Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
I am starting my first direct mail campaign and figured I would post my plans and how things are going as time passes to help keep me accountable. Give me your thoughts, questions, and suggestions!
The Plan:
- Mail 1000 pieces per month (250 per week)
- Mail each contact once per month for at least 6 months
- Switch up between letters and postcards, do some split testing (no specifics here yet)
The List:
- 500 absentee owners
- 250 "poor condition" properties (properties listed as "poor" or "very poor" condition on tax appraisal records, built after 1950, deed transfer before 2010, few other filters I can't remember)
- 250 TBD (trying to get list of properties with code violations from the city, open to other suggestions)
What do you think? I will post progress soon. I'm sure I will have plenty of questions as I go along.
Involved In Real Estate · Lynchburg, VA · Member since 2013 · 246 posts · 75 votes
12y
Just do 1,000 absentee owners. Why try multiple things at once? You're "spreading" the risk but at the same time making each list super small. 250 is such a small number you might as well go hang door hangers.
Who's your target audience? What's your call to action? Why should they respond to your offer compared to the other ones they're receiving (USP)?
I'm not trying to give you a hard time. You did ask for help keeping you accountable. Direct mail is awesome but can be an epic waste of money if not focused properly.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
Just realized I've haven't posted my progress in awhile. About to send out the first week of letters for Round 2. Still no deals yet. Got several calls and website hits.
I currently have a house under contract, but it is unrelated to my direct mail campaign. It was actually a house that my wife staged and the realtor had mentioned to them we were investors. If we end up going through with it, this will be a more "speculative" play because we like the area. It is a neighborhood full of older houses built in the 1920's and 30's. The area is rapidly gentrifying. It will provide decent cash flow while we wait out the market for a few years.
I also went and looked at another house and gave an offer, but was overbid by someone who either didn't realize how much work it needed or was willing to barely break even on the deal (I offered $25k, he offered $42k). This was a lead from my website.
Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
12y
Be sure to follow up with that seller you got outbid on. Often time newbie/wannabe wholesalers will bid too high and then not be able to assign the contract to a more experience investor. They will have to pack out of the contract and the property will be back on the market.
My plan right now is to send out a mass text to missed calls, saying something to the effect of "I saw I got a missed call from this number. If you are calling about a house, please feel free to get back with me. Look forward to your call." What do you think?
keep your texting simple, like an ordinary text: "did you call me about a house?"
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
Got two good leads in the last two days. Going to go look at one house tomorrow, and the other hopefully on Saturday. If you are familiar with DFW, one house is in Mesquite and would make a good rental, and the other is in Richardson and would make a great flip.
Since I have a loan pending on another house, I don't know if I could move cash around to actually pick either of these up, so they may be wholesales if I get them under contract. I would probably wholesale the Mesquite rental either way as I don't want to acquire any more rentals at this point. However, I would really like to rehab the Richardson house. It's in a nice neighborhood with good property values. In any case, I'm getting a little ahead of myself, we'll see what happens this weekend!
Investor · Denver, CO · Member since 2014 · 84 posts · 52 votes
12y
Fantastic read following your thread there. Please keep it going :) I'm new to the direct mail stuff, but I might consider looking into it as deals are getting tight via normal and abnormal avenues around here.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
Got a house under contract! Went and met the guy at the house. He owns 3 rentals and is getting rid of two (had bad tenants and just wants out). I saw both houses and we signed a contract on the spot for one of them. The other I will give him a call later today, but I think he owes too much on that one to make it work.
My plan currently is to wholesale the house to a landlord as it is in a solid rental area. As I have never wholesaled before, I've got some learning to do.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
So I ended up putting the second house under contract as well. It is actually in better condition than the first overall as far as major systems, but it has pretty extensive cosmetic damage. After the previous tenant was evicted, they broke in through the back window with a sledgehammer and put lots of holes in the walls as well as destroying most of the door frames. They also lit a fire in the kitchen sink, so there is quite a bit of smoke/fire damage in there. However, the fire damage is covered under the owner's insurance and will be repaired before closing. After replacing the floors, and fixing the tenant damage, this one would make a great rental for me to hold or possibly a flip if I go a little higher end on the rehab. Haven't decided how I want to proceed yet.
Back to House #1, I have made contact with a local wholesaler and will probably let him market it to his list for a cut of the profits. Basically I send him all the info along with what I am hoping to make as a wholesale fee, then he adds his fee on top and markets to his list. I have been on the receiving end of that list for awhile now, so I have a pretty good idea of what I could get for the property. I am sending him all the info today, so hopefully in a few days I will have assigned the contract.
I don't want to get into specifics of the financials until these deals are closed, but I do plan on sharing my exact costs and profit once they do. Stay tuned!
Investor · Denver, CO · Member since 2014 · 84 posts · 52 votes
12y
@Andrew Herrig congrats! Great news, sounds like some solid deals and quite an exciting time. Keep us updated on the total process--especially for people like myself who are new to the whole idea of you guys being a wholesaler.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
I'm not sure why, but I have gotten a TON of leads the last few weeks. Between working a more than full-time job and this, I have been pretty overwhelmed.
As of right now, we have 3 houses under contract. One we found through our realtor, and we will hold as a rental with plans to flip in a few years. Two we got from the same person through our direct mail campaign. On one we assigned the contract, and the other I am in the process of trying to wholesale (it's on the BiggerPockets Marketplace!)
It also looks like we are going to get another house under contract, also from our direct mail list. Not 100% yet, but they have verbally accepted our offer. Will post more details when I have them.
I have kind of become an accidental wholesaler, because we do not have the capital to buy more than one house at a time. Our first wholesale deal we put under contract for $50k. I then partnered with a local, experienced wholesaler, who found a buyer at $57k. We split the profit - I got $4k and he got $3k. Just waiting on this one to close! Not a home run by any stretch, but for my very first deal, I consider it a win.
Landlord · Dallas, TX · Member since 2012 · 505 posts · 34 votes
12y
@Andrew Herrig Great thread to read through, looks like you made a plan and stuck with it and now your reaping the results. Awesome work.
I do have a question if you don't mind, you said people are finding you online? We tried to do PPC a few years ago and didn't get anything good out of it, we paid alot and got junk leads mostly. We were using PPC for words like "We buy houses" and "sell your house fast". We mostly invest in Denton TX, so maybe the Denton population is differnet from dallas when it comes to online ppc.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
@Samantha M. I have actually not done any PPC advertising as of yet. My website leads come from organic searches. I think it is definitely worth the $10/month I spend to host the site, but it doesn't generate a ton of leads. I probably get 1 per month or so that is worth pursuing, so not something I could build my whole business around by any means. I have yet to put an online lead under contract, but have been close a few times.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
Just a quick update. I signed an assignment contract on my second property today. I used the same wholesaler as before and he was able to find me a buyer within 24 hours! Here are the stats:
The wholesaler assigned it to his end buyer for $58,000, so there was actually quite a bit of room in this deal.
I have 2 other potential deals I am working. One in Richardson I have been in contact with the owner's relative for several weeks now. I am a little worried about this one because the person I have been in contact with would definitely sell the house for that price, but she is not ultimately the owner and decision-maker. I will follow up again on Monday and see where things stand. The other deal is in Farmers Branch and is an inherited property. Looks like they are just trying to get rid of it. It does need a lot of work, the foundation is in pretty bad shape. I'm getting my foundation guy out there next week to take a look and then I will be giving them an official offer.
As for mailings, I am about to start Round 3. I have decided that I will be sending out postcards this month instead of letters, just to switch things up a bit. I've been messing around with click2mail, but it is proving to be extremely difficult to work with. Formatting is nearly impossible. Does anyone out there use click2mail, or do you use something else? Any suggestions for a postcard newbie?
Real Estate Agent · Orlando, FL · Member since 2013 · 270 posts · 40 votes
12y
great results @Andrew Herrig with you list you said you were mailing to 1000 people per month. When you say round 3 your still targeting the same people or was it a larger list?
Residential Real Estate Agent · Broomfield, CO · Member since 2013 · 390 posts · 125 votes
12y
@Andrew Herrig how is the condition of the properties determined for tax purposes? Just by age? That might not be a good list if so.
How are you having the letters prepared? Contractor or a website?
I think it's ok to have the calls answered by VM provided that 1) you have a really good outgoing message so that people leave a message and 2) you follow up ASAP after getting the message.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
@Charles Townsend Thanks! What kind of investing are you interested in? Hope to see your own success story on here soon.
@Adrian Tilley Condition is determined by inspection, but I'm not sure how old some of their data is. The only thing I've gotten from that list so far is a referral for a short sale, so we'll see if it ends up being a list worth repeating.
My wife is actually hand-addressing all the envelopes right now, but we plan to hire it out soon.
Highlands Ranch, CO · Member since 2014 · 7 posts · 6 votes
12y
@Andrew Herrig I'm going to start out on Wholesales and go from there. My ultimate plan is to do 5 wholesales, with the earnings from those, purchase a fix and flip, with the earnings from that, purchase a buy and hold.
Rental Property Investor · Dallas, TX · Member since 2012 · 502 posts · 263 votes
12y
Well looks like one of my potential deals in the pipeline is not going to work out. I was getting worried because they were taking forever to sign the contract. Apparently they were going through their attorney, and in the meantime got an offer $20k higher than mine. It was an investor offer, but I have no idea how someone could offer that high unless they were just looking for a 1% rental deal to park their cash.
In other news, I sent out 500 postcards via Click2Mail this week, so we will see what kind of response I get from those. These postcards went out to the same original list that has already received 2 letters. Next week or the week after I will send out the remaining 500 postcards to wrap up Round 3 (of 6).
I closed today on a new rental house in Oak Cliff. Paid $74k, going to put about $15k into it, and rent it for $1250 per month. Already have a renter lined up for April 1, just hoping we can get the renovations done in time. This isn't a slam dunk deal, but it is a play on the neighborhood which is rapidly redeveloping. I hope to hold this for 3-5 years and eventually flip it.
Still waiting for the 2 wholesale houses to close, should be Friday or Monday. I'll post the details once they do!