So, I'm 2 direct mail campaigns in and I haven't reached my goal of closing my first deal yet. Slightly discouraged but not yet defeated I was hoping for some help from the BP community to get my first deal in the bag. I'll quickly go through my system just in case my flaw is there, but I believe my main flaw is talking to prospects.
I'm running direct mail campaigns to absentee home owners using yellow letters, standard 'I would like to $Buy$ your house at..', by Yellow Letter Complete. I field my calls using a live answering service, they fill out the script for me and I perform the call back. In that call back is where I believe my mistakes are made. Below are the main scenarios I have faced that I haven't figured out how to tackle.
1.) With my goal being to wholesale, I am looking to obtain the sellers property for X amount and assign their contract for Y amount, my interest in the deal being Y less X. However, when I mention obtaining the sellers property and reaching out to/marketing to/sell to, etc. another real estate investor most sellers seem to be instantly turned off. I've tried reassuring the seller by stating my assignment fee is paid for by the buyer, the expense of using an agent, the amount of time selling traditionally takes, etc. but the outcome generally leads to disinterested sellers.
2.) The main goal out of my call back has been to schedule an appointment to see the property so I can make the seller an educated offer. Another problem I am running into is that most properties are occupied with a tenant and the seller doesn't want the tenant to know they are considering selling. A couple said they would only schedule an appointment if I made them an offer.
Any help with these scenarios or handling follow up calls in general would be greatly appreciated. Discouraged for the time being but still determined to get that first deal!!
Have you considered changing you tactics, your business plan? First, a Realtor's goal as a listing agent is provide the highest price possible, your goal is an opposing strategy.
It also sounds like you trying to buy low, plug in a figure as a profit and find a buyer, do you have any idea of what value you really bring to a transaction?
I'd suggest you find your own distressed properties and owners, I'd bet that Realtors in Raleigh know who cash buyers are, you'll need to add more value than they do even if a listing agent thinks your offer was the highest to hope for. If you're looking a owner occupied homes that are listed, you're barking up the wrong tree.
I've never used direct mail, but I do know two shots isn't enough as direct mail is an ongoing campaign, not a short term blitz. You'd probably do as well buying ads at local movie theaters!
Did you begin by learning the basics and valuations along with rehab costing or are we just trying to talk any seller down, adding an arbitrary fee and then beating the bushes for a buyer as the gurus sell the strategy? Might rethink that.
Raleigh is big enough to have a good inventory, learn to find motivated sellers in specific area, divorce, death, job loss, job promotions move out of the area, growing family, etc. should be easy to find these and target those who have properties that are not marketable, in need of repairs. Before that know who your buyers are and what they want, look for those. You could spin your wheels a long time just hitting houses for sale and you could put mail out for months and not hit any deal. IMO, mail is not the best when done in a shotgun blast, you're looking for niche properties.
I'd suggest you rethink your strategy. :)
I'm marketing to absentee homeowners (off market properties) by zip code in hopes of finding distressed home owners. With the absentee list I'm looking to find home owners who are worn out landlords, vacant property owners, moved away for work, etc. I think the value I would be bringing, to the distressed home owner of course, would be debt relief, landlord stress relief, and monetary compensation.
I'm a structural engineer so I've got a pretty good idea of what to look for rehab wise and I work in the residential construction industry now so I'm pretty confident in my estimating ability.
I agree, 2 campaigns is definitely a small sample size and I know direct mail is essentially playing the numbers, the more letters you send, the more calls, the more calls the more deals.
I also agree that I should rethink my strategy, or at the very least expand my strategy. The more weapons I have in my repertoire the more successful I'll be. I see bandit signs and movie ads in my future. Thanks for your input, I will definitely take your advice going forward.
@Adam Perry I only have one question and that question is how many did you send out?
Originally posted by @Wayne Woodson:
@Adam Perry I only have one question and that question is how many did you send out?
I'll tag onto this and ask, are you really talking "campaign's" here (meaning 6-9 successive mailings with content building on the previous mailing's message) or just 2 individual mailings?
Others who are direct mail experts have stated before a mailing is most effective between 5-7 mailings to the same address.
Your approach is wrong for your list. That (OLD) yellow letter technique with the "I want to $BUY$ your house at..." was designed for owner-occupants. Absentee owners that might sell to you are "tired landlords" and heirs of properties, etc. They will respond to a message of "have your tenants trashed your rental house again?" or "tired of paying taxes and up-keep on a vacant property?". These are the needs of the absentee owner. They don't give a hoot if you want to "$BUY$" their house (I don't know who invented that $word$ thing but that idea should be retired :-P ).
The point is - understand your targets and their needs and speak to those needs in your marketing. You need to solve a problem they have, not just express interest in buying. Make sense?
I prefer postcards for absentees - cheaper and get to the point quicker. This is a numbers game. A "campaign" is actually a series of activities - such as a 6 mailing series. Mailing # 2 is the WORST for almost everyone that does this. You get results from direct mail after 3-5 touches minimum (see our [REMOVED] video).
@Wayne Woodson 500, I know that's not much but I was hoping to get at least one deal out of it.
@Matt Devincenzo Just two individual mailings.
@Dev Horn Yeah, I was thinking about changing my yellow letter type to better explain what I'm looking to do and to better market to my mailing list. I think that will help with my scenario 1 problem.
Thanks guys I appreciate the input. I think I may want to readjust my marketing strategy because right now I don't want to use the resources required in direct mail 'campaigning', 5-7 touches to the same mailing address isn't something I realistically want to do right now. Bandit signs and local ads here I come!!
A better list for worn out landlords are (IMO) the lists in the courthouse, third floor,
refreshed on a daily basis. (Hint: small claims eviction court)
Regarding bandit signs in Raleigh, make sure your telephone number is really big so code enforcement can see it and call the right number;)
Curious why you would not use PROP searches for NOO? Historically, all NOO must be registered in the city limits. From InspectionNet click on Rental Property Information and enter a street to get all NOO registered. It's about as accurate as the property card. Many NOO owners still circumvent the registration.
@Chris Martin Thanks. Those are some great websites!!
Hi @Adam Perry , I wouldn't mention anything about a assignment fee.
@Adam Perry dude, keep trying. you are not going to get much, if anything at first. sometimes, you have to hit the same person 4 - 5 times before they respond. sure, if you cleaned up the letter and/or wording you might get a better response, but the most important thing is consistency.
there have been studies done showing that the response rate is over 80% after the 5th attempt. the study also indicated that most "sales people," which is what we are, quit after the 3rd attempt.
You've received great feedback from people far more experienced than I. I am in the midst of my first campaign and encourage you to stay the course and pivot when it makes sense.
In the few conversations I've had, I have not shared that I intend to wholesale the deal as I sincerely don't. Wholesaling is always an option, but I look at each property as if I was purchasing it myself.
When on the phone with a seller, or meeting in person, this allows me to establish credibility. Although I am brand new, I have had two sellers now say they are willing to work with me because they can tell I'm "serious".
You have a fantastic background for getting into this business, and I'm always encouraged to see another young investor!
May I ask why you are wholesaling? I don't think it's good or bad, it just depends on your goals as an investor.
Would love to connect with you and trade ideas if you're up for it, and let's plan on being full time Real Estate Investors in 5 years... if you're up for a challenge?! :)
- as mentioned above, this is a numbers game. It's hard to keep that fact straight when you are expending time, money and mental/emotional energy (because, let's face it, when we think we have a deal, we get excited! - at least until we've done this 50 times, lol). Right now I too am going through a "slump" of sorts because I'm 2 months into my second 6-month campaign (and I added an additional layer/niche to it as well) and I'm getting dramatically less on calls, etc. i should add I was fortunate enough to get 2 deals out of the first campaign (but those did not come until the 4th to 6th mailing, mind you). However, I did obtain my real estate agent license and I'm hoping to use that to my advantage to try to monetize any leads any way I legally can. Keep at it and I believe you'll be successful.
@Adam Perry I can definitely agree with most of what you have been told. We just started our 3rd month of our 6 month campaign. 2nd month felt like someone unplugged the machine. This last few weeks we have been slammed with really good calls! Maybe tweak your wording as @Dev Horn mentioned. Otherwise keep it up and congrats to actually taking action!
@Adam Perry add networking to your tool belt. Get out there and let people know you buy houses. It is legal and most of the time free or cheap.
I talk to a lot of people every week from my direct mail campaign. If I told any of the callers that I was going to put their house under contract and then try to find a real buyer who could close on it and I was going to make a profit from that, every one of them would hang up on me. They need someone to help them solve their problems, not make a quick buck by scamming them (which, understand, is what it sounds like to them). Don't say anything about you or your strategy. Listen to them and hear their needs. Then make an appointment to see the house and after seeing the house write them an offer.
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