From reading the forum and understanding what other investors are doing to get responses from direct mail. It seems like a majority of members on BP are using yellow letters. Yellow letters seems to get a higher response rate then a postcard, but a postcard is cheaper allowing you to send more. My question is if a high majority of investors are using yellow letters, wouldn't it be idea to try something different. Any members on BP use anything different besides the standard yellow letter and got results? Please share so other new investors don't waste money doing what other are already doing. Thanks!
Try a website or utlizing internet marketing. Also if you read back in other recent posts, your question has been asked before. As far as yellow letters, I believe Michael Quarles is somebody worth speaking with or researching.
@Winston Spence You can always try the less expensive route and just call people. Scour the internet for FSBO and absentee owners and if you can locate their phone numbers, just give them a call and ask them. You can also drive around and find distressed properties, walk up and knock on their door. I believe very few investors actually do the door-knocking, so you'll stand up from the rest by doing this.
I've used direct mail in many different sales of all types, the most effective way to capture through mail is focusing all your skills on the outside appearance. In other words the letter shouldn't look like just another mail piece and sadly post cards fall in that category. When we see things like that in our mail we tend to just toss them to the side or in the drawer, however if it came in an envelope looking like it was from a law office or fedex (we used airEx) then the client's automatic reaction is to open it, trust me. We use to use a company called traffic jam that was HIGHLY successful and generated our store millions in gross. The letter scan basically say nothing if the envelopes they coms in stands out so much that your future clients open them as soon as they get it. Hope this helped, thanks
Does anyone use a different color besides yellow for their direct mail? And what is your response rate? I should have asked this question instead.
Pink seems to be a good choice for letters and green and pink for postcards if text...
This is the PC I am using lately as an added touch..
However I only want HIGHLY motivated callers.... And I buy crappppppy houses.
Letters cost TWICE as much to mail as postcards. But it's not just the cost that you should consider - it is the MESSAGE. Most people that send yellow letters use the old standard "My wife and I are interested in your house... blah blah blah." COMPLETELY WRONG MESSAGE if you are looking for MOTIVATED SELLERS with DISTRESSED PROPERTIES. The old "my wife and I..." yellow letters will generate calls but almost ZERO of them will be the people you are looking for. Don't make that mistake.
We use postcards because they are cost effective, and when paired with a good brand, message, and mailing list, they are hard to beat for generating ACTUAL MOTIVATED SELLER leads...
You know I can't agree 100%... I would never send a letter with my wife and I... I would say my wife, Mary and I... Power in the name Mary.
Historically the YellowLetters numbers are 1.1% motivated and 1.9 willing to sell. The rest are on your prospect list. You should use their additional information collected from their call for future marketing, i.e. telephone number etc.
That said postcards have their place as well. ESPECIALLY if you have a brand like the enormous brand of WeBuyHouses®. Heck if every one of your licensees haven't had "We Buy Houses" added to their local telephone directories, both hard copies and digital, with their number when looking up the telephone number they're crazy...
The EXPERT on Yellow Letters has spoken!
You make an excellent point - there is both ART and SCIENCE involved in marketing, words matter - a LOT.
I am having trouble building a prospect list. Using Listsource, what would you recommend to find prospects to mail to? What lists gives you the highest response rate?
What message do you include in your postcard to get results?
What lists gives you the highest response rate? = The ones I mail to... I know that's a cliché but too true...
As for criteria currently I like: And criteria changes fast so what I did a month ago I may not do now and so on.
- Last sale Date 2010 or before
- 1-3 Bedrooms
- 30% or more equity
- Median values or lower based on assessor data. 2/3 seems great
Here is what I am no longer worried about... Absentee Owned... Unless my budget wouldn't allow me to market to all of the addressees on the above list.
What I don't like are Trust owned and Corporate/LLC owned.
@Michael Q. Are you not concerned with absentee criteria because you are wanting volume? Or are there other factors/psycology involved?
Couldn't Corporate/LLC owned be other investors, or Inc'd landlords who might want to get out of that particular property? I guess what I'm asking is (unless there's so many to be cost prohibitive) what's the worst that could happen? They won't contact you, or they will and possibly be buyers or even sellers?
I am not currently distinguishing between Owner Occupied and Absentee on my lists for a couple of reasons... 1) Its a friggin great time to buy and OO are selling.. They don't want to live in the lower than median areas and seem to feel that the market has turned enough for them to get out. 2) EVERYONE markets to the absentee market lowering the deal conversion rate although still strong enough to include. Certainly an out of area and especially out of state absentee who a has motivation to sell also has distance issues which tend to mitigate the lower sales price mentally for them. However I factor back in that the OO market is not marketed too nearly as much and that that group is much larger which offsets my concern currently. Not to mention the TOM base we start creating when we use an inclusive marketing approach.
Sorry for the long answer, I love marketing..
LLC/Corps/Trusts are too like minded. Typically you wont see the mom'n'pop investor hold in an entity. And they are our seller. Certainly the conversations will be easier when talking Sub2 or Seller Financing however the 50% of value conversation and finding pure motivation is lessened by the knowledge of the person in control of the entity.
In most markets, we still get better response rates from consistent mailings to Absentees (compared to the same marketing to Owner Occupants). We do split testing with different phone numbers so the stats still seem to support the idea of concentrating on Absentees if you have budget constraints. I don't really care about excluding LLCs & Trusts because it's usually a small % of the total and many inherited properties are held in family trusts where the trustee was the executor of the will. But again, eliminate those if you need to trim your list.
I'd almost rather do door hangers or EDDM or shared mail to OO's to get the cost per door down under 20 cents each. Sending 50 cent postcards or $1 letters to OO's is expensive and they're response rates are often slower to develop (take more hits before we see response, compared to Absentees).
I know this is off topic but I heard a podcast you were featured on: Real Estate Mastery Podcast. And you was going over your business model of how you make offers with motivated sellers, it was something I never heard before. You exclude using the ARV because your not rehabbing the property which makes, but I can't wrap my head around how you get the numbers to make an offer. I think you said something along the lines of if a property as-is value is $100K, you either take off 25% or $52K which I don't get. The part that does make sense is putting back on the MLS at the as-is value meaning you are crushing mostly every deal you wholesale.
I just have a few questions to ask: how do you come up with the as-is value of a property? Do you use an inspector, comps of recently sold as-is properties, etc..? After, how do you come up with the 25% off or $52K? Is that to cover the expenses such as a realtor, contractor for estimates, etc..? Then how do you get your offers accepted? I think I heard you say something about not letting the buyers into property unless you agree on a price.
Apologize for all the questions as this is a formula I never heard of. If you can go into depth on how you use this formula it will be greatly appreciated. I personally think this can really benefit my business which is getting stagnant.
I wasnt referring to ALL OO, just those who qualified... And door hanger are good if one of two or both things are happening...
1) You are hanging them around the doors of your appointment...
2) You hire them to be hung... If anyone thinks they will consistently hang their own door hangers they are crazy... However when hung for you it makes sense... However when you do have them hung make certain that you REQUIRE the hangers to note all of the vacant houses and report that list back to you. To find the hangers driver your market and look for business cards stuck to a door then call those business and share the cost of hanging or at the very least find out their hangers number... Looking for business cards will also tell you vacants as you notice the pile of free periodicals pile up. And the best day to hang door hangers will be saturday...
As for EDDM it isn't a solution yet... Its coming soon but not yet as the number of true prospects don't make the cost worth the investment.
I have researched EDDM so much to come to this conclusion it isnt funny.
And your cost are high... Postcards are .36 cents and letters are .77 cents.
As for LLC/Trusts, yes a small amount of trusts will have inherited concerns. Heck everyone alive with equity is a prospect however when weighing the costs I just don't see LLC and trust as viable.. Heck I would sell more mail if I promoted them so maybe I should take the position of self promotion and make more money... I just cant..
That answer is a long friggin answer. I must state that I dont wholesale. I don't think anyone should and nobody would if they either had the money to purchase, time to purchase, or understood how to purchase with no funds of their own. Wholesaling is the most expensive form of real estate investing period... Finding the "Deal" is worth more than the fee most investors accept.. Finding the deal is the deal...
Besides the word "wholesaling" is so misunderstood.
If someone gave me an hour to explain to them how to sell retail without exposure they would never wholesale a deal. Ever..
As to your question. Maybe Dev and I will get together soon and do a podcast together, maybe invite Jerry and have a round table on Skype for people to watch and ask questions or something... That would be cool.. Listen to three different perspectives...
I love that podcast/round table idea!!
Thanks for the response. Honestly though, how did you get the property as-is value and get sellers to accept that?
And a podcast with @Michael Q., @Dev Horn , and @Jerry Puckett would help every new investor out. Can't wait to hear it!
@Michael Q. Not at all, thanks for feedback.
When you say selling retail without exposure: Exposure to mls? Exposure to risk? Exposure to what exactly?
limited risk. Naturally we can't complete eliminate risk however we can reduce it considerably while earning the highest profit dollar.
Roundtable on Direct Mail with @Michael Q. & @Jerry Puckett ? I would love to hang out with those dudes (2 of my absolute favorites on BP) for an hour an chat about direct mail!
Originally posted by @Michael Q.:
Maybe Dev and I will get together soon and do a podcast together, maybe invite Jerry and have a round table on Skype for people to watch and ask questions or something... That would be cool.. Listen to three different perspectives...
@Joshua Dorkin , awesome concept to bring these 3 together for a round table
Have you ever heard of “lumpy mail”? Lumpy mail is the process of inserting “something” into an envelope or doing something “unique” to make it stand out, involve curiosity and get opened. It’s also known as a “grabber”.
The “thing” you include must tie-into your message inside. Coins, plastic money sign, a pencil, etc.
For example, one agent mails their farming pieces in a small brown paper bag with a stamp. Inside, the letter headlines, “Here’s Why There’s No Free Lunch When Selling Your Home…”
The letter talks about “you get what you pay for — so why would you use a discount broker and steal from yourself?”
The letter then talks about the risks of using a discount broker, all the ways the agent can net the homeowner as much or more than a discount broker, makes an irresistible, completely risk free offer for a “Free Home Audit” and a “Free Special Report”.
The agent also uses a few great testimonials and statistics about their success (proof). The letter is then followed-up by a second and third notice.
Can you see how this type of mailing would get noticed and acted upon?
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