How BiggerPockets created 100k in net worth in 4 months

How BiggerPockets created 100k in net worth in 4 months

Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes

This is a long overdue thanks to the BP community as a whole and the mentors and friends I have met through BP.

By way of background, my core investing strategy is buy and hold. I have a full-time job and consider real estate investing to be a solid hobby of mine. Some guys like sports, cars, legos... etc. While I like those things, I choose real estate. I have been trolling BP for almost 7 years now and for many years I have read and listened to conversations about whatever was discussed in the forums and podcasts.

I bought my first rental in 2007 and was hooked.

Enter BiggerPockets.

After slowly growing my portfolio to what I thought was a critical mass, I felt I would benefit from obtaining a RE license. Once I got the license finding deals became easier, but I was still limited by what was listed on the MLS, however, I was getting better deals and saving commissions. Happy investing.

I have been trolling BP for almost 7 years now and for many years I have read and listened to conversations about direct mail. I always thought it would be too time intensive for me with a full-time job. After hearing @Jerry Puckett and @Sam Craven podcasts (as well as all the others), I thought I might give it a try. I was quite skeptical at first as I have a full time job and thought engaging in a direct mail campaign would be time and capital intensive.

After a quick email to Jerry we set up a call. One call with Jerry and we were ready to go (skeptical, but ready to go). We engaged Jerry to help us with a very small direct mail campaign (500 letters a month at a total cost of $3,000 for a 6 month campaign).

Since it was our first campaign we opted to do as much as we could to keep the cost down so we chose to stuff and stamp the letters ourselves and knew we were taking a considerable risk with a small campaign.

We committed to a $3k campaign for a 6 month period and never thought we would see the $3k again (but we were excited for our expensive experiment). Since my partner and I have full time jobs (and manage our growing rental portfolio) time was our biggest constraint (and money). We set up a google voice number and started mailing letters. As the calls came in we let every one go to voicemail. Never answered a single call. We called back each individual and fumbled though the many scripts that can be found on BP. Low and behold, our 500 letters to the same 500 individuals a month got the phone ringing.

Let's talk results.......................

Remember I am a buy and hold investor with a RE license and a full time job. I was just hoping to get better deals than I could find on the MLS.

After 4 months of letters (500 a month to the same 500 people) My partner and I have COMPLETED the following deals solely from our direct mail compain (these results do not include current leads we are working or deals purchased on the MLS).

House 1 - Purchase price 48k, 12k rehab, rents for $1,100 a month. ARV = 90k (Net 30k equity and cash flowing rental)

House 2 - Purchase price 31k. Wholesaled (closed and relisted on MLS) for 59k two weeks after purchase. Netted 24k after holding/closing costs. House required 25k rehab and had an ARV of 110k.

House 3 - Purchase price 61k. Partnered with a local wholesaler (met on BP) who found a buyer at 73k and double closed it. We split the spread with the wholesaler and netted 5k.

House 4 - Purchase price 70k, $0 rehab, rents for $1,100 a month. ARV = 90k (Net 20k equity and cash flowing rental).

House 5 - Purchase price 70k, $0 rehab, rents for $1,100 a month. ARV = 95k (Net 25k equity and cash flowing rental).

Net Net Net.........

The value I place on the education and training that can be found on BPockets can not be calculated by a simple cost benefit analysis, but if you want one here you go.

My partner and I have increased our net worth by the following amounts solely from the 5 completed deals in the first 4 months of our direct mail compaign. These does not include the 7 other rental properties purchase directly from the MLS in 2013 that we used knowledge learned on BPockets to acquire.

Cash - 29k (properties sold)
Equity - 75k (properties held)
Total - 104k
Plus the net present value of the 3 cash flowing properties we held.

Subtract the 3k for our small direct mail campaign and we are still over 100k in net worth increase. Not a bad result from our 3k experiment with direct mail through contacts made on BPockets.

In the last 6 months, I have used the knowledge gained from BPockets to find, analyze, acquire, finance, rehab, advertise, lease and manage 10 additional properties. My modest portfolio continues to grow and my simple hobby has turned into a passion.

Thanks for the community @Joshua D. and @Brandon Turner and all the moderators and contributors.

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Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
12y

Great post. Very motivating. I have not used direct mail before but after reading this i think I'm going to have to start.

See this reply in the discussion

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  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    12y

    @Michael Slabitcher @Raymond B. The voicemail was set up over a year ago so I had to call and listen to it.  Here is the secret sauce (or not):

    "Hi this is David and thanks for calling.  If you would like to sell your property in [CITY], it is really important that you leave a message for me with your name and the property address.  This will give me a chance to look up a couple of records and save us both some time. There is no cost or obligation to find out what I can do for you.  Thanks for calling. We will talk soon.  Leave me a message."

    I have no idea where I got the script for the voicemail, but it is personally recorded in an excited tone.  I doubt I came up with it myself.

  • Specialist · Miami, FL · Member since 2013 · 56 posts · 20 votes
    12y

    Thank you David.

  • Real Estate Investor · Phoenix, AZ · Member since 2013 · 111 posts · 76 votes
    12y

    Wow! Thanks for the post David! I too use direct mail. Here in Phx the tried and true absentee owner lists has been hit very hard by so many investors. Motivated sellers who call me in response to my mailing have a stack of post cards they've received from other investors and 5 other investors to call back after me. :-(  They have a lot of options and with that much competition, prices get driven up above my max allowable price. But, deals can be found, just gotta get creative!  I do appreciate your post and the detail you provided. I like the monthly commitment and budge you set. It motivates me to re-look at what I am doing and get refocused. Thanks again!!

  • Investor · Baltimore, MD · Member since 2012 · 605 posts · 103 votes
    12y

    @David Jackson.  Thank you for sharing your inspiring story.

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    12y

     That would be me....I sent it to you among other training materials. I've always liked it; kind of business, kind of personal....very short and sweet. 

    Again, congratulations and I just love how you're killing it down there.

  • Real Estate Agent · West Sacramento, CA · Member since 2014 · 39 posts · 14 votes
    12y

    Very interesting. I like to know about the elements of such campaigns. 

  • Real Estate Agent · West Sacramento, CA · Member since 2014 · 39 posts · 14 votes
    12y

    What would be the cheapest way to send the mail out? Yellow post cards? Where do you get them? How about the wording? Since this is an on-going campaign,  your wording cant be the same each month. Or can it?

  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    12y

    @Jerry Puckett 

    I reviewed my emails and confirmed that one Jerry Pucket did provide it to me along other training materials (scripts, podcats, teacking schedule etc.) I found very helpful. 

  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    12y

    @Bahman Ghashghaei 

    What would be the cheapest way to send the mail out?

    From a cost perspective, post cards are the cheapest (both actual postcard and stamp).

    Yellow post cards? Where do you get them?   

    We send yellow letters that are typed in a handwitten-looking font.  If you read the very first post in this thread it details where I get them and how much we spend onthe campaign.

    How about the wording? Since this is an on-going campaign,  your wording cant be the same each month. Or can it?

    6 month campaign.  One letter a month.  6 different lettters (content). 

    At the end of the day, yes... there is competition.  The letters are designed to get people to call.  I am sure some work better than others, but I do not think there is a secret formula to success.  The people and knowledge needed to help you to succeed can be found on this site.  I think even more important that getting the phone to ring is being able to convert the leads produced into deals.  It takes some learning, but for exemple, this thread details our first 6 month campaign including 500 letters.  We just finished our second 500 letter campaign and our success was even better.  I attribute this to the failures of the first campaign. 

    Closing a property is sales. In our first 2 campaigns, we have had multiple properties in each campaign where I said the wrong thing (or my timing was off) and I knew at that second we lost the deal.  I am sure there are other sending letters to the exect same people and buying houses our from under us.  Our skills have improved in our second campaign and our results are evidence of such improvement.  Hope that helps.

  • Real Estate Investor · Fort Worth, TX · Member since 2014 · 21 posts · 1 vote
    12y

    Congratulations! Hoping that this is just the beginning for greater things to come for you.

  • Real Estate Agent · Ozone Park, NY · Member since 2014 · 38 posts · 8 votes
    12y

    Congrats! Thank you for sharing. Good luck.

  • Houston, TX · Member since 2014 · 3 posts · 1 vote
    12y

    Funny reading this.  I get these types of cards and letters all the time! 

  • Real Estate Investor · Houston, TX · Member since 2014 · 40 posts · 11 votes
    12y

    @David J.  Of the initial $3000 budget, how much of it was used to actually purchase the list you mailed to?

    Rich

  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    12y

    We paid $100 for the first list of 500 names. Now we make our own list using the MLS tax info.

  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    12y
  • Wholesaler · Winchester, KY · Member since 2015 · 3 posts · 1 vote
    11y

    great story, but where can a invested find the inherited property list in his area? If you could share.

  • Colin SmithBusiness Member
    Realtor · Colorado Springs, CO · Member since 2013 · 988 posts · 447 votes
    11y

    That is incredible!!! Good Job!!!

  • San Diego, CA · Member since 2015 · 7 posts · 2 votes
    11y

    This is great to read considering I also have a full time job! Adds fuel to the fire!

  • Information Systems and Cyber Security Manager – US ARMY · Augusta, GA · Member since 2015 · 128 posts · 30 votes
    11y

    I know it's been a while since this all went down but just reading today. From Facebook.... Residual influence ;-$ very impressive and I'm sure you have done many more campaigns since then. I keep hearing the whispers of direct mail. Maybe one day... Thanks for sharing your story!

  • Huntington Beach, CA · Member since 2011 · 16 posts · 1 vote
    11y

    awesome story, thanks for sharing and continued success as well!! :)

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    10y
    Originally posted by @James Wise:

    Great post. Very motivating. I have not used direct mail before but after reading this i think I'm going to have to start.

     Whooooo time flies. I just got a vote on the quoted post that I wrote two years ago. 

    Up until that point I was not utilizing direct mail in my business. I did in fact start utilizing it after reading this thread and what a great decision that was. At this point in my business I have the front desk employees at Holton-Wise stuffing direct mail letters during their down times every month. I spend over $1,000 per month on direct mail per month and boy does it pay off. 

    I can not count all of the listings I sold or properties I bought because of direct mail off the top of my head in the last two years but I do recall some very large commission checks that came because of it. One was about $26,000 & the other was around $12,000 and I am currently under contract to  purchase a new office building for just under $900,000.

    Great thread, let's keep this thing moving 2 years later! 

  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    9y

    @James Wise

    I agree.  This thread chronicles my first 4 months of direct mail (not even a full campaign).  Since then (6 campaigns later), we have continued to mail on a monthly basis at about the same rate and have had the same experience as the first campaign on almost every one.  We have improved our systems and eliminated most of the time it used to take to manage the campaigns.  For a side gig, it sure has been fun and rewarding.

  • Real Estate Investor · Medina, OH · Member since 2013 · 32 posts · 21 votes
    8y

    David,

    I have been doing REI for about 7 years and have 7 properties under rental with a few flips all from MLS. I too work full time. I just started sending out probate letters to a very targeted list of executors of estates with real property. The list is targeted and is in a defined area that I want to buy in so is only about 7 new letters per week. Over a year, that will be close to a 300. I have established a new LLC, created a webpage, and a brochure. I have been doing this for a month now and no calls yet. I'm not too worried, because it is early. In an attempt to improve and win over competition, can you answer a few questions.

    1.  Do you attempt to use colored envelops or letters to be more eye grabbing?

    2. I am establishing a Facebook page and website page to try to be more credible.  Have you done of this?  Would you recommend this?

    3. I have created a brochure, again an attempt to provide more legitimacy to a small company.  Do you think this worth the bother?

    4. Do you think 7 NEW letters per week is too little to be successful? If I repeat this 3 times over 3 months, it will turn into 20 letters per week.

  • Investor · Houston, TX · Member since 2009 · 210 posts · 261 votes
    8y

    @Kelly M.

    Thanks for following.  Your questions below are followed by my answers.

    1. Do you attempt to use colored envelops or letters to be more eye grabbing?

    The letters are yellow, but the envelopes are white.  The print appears to be handwritten on both the letter and the envelope.  

    2. I am establishing a Facebook page and website page to try to be more credible. Have you done of this? Would you recommend this? 

    I have no feelings either way other than if I come across an entity with a facebook page and no website they actually lose credibility points since for the same amount of effort a website can be created. Frankly, I have no web presence and have no plan to get one.  I work full time and buy rentals on the side. My credibility comes in the proof of funds and cash to close.

    3. I have created a brochure, again an attempt to provide more legitimacy to a small company. Do you think this worth the bother?

    No. Not even a little.

    4. Do you think 7 NEW letters per week is too little to be successful? If I repeat this 3 times over 3 months, it will turn into 20 letters per week.

    Probate is a super niche market. There are a few experts in these forums that could tell you, but you have to mail, and mail, and mail, and keep mailing to probates because you never know when the executor will be able or ready to sell the property.  I don't have much experience with probates to be honest.  I dump letters monthly to the same non-owner occs with equity in the neighborhoods I want to buy in for 6 months in a row and then I refresh the list ad mail 6 more time.  I've been mailing 500-1000 letters a month for the past 4 years and average about a house a month.  Some are killer deals and others barely meet my buy and hold criteria.  It is completely a numbers game (and a people game). Since I started mailing, the market I am in has gotten hotter and hotter.

    Hope that helps.  Good luck.

  • Abita Springs , LA · Member since 2017 · 80 posts · 43 votes
    8y

    great job. awesome read. 

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