Am I over complicating direct marketing or underestimating it?

Question

We are experienced landlords and have done a few flips.  We have never done direct marketing for properties but want to.  The more I read, the more I get confused. I realize there is no recipe / cook book for what will work.  This is the parameters I was searching in our desired area (using Listsource.com)

Specific County30-100% equityLast market sale date 4/26/08 - 4/26/2011Year built 1950-1998Exclued corporate ownedIt stated there were 658 properties for my search.  That seems very small of a market.  With a company like yellowletterhq.com I could have all those properties recieve mail in the first day.  Right????  My questions are :

1) Is my criteria too specific?2)  How many letters should I be sending out a day/week?  I know this is budget specific.  My goal is to close one property a month.  I have heard some spend on average about $750-$1000 per every deal they close.

3)  How often should I send out to this each list?  1/month? 1/other month??4) ANY advice that would help me launch my first campaign would be helpful.  My head is spinning!!!

Thanks!!!

Jeff

Mike Hicks · Answer

seems pretty small. from my experience anything under 1,000 pieces of mail yields a subpar result, but at the same time only 1 piece of mail to the right 1 person equals a sale. How many letters you send out and the frequency depends on your budget AS WELL as the ability for you to actually answer the phone and respond to the calls, and your how your area and market responds to the direct mail.

best advice. just do it. you won't find out if it works or if it doesn't work if you don't take action and just do it. you'll learn more from one campaign of letters than listening to strangers on the internet lol

best advice. just do it. you won't find out if it works or if it doesn't work if you don't take action and just do it. you'll learn more from one campaign of letters than listening to strangers on the internet lol

Claire Trammell · Answer

@Jeff Gebhart

It doesn't seem like your criteria is too specific, however if you were wanting more leads to mail to I would suggest either expanding your geographical area or the last market sales date. Since you have an equity percentage in your search, it might be worth it to you to look further back for the last market sales date. We typically recommend 3%-100% equity with 4+ years ownership. Yields pretty good numbers.

As for the number of pieces mailed, you are right, it largely depends on your budget. @Mike Hicks is spot on when he said that it "depends on your budget AS WELL as the ability for you to actually answer the phone and respond to the calls". Based on our customer feedback as well as our own mailings, we have seen an average response rate based on the type of mail piece. This may give you an idea on how to estimate the call volume to expect. Again, this is an average:

Yellow Letters- average response rate of 8%-9%, all kinds of calls (angry calls, curious calls, tire-kickers, quality calls)

Postcards- average response rate of .5%, mostly quality calls.

Zip Letters- average response rate of 2%, mostly quality calls. (Great for follow ups)

Greeting Cards- average response rate of 2%, mostly quality calls. (Great for follow ups)

Follow ups are VERY important. On average, it takes someone 3-5 touches before they actually take action. We have seen that sending a different mailing piece every 3-5 weeks works pretty well. Granted, it may vary some in your market and you will need to test to find the right time frame, however, this may be a good start.

All in all, it sounds like you are on the right track! Good luck and keep us posted!

Charlie John · Answer

when you buy off mls, you are a buyer. When you market for properties direct to seller, it's a whole different game man. It's not as much about the criteria as much as it is about salesmanship. I think that's more of a requirement going into this vs what list you are sending to.

Just start tho.

Jeff Gebhart · Answer

@Charlie John Thanks for the reply!  I used those dates as I read someone else said they had good luck with homeowners that purchased 5-8 years ago.  But really no other reason but someone else is doing it.  On the 1998 build date, that doesn't mean that someone bought the house 18 years ago, that would only apply if the the owners are the original owners.  Right?

I think I am caught in analysis paraylsis on this and keep second guessing myself.  I really appreciate your feedback!  Thanks !

Charlie John · Answer

@Jeff Gebhart

Why did you use 2008-2011 on sale date? I guess that makes sense if you are trying to find houses that were bought at a discount in the last buyers market. However, most of those people think they are really smart for buying and will want 110% of market value. Good luck with that!

I would look at 1998 and prior as A build date. Some people in that segment have still not done much updating since they bought 18 years + ago. That's a better target for you.

If you are looking to buy a house or two and that's it - then go ahead and use a company to create your list and send out the "mass produced" lookin Mail.

Otherwise I would drive for dollars, create your own custom lists and send custom marketing pieces saying you are a buyer in the area for the long term. People tend to respond better to

Someone who isn't "fly by night".

Good luck man. It's fun marketing direct to sellers. A lot of stories will come from it. Crazy sh*t you will see too!

Jeff Gebhart · Answer

@Mike Hicks Thanks for the kick, I need it!!!  Is listsource a good source for developing the lists?  Where else should I look?

Am I over complicating direct marketing or underestimating it?

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