yellow letters to absentee owners

Marketing Your Property
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yellow letters to absentee owners

Tiffany Robinson
Homeowner · Humble · Member since 2011 · 15 posts · 3 votes

I am thinking of getitng a list of absentee owners from a very known site and startind sending out letters to find asbentee owners sellers. Starting with 500 letters in the Houston area. Does this or will this actually work?

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Dev HornPro Member
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
12y
Originally posted by @Jay Hinrichs:

@Rob Scarborough 

  Just like you have the 2% rule for figuring cash flow you have the 1% rule in direct mail marketing... depending of course of the area of the country.

So 500 letters to answer your question directly.. If you got 5 calls and close half a deal that would be normal.. 1000 letters should get you one solid closing. So for 85 calls that's probably 5000 or more letters....

Yes, in fact, this varies - pretty dramatically - in different areas of the country (send 1,000 letters in LA and prepare for maybe 3 calls, certainly not 10).  I'm not a big fan of "response rate" as it can be a misleading measure of marketing efficiency.  I can increase my response rate by diluting my marketing message (i.e., "I buy any house at any price... or, my wife and I love your house and want to pay you top dollar for it", etc.).

Contrast that to the typical "cash offer" message -- "I pay CASH, close FAST, and buy in AS-IS condition."  If the homeowners are not motivated by cash, speed or the fact that they have a house in need of repair, they might not respond to this message.  But when they do, it tends to be an excellent lead.

If you are a wholesaler or rehabber, you need MOTIVATED SELLER LEADS from people with DISTRESSED PROPERTY.  You can get plenty of curiosity-seekers with a "my wife and I love your house, I pay top dollar" message, but most those calls will be worthless to you, and you'll weed thru a lot of them to find actual motivated sellers.  (I also think half the absentee owners are other investors that are wise to the yellow letter tactic; I prefer to send variable print postcards or professional letters to absentees...  Owner occupants are better targets for the typical yellow letter format.)

The metric that matters most is simply "Return on Marketing".  It will not be revealed to you in a single mailing, but over time you evaluate your marketing spend as a % of your revenue to see how your marketing is "working".  In 6 months, you might spend $6,000 on marketing and generate $30,000 in revenue, giving you a 5X Return on Marketing. From a business perspective, that number will be a lot more revealing to you than response rate. 

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  • Michael Quarles
    Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    12y

    Absolutely... I know a guy who just closed 58k worth last month in your city.. just last week he had 85 calls from sellers.

    2Reply
  • Rob Scarborough
    Investor · Smithville, MO · Member since 2014 · 160 posts · 19 votes
    12y

    Hi @Michael Quarles -

    Just out of curiosity, how many letters, PC's, etc. did he send out to get 85 calls?  Is that a normal ratio?

    By the way, I'm a big fan.  I'm trying to learn your Jedi ways :-)

    1Reply
  • Michael Quarles
    Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    12y

    that equated to .00879 

    0Reply
  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    12y

    dont talk to michael. his suave voice will make you sell all your houses for a song. :)

    btw, i am thinking of around 500 letters to start with too. 

    0Reply
  • Tiffany Robinson
    OP
    Homeowner · Humble · Member since 2011 · 15 posts · 3 votes
    12y

    @

    Michael Q. that's all I needed to hear....

    0Reply
  • Tiffany Robinson
    OP
    Homeowner · Humble · Member since 2011 · 15 posts · 3 votes
    12y

    @Michael Q.

    0Reply
  • Michael Quarles
    Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    12y

    @Tiffany Robinson 

    Hi.  Did I say something wrong. 

    0Reply
  • Tiffany Robinson
    OP
    Homeowner · Humble · Member since 2011 · 15 posts · 3 votes
    12y

    sorry for the repeat

    @Michael Quarles mentioning. I am so new that I was trying to figure out how to do that. You said nothing wrong. I meant to say that's all I needed to hear. If one person can do it, with hard work and consistency, no reason why it cant be me too. By the way I am a huge fan of yours Mr. Q!

    1Reply
  • Michael Quarles
    Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    12y

    The great thing about real estate investing is that everyone who has the drive and determination can succeed.

    Real estate investing is blind... We can be fat, skinny, short, tall, multitude of skin colors and nationalities, and have all kinds of things against us and yet still succeed.

    What a profession... I get to get up every morning and determine my outcome... I don't have to worry about layoffs or attitude or misfortune... All I have to do is decide to have abundance.

    And I can invest from anywhere.. I can be sitting on a beach chair or office chair or couch and I can still dictate my future.

    5Reply
  • Daniel Humphries
    Broker · Atlanta, GA · Member since 2014 · 47 posts · 17 votes
    12y
    Is it wrong of me to ask you to share the website you are using? I may want to start this yellow letter process myself.
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Rob Scarborough 

      Just like you have the 2% rule for figuring cash flow you have the 1% rule in direct mail marketing... depending of course of the area of the country.

    So 500 letters to answer your question directly.. If you got 5 calls and close half a deal that would be normal.. 1000 letters should get you one solid closing. So for 85 calls that's probably 5000 or more letters. I just posted on this I just got my first Yellow letter.. I may have gotten more but I just threw them away.. this one I opened and read.. Its a pretty slick piece and should work well... my only feedback would be to not have a mail service mail them from out of state.. Like the one I received.. If your going to pay for this and put a local phone number.. Have them send you the letters and mail them from a local post office so you keep continuity in your attempt to make your mass market piece look personal

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Tiffany Robinson
    OP
    Homeowner · Humble · Member since 2011 · 15 posts · 3 votes
    12y

    @Daniel Humphries I am researching that right now. There are a bunch of them out there though. I might even decide to have my teenage daughters and I write them ourselves because I don't have a ton of money to start this thing.

    1Reply
  • Rob Scarborough
    Investor · Smithville, MO · Member since 2014 · 160 posts · 19 votes
    12y

    Thanks @Jay Hinrichs !

    0Reply
  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    12y
    Originally posted by @Jay Hinrichs:

    @Rob Scarborough 

      Just like you have the 2% rule for figuring cash flow you have the 1% rule in direct mail marketing... depending of course of the area of the country.

    So 500 letters to answer your question directly.. If you got 5 calls and close half a deal that would be normal.. 1000 letters should get you one solid closing. So for 85 calls that's probably 5000 or more letters....

    Yes, in fact, this varies - pretty dramatically - in different areas of the country (send 1,000 letters in LA and prepare for maybe 3 calls, certainly not 10).  I'm not a big fan of "response rate" as it can be a misleading measure of marketing efficiency.  I can increase my response rate by diluting my marketing message (i.e., "I buy any house at any price... or, my wife and I love your house and want to pay you top dollar for it", etc.).

    Contrast that to the typical "cash offer" message -- "I pay CASH, close FAST, and buy in AS-IS condition."  If the homeowners are not motivated by cash, speed or the fact that they have a house in need of repair, they might not respond to this message.  But when they do, it tends to be an excellent lead.

    If you are a wholesaler or rehabber, you need MOTIVATED SELLER LEADS from people with DISTRESSED PROPERTY.  You can get plenty of curiosity-seekers with a "my wife and I love your house, I pay top dollar" message, but most those calls will be worthless to you, and you'll weed thru a lot of them to find actual motivated sellers.  (I also think half the absentee owners are other investors that are wise to the yellow letter tactic; I prefer to send variable print postcards or professional letters to absentees...  Owner occupants are better targets for the typical yellow letter format.)

    The metric that matters most is simply "Return on Marketing".  It will not be revealed to you in a single mailing, but over time you evaluate your marketing spend as a % of your revenue to see how your marketing is "working".  In 6 months, you might spend $6,000 on marketing and generate $30,000 in revenue, giving you a 5X Return on Marketing. From a business perspective, that number will be a lot more revealing to you than response rate. 

    6Reply
  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    12y
    Originally posted by @Tiffany Robinson:

     Starting with 500 letters in the Houston area. Does this or will this actually work?

     I, too, know a fellow in your area that has had great success with this. He began with 500 letters a month and leveraged all of the resources here on BP to make that success happen, though he was totally skeptical in the beginning. Check out his story here:

    http://www.biggerpockets.com/forums/223/topics/112568-how-bp-created-100k-in-net-worth-in-4-months?page=1

    @Daniel Humphries, not sure which site you're referring to....Tiffany is likely referring to List Source for her list. But if you were asking @Michael Quarles , he probably couldn't respond without breaking the forum rules. However I can tell you that you can start the Yellow Letter process at http://www.YellowLetters.com among others.

    2Reply
  • Tiffany Robinson
    OP
    Homeowner · Humble · Member since 2011 · 15 posts · 3 votes
    12y

    @Jerry Puckett

    I am checking out that article tonight. I have been educating myself on podcasts now and looking for meetings in my area that are held on the weekends. You were right on about listsource.

    This site is awesome!

    0Reply
  • Chip Chronister
    Investor / Rehabber · Fort smith, AR · Member since 2014 · 178 posts · 30 votes
    12y

    One thing I have learned about direct mailing is to keep the names and numbers of people who has called you and do follow up calls several months later bc they might be more motivated a couple months later.

    0Reply
  • Rebecca Pokorski
    Brookfield, CT · Member since 2015 · 8 posts · 2 votes
    11y
    So if you are going to send out your first batch of yellow letters, in your opinion (and I know everyone's answer will be different) what list would you choose (absentee owner of state, probate etc...) and why?
    0Reply
  • Erin Elam
    Little Elm, TX · Member since 2014 · 356 posts · 47 votes
    8y
    Originally posted by @Dev Horn:
    Originally posted by @Jay Hinrichs:

    @Rob Scarborough 

      Just like you have the 2% rule for figuring cash flow you have the 1% rule in direct mail marketing... depending of course of the area of the country.

    So 500 letters to answer your question directly.. If you got 5 calls and close half a deal that would be normal.. 1000 letters should get you one solid closing. So for 85 calls that's probably 5000 or more letters....

    Yes, in fact, this varies - pretty dramatically - in different areas of the country (send 1,000 letters in LA and prepare for maybe 3 calls, certainly not 10).  I'm not a big fan of "response rate" as it can be a misleading measure of marketing efficiency.  I can increase my response rate by diluting my marketing message (i.e., "I buy any house at any price... or, my wife and I love your house and want to pay you top dollar for it", etc.).

    Contrast that to the typical "cash offer" message -- "I pay CASH, close FAST, and buy in AS-IS condition."  If the homeowners are not motivated by cash, speed or the fact that they have a house in need of repair, they might not respond to this message.  But when they do, it tends to be an excellent lead.

    If you are a wholesaler or rehabber, you need MOTIVATED SELLER LEADS from people with DISTRESSED PROPERTY.  You can get plenty of curiosity-seekers with a "my wife and I love your house, I pay top dollar" message, but most those calls will be worthless to you, and you'll weed thru a lot of them to find actual motivated sellers.  (I also think half the absentee owners are other investors that are wise to the yellow letter tactic; I prefer to send variable print postcards or professional letters to absentees...  Owner occupants are better targets for the typical yellow letter format.)

    The metric that matters most is simply "Return on Marketing".  It will not be revealed to you in a single mailing, but over time you evaluate your marketing spend as a % of your revenue to see how your marketing is "working".  In 6 months, you might spend $6,000 on marketing and generate $30,000 in revenue, giving you a 5X Return on Marketing. From a business perspective, that number will be a lot more revealing to you than response rate. 

     I know this thread is old but I'm hoping to get some more great answers. It was mentioned that using the 'I buy houses fast' verbiage might not be the best for absentee-owned properties... It was insightful to mention that they may also be investors.  

    So to that point,  what approach is better for the absentee-owned properties? Should I focus on the out-of-state maintenance? Or @DevHorn what do you include in your personal postcards? 

    Thanks to all for this thread! 

    0Reply
  • Ray Lai
    Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes
    8y

    @Erin Elam

    The likelihood of an investor being distressed is a lot lower, and the likelihood that your absentee owned property that looks beat up belongs to an investor is lower again. Rather than cater your message to a small minority of your list, you're better off sticking to verbage that will get motivated people to respond.

    1Reply
  • Erin Elam
    Little Elm, TX · Member since 2014 · 356 posts · 47 votes
    8y

    I hope to pick the brains of seasoned investors here in the DFW (Dallas - Ft. Worth) area regarding marketing to out-of-state absentee owners. I've admittedly been reading on the subject of wholesaling for quite a while. My question is this: those of you who have successfully sent direct mail, received a response, got a contact, and subsequently completed your chosen exit strategy - what are some of the reasons the sellers were willing to sell? A lot of inherited properties? People needing less debt on credit reports? Bad tenants? Up in age? Unable to afford repairs on the property? I'm looking forward to this insight! 

    Erin

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    8y

    I always say...don't send anything out, that you aren't willing to follow up with a phone call or personal visit.  In this case if you are sending to absentee owners, visit probably doesn't work.  Especially if you have more time than money, call first, then send the letter, then call again to make sure they got it.   You'll up your response rate significantly.

    1Reply
  • Emmanuel LopezPro Member
    Investor · Elizabeth, NJ · Member since 2017 · 70 posts · 14 votes
    8y
    All great information from everyone’s input. My question is for one to do direct mail with out of state properties what is the best way to find a good market?
    0Reply
  • Erin Elam
    Little Elm, TX · Member since 2014 · 356 posts · 47 votes
    8y
    Originally posted by @Emmanuel Lopez:

    All great information from everyone’s input. My question is for one to do direct mail with out of state properties what is the best way to find a good market?

     IMO - you can't go wrong with good school districts. 

    0Reply
  • Emmanuel LopezPro Member
    Investor · Elizabeth, NJ · Member since 2017 · 70 posts · 14 votes
    8y

    @Erin Elam great point. Inbox me your email. 

    0Reply
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