Real Estate Investor · Irvine, CA · Member since 2014 · 6 posts · 2 votes
Hi,
For those that do a lot of deals through direct mail, I'm interested to know how many sellers you generally have to speak to to get a deal. I've been sending out direct mail for a couple years now and never had to speak to more than 30-40 sellers to put a deal together. Recently I've probably spoken to over 100 sellers and I can't seem to get anything.
Interesting topic. In 2013 I spoke to 104 serious sellers on the phone, closed 4 deals, and have another 3-4 still in the negotiation stage. I don't log the tire-kicker sellers, or the ones who want to be removed from the list. The tire kickers will continue to get postcards from me if they change their minds and if they seem "on the fence" I follow up with them every few months.
While that sounds pretty good, the bad part is that it took 22,000 postcards to get there. So my serious response rate was only .47%.
I agree with @Sharon Vornholt - that's what our experienced investors see - about 1 in 20.
One thing to consider is your "exit strategy" options for a deal. Investors that do very well tend to have multiple exit strategies - wholesale, rehab, owner finance, lease option, LISTING it, etc. (you should be licensed or have someone on your team who is).
If you are only looking at these opportunities thru a "single lens" - i.e., just wholesaling with the an aggressive "ARV x 65% - repairs" formula, you will see less opportunity in your leads.
The other issue is your ability to gain trust and negotiate. Some are better at that than others - and it is at LEAST as important as the "technical" skills of real estate. You need to be great with people or seek training to get you there.
Dev - my buying strategies now are to buy cash, fix and flip, or wholesale. My end buyers can pay up to 85% of ARV so I'm able to make some pretty high offers. I've tried using other methods but sellers just don't respond to those offers. They all just want cash and they want it now. I feel my ability to gain trust and negotiate is ok. I follow up with all the sellers I speak to and they're not selling to other investors. 90% of the people I speak with aren't serious sellers and just want to see what I could offer. The rest usually end up listing their properties. Can you recommend any training for dealing with seller calls?
Paul, I guess if I'm missing it then I don't know. All I can tell you is they're not selling to any other investors. They either hang on to the property or list it.
Interesting topic. In 2013 I spoke to 104 serious sellers on the phone, closed 4 deals, and have another 3-4 still in the negotiation stage. I don't log the tire-kicker sellers, or the ones who want to be removed from the list. The tire kickers will continue to get postcards from me if they change their minds and if they seem "on the fence" I follow up with them every few months.
While that sounds pretty good, the bad part is that it took 22,000 postcards to get there. So my serious response rate was only .47%.
You sa you've been doing it for a few years. Have you been targeting the same zip codes the entire time? Is there a lot of wholesale / investor competition in your area? Maybe the leads just simply dried up and it's time to try out an area different from where you have been working..