Am I throwing away money with mailers??? HELP!!!

41 Replies

Hi All,

Closed my 1st deal from the the 1st 1,000 mailers I sent out to absentee owners mid May.

The 2nd mailer (1,000YL's) produced less than 12 calls and my last mailer produced 3 hang ups and a not so mentally stable person.

I purchase my leads on ListSource and my cost per 1,000 YL's is $680.00 which is not as much as some wholesalers are paying but it does add up and more than anything, it is time without production.

As far as I know, mailers are the quickest way to start generating sales but I am starting to think that I am doing something wrong. I have money to invest in my business, however I don't want to throw it away and it seems that is precisely what I am doing.

Any and all suggestions welcome... thanks for any help!

-AMG

Mailers happen to be the best source of leads for many investors. Bandit signs also work well for some people depending on how quickly your city takes them down. Yellow letters when done correctly (targeted list, hand addressed, first class stamp) usually produces at least a 5% response. You need to follow up with each list. Also try mailing to other types of lists (divorce,bankruptcy, inheritance, etc)

5% response sounds high to me here in California. Lots of people throw around big numbers like that, but I don't see it and I'd love to see how many deals they are actually closing. 

Tell us about the list you are mailing to; Is it the same list as your first mailing or did you pull a new list? 

congrats on your first deal. i may be close to closing on my first deal soon.

as a master investor you should have about 7 entrance strategies (give or take?), so yes you are throwing away many leads probably. as a wholesaler you only have 1 strategy.

recently i have been learning about "subject to" and "lease options". i want to be able to close on any lead than comes to me

Originally posted by @Armegi Gil :
Hi All,

Closed my 1st deal from the the 1st 1,000 mailers I sent out to absentee owners mid May.


I think you answered your own question :)

1st and 2nd mailers were complely new and had the same filters. My last mailer was a repeat. follow - up of the 1st mailing. I don't know of many wholesalers in California with a 5% response rate, that's very high! However, I do think that only one live person to speak to from 1,000 YL's is over the top....

@Armegi Gil it's funny you mention sending out 1000 mailers. I just had a conversation with another investor today who said, it's better to send out 4 direct mailings to 250 prospects than it is to send out 1 to 1000 prospects. Apparently it's the number of "touches" that matters with direct mail. At least that's what I've read and heard from others who know what they are talking about.

@Account Closed I hear what you are saying about having more strategies but I am not throwing away leads because the phone is not ringing, It's money that I am throwing away.

Not sure if it's the filters I placed but I am obviously not doing this right...

I don't believe a 5% is that high with a targeted list. Assuming you are a classic wholesaler where you buy low and sell low (not flipping lease options, etc) your absentee owner list should targeted to in/out of state owners who have owned their property for 10+ years. Homes built 1950 and later. (Not as important). Median home prices and under. I'm not sure what that is in California but I would assume it's under $300,000. Single family residences, duplexes, and triplexes. Homes 900-2500 sq ft.

Some of that criteria will be dependent on your buyers list and what your buyers are looking for.

I've heard the same thing @Robert Leonard  and I think it makes sense.  

@Armegi Gil , I'd say you keep at it. What was your ROI on the first 3000 mailers?

@Jose Sison 83% ... :) Shouldn't complain but I want to get this mailer thing right! My 1st deal came with a nice $24,450 profit.

Touches are more important than numbers.  I don't use mail outs anymore but when I used them we had very specific criteria, 23 lots in one subdivision  Most of the owners had owned the property for 30 + years and had never developed it,  Each mailing to this group rewarded us with more calls and more purchases.  We got one the first mailing and it took 10 + mailings to get 21 purchases.  We also got 20 more purchases from these same owners as they had more than one property and with trust we got more sales.

Most people on your list have gotten these mailers before and they only got one touch and never heard from the investor again, that's not effective use of your time and money.

I have used other mail outs but again they were very targeted and multiple touch systems.

Are you using yellow letters in a hot San Diego market?  Or is your farm area somewhere else? My experience says yellow letters are not appropriate or effective in every market, and certainly have limits in markets where values are $250k+.

Kristine Marie Poe Yes, I am mailing within San Diego but not one specific area. I've only excluded higher end coastal communities. There is nothing in SD for less than 250K :)

@Martin Scherer are you saying that over a period of XYZ time you obtained 41 transactions from 23 property owners?

Proven / Exact Answer

Small Post Card #9 from Yellow Letters

List Source: Owner Occupied, 60% to 100% Equity, 10 Years of Ownership, Single Family Houses

Do a split test (always do this)

Try editing something on the post card; headline, color, text, etc. Then use one phone number on one version and one phone number on another. Measure your results.

I have a split test I am documenting right now that I will send out soon...

Also - you may want to check out my brother's site, Todd Toback, he is absolutely crushing it in San Diego right now!!!

Yes that is exactly what I am saying.  None was a large transaction but profitable for us.  My main point was that we built up trust with these folks by continually mailing to them.  They called, some on the first or second mailing, some on the 10th and some took more than one phone call to get them to agree once they finally called

We were assembling an old subdivision and then restructuring the lots to provide space for more modern homes.  The other project targeted  people who had listed a property with an agent and had not sold during the previous year.

I know A LOT of investors do extremely well with mailers, but I also hear that you'll need to have some coin to spend to be successful with it...so what's the next best alternative especially if you need to be more cost minded?

when I think of that question I always ask myself where do I have the most control over the allocated budget I have for "marketing" to get leads.

lucky for me, I've got an unfair advantage because of my background lol

but if I had a little bit of coin and a little bit of time, I'd pump $$ into PPC because I know the phone will ring AND I have a little more control over the marketing spend.  I can stop the campaign and tweak it if I notice that its not yielding the kind of results I'm hoping for. 

unfortunately you can't do that with a list and direct mail.  once your send it out, there goes your money and you're now stuck to chance, "odds", and the best you could do in trend research on a list provider, etc...

BUUUT, if I had a decent size budget, I'd spread it out between a healthy balance of PPC and tossing up my own website and throwing proper seo campaigns at it to rank for the necessary "motivated seller" terms that have decent search traffic...this way I have control over my budget and can see the short term (PPC) benefits along with the long term (SEO) benefits.

the only caveat to this approach is you WILL NEED to really know your stuff for PPC and SEO...but if you obviously have a marketing budget you'll probably want to carve out some room to consult or hire someone who knows what to do and how to do so that you're not throwing money at the wind bc if you try to do it on your own, you might as well just send mailers lol

sorry so long, but the cool thing about real estate is that there's always an alternative path to a solution...its just a matter of finding it and where there's a multitude of counsel, there's bound to be gem of an answer somewhere!

have I spent money on mailers? YES

did I get a call from it? NO

have I spent money on alternative means to generate leads? YES (online)

did I get a call from it? HELL YES!!!  more like waaay too many calls for me to handle on my own so I had to form a team of Investor Votrons to work it (again this is a biased pov bc online and digital stuff is what I do as a day job lol)

@Rob Pene Thanks so much for your response and I couldn't agree with you more!

A person I hired just finished setting up my websites this weekend and I also had him make a couple squeeze pages for Craigslist. I have yet to find a person/company for my SEO and PPC marketing. I can't do it because just like you said, I'd be throwing away money :)

The reason I keep going bad to the darn mailers which BTW, I have never been keen on direct mail, is because I read and hear it's the quickest way to get a pipeline going. Long term, I see the benefit of online marketing 150%!

If I may ask, how many months did it take to get your online marketing efforts to get the phone to ring? Did you start of with SEO and then added PPC?

I found a lot of value in your response, thanks again ana MUCH continued success to you!

Arlene

in general, the time it takes to see results for PPC isn't long at all, especially if you've got someone who knows how to work it properly...it can be as quick as a few hours to a couple days...but PPC is a beast in and of itself lol

for SEO and your website, it could be a month or so (I've seen quicker), depending on the competition and the type of campaigns you run...if your campaigns are weak and the competition is decent then it takes longer, if your campaigns are on point and the competition is decent, it could take a few weeks to see page 1

it all varies depending on how well you can harness all the moving pieces and the dynamics of what works, when it works, why it should work, and the adjustments you make on the fly (again, the benefit of having more control over your budget!!!) when you notice you need to tweak things

I posted something around March of this year about really taking it serious and giving myself a chance at this real estate investing...and here in June of 2014, things look super different :)

Originally posted by @Armegi Gil:

@Rob Pene Thanks so much for your response and I couldn't agree with you more!

Before getting too enthused, best to check out his website and see what he's selling. ;-) Not that there's anything wrong with that, but he's correct in admitting he's biased and didn't really paint a fair picture.

Direct mail is not always just so simple as throwing a bunch of letters in the box. It requires a strategy, a plan, testing and tweaking. Rob said you couldn't do these things, but of course you can, and you should.

It's a little strange. Most folks get a little glossy eyed thinking about SEO and PPC. Like "oh my goodness that's complicated and I had better get a pro to do it right". But they won't think twice about doing their own direct mail after reading a few a few blog articles about it.

As someone who's done quite a lot of both (and yes, full disclosure, I offer services in both areas also) I can tell you this:

People's internet behavior is atrocious. When they go on line to a website, they will jump from site to site, searching searching.....comparing....searching. I can promise you that if your plan is to drive traffic to your site with your mailers, once there, your prospects will fill in your form, .....and probably 5 or 10 more on other sites.

The internet game is not to be played lightly. You need top notch SEO and content to win in that arena. The internet is a very, very big place. You could build a store front for the greatest product in the world; but if you built it on a back street....in a nondescript building....in the basement....in a closet....who's going to know? (Believe me, this is not an exaggeration, the internet is that big. ) And if they did know, how will they find it? 

The truth is that it costs more to compete on the internet than it does with Direct mail. Dollar for dollar, you'll get more bang for your buck contacting people directly rather than waiting for them to find you along the single most busy highway in the world.

@Armegi Gil  

Your question or statement was; Am I throwing away money with mailers??? HELP!!!

The simple answer is YES... we all do.. I mail a ton of my own mail I although it would be a fun experience, not really, to have every mailer create a response I am certainly hoping they all don't. 

With marketing in general you'll find that a 8 to 12% marketing cost is appropriate. After time that cost percentage will diminish to 4-6%. 

A friend of mine was having his sons help him stuff envelopes and prepare his mail and his youngest asked him how many houses he wanted to buy. He replied one. His son then asked; then why don't we just send out that letter? Very logical in theory however hard to quantify. 

We send out buckets of mail to introduce ourselves to that one very motivated seller. The one who will give us 50,000 for our trouble and fear. 

Are there better methods for marketing... Absolutely.... If an investor would implement the laws of the six degrees of separation they would be more successful than any direct mail marketing. The issue is that this media for most is not one which they are comfortable with doing. 

Getting to your direct mail issues.

In your market you will want to stay below median values and stay at 3 bedrooms or below. Use the filter of 30% or more equity as the algorithms in your market haven't reset yet. Also stay to SFR with 4 years ownership or more and if your budget doesn't allow for all of the list then take that number to 12 years and make one of the occupants 65 years or older.

As for percentages of response. In your market you have a 4 to 6 time multiplier so keep that in mind. 

Mix up your mail piece and consider using Postcards over YellowLetters if only able to send 1000. And send them... Your market is  a 17 touch cycle so dont be afraid to hit the list. 

Most importantly be prepared to ask the questions which uncover motivation. Most wont just come out and tell you they will sell at a discount so we have to pry a little. 

And finally WAIT for the deal to manifest... Most investors think busy work equates to profitability and it doesn't. 

Good hunting is ahead...

I agree a lot with @Jerry Puckett , he’s an experienced investor on both the online and offline approaches :)

Online leads are shoppers because that’s just the nature of the internet. So it requires some skill and strategy to capitalize on those types of leads. As a full disclaimer as well, the leads I’m getting are two-fold, they are specific to my city because I’m ranking for those terms AND I’m getting leads all across the nation because I’m ranking for bigger broader terms as well.

I would certainly plan on doing both online and offline strategies because that’s just the natural way to scale and run multiple channels of marketing in order to build/grow your business.

I only do online (for now at least) mainly because that’s what I’m better at and a little more comfortable spending my money and resources at. It just makes sense for me at the moment, but I do plan on spending money on mailing vacant lists once a month (starting in July) so I can get that channel going.

Hello @Michael Q

What does 4 to 6 time multiplier mean?

17 touch cycle? Does that mean 17 mailers?

Thanks
Patrick

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