Let me first warn you that this is a long post but I'm sure you'll find it interesting and I hope to hear what you think. If anyone has any questions please post them in this thread. Ill be happy to help!
I have been working on something very interesting for the past 2/3 months that I think would really be beneficial for any investor to have access to and I'll tell you exactly how I did it.
To start, I am about to close my first 3 wholesale deals and they all came from lists I had to pay for. Not only are the general list providers we all hear about and use expensive they also provide lists that are so-so when it comes to quality. For example, I purchased a list from List Source a few months back and at least 30% of the mailers were returned.
I'm sure someone has a way around this or a way to improve their rate of returned mail but I don't want to spend the money to figure out how to optimize someone else's list.
SO, I decided to make my own.
Now let me preface the rest of this post with the fact I am VERY VERY VERY lucky to have access to all the data I used for these lists. There is absolutely no guarantee you will have the same luck in your city. However, if you live in a larger metro area where there is publically available data I think you'll be able to follow what I've done and get monthly updated high-quality lists just like I did.
So here is what I did and what we made!
I worked with a FANTASTIC developer from upwork to aggregate all the valuable public data on distressed properties into a program that cross-references all those separate data sources and finds the matching data from each list. And... it auto updates each month when the county puts out new data! Do you follow me?
For example, I have access to all the properties in my area that are currently going through mortgage foreclosure, tax foreclosure, probate, marked as vacant, marked as high grass or any other code violation. Additionally, my county provides general property data in easy to use files showing things such as # of bedrooms and bathrooms, the general condition of the property, last market sale date and price, zoning, etc. Based on the unique ID # used to identify each property we cross-referenced each list against the others to find the correlations.
The result is lists of houses that fit at least one of the criteria or all of them or anything in between.
So I have these great lists but then the next problem was getting the owners mailing address and name...
We then created an additional part of the application that scrapes tax assessment sites for that info and imports it directly into the database with all the other info. Same developer... needless to say... he's a beast!
At this point, I'm pretty excited because I now have a computer program that not only automatically gathers data on distressed properties, updates monthly (automatically), but it also gives me the mailing info I need and formatted correctly to be sent directly to the printer I use for mailings.
So I obviously had to pay for this application to be built and I'm going to have to pay monthly for it to be hosted in the cloud so I can access it from anywhere. But, now I do not have to worry about paying for lists and I don't have to wonder if the data is up to date. A huge problem I've had with list providers in the past few months is letters coming back that say the person the letter is addressed to has moved and no longer lives at that address. This problem is eliminated with my access to the "last market sale date" data. I just filter out the houses that have sold recently.
There are a few potential holes in my plan. First and foremost, the organization that compiles all the data into easily digestible files for my developer to work with could stop providing the data out of nowhere. If that happens I'm back to square one trying to outsmart List Source to find the best combination of home criteria for my next mailing. Another potential problem is the list may update each month but it could be a very small number of new leads to mail.
However, I did my initial export of the data and have a list of over 45,000 houses to start mailing. My guess is that assuming the quality of the list is maintained I will be mailing those initial houses and any new ones for a long time before the well is tapped.
I'm sure there are other downsides if you can think of them let me know!
As an added benefit I have been making contacts in the industry by talking to everyone I possibly can. One of the contacts I made was so impressed by this program that he offered to fund the monthly printing/mailing fees in exchange for first access to deals in the areas where he focuses his business.
Finally, the last cool thing I am going to do is use my extensive knowledge of social media advertising and web design to ensure I'm in front of these distressed owners by not only getting into their mailbox but also their social feeds. See, with access to so much data for a specific property you can tell the social media platforms to show ads directly to those individuals on the mailing list and no one else. THEN, you can tell the social platforms to find other people outside your lists who are very similar to the individuals on your list, thus expanding the audience of people seeing your ads far beyond your initial list.
Needless to say, I'm excited to see how this goes. I will be posting updates if that's something that interests people.
Like I said above, if you have any questions or if you find any holes in this plan please reply to this thread. Also, I will be happy to help anyone set up a similar program in their city if you want. Keep in mind though this took A LOT of work and could all crash and burn. But hey, no one can ever say I didn't try!
Thanks for sharing, @Paul Wakim ! I'm especially interested to hear more about how you are using social media to get into distressed owners' social feeds. Which platforms are you using? I'm guessing Facebook is the best place for ads? Are you using LinkedIn, Instagram, or Twitter in any way?
@Mindi Rosser This is one area I really know well. Please let me know if you have any questions!
I am going to use only Facebook and Instagram and based on the performance of the different ad placements refine my strategy. Sometimes it turns out that Instagram is not a great place to post the ads. But time will tell.
I've considered reaching out to homeowners on linked in but never thought of using their ad platform. I could be wrong but what I've heard about LinkedIn ads is that they are expensive and low quality.
For my photography business, we use a chrome extension called DuxSoup to automatically connect with potential clients to build the business. We have had some great success with this extension!
@Paul Wakim I agree that LinkedIn is probably not the best place to place ads because the CPL (cost per lead) is typically $9 for a very well-targeted campaign, whereas Facebook can be pennies on the dollar.
Reaching out to homeowners on LinkedIn might be an interesting approach, though it all depends on the target audience - are they active on LinkedIn?
And, I've heard of DuxSoup but never used it because it felt a bit too automated for my B2B technology CEO clients - they preferred a one-to-one approach. But when it comes to REI, DuxSoup might generate better ROI if set up correctly. Thanks!
@Paul Wakim , thank you for the detailed explanation of what you managed to do with your own culled lists using a programmer's services. I have sent you a PM, and would like to connect with you. Thank you.
Hi Paul, I would like to use you for your services. Please Message me when you can. Thanks