In a few months once I have completed my Multi-family direct mail campaign, I planned on doing one directed to a subdivision down the road from me. It is one of the largest in South Carolina(used to be the largest a few years ago) at just over 1000 houses. The town it resides in is has blown up over the past few years with close to double digit increases in property values YoY in that time. The subdivision itself has smaller homes for the area, and they are older for the area, most built in the 70's. Most of them have a similar look and footprint with a few different designs for the builders to choose from originally, so there is not a ton of variation.
Long story short, these homes are smaller and older then others in the area which makes them affordable, and would be a good place for lower income or first time home buyers to invest in the next few years since the area is really blossoming, but I do want to get them at a discount and likely rehab or upgrade them once purchased to build equity.
When I do a direct mail campaign to these houses would it behoove me to include a suggested price I'd buy the houses at with tier levels for how many beds and baths there are? Or should I just leave that up to the negotiation after they call? Obviously I'd include some language saying something to the affect of "sales price may vary based upon square footage and condition of property" to ensure there is some leeway.
I can see Pros to including it because everyone who called would know that I wanted a discount and wouldn't waste my time calling since they'd be ready for it, however I do know I'd likely receive fewer upfront calls and would not be able to negotiate people down on price.
Any thoughts on this strategy or has anyone tried this?
@Zachary Bradigan I would NOT personally put a price with tiers on the piece. Everyone will assume their house is nicer than it is and bump themselves up tiers only to get "hurt" and accuse you of low balling when you explain the actual condition.
I would assume that you're pulling ones with equity? Off of 1,000 (or less) mailers you're really probably not going to drowned in calls but I would make sure you're there to pick them up.
Are you doing the letters yourself or outsourcing?
Agree with Ryan. Also, you should use every door direct mail if you're going to target the whole subdivision of 1000 houses if you're short on time. If you aren't and it's close to you, you can do a more targeted campaign by walking or driving for dollars in that subdivision.
@Ryan Dossey and @Ray Lai
I am not short on time per se as I planned on doing this in a few months, however I don't have a ton of time to devote to it right now, so likely I was going to do the entire neighborhood and outsource to ListSource or something similar. The costs that I have priced are not outrageous.
I should have explained the tiers better as the strategy was to set prices based upon beds and baths, and go up in price for each additional ba/br. Something like below:
Don't get caught up on the numbers as they are just an example, but it would make it much less subjective as you point out. Does this sound any better, or not?
PS how do I get my replies to go back to people's names with the blue hyperlink? I've tried it several different ways and you can see I made a failed attempt in the last reply I gave to you two.
Use the "@" sign and slowly type my name. It should pop up. Click on my name and I will get notified. (It should also show up blue if you've done it correctly.
I wouldn't put your price on there because it also gives them no reason to call you. You lose out on the opportunity to build rapport, get to know their hot buttons, and present your offer intelligently.
Call me for a cash offer... Gets calls in the door. It's your job to close them then.
One of the rules of successful negotiation is Don’t name price first. Wait for them to start with the price. LIsten to the recent podcast on BP on the topic, with the FBI negotiator, Chris Voss.
You don’t want dozens of tire kickers calling you, so much as you want calls from “motivated sellers.” Search that term on this site for sample direct mail letters, as there are samples on BP. People become motivated to sell at a great price when there are other pressures, such as divorce, probate or inherited house, medical problems, a partner in jail, relocation, loss of a job.
You did the @ with name right, sometimes your browser can be buggy and you have to wait a few seconds for it to work, or try a different browser. I know it works fine on the latest version of Chrome but I had to wait like 5 seconds before it popped up the box for me to select your name. When you select the name it turns blue.
So I read your post and I think I understand what you're saying. You're going to input the zipcode into listsource and sort by 2 and 3bedroom houses only. You should also add in high equity % as well if you're doing it that way.
Agree with both Ryan and Kerry that you should take a look at the templates out there rather than use the tiered system because you're limiting your response rates and lowering your negotiating power by doing so. Negotiating is a $10k/hour activity that you can hone from your marketing campaigns and it's always better to have the other party state their $ figure first. You'll also want to learn to listen for distress and motivation and learn how to communicate the facts that support your position and weaken their price - e.g. the roof has 1-2 years of life left and will cost $5k to fix and the comps are for houses in pristine condition... etc
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