How Much Marketing for 1 Deal a Month?

25 Replies

If I want to just get 1 or 2 deals a month right now, how many mailers should I be sending a month? I am working on about 1000 leads right now. I haven't mailed them all yet (I'm on a very tight budget until I get that first deal so I'm only sending like a few hundred out every pay day).

My basic question is this. If I want 1 or 2 deals a month, should I hit this list every month or should I be hitting a new list every month? Statistically I should be hitting like 3,000 leads, right?

My goal right now is just to double my income for a few years through wholesaling. I make about $50,000 a year so I want to do the same in wholesaling. So breaking that down, I need to make about $4,167 a month. Depending on the deal, that is potentially just one deal a month.

I am beginning to think I need to be mailing 1000 a month but this also doesn't include the fact that I'll be hitting probate court up and I D4$ (but that's a very slow process; my goal there is only to learn the market/neighborhood/ and potentially luck-out on a deal every once in a while through it).

So I'll repeat, should I work this lead list to death, hoping to strike a deal a month, or should I be adding a new list each month to assure I hit that one deal?

Benjamin,

The short answer is; mail enough

There is no formula on how many mailings you send out each month, but here is something that will be helpful to anyone sending out mailers.

1) Make sure you put together a mailer that someone will want to open unless its a post card

2) It has to get their attention and courtesy to want to call you.

3) If you are going to mail out pieces you want to sent them out to people you know that want to sell.  If you just farm a market in general you will probably run out of funds before you get someone to call you with interest.

4) It's better to send out to the same people at least 5 times.  Research has shown it takes someone seeing your mail piece at least that many times before responding.

Good luck and if you follow those rules you will be on your way in reaching your goals

Jim Sakalis 

It all depends on your area and the statistics you receive. Not all areas are the same 

Benjamin,

That's a good question but doesn't seem like there is a real answer. I'm just getting started myself and would like to do the same thing. I'm located in Dallas but grew up in Knoxville (graduated from Bearden). If you want to get together on anything let me know.

Best of luck to you.

@Benjamin Barredo I have read it takes between 25-30 phone calls with sellers to close a deal (this is just an average). So If you send 1,000 letters a month, and get a 3% response rate you would receive 30 calls. First deal will be the most difficult for sure but you just need to follow up on leads, and keep mailing your list! 

For my farm area I've had to spend anywhere from 1-3k to get a deal. So spending 1k/mo would either lead to a deal a month or one deal every three months. 

Make sure you are keeping track of your numbers. I can't emphasize enough, marketing is a numbers game. 

To answer your question; keep mailing to the same list and test different yellow letters, white letters, post cards, etc. until you find the one with the highest response rate. Then continue to mail your best piece until it doesn't work. 

Don't be afraid to experiment. 

@Benjamin Barredo

It's not about how many mailers you need to send or what type/content for that matter. Instead, you need to focus on the quality of the actual lead.

You might not be able to win on quantity but you can certainly opt to win on quality. We recently sent < 500 mailers out and got 2 deals out of those mailers. We didn't mail to absentee owners (like everyone else does) with the hopes they were motivated. Instead we sent to people who we KNEW were in some sort of distress AND had high equity (probate, delinquent taxes, etc). These lists are harder to get your hands on (in some areas anyway) but they are (IMO) much more fruitful.

Good luck!
Michelle

@Michelle B.

Would those lists happen to be probate and NOD's (notice of defaults)?

I just recently found when I called the Office of Deeds they told me I had to come to the office to search their computers for the information. I also have to manually go the courthouse to and search their files.

I have a full-time job so this is going to be hard but I think I'm going to either bring someone in on a "referral fee" basis to research for me or skip out to a "doctor's appointment" one day and search them myself.

I do think that because most investors are lazy, in that they wan to make money as easily as possible and can afford to use expensive marketing techniques, I won't have a lot of competition in the probate and NOD area because they aren't going to the courthouse and digging through filing cabinets.

If you have any tips for a brother, message me. We could even work out a way for you to make some "fees" for your time.

Thanks again,

Ben 

Ben, there are usually NOD list companies who already compile this information for you at a nominal monthly costs.. Like here in on the west coast look up Property radar.. its a really really cool website that is only about 50 bucks a month.. its quite incredible.. there maybe something like that in your city.. not sure how big Knoxville is.. and if there is no service.. then I would start one.. you could make more money providing leads to others than wholesaling LOL.. that's what I did in the timber industry on the west coast back in the 90's when I had to pull info by hand like what your talking about.

Also do check your state laws on working NOD's out here again on the west coast there are very specific laws one must follow and like in Oregon you MUST be a licensed foreclosure consultant to engage with folks in mortgage distress.

Also the amounts of NOD's have dropped drastically in most markets.. there are still markets with long foreclosure process were there are hangover inventory..

We work in a East coast city and we buy using VERY targeted direct mail.. and its more of a professional letter than a yellow letter.. and we will get one deal usually each mailing of maybe 500 letters.. .But again very very targeted.. and a lot of research up front before we even send them out.  Also local number any my partner there answer LIVE ALWAYS and is at the property within 30 to 60 minutes with an offer within 2 hours... all cash close no contingencies as soon as title work is clear.. that is the competition on very hot markets like this.. I don't know if Knoxville is hot right now.. but I heard Nashville is on fire.. and in a market like that it can be dog tough doing direct mail.  And here in PDX same thing.. most folks that meet the metrics of high equity long term ownership in certain areas will get mail almost daily...

I like tax delinquent in some markets.. for instance each year we can easily buy 10 to 30 properties in 2 weeks prior to the Memphis tax sale by knocking doors.. usually semi to full hood stuff but we just off load it

Depends on your area and other factors.  In general though, I've found that 1,000 mailers on the same list, 6-12 times (once per month) would lead to a handful of deals.  Thats for blind leads, zip code for the area I'm farming.  

I've found driving for dollars, writing down distressed/value add properties and then marketing to those lead to a more fruitful, higher and quicker response rate.

If you are on a tight budget, door knocking and/or driving for dollars may be a more effective means ... you're looking for beat up properties with equity and can use detective work on the ground to gather further info on the situation ... if you can't set an appointment directly with the owners in person, you can follow up on promising leads from that via mailers, and that would likely be a much smaller (less expensive, but higher quality) list.

@Benjamin Barredo As others have mentioned, how much to mail depends on a lot of factors. How good is your list? What is your response rate? Letter or postcard? What is your lead conversion rate? Do you have good follow up systems in place?

My advice would be to just focus on doing what it takes to generate a certain amount of leads. Get a list and stick to it mailing once a month for at least 6 months. Track how many leads you get, and if they aren't ready to sell today, keep following up with them over time. Theoretically you should be able to close a deal every 20-40 leads. If after awhile of tracking this, you aren't closing deals at that rate, I would start to evaluate your processes for answering the phones, setting up appointments, and salesmanship skills.

@Andrew Herrig At what point should I get a new list?

I'm doing exactly what you advise. I'm mailing the one list, finishing up my first campaign and scheduled to follow-up each month after. As calls come in, I'll divide them up into "act now", "follow-up potentials short" and 'follow-up potentials long". I plan to follow up on the non-responses 8 times. I'll find out which piece they respond to and collect data to find out what is getting the best response so I can use that. I split my list into thirds, mailing each third every other week, each with a different type of campaign (1st third - postcards, 2nd third - yellow letters, 3rd third - typed professional letters) and then I'll rotate them through each. I hit my D4$ with yellow letters and I'll follow up with postcards and then white professional and so on. Same for my probate and NOD lists.

So I guess my only question now is, when do I give up on the current list and buy a new one? I don't want to overwhelm myself with calls and since I'm doing this part-time I want it to be self-manageable. When I stack up some capital I'll invest in automated methods (voice answering service, VAs, etc.) but now I have just me. Should I buy a new list if I don't get a deal closed after 2 campaigns or sooner or what? I guess I answered my own question and I should probably do it if I don't get a deal by the end 2 weeks, after mailing the last third of my list. If I don't get a call back by then then I need to act to ensure I return on my investment. Right?

@David Faulkner and @Josh Braun I am currently D4$ now but I haven't tried door knocking. I live in the south. Though I have a license to carry, that type of behavior could get me shot easily. I don't want to end up in a gun-fight, lol.

Josh, what is a blind lead? Is that just buying leads based on the area with no other criteria?

@Benjamin Barredo I wouldn't even think about calling a list a success or failure until you've mailed every lead on it at least 6 times over 6 months.

thanks. That's the kind of answer I was looking for. Short and sweet. It's surprising how hard that kind of answer is to get on BP. ;)

@Benjamin Barredo - yes, blind lead being a mailing based purely on zip code or neighborhood. 

When driving for dollars, you don't have to door knock. Key things to look for are: overstuffed mailboxes, knee high grass, papers taped to door/window, or any other signs of the property being distressed. Most of the time these properties are unoccupied, so take down the address and then lookup the property owner.

If you do go door knocking, an easy way to do that is to try and catch the person outside the property. Great way to do that is take a dog for a walk around the neighborhood, ride a bike or something similar. 

Originally posted by @Benjamin Barredo :

@David Faulkner and @Josh Braun I am currently D4$ now but I haven't tried door knocking. I live in the south. Though I have a license to carry, that type of behavior could get me shot easily. I don't want to end up in a gun-fight, lol.

Josh, what is a blind lead? Is that just buying leads based on the area with no other criteria?

Because door knocking is scary is the very reason many don't do it and why it works so well. My friend is a short white dude, and he goes door knocking in Compton ... he has not had a problem, most people are nice, and he's gotten a lot of deals with no competition. It is all in how you carry yourself. Go with a friend and split any deals you find, and/or look in a slightly less rough neighborhood if safety is a concern.

"Plan you work and work your plan, but don't plan the results."

I've used that motto for decades.

While I'm considered a seasoned probate investor by many, I'm actually an experienced marketer with title expertise who happens to fish in the probate rivers.

Probate sales are not, contrary to what othersmay tell you, necessarily distress property sales. 

Foreclosure, delinquent taxes and disputes are typical distress sales. That's where the better opportunities are. 

Lead generation is key. However, many don't invest sufficient time, money and effort to have the base knowledge to recognize and monetize the opportunities they stumble upon. 

That's what finders/bird dogs are all about. You don't know how to solve the entire problem for a seller/principal, however if you connect with people who do, you can get compensated for introducing the parties who can compete the deal. 

Break your educational requirements into: fundamentals > finding > working. The learning never ends however you do need to start somewhere. 

List building can start on day (1). Work a small, manageable geographic area. Create a list of properties from a foreclosure or tax list. F you insist on working probate lists, focus on the high equity opportunities. Better if they show up on all three lists!

Your objective should be to have (6) high shot prospects in your pipeline at all times. If one drops out, replace it. I've been following this formula now for (35+) years and has made it possible to exceed my financial expectations by an exponent.

You said you did not have time to research in the Regidter's office.  I believe they have an online service. Contact the Register of Deeds Office at 215-2330 and ask about it.  

Also, the next county over is Anderson and you can search it for FREE: http://search.andersondeeds.com/menu.php.   

@David Faulkner

Do you know if your "short white" friend (lol) uses a script or talking points he hits when door-knocking?

@Joseph Kirkland

I called the Deeds office and they said they don't have a place online to specifically search for houses in the pre-foreclosure process. They said it has to be done at their office on their computers. Is this what you meant?

I have never used the Knoxville Register's office site.  Here in Memphis you can search by instrument type online and look for Substitution of Trustee documents on a daily basis or by date range. The site here is very user friendly once you learn to use it. I suggest you check with your local REIA for someone that can show you the best way to use the available tools in Knoxville. Don't try to reinvent the wheel.

@Benjamin Barredo I know this thread is about direct mail, but thought I'd impart some advice. It seems like you have a full-time job but want some extra income. I'm assuming your long term goal is passive income to quit your job?

I started with a rental which led me to wholesaling. That lead me to flipping, which ultimately led me to raising money to buy apartment buildings. I wish I would have learned commercial real estate when I started in 2009 and I would have been that more ahead of the game. I'm just getting started in commercial but check this... you can buy an apartment building with barely any money by JV'ing with an experienced investor and make a 1-3% fee, along with a small equity position. For example, let's say you put a deal together for a $5M community... at 2% you get paid $100k. Pretty soon you're doing deals on your own and making much more money and utilizing exit strategies that make you even more money or cash flow.

Knoxville has a great multifamily market. I'd recommend reading "Commercial Real Estate Investing" for dummies and getting active in local CRE and multifamily meet-ups. Mark Kenney is hosting a pretty cool into course for next to nothing in Dallas if you travel at all. You seem like a pretty driven guy, so thought I'd recommend this route.

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