Wholesaler · San Diego, CA · Member since 2014 · 21 posts · 8 votes
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!
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.
Congrats on your first close. It takes 4 - 6 "touches" over the same number of months. Very few people will be "ready" when you are. What you are trying to do is to get you name in front of them so that when the moment arrives and they are ready, they will call you. Don't get wrapped up in what you are sending them and mix it up, formal letter, hand written letter, post card, tri-fold whatever. And there are no right words.Everyone responds differently and there is no way you can tailor to people you have never met. Good Luck and let us know how you do.
It is absolutely true what they say about touches on mailers. We are on our 4th mailing of a 3000 pc list and the leads are increasing and of higher quality with every mail. I have been paying for SEO for 6 months with minimal results, however PPC gets calls and webform submissions galore!
I spend $1200/month on PPC and that is our #1 source for motivated sellers. I imagine SD is much more competitive so PPC will probably be significantly more expensive.
@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.
@Robert Leanard You are right. As a marketer I can tell you that is 100% accurate. It's better to target and create more touches than using a blanket process.
@Rob Pene I am brand new to the game. And I am about to hop into the same marketing game Armegi is. I read your post and couldn't agree with you more. However, I am really uneducated when it comes to a PPC and SEO campaign. Do you have any recommendations for a consultant or company that I could hire to do this? Thank you.
@John Hornermay I please ask if you are using a consultant or company to help you with your PPC campaign. I am a beginner also looking for a start. Thank you.
@John Hornermay I please ask if you are using a consultant or company to help you with your PPC campaign. I am a beginner also looking for a start. Thank you.
I do the PPC myself. We have had a consultant help us with content but I manage the PPC Campaigns myself.
@John Horner so you must have knowledge on how to even do it. Is there someplace I can learn? I know I want to have a PPC campaign, I just have no idea how to even set one up or where to go. Thank you.
OK, reality check time. NO ONE gets a 5% response rate from investor letters or postcards in California unless the mailing is completely untargeted and therefore a huge waste of money and time. The quickest way to generate real motivated seller leads are - in order:
1) Bandit signs (not recommended) 2) PPC 3) Direct mail - absentee
SEO takes months to work, but it is worth the effort. Direct mail in general takes multiple touches before it starts to work. We did a free REI education video a while back on that - called the Rule of 7.
PPC is your quickest bang for the buck but it will not be cheap in any major CA market. Expect to pay $100 or so for every completed form on your site. It's not as hard as you think to create an AdWords account and launch a Search Ad with a few keywords and a low budget just to get the feel for it.
I was lucky to obtain a awesome postcard from mark evans. I sent out 1000 postcards and received 200 phone messages and 90 or so hangups with phone numbers. I didn't mail to CA. I mailed to Mo. I will always use this postcard and system. The deals that I will get will not make me 24k but I will make consistent money without ever driving to the houses.
You did well on your first deal..23k is nothing to frown on...The So Cal market is just tough. Theres no special trick, no special wording, first class stamps, hand written, blah blah blah. You just have to get your letter (rather its yellow, green blue, or soaked in gold) there first...There's no way to predict rather somene will be motivated. Just get your letters out. You can be more targeted that will help, But if your not reaching those numbers, you wont get those calls. I get a high call back %. But my budget a month now (as i grew) ranges from 2k-3k...I make my own letters. 1000 letters cost me about $420 bucks, to print, fold, stuff and mail....
i would suggest (if you dont already) get you and LLC with a local number and send nice professional letters out in your areas, San Diego is much like Oragne county (where i wholesale) They are more upper class, and they want to see those letter heads and nice typed letters. Im upfront and honest, i tell them its a small family business, and we work form our home offices...
Personally id love to hear more about online marketing, my experience was awful, it was like a convention of tire kickers, whoelsaers acting as buyers, send my deals out, adding 10k on top...a 200k deal ended up at 275k after it was daisy chained. I put money into it, but it just didnt work out...I had to change my number 3 times...It was the worse experience for me...
$680 dollars produced you 23k......(you did that)....not many people on BP can say that....My first mistake after my first deal, was straying from what got me there in the first place. Perfect it, put some money into it, think about, strategize, and push those letters out...Your 23k above all your competition now...
I have never used mailers, so I have no experience on that front, but I get them, a LOT of them every week for different rental properties.
Can you filter out owners that have over a certain number of properties,,,if someone has 10 NOO properties, chances are they are an investor and your mailers to them will get pitched. I would think the person with a single property. I hate to throw away mailers knowing people have spent good money sending them,,,but I'm not selling,,,I'm buying
@Winston Spence As for me it doesnt matter, just put your letter in an invitational envelope to get them to open it, if they are motivated they will sell, the color of the paper and type of writing wont make them want to sell..
So from what I have heard we have response rate of 1-8% on direct mail. From that 1-8% what percentage of those actually turn into leads worth perusing, then from there into actual deals?
When we talk about that 1-8% response are we talking about per letter or is that combined for 4-5 touches?
I.E.- If I have a list of 250 houses that meet my criteria of 50-100% equity in a very narrowly defined area on a map, and I send 4 letters to each person, lets assume a 5% response rate.
Should I prepare for 50 calls or 12? Then of those calls how many will be worth perusing? Of those how many should I expect to be deals?