Direct Mail Message to Tax Delinquent Properties...

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Direct Mail Message to Tax Delinquent Properties...

Ushi Hastie
Seattle, WA · Member since 2012 · 34 posts · 23 votes

Hello,

I am completely burned out on finding deals using bandit signs.  I would like to create a system that is more targeted and scalable & have decided to test out direct mail to tax delinquent properties.  Trying to decide on the message & whether or not to use postcards vs. letters.  Help, I feel analysis paralysis coming on!!!

Main questions:

1. Should I mention that I know they are tax delinquent in my message or should I not? 

2. Do you think a postcard or a letter is better to send to this particular list? (it's a smaller list hovering around 500 in my county which I will probably trim down using parameters such as how many bed baths and/or value range). 

3. If letter, should I use my company name etc or not include that info and just express interest in purchasing the property as an individual? (I'm not into the yellow letter, it will be typed and then hand addressed).

Looking forward to hearing your opinions, thank you!

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Carl Brown
Investor · Marietta, GA · Member since 2016 · 131 posts · 84 votes
10y

Greetings all! I wanted to chime in real fast because TD's are great. We never send out mailers! I might be an oddball for that, lol. However, we see more action by simply skip tracing each lead and making a quick phone call to see whether or not we can help solve the homeowners problem. A non invasive courtesy call seems to be the most effective way to lock deals down for us. Super sweet and professional phone calls works every time. I've spoken to countless homeowner's and they all say the same thing about mailers, " I get dozens of mail from people saying they want to pay cash for my house and I just throw em in the trash . Thank's for picking up the phone to call me." Most REI's focus on sending out thousands of mailers and hope for a 5 - 10 % response rate. I also use Rebogateway among other lead sources to pull lists. Throw em in the skip tracer and bingo! Homeowner on the line in 1 minute. Be great guys! If mailers are your thing, keep it up! Much success to you all!

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  • Kimberly Farrally
    Real Estate Investor · Kansas City, MO · Member since 2016 · 84 posts · 32 votes
    10y

    @Ned Carey, how do you track your different mailing pieces to see which is working better?  Do you have different contact information (i.e. phone number)?  Do you ask the person when they contact you?

    1Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    10y

    @Kimberly Farrally This is not exactly my field of expertise.  Other really good marketers here may be of more help - try a search.

    For mailers you can simple keep track manually of what was sent to which properties, or simply ask the caller. A more sophisticated way is to have  two phone numbers. Also you can use a some type of  code "Mention code M when you call"

    4Reply
  • Tina Ferrier
    Wholesaler · Charleston, SC · Member since 2014 · 38 posts · 18 votes
    10y

    love the mention code idea

    1Reply
  • Paul Winka
    Rental Property Investor · St Louis, MO · Member since 2010 · 317 posts · 72 votes
    10y

    Very useful thread here and I am staying tuned because I'll be doing direct mail soon enough.

    For tips on direct mail, listen to the BP #176 podcast with Tom Krol. That's probably my favorite BP podcast of all so far. 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    Ushi,,, I have been doing this type of buying my entire career.. and West coast simply is not east coast or other markets were the amount of unpaid tax's is staggering.. 

    In a good year we might land 3 or 4 deals on the west coast we don't start until 30 days before they are going to lose it.. and we knock doors.. thats the best way to do this.. you can send mailers and you could hit one.. but sending them that far in advance I would think your success rate will be marginal.. for one thing they can simply list the house and sell it.. ANY property in Seattle in ANY condition will bring top dollar.. the only properties we are able to land are extreme hoarder houses or LAND.. land is much more prevalent in tax sale success on the west coast than SFRs.. 

    Also we have cash to buy it that day.. we do not have to wait for HML or other funding sources like most of our competition. .so when you make a deal a few days before they are going to lose it... thats when the deals are made.. other investors who need to get a HML simply don't have the time.. We also close many times doing our own title searches because there is no time to even do an escrow.

    AS Wayne stated by the time you get your letters out there will be 50 others.. so its simply a crap shoot frankly.. this is why we just don't spend any energy until they are fully motivated... same with pre foreclosure we don't hit them until one week before and we knock doors.  Although we no longer do this in Oregon and Washington because of the anti equity skimming laws.. you can end up in serious trouble buying a pre foreclosure and not following the rules.

    Good luck with it.. I suspect you will with a lot of hard work and grit and determination be able to land a deal it will never be high volume though .. I can tell you the one's we land are high profit deals but they are for the reasons stated above.. No competition or very little.. and Extreme hoarders who only come to Jesus at the very last second.

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    7Reply
  • Carl Brown
    Investor · Marietta, GA · Member since 2016 · 131 posts · 84 votes
    10y

    Greetings all! I wanted to chime in real fast because TD's are great. We never send out mailers! I might be an oddball for that, lol. However, we see more action by simply skip tracing each lead and making a quick phone call to see whether or not we can help solve the homeowners problem. A non invasive courtesy call seems to be the most effective way to lock deals down for us. Super sweet and professional phone calls works every time. I've spoken to countless homeowner's and they all say the same thing about mailers, " I get dozens of mail from people saying they want to pay cash for my house and I just throw em in the trash . Thank's for picking up the phone to call me." Most REI's focus on sending out thousands of mailers and hope for a 5 - 10 % response rate. I also use Rebogateway among other lead sources to pull lists. Throw em in the skip tracer and bingo! Homeowner on the line in 1 minute. Be great guys! If mailers are your thing, keep it up! Much success to you all!

    14Reply
  • Michael Watts
    Investor · Mobile, AL · Member since 2013 · 71 posts · 29 votes
    10y

    you ever thought about going to the tax sale and purchase the liens on 2 or 3 properties. If the owner don't pay the taxes after 3 years you get might lucky

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Michael Watts West coast is TAX deed state cash and carry at the auction. And very few if any SFR's actually make it to the sale.. between owners selling before they lose them.. to investors like we are talking about here buying them.. and banks paying the tax's on their collateral.. there might be in the big metro counties 1 or 2 actual SFR's that make it to auction.. the rest will be land.. little slivers here and there..

    out in your tax cert states its totally different and much larger industry.. and its a real thing.. here on west coast very very limited access to properties.. AS in most of the large metro areas.. it does not matter what the house looks like there is a price it will sell for on MLS within a week for all cash.. we have an extreme shortage of housing stock generally speaking.. so its just not like what you folks are blessed with out your way in as it relates to the TAX deed investing.

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    3Reply
  • Ushi Hastie
    OP
    Seattle, WA · Member since 2012 · 34 posts · 23 votes
    10y

    @Jay Hinrichs, @Carl Brown

    Thank you for your advice. I was checking my VA's work with scrubbing the TD list and there were too many mistakes so I decided to do it over myself. Which got me to heavily contemplating this past week, why don't I just pick up the phone instead of jumping through all of these hoops/spending so much money mailing?

    1Reply
  • Carl Brown
    Investor · Marietta, GA · Member since 2016 · 131 posts · 84 votes
    10y

    BOOM! There you go! They call me " MR. Telephone man" aint nothin wrong with my line, when I call these seller numbers, I get a deal every time." 

    6Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Carl Brown  Door KNock,,, phone, letter, post card, billboard, bandit sign

    in that order are the most effective I have found.  but in our market the amount of tax defaulted properties that get sold to investors is miniscule compared to were you live and work..

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Carl Brown  I had a full blown telemarking team when I was in the timber business in the 90s in the northwest.. we kicked those local MIlls butts... they would just have the same old add in the local paper with their one log buyer... :)... that was my job.. I brought modern day marketing techniques to a century old industry.. you talk about making money.. holly man.. when it was good it was VERY good. The only way we sent something in the mail .. was if we could not drive up and talk to them ( they lived out of state) or they would not answer the phone.)

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    2Reply
  • Carl Brown
    Investor · Marietta, GA · Member since 2016 · 131 posts · 84 votes
    10y

    @Jay Hinrichs Awesome! We are building a team of master phone reps for our Atlanta call center to scale our model 10x. The great part about it is that most REI don't like cold calling. It's cheaper and more effective if you can handle rejection like water on a duck. Lol

    Cheers

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Carl Brown  RE brokers have been doing this for years telemarking for listings.

    but with the no call list now a days its a little more difficult.

    Our targest were rural these folks never got telemarketed and you could not get them off the phone LOL

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    2Reply
  • Jonathan Frazier
    Realtor · Douglasville, GA · Member since 2016 · 44 posts · 17 votes
    10y

    @Carl Brown What is your approach when you talk to sellers?

    0Reply
  • Johnny Kang
    Investor · New York, NY · Member since 2014 · 279 posts · 224 votes
    10y

    @Carl Brown

    I'm definitely adding skip tracing/telemarketing to my arsenal 

    1Reply
  • Carl Brown
    Investor · Marietta, GA · Member since 2016 · 131 posts · 84 votes
    10y

    @Jonathan frazier I have a script that I created that works like a charm. You just have to go into the call like Claude Diamond. (look him up) We are very alike in our approach. 

    @Johnny Kang It is the key to my business. 

    0Reply
  • Claude Diamond
    Professional · Rancho Santa Fe, CA · Member since 2015 · 49 posts · 39 votes
    10y

    Thank you for the Kind words Carl; appreciated.

    I like a free form style of selling rather than a repetitive script in my conversations with prospects.

    I learned from my Mentor that scripts don't work ! The prospect usually picks up on a script in 5 seconds and rejects us harshly because they have heard it all before.

    Basically I use a 3 simple step approach that gets me into an immediate friendly adult to adult conversation and eliminates the instant rejection that so many investors experience.  

    Anyone can learn this technique with enough practice.

    Conclusion; Sales can be fun and profitable; It's The Million Dollar Skill:-)

    Claude

    1Reply
  • Claude Diamond
    Professional · Rancho Santa Fe, CA · Member since 2015 · 49 posts · 39 votes
    10y

    Hi Ushi,

    Just a suggestion that works for me and could work for you.

    I get quality direct real estate leads everyday (phone calls-texts and emails) by using content marketing with no cost to my business. I use social media like youtube (i have over 400 videos) ,Facebook,Periscope everyday. The results are amazing. It takes time but the leads are more quality than quantity and generate a wonderful consistent income for my business.

    In my experience most blind mailers have a very low ROI (return on investment) because the blind mail lists used are repetitively and the mail piece (yellow letters & postcards) is unoriginal, blatantly commercial and discarded quickly by the prospect in the shredder . The costs involved in mailers is enormous for the very low response rate.

    In addition, Many people don't really use the post office that often in a digital cell phone age.(ask anyone under the age of 29 how often they go to the P.O.)

    Lear more about social media content marketing and watch the magic happen. 

    Give it a try

    Claude

    1Reply
  • Johnny Kang
    Investor · New York, NY · Member since 2014 · 279 posts · 224 votes
    10y

    @Claude Diamond

    Content marketing; another aspect of marketing I gotta get better at. I have some work to do. 

    0Reply
  • Claude Diamond
    Professional · Rancho Santa Fe, CA · Member since 2015 · 49 posts · 39 votes
    10y

    It really works Great Johnny. I did a contract yesterday in Nevada with a net net profit of 25K entirely from a Youtube video I did. It makes the phone ring:-).  BTW, I am original from NYC too

    0Reply
  • Gregory HillPro Member
    Real Estate Broker · Buhl, ID · Member since 2015 · 15 posts · 13 votes
    10y

    What or who do you use for skip tracing?

    1Reply
  • Ushi Hastie
    OP
    Seattle, WA · Member since 2012 · 34 posts · 23 votes
    10y

    @Claude Diamond  is that really you?!?!  What an honor, thank you for chiming in.  I think you're right.  Content marketing, hunting down a prospect & getting them on the phone is where it's at & will be my next endeavor.  

    My tax delinquent mailing has been dismal.  I've sent hundreds of handwritten letters so far with only a few responses (polite declines).  Which I suppose is an improvement from the sometimes angry/livid phone calls after sending thousands of the standard ugly yellow obnoxious "3rd/Termination Notice" post cards to absentee owners earlier this year. I noticed that I would mail a zip for the first time & would occasionally get msgs "stop sending me your fing postcard!!!!" .... apparently everyone & their brother is using that postcard that probably worked great 5 years ago.

    I did get some good leads from those mailings, but realized too many people are using the same method & I didn't want my company name represented like that.  This is why I decided to send handwritten letters to a smaller & what I hoped to be more motivated list.  I'm going to wait until a month or 2 before the tax foreclosure sale & get them on the phone. The tax sale here isn't until February.  

    After some frustrated reflection, until then, I have decided to take the phone call approach to vacant & severely distressed properties in a couple zip codes with heavy investor activity near where I live.     

    Thank you to everyone that has given me your advice & opinion (positive or negative) about mailing.  After 8 months of direct mail, I feel like at least in my neck of the woods, absentee & the other typical motivated prospects are receiving too many letters & most of them are ending up in the shredder.  Taking the time to personally call them will set me apart.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    ushi good luck and good wrap up post.. I think it accuratly describes the direct mail wholesale   business on the west coast these days.  I have no CLUE as to what content marketing is or how it works.. but if you can generate leads and calls as described above with little to no money and just elbow grease that sounds pretty good.. not sure if its real.. but heck I dont know.

    On the train from seattle back to PDX today nice way to travel I 5.

    lastly remember as I stated the target your going for is VERY VERY small if you get one or two deals a year I would consider that a success

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    0Reply
  • Ushi Hastie
    OP
    Seattle, WA · Member since 2012 · 34 posts · 23 votes
    10y

    @Jay Hinrichs  Thanks Jay,  your input has been extremely valuable & helped me to stop beating a dead horse ;)  I'll buy you a coffee sometime, I travel to Portland frequently & plan on moving back there in a few years.

    As disappointing (& expensive!) as my venture in direct mail has been,  I don't think I would have gotten to the point of feeling perfectly comfortable with taking the initiative of changing direction if I hadn't made as big of an effort with it as I did.  I'm actually feeling excited to make a change & will start a new thread on the topic as it progresses.  

    If at first you don't succeed...

    1Reply
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