Wholesaler · San Francisco, CA · Member since 2012 · 259 posts · 147 votes
Hey There BPers,
Myself and my business partner have been spending a significant amount of time on our direct mail campaign and so far, our results have been subpar to say the least. We have sent out a total of 395 letters and received a whopping 5 responses. 1 was a prank call. 2 were of the "please remove me from your list" variety. Our one success was getting an appointment with a seller, so in reality we have had 1 good response out of 395 total letters. I'm hoping to get some insights and ideas/critiques for increasing our response rate. The details of our campaigns are below.
We have slowly been gathering addresses so our list is split up, one campaign is 149 people and the other is 246 people. We have sent the different groups different pieces to try and test what will get the best response.
The first group received a standard yellow letter stuffed inside of a handwritten (in blue sharpie) 6x9" manilla envelope (link). I also used some muscle car stamps instead of the regular American flag ones to hopefully make it seem more "friendly". Our response rate was 4 of 149. Here is a picture of the finished letter:
The second group of 246 received a different mailer altogether. We used an A6 invitation-style envelope that was handwritten in black ink. Instead of a yellow letter, we sent our message on standard white copy paper. This letter was placed in the mail on 10/19 and we've only received one phone call and one FB like from our efforts. Here is the copy:
Your list there is a good "core" list of houses for you guys to keep an eye on, but your list size is WAY to small to generate a meaningful flow of leads.
Buy a list of at least 1,000 ABSENTEE OWNERS and mail them postcards every month for AT LEAST 6 months.
We mail 1000 letters per week and only end up getting five or six houses per month from our letters. Its just one way of getting houses. Don't limit yourself. You need many streams to converge to make a river.
ONLY? That's a GREAT return for direct mail deals. Who do you use?
Its done from their (I just switched companies - I decided to become an REO listing agent) corporate office in Texas. It was up to agents to drive neighborhoods and write down addresses.
After spending a lot on direct marketing-door knocking and direct mailers etc....I think I'd rather be in the business of selling/printing and selling directly to REI...
Ok, I hope you are still looking at this thread because there has been some really great info and ideas to come out of it.
I will now throw in my 2 cents. The list you are developing is much to valuable to be leaving it to a hit or miss mailing campaign. You know for a fact that because of the shape and issues regarding the properties on your list that if you could just get in front of them, you would probably get the deal.
The problem is that they are people just like you, that stand over their trash can sorting their mail, just like you. And yes, they are getting at least 20-30 yellow letters or post cards that all say the same thing. "I'd like to buy your house!!"
The thing is most people would rather run from their pain then face it and resolve it. That's why they drop letter after letter into their circular file and actually get desensitized to the deluge of mail.
I have been marketing to this same list in my areas for years and I never get less then 5-10 deals each month, by simply going one step further... I call them.
Again, you've already gone through so much trouble narrowing down your list to the potency that you want, why not take the one step that everybody else isn't taking and call them?
Or if you are too nervous or find it too uncomfortable to call them yourself, put an ad on Craigslist for an appointment setter on a commission basis and let them do the calling for you. (I myself have 5 additional callers that bring me deals on a silver platter)
My average call to deal ratio is better than 1 out of 10 as long as their problem is one I want to solve, I can usually get the deal.
I hope I'm not coming off brash with this, and I apologize if I am. I just believe that by stepping a little bit out of your comfort zone, you will realize a tremendous upswing in your business.
If you would like a couple of scripts on what we say to our sellers, feel free to pm me and I'll get it to you.
Just remember, to get the results that others aren't getting, you must do the things the others aren't doing.
After spending a lot on direct marketing-door knocking and direct mailers etc....I think I'd rather be in the business of selling/printing and selling directly to REI...
Lol!!
Remember, the guys that made the most during the gold rush weren't the prospectors. They were the ones selling the picks and shovels!! ;)
Ok, I hope you are still looking at this thread because there has been some really great info and ideas to come out of it.
I will now throw in my 2 cents. The list you are developing is much to valuable to be leaving it to a hit or miss mailing campaign. You know for a fact that because of the shape and issues regarding the properties on your list that if you could just get in front of them, you would probably get the deal.
The problem is that they are people just like you, that stand over their trash can sorting their mail, just like you. And yes, they are getting at least 20-30 yellow letters or post cards that all say the same thing. "I'd like to buy your house!!"
The thing is most people would rather run from their pain then face it and resolve it. That's why they drop letter after letter into their circular file and actually get desensitized to the deluge of mail.
I have been marketing to this same list in my areas for years and I never get less then 5-10 deals each month, by simply going one step further... I call them.
Again, you've already gone through so much trouble narrowing down your list to the potency that you want, why not take the one step that everybody else isn't taking and call them?
Or if you are too nervous or find it too uncomfortable to call them yourself, put an ad on Craigslist for an appointment setter on a commission basis and let them do the calling for you. (I myself have 5 additional callers that bring me deals on a silver platter)
My average call to deal ratio is better than 1 out of 10 as long as their problem is one I want to solve, I can usually get the deal.
I hope I'm not coming off brash with this, and I apologize if I am. I just believe that by stepping a little bit out of your comfort zone, you will realize a tremendous upswing in your business.
If you would like a couple of scripts on what we say to our sellers, feel free to pm me and I'll get it to you.
Just remember, to get the results that others aren't getting, you must do the things the others aren't doing.
Hope this helps
You are doing the thing that the others don't do to get to the tipping point. How are you getting their phone numbers?
Finding phone numbers is actually pretty easy now days. In this age of Internet and public records and ease of access, It's very difficult to stay off the radar.
Everybody leaves a digital footprint somewhere.
Here are some basic tools I use to find people.
Free first:
Whitepages/anywho/zabasearch/
Google is the most underrated tool to finding a person. Starting with their name and hopefully city or at least state. You can find out pieces of the puzzle that make it easier to locate the person.
Ex: if they are a professional of some sort, i.e. Doctor, lawyer, now you have areas you can find them. If they are a part of a forum, it pops up.
I once pulled up a person that was a on a site for classic cars that posted a request for parts along with his phone number. (Bought the house and made a 20k flip profit)
Public records are amazing: if you locate the area where the seller lives, make sure you look them up in their counties property appraiser, and clerk of court/register of deeds.
Examples of places you can find them:
If they pulled a permit on a house the notice of commencement may include their phone number.
If they were in a lawsuit and represented themselves, most forms will include a phone number.
If they were a landlord and did an eviction, the 3 day notice or complaint will usually have their phone number.
There are quite a few areas the info will show up in public records.
Social media is the hands down best way to locate people.
I have found more people through Facebook, Twitter, LinkedIn then I can tell you.
My favorite example is where I located the owner of an abandoned home on Facebook. I had tried every tool I had available to me prior including free and paid services. Including high end skip trace tools. I had found out she had a daughter but couldn't find her either. Then I tried Facebook. Her daughter popped right up showing that she worked at the local Applebee's as a bartender. And on her page her most recent post was a request by her to her fb friends requesting a ride to work. And in the response was.... Wait for it... Her mom apologized for not being able to pick her up as she was heading into work right then. (Thank you oversharers) a quick click over to moms fb page revealed that she worked as a waitress at the crackerbarrel next door.
One of our bird dogs actually went over there and talked to her, set up an appt and we ended up buying the house for $600.
Cheap next:
Ussearch is a cheap skip trace tool that costs about $49 for a 3 month unlimited use service. There is a lot of junk in to sift through but many times you get lucky. The best tool in there is their direct link to social media.
More costly but worth it:
We have access to a service called tracers that, for .50 per pull, gets us some of the most up to date info on anyone out there.
We also employ a couple of private eyes that are somewhat entrepreneurial that will not only locate the owner but set up the appt for between 500-1000 per closed transaction.
These are a few of the tools we use to locate our sellers... And our buyers.
Hope this helps!!
P.S. I mentioned if the owner is a professional of some sort.
If they are, check your states Secretary of State corporation look up, manytimes in their filings you will find their phone numbers.
P.S.S. If they own or run a website, that turns out to be an easy search. Whois.sc is like a whitepages for domain owners. Unless they specifically use and pay for a private service, you will have their email and phone number right there. (Try Zillow for example. I used the tool to speak to someone at the company to learn how to get info on expired listings off Zillow)
I think any single method could be overused and lose effectiveness. However, I think one to one marketing to buy property will always have effective methods. Also, while some areas are saturated with yellow letters, other areas get none at all. If you figure out a niche where other buyers aren't playing, your response rate can be excellent.
I also believe in marketing to highly competitive areas if it fits your objectives. Recently a seller called me from my yellow letter, and told me she had received five similar pieces that day. I still ended up buying five properties from her, as she was a retiring landlord.
Thanks for the great information. What lists are you making the cals to? I assume that a standard absentee owner list wouldn't be worth the time since most of them will probably not be too motivated.
Thanks for the great information. What lists are you making the cals to? I assume that a standard absentee owner list wouldn't be worth the time since most of them will probably not be too motivated.
Thank you for your kind words. The fact is I create my own lists. Our groups personal motto is, "the money is in the research."
Our business model is "Professional problem solver!"
We use specific psychology to create each list depending on what we are looking for.
Ex: if looking for properties with creative finance (perfect for rentals or rent to owns) we have VA's go through the public records looking at evictions every week, always a week behind. (So this Friday I would get the list of evictions for the week ending last Friday)
I have them weed through and pull out all management company evictions, and apartment complex evictions and narrow them down to only single family properties and small 2-4 unit properties where the eviction is done by the owner.
Once they narrow the list down to the target market, they pull up the complaint which includes the pay or quit notice which always includes... Wait for it... The owners phone number!! (Most often a cell phone)
The thought process is that owners have a more emotional response to a tenant default then a management co, and at the height of his/her agrivation gets a call from our appt setter saying that they work for a company that buys rentals that would be interested in their property allowing them to sell and maintain cashflow without having to deal with toilets and tenants.
We had a tremendous response of owners that were willing to sell with terms.
Now before you go off and start a program off this one post, let me be clear. This is not a wholesale or deep discount concept, the owners for the most part did not want to discount their properties tremendously, though of course we had a few. Where this concept worked was in getting good terms to buy the units with little to no money down for rentals or to wrap around the financing and offer rent to owns or owner financing and getting good down payment profits.
We have built similar lists for deep discount wholesale deals, for multi family, and for penny deals. This is where we pick up houses for 1000 or less (since last December, we have bought over 25 houses for under 5k a piece that we flipped for an average 30k or more)
I know these sound like unrealistic claims, but I can verify every deal. Bottom line, there are amazing deals out there right now and if you know what to look for you can create a list of properties that has so little competition that it feels like you're the only player in the game. Just decide on what problems you want to solve then get creative on finding them.
Brandon: advice from marketers can vary wildly. You have to make sure you are taking advice from someone with lots of experience and in the same arena. The response rate you are getting is not bad. Direct mail is very expensive, but effective in the long run. You will continue to get responses up to a year later and longer. I have had people call 2 and 3 years later! If you get one more lead out of your 395 letters (2 good leads vs. 1), your response doubles from .0025 to .0050. And, as mentioned above, you are mailing a very small amount to get solid statistics. Once you are mailing in the thousands, you will be able to get a truer number. Most people starting out cant afford to stay the course with direct mail. As to the list, this is very critical. Once you have a decent mail piece, the list will have the most effect on response (after that, the economy, and the competition). If you mail vacant houses only, you will have better response (as long as the piece is getting to the owner) than occupied homes. Some lists will get a lot of responses but they are garbage leads (no equity for example). In short, to make it with direct mail, be prepared to invest a lot of time and money for at least 6 months before you really start to see the results. God Bless!
I think this is a problem that many people face. We have done direct mail for and my company generates nearly 1600 leads in a year both in Chicago and Atlanta.
As I look at your letter I would not change much. I think the biggest issue is your data.
We constantly shift our target. You might try going after something more specific like - Divorce leads (you can get these on listsource.com), Also most people tell you to mail monthly. I find if I am consistently mailing once per week over a month period to "distressed mortgage situations" it yields higher responses than monthly mailings.
Also a technique we use is when we have a certain area hitting we will do an EDDM (every door direct mail) post card through the postal service to that mail carriers route. This also has had a very high yield.
Hope this helps.
Hi Andrew, do you think that hitting your mail list weekly is still good nowadays compared to what the majority of people are saying (monthly). Also, can you elaborate for us on what the EDDM post card is? Is it for the same list you have tried other mailings with and you are just doing another campaign to that list? Thanks!
I am happy to answer and give my opinion, but as you know in REI every market and every demographic is a little different. So feel free to listen to other investors as well.
As far as mailing weekly versus monthly, it probably depends on a couple things:
1. Where the distressed seller is in the "losing the house" process.
2. I forget the exact stat but when it comes to marketing in general not just REI. It is said that you have to get in front of a "NEW" customer 6 times before they choose to do business with you. That is not including face to face or phone calls. That is taking a cold customer and getting in front of them enough times that you become familiar. Remember people do business with people they know or at least have a familiarity with, and that is what you are trying to establish.
*** Side note, many direct mail people in REI are only following what they heard from another REI who does direct mail. Where my whole business changed and we had explosive growth was when I hired a Marketing Consultant Firm not involved in REI. They were able to establish Marketing Principles in our business. Just like there are there are REI Principles, there are also Marketing Principles. So keep that in mind. That is also when I began to focus more on Inbound Marketing than Outbound Marketing. HUGE GAME CHANGER!!!
2. EDDM-- is when you are really wanting to own a house in a certain area, or like in ATL when there is Urban Development happening there are a lot of people that have houses that are NOT in a distress sell, but if you could get them to sale you could tear it down and build a million dollar home. So that is where you are more shotgun approaching your marketing. It is also cheaper than direct mail per piece as the post office has a special price for EDDM.
I hope that helps a little, I do not know everything about REI so feel free to pass on my thoughts here. As there are some other really smart people on this site.
Hey guys. I'm on page 6 of this thread and have taken a few notes to help my brainstorming. I've finalized my list and am almost ready for the mailers. Some of you mentioned door knocking, and I'm just curious if you were targeting homeowner occupied SFRs? I'm assuming you were.
Any suggestions, outside of phone calls and personalized letters, to achieve the same rapport enabled by door knocking...but for absentee owners? Seeing that they live all over the place, it would be hard to target them in this manner. Has anyone tried setting up a "webinar" or some sort of "information session" where all interested parties call in and are able to hear a quick 10 min presentation followed by FAQs? Is this crazy or am I onto something?
The market is fiercely competitive, and I am thinking of anything to set myself apart. Would a color photo of me help to normalize me and show that I'm a person not some scam?
Thanks in advance for your tips! Hope I didn't jump the gun and ask these questions before getting to them in the next thread pages...
This thread has been extraordinarily helpful. I’ve read through the entire 10 pages and picked up a few gems. We’re approaching our 3rd month in our campaign. Our first month, we sent 500 postcards and got 5 calls, 1 deal with a lot of upside.
But our second month we sent 2,300 postcards and got a few hangups and 2 calls, one of which was asking not to be contacted. I saw an uptick in web traffic using Google analytics, but that's about it. I’d been in outside sales a long time and know inherently you have to touch a prospect repeatedly to gain traction, but the one call was VERY disheartening. Guys may not know it, but sharing results means a lot to people reading the details of others’ experiences. So THANK YOU for your transparency.
@Brian Davis I would take one disheartening call asking not to be contacted if I got a deal out of that campaign any day of the week. I'd like to congratulate you on the deal that you did get.
This thread has been extraordinarily helpful. I’ve read through the entire 10 pages and picked up a few gems. We’re approaching our 3rd month in our campaign. Our first month, we sent 500 postcards and got 5 calls, 1 deal with a lot of upside.
But our second month we sent 2,300 postcards and got a few hangups and 2 calls, one of which was asking not to be contacted. I saw an uptick in web traffic using Google analytics, but that's about it. I’d been in outside sales a long time and know inherently you have to touch a prospect repeatedly to gain traction, but the one call was VERY disheartening. Guys may not know it, but sharing results means a lot to people reading the details of others’ experiences. So THANK YOU for your transparency.
I Would Google Dev Horn and find his video marketing meeting seven hits or the "rule of seven"
There are some markets where Cash Buyers are not interested and then there are some markets that cash buyers are interested.
In Los Angeles it's not uncommon to hit a list 10 times more
That said, being a transaction engineer where you help Sellers solve problems, where you can offer a listing as a solution if there's enough equity, or a sub to or a lease option or wraparound mortgage purchase
Lastly, a joint venture with the seller, helping them sell by buying it, fixing it, and reselling it quickly, earning a joint venture fee, is another tool to use with all your leads
Bill Gulley talks about a TIC or a tenants-in-common contract
Bottom line, fill your toolbox up, don't be a one trick pony, be a transaction engineer
Your list there is a good "core" list of houses for you guys to keep an eye on, but your list size is WAY to small to generate a meaningful flow of leads.
Buy a list of at least 1,000 ABSENTEE OWNERS and mail them postcards every month for AT LEAST 6 months.
Are lists like that typically accurate? I have been in tech sales and have not had much luck with paid lists.
I've been doing direct mail for a long time. About 80-85% of your deals will come at or beyond the 5th mailing. You need to mail until you buy the house, someone else buys the house or you remove them from your list for one reason or another. That's it.