Is the yellow letter worth it??
Investor · Bowie, MD · Member since 2011 · 81 posts · 17 votes
Is the yellow letter worth it??
Most Popular Reply
Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
14yHello Derek,
First let me congratulate you on marketing irrespective of the type…
Secondly I like Troy have a slanted view point since we are both with Yellow Letter Mail businesses. He is with YellowLettersComplete.com and I own YellowLetterMail.com.
As for your question: Yes…Short of full page newspaper ad on the first page of the Sunday classified section or 30 minute TV infomercials I haven’t seen a better response rate. Problem with the newspaper ad and TV is that it is a very expensive cost to entry and it produces a lot of “Junk” calls. Whereas direct mail done right is very targeted and can deliver calls from your business model prospect. Example being, shot gun marketing ie. Newspaper, bandit signs, radio, TV, Bill boards, etc. produce calls from all demographics some of which wont fit you business model. If you’re an equity investor and don’t do shorts then the short calls are a waste of advertising dollar.
As for post cards versus yellow letters..
Post cards are great reinforcement marketing. Absolutely save the cost of a yellow letter on your third mailing. Letters 1 and 2 best be yellow letters, If you send out letters 4 and 5 they can be either two yellows or a yellow and a typed letter. Typed letters can be produced cheaper. Mail piece 6 a post card is fine.
Troy explained a little about why the post card is more expensive then the yellow letter very well so there isn’t a need in going there. But lets look at the post card as a reinforcement.
In all marketing we have a series of touches. It’s the reason Budweiser advertises at a million dollars a commercial during the super bowl telling us to drink what is in our hand. Reinforcement works and frankly is needed. No one buys on the first contact. Even the sellers who call off of the first Yellow Letter still have been touched by something to cause them to think about selling. Maybe it was a for sale sign in their neighborhood which causes two sellers to offer their home for sale within six months of being planted in the ground. Maybe it was the passing glance of a realtor magazine offering homes for sale. Something has touched them. When someone is being touched typically they must be touched 3-8 times to cause them to take action. And frankly the PC is a good touch… It just doesn’t create a call to action.
What is a call to action? A seller picking up of the telephone and calling you to buy a house. PCs are a passing touch at best however at some point when they hit the prospect at the right time they will create the call. They just don’t do it at the volume of the yellow letter mail piece for the money spent.
So why do people recommend the post card? The post card has two qualities that a yellow letter doesn’t.
1) Low cost, although just perceived, to enter a market.
2) Spend to enter the market.
Heck you can go to click2mail.com and buy a PC for .39 cents as long as you have the verbiage or jump on my site and spend .45 and use a prewritten PC. The price point makes the PC look great. However as Troy explained and although 5% is a low response rate PC are much more expensive. Then there is speed. You can order PCs and have them in the mail within 24 hours whereas the Yellow Letter Mail takes a week or less to produce…
So with all of this said let’s take about the two biggest positives of a post card over a yellow letter mail piece.
1) Extremely low cost vacant and abandoned house marketing. If you’re searching for vacant houses then use postcards only. If you’re searching for both non abandoned and abandoned then yellow letters only.
2) Cost effective media to explain how we buy which eliminates some junk calls.
With that said I think it is important to receive as many junk calls as you can however only if you plan on doing something with the information you receive. When I say this I mean weighing the value of a not now seller prospect call to a now seller prospect call.
What I mean is this; we are marketing to people who fit our investor model. If we get a call from anyone in our prospect base wouldn’t that information be valuable even if we they weren’t planning on selling today and just wanted to know how you received their information? Absolutely if we used the information to continue to touch the prospect.
I know from my research that above 70% of callers call from a cell phone. Cell phones numbers are not published information therefore I have a unique piece of marketing information someone else may not have and as long as I use it wisely I can cost affectively touch the prospect again and again.
Lets look at normal response rates and expectations of a yellow letter mail campaign.
Over the last 6 weeks I have had the following for my personal investment business. I am an investor first.
12.9% calls
3.1% people telling me that wanted to sell their home.
74% Hang-ups - I send everyone to a long voicemail to weed out the non sellers.
.5% have their house listed.
The balance were either giving me information about another house or weren’t interested in selling..
So in the big picture. For 1000 bucks I get
129 calls less than 8 bucks
31 Sellers wanting to sell their home Less than 35 bucks
5 Listed houses with motivation
90 cell numbers that I can continue to market to via text marketing, after all they are my prospect
129 numbers I could warm call monthly
If I were an Agent I would have 31 people I could buy or list fairly immediately.
50 Replies
- Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes14y
If you use bandit signs or just want to get calls meant for investors who use bandit signs you should do the following.
Call your local telephone company and place two business names in the white pages for your local area code.
I buy houses and We buy houses.
Doing so will get you calls from people who see bandit signs and don't write down the number.
This may take you registering the name as a DBA in your County. However worth the cost.
- Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes14y
Derek
the absentee list is ok - but you need to research the DEED DATE too. If the property was not purchased at least 15-20 years ago, then there probably won't be enough equity to do a wholesale deal. The older the DEED DATE, the better.
One of my absolute best sources for whole sale deals has been code violations. These properties can be purchased for 10- 20 cents on the dollar usually. The owners are getting hounded by Code Enforcement to fix them up but they don't have any money so they can't. they are extremely motivated sellers. Most of the properties can get a certificate of occupancy again after certain repairs are made.
See my ebook in the files section for more tips and tricks about wholesaling.
In my experience, you'll get much better results with a yellow postcard.
Average response rate ( if you have a good list to begin with) with a letter is 3-4%
with a postcard it will be 10-12%The response rate is better with a postcard because people don't have to open it to see your message. In a split second, your message should be enough to GRAB THEIR ATTENTION and make them want to call you.
If you advertise the same old. we buy houses, message, you will NOT get a good response rate.
Instead, sellers want to know WHAT'S IN IT FOR THEM.( not what you do) -- what's your answer to that question? That should be your message.
- Investor · Wilson, NC · Member since 2011 · 34 posts · 11 votes14y
Derek,
I am a newbie as well I attempted my first direct mail campaign last week myself. I sent out about 9 letters just to see what would happen and I had one hit. It actually turned into a deal. I know this might be the exception to the rule. I say go for it do what you can and when you get that deal reinvest in your marketing budget.
Dwaun
- Investor · Bowie, MD · Member since 2011 · 81 posts · 17 votes14y
Dwaun, wonderful, congratulations. I hope that I am so lucky. Mike as usual, thanks for the great advice. Jackie, thank you for the great advice. None of the "guru" courses have given me this important bit of information.
Thanks All.
- Real Estate Investor · Columbia, SC · Member since 2010 · 59 posts · 23 votes14y
Originally posted by Dwaun Elam:
Derek,I am a newbie as well I attempted my first direct mail campaign last week myself. I sent out about 9 letters just to see what would happen and I had one hit. It actually turned into a deal. I know this might be the exception to the rule. I say go for it do what you can and when you get that deal reinvest in your marketing budget.
Dwaun
You hit the lottery there. I'd be interested in hearing the numbers of the deal. What was your target audience for that mailer?
- Real Estate Investor · Columbia, SC · Member since 2010 · 59 posts · 23 votes14y
Originally posted by Rob Gillespie:
Derek,Not sure on your time available, but in my marketing I do a form of yellow letters that I tape on the glass of the front door. I actually pay someone to do it, but if you did it yourself, you can do about 100 in 5 or 6 hours.
You will spend about 5 bucks on printing and 10 bucks in gas.I get HUGE responses and it is super cheap!!! :mrgreen:
I used to do something like this but I would actually leave it in a Fed-ex envelope at the front door. You can get the envelopes for free at drop off boxes or any store that ships fed ex.
Guaranteed to be opened as long as the house isn't vacant! - Residential Real Estate Broker · Colorado Springs, CO · Member since 2008 · 100 posts · 4 votes14y
Originally posted by Jackie Lange:
One of my absolute best sources for whole sale deals has been code violations. These properties can be purchased for 10- 20 cents on the dollar usually.Jackie,
Where can I input the code violations in my list criteria? I am using Melissadata.com. - Portsmouth, OH · Member since 2009 · 198 posts · 54 votes14y
Originally posted by Jackie Lange:
Average response rate ( if you have a good list to begin with) with a letter is 3-4%
with a postcard it will be 10-12%Jackie,
I’m sure many of us here would love to know how you’re getting a 10%-12% response rate with your postcards. Do you do anything different with the design, color, or message? Anything you could share would be helpful and appreciated.
- Real Estate Investor · Austin, TX · Member since 2009 · 17 posts · 7 votes14y
Ok, so the yellow letters I wrote up are already doing better than the postcards did. I dont have a deal yet but ive already gotten more calls. Once i DO get a deal, im probably gonna sign up with Michael's company to do more volume.
I may try out the yellow book idea, it sounds promising.
- Real Estate Professional · Salt Lake City, UT · Member since 2010 · 608 posts · 163 votes14y
I have been testing 60 day late and just started 90 day late. I also have been cross checking the 60 day late against the NOD (notice of default) recorded with the county. After 3 months very few 60 days go to NOD meaning most people solved their problem. Starting to mail to 90 day lates and will track the same as above. My goal is to get to people before NOD. Someone on BP once told me to forget 60 day lates because most people are not that motivated yet. I think I just proved that to myself.
- Investor · Bowie, MD · Member since 2011 · 81 posts · 17 votes14y
Well I sent out my first campaign. It consisted of 200 postcards to sellers and 50 to buyers. I mailed them on November 7 and I have so far received 18 calls, 2 from buyers and 16 from sellers. I have called 1 sellers back so far and will work through the others tomorrow. The one I called is kind of interesting. They guy owns 20 acres with nine houses. 4 are early 1900s and 5 are Army houses moved to the lots. All are rented and worth 70,000-100000 each (according to him). The guy wants to sale as commercial land and get it rezoned. He wants 2 million. The development is prime location. Not for me though. Anyway, 250 went out and 18 calls have come in so far. That is a 7.2 percent return so far. From what I have been reading, that is not bad. Hoping for at least 10%. Now lets see if any are deals. BTW, I used an ansentee owner list.
- Investor · Bowie, MD · Member since 2011 · 81 posts · 17 votes14y
Hi Jon, not yet, I did pick up a few interested buyers. Almost every inquiry was from someone who is updside down in their home and I could not make them work as a wholesale deal. Very motivated, just not right for me. I did not do a December mailing due to the hoilday. I am gearing up for a January mailing now. I was happy with the amount of response though. I have big plans for 2012 and I will get to my 2-4 deals per month goal. I will not let anything stop me!.
- Rehabber · Member since 2011 · 66 posts · 9 votes14y
Derek I don't know anything about yellow letter mailings. But I can tell that you have an awesome drive and attitude. And that's more than half the battle IMO. Keep trying different ideas and keep moving forward until you succeed!
- San Diego, CA · Member since 2012 · 37 posts · 0 votes14y
Everyone here has some great ideas! As for the yellow letter campaign, what do you say in your voicemail when they call? Or do you answer the phone and talk to them directly? Any help is appreciated. Thanks.
- Renter · Ortonville, MN · Member since 2012 · 7 posts · 0 votes14y
I would like to offer my two cents here. I am not saying the following simply because this is what I do for a living; I am telling you this because it works!! Save your money from your weekly and monthly mailings, and invest in Cinema advertising. I sell ads for Screenvision, where your ad plays on every screen before every movie every day at the local theater you choose!! The numbers are amazing when you look at the amount of people you can reach...and know they hear and see your message!! At a movie, the viewer is there to watch the 40 ft screen. This is an incredible way to get your message out there!!
Just think about it. If you would like more information, PM me, I would me more than happy to help. - Wholesaler · garden grove · Member since 2008 · 91 posts · 13 votes14y
Derek
Yellow letters do work, and I'm sending them out every week. Calls do come in and I do pick up the phone and make deals. what you do with them the calls will make or break you. If you're busy and not answer the calls then it's a waste of time and effort. But if you able to pick up the phone can make the deal, then it's great.
Second, You ever heard of the book called The Compound Effect by Darren Hardin, it's about the little things you do everyday that will make a difference. So, since sending 100 per month does not see result to you, but if you think about it, keep doing from time to time, will add to great result, then you add the leads that come in to your list and eventually you have your own list.
As of now,
Envelopes = .03 per envelope
Stamps = .45 per stamp
letters= .02 letter paper
Ink= .02 ink toner per pageTotal costs: .62 per letter
If you're able to put away $62 for 100 letters, you'll get much ahead. Now if you can double that, you'll be much ahead !!!!
- Investor · Bowie, MD · Member since 2011 · 81 posts · 17 votes14y
Great Advice Tin. Looking at your figures, do you write them by hand? Thanks for the compliment Mike B.
- San Diego, CA · Member since 2012 · 37 posts · 0 votes14y
Tin Lam, what if you are too busy to answer the phone at the current moment? What do you say in your voice mail message?
How do you begin a conversation with the homeowner?
- Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes14y
For most the yellow letter mail produces too many calls at the same time of day to answer them all. Which is why we have gone to a infoicemail. It works very Well and is tied to our text followup campaign.
Side question we have been asked by too many customers not to look into it about qualifying their calls and calling prospects back. What is the general thought on this.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes14y
Common sense but stay away from Cinema advertising. Very expensive and mediocre results.
Many people get to the movie theatre right as the previews are starting and the ads have already passed.
The rest of the time they are going to the bathroom,smooching the girlfriend or wife,talking,looking at the cell phone,or getting drink or popcorn before going into the movie or getting refills later on.
Not many will see the ads or will be a direct target audience for real estate.
Stick to targeted marketing with letters. I do not like post cards.Handwritten envelopes work best on the outside that look like from a friend.Letter carriers usually won't stuff in the junk insert like they do with postcards when delivering.
- Investor · San Antonio, TX · Member since 2009 · 106 posts · 50 votes13y
I'm just getting back into REI after some disappointing results with rehabs. I have decided to go back to wholesaling where I've had better success, although I never really cared much for all the hours spent in marketing. Here's my question, I have $10,000 set aside to get my wholesaling business going. How would you spend this in marketing for deals? I'd like to outsource as much of the work as possible since I work a lot and just welcomed my first son into the world! I am determined to build my wholesaling business and I think I have the capital to make it happen, I just need a proven strategy. What do you suggest? Thanks!
- Professional · Colorado Springs, CO · Member since 2015 · 29 posts · 3 votes10y
@Derek Smith So, Derek, after all this time what have you found works for you? How are you currently doing?
- Investor · Houston, TX · Member since 2016 · 17 posts · 5 votes9y
Can anyone provide any 2016 results on this topic? I would assume some great long term data has been collected at this point.
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