subject to existing financing - get the deed) and rent out or lease option.
2. Lease Option Assignment Offer (you lease option from seller and assign the deal for $5K)
3. Wrap - AITD Offer (you buy on a wrap) and sell on lease option
4. List it (get your license)
5. Lease with a ROFR (right of first refusal) ; this avoids Dodd Frank. You help the renter get the mortgage. Get a mortgage origination license.
Like the other posters, i think you should pivot your marketing strategy to a different list. But if you are dead set on doing NODS, call the Attorney Generals office of your state and ask them what you should be looking for in Scam deals. (ask as a concerned individual) and then when you have found out what flags they are telling people to look for change your copy to highlight the fact that you aren't waving those flags.
I'd guess that to not be thought of as a scammer, you need to step up the packaging of your letters and use something a little more legit and focus on being a helpful business.
Rewrite your copy to not be talking about foreclosures. Do a normal I buy houses flyer targeted at the NOD's.
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
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing