Direct Mail Woes: 16k letters 0 deals

Direct Mail Woes: 16k letters 0 deals

Rental Property Investor · Milwaukee, WI · Member since 2011 · 31 posts · 9 votes

I'm looking for a little advice on my first direct mail campaign. I've sent 16,000 letters and gotten no deals.

I sent letters to people with equity who are absentee owners who have owned the house more than 4 years or long time owner occupants who are over 65 years old. i used criteria I've heard Michael Quarles mention in his various interviews and podcasts. I mailed to everyone within 5 counties of me that meet that criteria excluding the handful of war zone zipcodes. The list is approx 8k names. I sent out 2k per week. The mail piece is a white envelope with handwritten font on the outside. The letter is as follows. It is a little different for owner occupants but the general message is the same.

10/13/2016

Hello <Contact>!

I want to buy your house at <Property Address> with cash.

I will pay cash and can close quickly. Call me at Number and we can discuss getting you paid and getting rid of the headache of managing a property you don’t live in.

I’ll buy your property “As-Is.” I’ll buy in any condition. No repairs or updating needed! Close on the day of your choice. I’m full time, experienced, local, and I answer my phone.

Give me a call at Number to get a cash offer on <Property Address>!

Looking forward to hearing from you.

Robert “Beau” Kriedermann

Number

Email address

Website

After all the names were hit in the first month, I started again hitting the names a second time. I have now hit my entire list of 8k names twice. I try to live answer the calls and I've called back every person I've missed calls from. I got about 5% response the first month and about 3% the second month. Although, the vast majority of responses are from the edges of those zipcodes I'd rather not buy in. I'll scrub those names from my list if I continue mailing. I keep track of all the contacts in my database and save their phone number when they call and make notes on each contact. I follow up on leads I think have potential. I had a couple of near deals but we couldn't quite come to agreement on price. I know I've heard people like Sharon Vornholt say 80% of deals come after the 5th contact. If I mail this list again I'm going to go with postcards for a couple rounds. I guess I'm looking for someone to tell me I'm doing the right thing and should keep going.

I'm an experienced full time investor. I started in 2008 and went full time in 2010. I've flipped about 50 houses. I know my market and have successfully negotiated deals with many sellers when they are actively searching for someone to buy their house and they find me. The conversation is a lot different when they reach out to you rather than when they respond to you reaching out to them through direct mail. I've put a few houses under contract from other marketing during this direct mail campaign.With direct mail I'm finding everyone is asking me "how much will you pay" and will rarely give me an asking price. I ask them a few questions about condition, why are they selling, etc. I come up with a ballpark number to see if we are close and most of the time we are not. No motivation. That is to be expected but you'd think I'd get one by now!

Do I continue with this campaign? The money is adding up. Should I modify something? I know from my first two months that I'm going to remove all the houses in areas that I know my phone rings off the hook from that are war zone adjacent. Is the 4 years ownership qualifier messing me up? Any advice or encouragement would be appreciated.

Thanks!

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Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
10y

yes STOP 

You're doing a bunch wrong.  

See this reply in the discussion

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    I don't know about all you folks but I buy a lot of real estate every month through out the country.

    and wholesale or direct mail accounts for a very small % of what my guys scare up.. but its regionalized for darn sure..

    We have had very good luck with hubzu Auction.com and MLS.. relationship with top OREO brokers is key... and having the bullits to shoot helps tremendously.. you then get the rep of a true buyer not a time waster.. so deals just come to you..

    My wife just did a MLS deal here in PDX .. she found it ( she is a RE broker).. she rehabbed it.. ( hired and managed contractor) She listed it.. did I mention she is a RE broker.. So commish on front end was 10k... save 15k on the back end because she is listing it herself.. and simply by being an agent you make 25k on a deal non agents don't make.. why anyone would think being an agent is not beneficial if yo actually do any volume always leaves me wondering.. end of the day 135k net profit 6 months. .. she is a keeper.. I went there twice LOL to give her atta girls. Although when it closes next week she informed me that she is buying a new bobble..

  • Residential Investor · Allentown, PA · Member since 2012 · 96 posts · 29 votes
    10y

    Do NOT change your phone number.   I've had people throw the card in a drawer, and call me 3 years later.  Hopefully sooner than that, so you can get some of that mailing expense back !!  

  • Savannah, GA · Member since 2014 · 11 posts · 2 votes
    10y

    I am also curious what aprcific suggestions Michael Quarles may have- not just general you're doing the wrong thing. I've read some of Michael's stuff and podcasts etc and it seems like you did follow his suggestions- maybe you just didn't use his yellow letter mail company for the marketing. Any other helpful suggestions?

  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Robert Kriedermann:
    Originally posted by @Ian Walsh:

    Something seems really off here.  There should be deals in there for sure.  Are you looking to wholesale them if youre not flipping?  5% response on 16000 pieces is 800 calls.  There are deals in there for sure.  Something is missing here.

    If the house isn't in an area that would be good for a flip (which 90% or more of the calls I have gotten are not good for flips even though I mail to all absentee owners within 45min-hour of me) I make an offer where I could wholesale the property by buying it with cash, and listing it on MLS to make a profit. It seems like deals would be in there but I talked to everyone and I'm not sure that there were. Maybe something is missing but I'm not sure what it is.

     Ok, so you are in rental areas.  Those should be able to be wholesaled for sure.  Are you offering too much?  What are the investors within 1/10th of a mile paying for properties there?  How many have you put under contract?  We used to wholesale a ton in those kinds of areas.  They aren't life changing deals but if you do enough volume it adds up.  

  • Rental Property Investor · Milwaukee, WI · Member since 2011 · 31 posts · 9 votes
    10y
    Originally posted by @Ian Walsh:
    Originally posted by @Robert Kriedermann:
    Originally posted by @Ian Walsh:

    Something seems really off here.  There should be deals in there for sure.  Are you looking to wholesale them if youre not flipping?  5% response on 16000 pieces is 800 calls.  There are deals in there for sure.  Something is missing here.

    If the house isn't in an area that would be good for a flip (which 90% or more of the calls I have gotten are not good for flips even though I mail to all absentee owners within 45min-hour of me) I make an offer where I could wholesale the property by buying it with cash, and listing it on MLS to make a profit. It seems like deals would be in there but I talked to everyone and I'm not sure that there were. Maybe something is missing but I'm not sure what it is.

     Ok, so you are in rental areas.  Those should be able to be wholesaled for sure.  Are you offering too much?  What are the investors within 1/10th of a mile paying for properties there?  How many have you put under contract?  We used to wholesale a ton in those kinds of areas.  They aren't life changing deals but if you do enough volume it adds up.  

     I am definitely not offering too much. I want to be very careful in those areas. Investors within 1/10th of a mile are paying $2,500 to $20,000. I'm getting calls from the D and D- neighborhoods. I didn't mail to the F neighborhoods. I make a lot of $2500 -$10k offers. I might offer $2,500 for a property in bad shape and $10k in good shape. I've put none under contract. The seller's don't bite on that because they can't believe that's what the comps are. It's possible I could get lucky and find some buyer to pay $30,000 for a house I offered $10k on so maybe I should have offered $20k but It's risky and I'm afraid to be stuck with a property in a war zone. I'm doing 3 rehabs in $300k areas right now so I don't need to be running around in warzone areas taking a lot of risk for not a big potential return. I'm going to scrub my list and take any property I know is in those areas out. I'm sure it will result in a much smaller call volume but at least I won't be chasing leads that aren't worth it.

  • Rental Property Investor · Milwaukee, WI · Member since 2011 · 31 posts · 9 votes
    10y
    Originally posted by @David Bokman:

    This business is all about sales and marketing. I always tell people if your not marketing for at least 6 months + then don't even bother!  Personally, I wouldn't of sent that many out your first time around, would of went with a much smaller number and made sure to hit those same people every month for at least 6 months!  Sometimes its the 4th or 5th letter that inspires them to call, not the 2nd. Unfortunately its also a numbers game. If your in it for the long haul then put systems in place, mail to different lists and track everything. Just my 2 cents.

     Yeah I went into it thinking I would hit this list once a month for 6 months. I'm prepared to do that but the results so far are discouraging.

  • Rental Property Investor · Milwaukee, WI · Member since 2011 · 31 posts · 9 votes
    10y

    I am working an absentee lead in a B area right now. If I could get that, it would make all the calls and mailings worth it. Wish me luck!

  • Rental Property Investor · Austin, TX · Member since 2016 · 65 posts · 16 votes
    10y
    Robert Kriedermann : would you have some time to connect with me ? I am interested in investing in Milwaukee area and would like to understand a bit about neighborhoods etc ..
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Robert Kriedermann:
    Originally posted by @Ian Walsh:
    Originally posted by @Robert Kriedermann:
    Originally posted by @Ian Walsh:

    Something seems really off here.  There should be deals in there for sure.  Are you looking to wholesale them if youre not flipping?  5% response on 16000 pieces is 800 calls.  There are deals in there for sure.  Something is missing here.

    If the house isn't in an area that would be good for a flip (which 90% or more of the calls I have gotten are not good for flips even though I mail to all absentee owners within 45min-hour of me) I make an offer where I could wholesale the property by buying it with cash, and listing it on MLS to make a profit. It seems like deals would be in there but I talked to everyone and I'm not sure that there were. Maybe something is missing but I'm not sure what it is.

     Ok, so you are in rental areas.  Those should be able to be wholesaled for sure.  Are you offering too much?  What are the investors within 1/10th of a mile paying for properties there?  How many have you put under contract?  We used to wholesale a ton in those kinds of areas.  They aren't life changing deals but if you do enough volume it adds up.  

     I am definitely not offering too much. I want to be very careful in those areas. Investors within 1/10th of a mile are paying $2,500 to $20,000. I'm getting calls from the D and D- neighborhoods. I didn't mail to the F neighborhoods. I make a lot of $2500 -$10k offers. I might offer $2,500 for a property in bad shape and $10k in good shape. I've put none under contract. The seller's don't bite on that because they can't believe that's what the comps are. It's possible I could get lucky and find some buyer to pay $30,000 for a house I offered $10k on so maybe I should have offered $20k but It's risky and I'm afraid to be stuck with a property in a war zone. I'm doing 3 rehabs in $300k areas right now so I don't need to be running around in warzone areas taking a lot of risk for not a big potential return. I'm going to scrub my list and take any property I know is in those areas out. I'm sure it will result in a much smaller call volume but at least I won't be chasing leads that aren't worth it.

     How did your mail pieces end up in warzones if you didn't want properties in those areas? I don't mean to ask the question in the way it probably comes off on the internet.   Was it a test marketing campaign of sorts?  A good way we used to move wholesale deals was by mailing the same non owner occupied list within 1/10th of a mile from the property we had under contract.  It was a simple postcard that said 'I have property 12xx main st for sale at xyz price. If interested call me'. It identified the buyers in the area quickly because they already were people that owned a property in that area.

  • Investor · New York, NY · Member since 2014 · 279 posts · 224 votes
    10y

    @Carl Brown

    What site, or sites do you use to skip trace? I know there's no 1 way of finding people. Someone mentioned Lexis Nexis is by far the best.

  • Investor · Marietta, GA · Member since 2016 · 131 posts · 84 votes
    10y

    @Johnny Kang

    TLO is the one for me. 

  • Residential Agent And Investor · Scottsdale, AZ · Member since 2013 · 212 posts · 83 votes
    10y
    Originally posted by @Robert Kriedermann:
    Originally posted by @Ian Walsh:
    Originally posted by @Robert Kriedermann:
    Originally posted by @Ian Walsh:

    Something seems really off here.  There should be deals in there for sure.  Are you looking to wholesale them if youre not flipping?  5% response on 16000 pieces is 800 calls.  There are deals in there for sure.  Something is missing here.

    If the house isn't in an area that would be good for a flip (which 90% or more of the calls I have gotten are not good for flips even though I mail to all absentee owners within 45min-hour of me) I make an offer where I could wholesale the property by buying it with cash, and listing it on MLS to make a profit. It seems like deals would be in there but I talked to everyone and I'm not sure that there were. Maybe something is missing but I'm not sure what it is.

     Ok, so you are in rental areas.  Those should be able to be wholesaled for sure.  Are you offering too much?  What are the investors within 1/10th of a mile paying for properties there?  How many have you put under contract?  We used to wholesale a ton in those kinds of areas.  They aren't life changing deals but if you do enough volume it adds up.  

     I am definitely not offering too much. I want to be very careful in those areas. Investors within 1/10th of a mile are paying $2,500 to $20,000. I'm getting calls from the D and D- neighborhoods. I didn't mail to the F neighborhoods. I make a lot of $2500 -$10k offers. I might offer $2,500 for a property in bad shape and $10k in good shape. I've put none under contract. The seller's don't bite on that because they can't believe that's what the comps are. It's possible I could get lucky and find some buyer to pay $30,000 for a house I offered $10k on so maybe I should have offered $20k but It's risky and I'm afraid to be stuck with a property in a war zone. I'm doing 3 rehabs in $300k areas right now so I don't need to be running around in warzone areas taking a lot of risk for not a big potential return. I'm going to scrub my list and take any property I know is in those areas out. I'm sure it will result in a much smaller call volume but at least I won't be chasing leads that aren't worth it.

    As someone who has done direct mail in Milwaukee, there is definitely something amiss if you are sending out 16,000 pieces and getting that response rate and not getting deals. I can empathize with getting a lot of leads for not as desirable areas as the zip codes in North Milwaukee tend to overlap with decent areas/warzones.

    If you are structuring your contract correctly, there should be no reason to fear getting stuck with a property in a warzone. If you're trying to wholesale, you can put it under contract and try to move it for 5 or 10 days while in the inspection period. I actually highly recommend you get in touch with Rebecca Holmes (not sure why it isn't linking her name) as she wholesales a lot of property in the areas of Milwaukee you are having issues with. At least you'll be able to split some deals to monetize those leads to subsidize your mail cost.

    I'm also betting you have a solid 10 retail listing leads in that bunch that should be referred to a good real estate agent. If you don't know one, I can give you a referral for an awesome agent that closed several of these type of leads for me during my last campaign. Just another way to subsidize your marketing. When talking to sellers, you should be probing for motivation and distress. If there's motivation to sell but no distress, immediately switch on your retail listing hat, talk up your agent, and ask if you can have that agent call them. 

    If you do it right, I'm sure you can get close to your monthly marketing budget to allow you to continue your campaign and I promise, you WILL get deals. Stay consistent and good luck!

  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    Thanks @Matt Morgan. 

    @Robert Kriedermann We market in all areas but we do wholesale many deals in less desirable parts of Milwaukee and we are more than happy to pay marketing fees for any leads we close on. 

    On a side note, I am looking for any deals in 53204 particularly around the 9th & Mineral area. 

    Captain Save-A-Home LLC
  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Johnny Kang I use www.Peoplesmart.com. It's what the MTV show, Catfish used to locate the people. You can look up people by name, address, phone or email and it will tell you their age and relatives and if they passed away and when. 

    Captain Save-A-Home LLC
  • Investor · New York, NY · Member since 2014 · 279 posts · 224 votes
    10y

    @Rebecca Knox

    Yes, I know people who use that; good to know. Thanks! 

  • Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    10y

    @Robert Kriedermann,

    You may want to soften your approach a bit ...

    "I want to buy your house ..."

    Yeah, that's why you're writing. You may be "setting switches" in the reader's mind you don't necessarily want to.

    Try something more focused on the solution to a potential problem for the recipient:

    "I'm looking to buy a home in your house's neighborhood. Wondering if you know of any for sale or whose owner may be interested in selling. I'm prepared to pay cash and close quickly."

    That should even work for owner-occupants, especially if they're in distress - underwater, pre-foreclosure, etc..

    You should be getting at least a 0.1% response (8 respondents). Maybe the change in text will help, especially if your mailer looks different from what you've sent before.

    Shop around for services which can hand-write your envelopes, also. Statistically, hand-written letters have a 5% higher open rate than computer printed.

    Just a suggestion ...

  • Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    10y

    @Robert Kriedermann I think I have received a letter from you a while ago. If you mail to absentee owners you definitley have to scrub the list from names who have multiple income properties - not your typical motivated seller. In my mind the main thing is touch points. Pick one area and like some said before make sure you touch them every month. What happens is that you build trust and recognition over time. The big missunderstanding is that you dont mail to people that are already motivated. You mail to normal people and they get to know you (your letters) - and then they become motivated. My suggestion would be shorten your list and increase your touches.

  • Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
    10y

    @Jason Hopkins depends on your city code enforcement. Its stated that these types of signs are not allowed. I've done it before on a flip that we were listing and got multiple calls from the city with threats of $400 per sign taken down but the number was a google number so they had no way of tracing us back. I didn't necessarily like the idea of it and haven't tested it since. There is only a small small number in my area that stick with them.

  • Owen DashnerPro Member
    Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
    10y

    I will defer to other experts on the finer points of direct mail, but I would highly suggest pulling the list by subdivisions within the zip codes you want instead of the whole zip to eliminate the bad areas.  Get micro instead of macro.  And look for other ways to monetize those leads that come in (i.e. network more with other investors, seek out the buyers in the areas where your leads are).

  • Rental Property Investor · Milwaukee, WI · Member since 2011 · 31 posts · 9 votes
    9y

    Update: 

    I ended up sending 8k pieces of mail a month for 3 months for a total of 24k pieces at a cost of about $12k total. After tracking and keeping in contact with all the promising leads I did get one worthwhile rehab deal at the end of three months. I'm pausing the direct mail until I sell one of the 5 properties I'm currently in the process of flipping.

  • Residential Real Estate Broker · Denver, CO · Member since 2010 · 22 posts · 7 votes
    9y

    @Carl Brown I would be interested in hearing more about your skip tracing success and techniques. I am looking to get involved with skip tracing as well!

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