A Beginner's Wholesaling Journey

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A Beginner's Wholesaling Journey

Greg S.
Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes

Hello everyone. I've been a BP member for a few months now, and I've previously been documenting my progress here:

http://www.biggerpockets.com/forums/12/topics/67333-a-newbies-birddogging-journal

I decided to start a new thread for a few reasons. Number one, although I originally planned on bird-dogging, but after really diving in, it seemed foolish to leave so much money on the table. There was one deal I had been working on a month or two back that seemed semi-promising, and I felt like I was doing all of the work I would have to do for Wholesaling, but was only getting paid as a bird-dogger. That deal didn't pan out, but I learned a lot from it.

The second reason is that I have been slacking off a bit lately, and I felt I needed to change my routine to get myself back on track. I am planning to update this thread once a week with progress updates and weekly goals. I also would eventually like to link to some audio files of me talking to sellers (with important information edited out, of course), to get some feedback on how I can improve. I tend to get tripped up on the phone, and need to improve if I really want to be successful with this.

Hopefully, this thread will help lead to some consistency in my marketing and real estate research.

This morning, I mailed out 74 new probate mailings. I pulled the data last week from my county clerk's office, and am hoping that I start receiving calls tomorrow. I plan on going back to the clerk's office on Tuesday or Thursday to gather more leads.

Ideally, I'd like to be sending at least 50 letters per week between new and follow-up mailings. I have about 180 probate entries in my mailing list, and will be sending follow-up letters every 4 to 6 weeks. I estimate pulling an additional 150 per month will suit for now. Gathering the probate data is by far the worst part of the process, but fortunately I work very close to the county clerk's office.

Along with sending the mailings, I need to update my routine to include reading success stories and forum threads on a more regular basis. I tend to do this in bursts, where I read a ton of success stories, get super motivated, put a lot of effort into investing, and then end up slacking off. Reading about other peoples' successes on a weekly basis will help to keep my eye on the prize. Does anyone have any recommended blogs? I used to read Flipping Junkie, and was sorry to see that the site was taken down.

Goals for this week:
Gather 50+ more probate leads
Print the next batch of mailings
Read-up on some success stories
Build my buyer's list

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Account Closed
Real Estate Investor · West Orange, NJ · Member since 2012 · 130 posts · 19 votes
13y

Greg I've also enjoyed reading your journey. All hard work brings a profit and in due time you will reap if you don't give up. Here's a tip about estimating repairs and negotiating with sellers that has helped me in my wholesaling business when meeting with homeowners. If you're meeting with someone they should be motivated. Never go see anyone you haven't qualified over the phone.

1. When you get there remember one thing, in the sellers mind all they know for repair pricing is retail, retail retail. They don't know what a rehabber is going to pay for repairs. So when you formulate your repairs list and you're going down the line you can ask them what they think all this costs? They know if they need a new kitchen, 2 new baths, roof work, plumbing, etc they're looking at a crazy number that in most cases they can't afford. A retail kitchen alone could be over 20k. So you add up everything and tell them a retail price, then come back with the statement "now I can do the work a little cheaper because I have my own team" then they know that from a retail standpoint there house needs $60,000 in work. Doesn't matter if you can do it all for $30,000, they can't. You now shock them into reality. Always estimate repairs higher, remember all they know is retail, so if it would cost them 60k when you're making your offer use 50k. You know in the back of your mind that you could probably get it done as a rehabber for the $30k but you leave yourself room to negotiate.

2. Make sure you mention to the optimistic seller that if they list the house for $150,000 that's not what goes into their pocket. No one in this market pays your asking price, they also are entitled to a sellers concession and you'll pay 6% to a realtor. Add to that they're going to hold the property for another 3-6 months best case scenario, in NJ our taxes aren't cheap, that could be another 3-4,000, plus utilities, ins, etc. so if the buyer of their home asks for a 10% discount, 3% sellers concession and they have to pay a realtor, what % of their asking price do they really end up with 81%. If you deduct their holding costs for the property even if there's no mortgage (probably common with probate) they're probably going to net 79% of their asking price, WOW. So much for that $150,000. Now for the big tip...

3. Also emphasize that in this market, houses are not selling unless they're perfect. Wives want new kitchens and bathrooms, there is so much inventory, the houses sitting on the market for over 150 days are 1. Overpriced or 2. Not updated. Now they know if they don't bring that house to that condition it's not going to sell, when they think about it, it's $75,000 that they don't have. And the best part is if beautiful houses in the neighborhood are selling for $150k then that's your ARV, that's for a perfect house. If theyre really motivated then theyre not delusional trying to get top of the market, theyre probably trying to get closer to $100,000 if they listed it. So their number they hoped to get is $100,000, your ARV is $150,000. Here's how we bring this home, let them know they're only going to net $79,000 off that $100,000 sale. Your offer is based off of 65% of $150,000-$30,000 in repairs or $67,800. Write those 2 numbers next to each other then you say we're only $11,000 away from a deal. This is when you begin to look very good.

So to summarize, it's important that you do all these things and work them into every meeting with the seller. If you're just making offers at 60% of fair market value you might come off as a jerk, but if you do this,i guarantee you when you leave that house, if you don't buy it they will know they're going to have a heck of a time trying to sell it on their own and that's what you want. You want them saying to each other, "do we really want to go through all this for a few bucks more" that my friend is how you justify your offer. God bless you on your journey.

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  • Account Closed
    Real Estate Investor · West Orange, NJ · Member since 2012 · 130 posts · 19 votes
    13y

    Greg I've also enjoyed reading your journey. All hard work brings a profit and in due time you will reap if you don't give up. Here's a tip about estimating repairs and negotiating with sellers that has helped me in my wholesaling business when meeting with homeowners. If you're meeting with someone they should be motivated. Never go see anyone you haven't qualified over the phone.

    1. When you get there remember one thing, in the sellers mind all they know for repair pricing is retail, retail retail. They don't know what a rehabber is going to pay for repairs. So when you formulate your repairs list and you're going down the line you can ask them what they think all this costs? They know if they need a new kitchen, 2 new baths, roof work, plumbing, etc they're looking at a crazy number that in most cases they can't afford. A retail kitchen alone could be over 20k. So you add up everything and tell them a retail price, then come back with the statement "now I can do the work a little cheaper because I have my own team" then they know that from a retail standpoint there house needs $60,000 in work. Doesn't matter if you can do it all for $30,000, they can't. You now shock them into reality. Always estimate repairs higher, remember all they know is retail, so if it would cost them 60k when you're making your offer use 50k. You know in the back of your mind that you could probably get it done as a rehabber for the $30k but you leave yourself room to negotiate.

    2. Make sure you mention to the optimistic seller that if they list the house for $150,000 that's not what goes into their pocket. No one in this market pays your asking price, they also are entitled to a sellers concession and you'll pay 6% to a realtor. Add to that they're going to hold the property for another 3-6 months best case scenario, in NJ our taxes aren't cheap, that could be another 3-4,000, plus utilities, ins, etc. so if the buyer of their home asks for a 10% discount, 3% sellers concession and they have to pay a realtor, what % of their asking price do they really end up with 81%. If you deduct their holding costs for the property even if there's no mortgage (probably common with probate) they're probably going to net 79% of their asking price, WOW. So much for that $150,000. Now for the big tip...

    3. Also emphasize that in this market, houses are not selling unless they're perfect. Wives want new kitchens and bathrooms, there is so much inventory, the houses sitting on the market for over 150 days are 1. Overpriced or 2. Not updated. Now they know if they don't bring that house to that condition it's not going to sell, when they think about it, it's $75,000 that they don't have. And the best part is if beautiful houses in the neighborhood are selling for $150k then that's your ARV, that's for a perfect house. If theyre really motivated then theyre not delusional trying to get top of the market, theyre probably trying to get closer to $100,000 if they listed it. So their number they hoped to get is $100,000, your ARV is $150,000. Here's how we bring this home, let them know they're only going to net $79,000 off that $100,000 sale. Your offer is based off of 65% of $150,000-$30,000 in repairs or $67,800. Write those 2 numbers next to each other then you say we're only $11,000 away from a deal. This is when you begin to look very good.

    So to summarize, it's important that you do all these things and work them into every meeting with the seller. If you're just making offers at 60% of fair market value you might come off as a jerk, but if you do this,i guarantee you when you leave that house, if you don't buy it they will know they're going to have a heck of a time trying to sell it on their own and that's what you want. You want them saying to each other, "do we really want to go through all this for a few bucks more" that my friend is how you justify your offer. God bless you on your journey.

    6Reply
  • Account Closed
    Real Estate Investor · West Orange, NJ · Member since 2012 · 130 posts · 19 votes
    13y

    Sorry guys,in the above example 65% of 150k-30k is $67,500.

    0Reply
  • Account Closed
    Real Estate Investor · West Orange, NJ · Member since 2012 · 130 posts · 19 votes
    13y

    And make sure when you say we're only $11,000 away from a deal you follow it by "and I can close in 30 days or less".

    This will take time to master but if you make this your routine you will not leave looking like a jerk, the people will thank you for coming out and they will give what you said some serious thought because the truth is it makes sense. Over your career you will get many many more offers accepted as well.

    1Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Deshone,
    Thanks so much. That is one of the most helpful posts I've received, and it's certainly one I'll be referencing many times. I really appreciate it!

    0Reply
  • Gary Parker
    Real Estate Professional · Salt Lake City, UT · Member since 2010 · 608 posts · 163 votes
    13y
    Originally posted by Greg S.:

    I also put a lot of time into trying to find a list of code violations in the towns in my area. Unfortunately, I've been told that while the information is public record, I need to request info on a specific property. A list of all the properties doesn't exist, according to the people I spoke with.

    In my County a document is recorded for each code violation. One can search for the recorded document.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    1/29/13 - Finished putting together the mailers for my additional mailing. These 75 yellow letters (and envelopes) were printed with red ink instead of black. I'll be comparing my response rate to see how it compares. Next week I will try blue ink.

    1/30/13 - Wednesdays are rough. All of my free periods during the school day are taken up by additional classes I teach (HSPA Review and SAT Prep). On top of that, I teach an SAT class for 3 hours on Wednesday nights. ...I have to pad that marketing budget somehow. I also received one call from an OOSO couple who is not interested in selling.

    1/31/13 - More calls started coming in from Monday's mailing. I received 4 calls, but 1 didn't leave a message and hasn't picked up on my call backs. All 3 sellers wanted market value or above.

    2/1/13 - Today brought the most calls I have ever received in one day (7). I got in touch with all of them. Five either weren't interested or wanted too much. One wanted too much, but could be a candidate for a listing referral in a few months (it's leased until June). Another was occupied by a 92 year old woman in bad health. I spoke to her daughter, who would be looking to sell it quickly if anything were to happen with the mother. I plan to follow up with her.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    January Recap

    Leads mailed: 620
    Calls received: 42

    Money Spent: $424
    Postage: $280
    Ink: $51.28
    Envelopes: $5.35
    Paper: $35.28
    PO Box: $52

    Cost per call: $10.09

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    "To be honest with you, I would give it away"

    Today I spoke to my first truly motivated seller. He went through a divorce a few years back and moved down to South Carolina. He rented the house he owned in NJ, but with the amount the property management company takes every month, he can't afford it. He said it was either going to sell it or lose it to foreclosure, and would give it away if he could

    Unfortunately, he owes $180k on the mortgage, and that's about all the house is worth. I'm not interested in pursuing short sales, so there's no deal there for me. I'm either going to refer it to my realtor to see if she can list it as a short sale, or refer it to another investor who specializes in lease options. I'm leaning towards the latter, since the seller said the mortgage was assumable, and it at least helps me network.

    I'm going to call him back tonight and get a bit more information on the financials before I call any investors with it.

    0Reply
  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    13y

    Greg S. - what happened to the seemingly motivated seller in CO?

    Also, why (outside of the short sales) are you and your wife simply referring the listings? It's a seller's market. If it was me running into sellers who wanted more than I was willing to pay for their property, I'd list it (assuming the price they wanted was at least in line with the retail market).

    I'm listing a 2 family house in Newark where the sellers originally wanted more than I was willing to pay. However their asking price was still in line with what I saw properties selling for on the MLS. So I listed it and have met a bunch of Realtors along with cash buyers who are willing to pay way more than I think the property is worth ($20k more). I now have more buyers/realtors I can call for my wholesale deals. And they buy 2 families which can be a bit tougher to sell sometimes.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Ibrahim S
    The seller from CO ended up being a bust. It was a textbook example of me not asking the right questions. When I originally asked if there was a mortgage, he said "Yes, but I don't see what that has to do with anything." He gave a few indications of motivation (damage from Hurricane Sandy, tenants were uncooperative) so I didn't ask any other financial questions. I ended up making an offer of $55k assuming a large scale rehab on the inside, but he wasn't interested. I eventually found out he was way upside down and my price didn't even come close.

    Regarding the listings...the last time I tried to explain this, I did a very poor job of it, and some forum members seemed to think my wife's license was invalid. A while back she worked as a salesperson for Ryan Homes, which required her to get her real estate license. She left that job 7 years ago, but kept her license hung at a local broker as a referral agent. I believe that in order to list homes, she would have to go through additional training since it has been too long since she was active as a listing agent. Regardless, she works long hours at her current job, and is not interested in taking on any listings. Hopefully I explained it correctly this time!

    0Reply
  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    13y

    Yep Gotcha Greg S. - Thanks.

    0Reply
  • Chris Cox
    Real Estate Investor · Bismarck, MO · Member since 2013 · 32 posts · 1 vote
    13y

    i would remove this line.

    even if the probate case is not completed.

    its they only part that i could find that i had any sort of emotion about as a reader.

    i would also send them out at 3 weeks. the people know already if they are selling well before the death. most family's discuss things like this before hand. three weeks is plenty of time for peple to need to pay bills again.

    0Reply
  • Rick H.
    Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
    13y

    Greg S. You've got it...

    Ask better questions!

    That, itself, is an essential point that should not be lost by any investor, new or seasoned.

    When you are buying, you are either trying to buy equity at a discount, or cash flow at a discount. Buying for appreciation is a fool’s game better left to speculators and gamblers. Stay in the present.

    So, when speaking to sellers, you’ll need a way to discuss the title condition on the property because it affects equity and may play a major role in how you work the deal, if there is one.

    After you ask: “What do you want to see happen?” you can ask if they are the only one on title, if there are any debts owing, like property taxes, mortgages or other liens.
    If they balk, ask them if they’ve sold a property before and if not, offer to help them understand the process (without being condescending).

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Thanks Chris Cox, I will try revising the letter with that line removed.

    Rick Harmon, it's definitely a learning process but I'm picking it up, slow and steady. At this point I have trained myself to consistently hit the questions "Why are you selling?", "What do you think it's worth", and "What do you need to get for the property?" I like your suggestion of "What do you want to see happen?", probably squeezed in somewhere between my last two questions.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    I had a another 6 calls today. I'm up over 50, and want to make it to 100 before the month is up. I dropped about 115 letters in the mail today, and am hoping to put together another batch before the week is up.

    I've been fielding a lot of calls in the past few days. I've spoken to a few people now who are very motivated, but way upside down. The one home (mentioned previously) has renters in it and the owner is open to someone assuming the mortgage, so I'm going to see if I can pass the lead onto an investor to lease option. The others have vacant homes and haven't been paying the mortgage for years or are about to do a deed-in-lieu.

    Is there anything I should be doing with these leads? For the ones that seem to be in good shape, I've been referring them to a realtor to attempt a short sale. I figure I'd be wasting their time sending them run down homes. I guess these owners are past the point of no return, and the properties will eventually turn up again as REO's or sold on the courthouse steps

    0Reply
  • Mike Neubauer
    Rehabber · Beecher, IL · Member since 2013 · 101 posts · 21 votes
    13y

    If they are willing to do a deed in lieu, they are surely willing to do a short sale. Besides referring them to a realtor, ask around at a REIA. I am sure there is an investor that would be happy about a new short sale lead. If they are underwater, there a very few options beneficial besides a short sale, unless you are in a quickly appreciating market.

    You need to spend time networking to find investors interested in short sales so you can make some referral (bird dog) fees on these. I pay referral fees of $2500 to people in this area if I close a short sale deal, but short sales are my main focus as an entrance strategy to fix and flip. A realtor can't pay you a referral so find an investor.

    Also, if someone thinks a deed-in-lieu is a good idea, explain to them that it shows in public records deed transfer the same as a foreclosure. The only benefit is usually a deed in lieu will take away the banks right for a deficiency judgement. Their best option is a short sale because you can still negotiate the deficiency judgement (automatically waived if HAFA), and public records show a normal warranty deed transfer.

    If a home is way upside down, there are not many benefits to assuming the mortgage.

    2Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Thanks Mike Neubauer. Unfortunately there are no REI groups in my area. Last year I joined the closest one (about an hour and a half away), but didn't meet anyone who worked my area so I let my membership lapse. Instead, I will try marketing on Craigslist to see if I can find short sale investors around here.

    The seller who is doing the Deed-In-Lieu said he had tried a few different short sales, but the bank kept rejecting the offers and eventually he just decided to do a DIL to put an end to everything.

    Also, the seller who I am talking about assuming the mortgage for isn't upside down like the rest of them. He owes about what the home is worth. It's currently rented for $1300...He couldn't remember what his payment was per month, so I'm not sure if a lease-option is possible, but I have a contact I can refer it to and let him sort it out. The seller said he's only 2 months behind so it seems like it might be workable.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    I've made a bit of progress since my last post. First off, I ended up getting in touch with a local investor who specializes in lease options and short sales. Those are not strategies that I'm interested in, so I'm passing my no equity leads on to him. He contacted the seller I wrote about previously (the one who owes what the home is worth and has it rented for $1300, but is sick of dealing with it and is about to let it go to foreclosure). The specialist I spoke with is working on getting that deal as a lease option, while simultaneously negotiating with the bank on a short sale. If it pans out, he'll pay me 10% of his profits. I'm keeping my fingers crossed.

    Since my last post, I've dropped about 550 letters. My response rate has gone way down this month. I was getting insane numbers for a few weeks (averaging about 18%), but all the sudden it dropped down to 7%. Still can't complain, I guess. I did do a few things differently to test out some other mailing options (switched to blue ink, used a less generic stamp, etc). I'm not sure that this was the reason that my calls dropped off, but I am going to go back to my first mailings (black ink on envelope, red on letter, US Flag stamp) to see if the response rate jumps back up.

    I'm currently at a grand total of 96 calls, and it looks like I will reach my goal of 100 calls before the month is up. I'm glad I'll hit that number, but to be honest I'm also getting a bit frustrated with all of the time and money I'm pouring into advertising and not getting any results. I have to keep reminding myself that in this business, staying focused and committed is what separates the successful people from the unsuccessful.

    I have been seeing "motivation" from the callers here and there, although they mostly have to do with properties in flood zones. NJ adopted the new FEMA flood maps ahead of schedule to assist with people looking for guidance in repairing their storm damaged homes. Long story short, there are a lot of rumors going around about what (and what not to) expect. They are saying a lot of homes will need to be raised on pylons to meet new height requirements. Homes that aren't raised will be subject to flood insurance with premiums as high as $30,000 per year. Raising the home 2 feet above the height requirement will still result in flood insurance to the tune of $3,500 per year. This would obviously have a very severe impact on the local market, and with all of the ambiguity around what's coming, I don't feel comfortable taking on a property in a flood zone at this point.

    I also feel like I'm stuck in a bit of a rut right now, since I've plateau'd with my growth. I want to keep moving forward, and plan to start recording my calls and uploading them so I can get some feedback from more experienced members.

    0Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    13y
    Originally posted by Greg S.:
    Thanks Mike Neubauer. Unfortunately there are no REI groups in my area. Last year I joined the closest one (about an hour and a half away), but didn't meet anyone who worked my area so I let my membership lapse. Instead, I will try marketing on Craigslist to see if I can find short sale investors around here.

    The seller who is doing the Deed-In-Lieu said he had tried a few different short sales, but the bank kept rejecting the offers and eventually he just decided to do a DIL to put an end to everything.

    Also, the seller who I am talking about assuming the mortgage for isn't upside down like the rest of them. He owes about what the home is worth. It's currently rented for $1300...He couldn't remember what his payment was per month, so I'm not sure if a lease-option is possible, but I have a contact I can refer it to and let him sort it out. The seller said he's only 2 months behind so it seems like it might be workable.

    If there is no equity but not upside down, can you offer to lease option and then assign for a 3% fee?

    Brian

    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    13y
    Originally posted by Greg S.:
    ... I want to keep moving forward, and plan to start recording my calls and uploading them so I can get some feedback from more experienced members.

    YIKES!!!! Recording laws vary all over the place; be sure that you become aware of the laws for calls you plan on recording before you record. In some places BOTH parties on a call must authorize recording, in other areas only one party to the call must authorize; do your homework on this first.

    1Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Steve,
    In NJ, only 1 party needs to be aware of the recording. Thanks for looking out, though. I'd also be sure to mute out all information that identifies the seller.

    Greg

    0Reply
  • Troy Fisher
    Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
    13y

    Greg S. A couple of thoughts. Generally accepted knowledge as you probably know is that you'll get 1 deal from every 100 calls that you receive. You are almost there.

    I'd make a couple of suggestions:
    Since you are working with a limited budget and assuming that you are getting around 15% response on your mailers now. You should spend one month compiling your leads to get 1,000 and then do your mailing in month two. It'll age your probates a little more and concentrate your efforts. It should generate 100+ calls giving you a deal.

    Month 3 spend working on follow up and chasing those leads and compiling another set of 1000 leads. When you get to month 4 you're set up to do follow up mailers on your first mass mailing.

    A question for you though, if there aren't any investor groups in your area how is your buyers list, and exit strategies? I think its great that you are working referrals to another investor and passing your leads along, it builds business karma.

    I am enjoying your posts, I've recently decided to pursue wholesaling to build up my capital base. And its good to see that there are others with the same thought process about holding yourself accountable by writing about your progress.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Brian Gibbons,
    I'm not sure how I feel about lease options. I understand the basic concept, but right now it's not something I'm interested in pursuing myself. I'd rather just birddog the lead and collect what I can on it.

    Troy Fisher,
    Thanks for the encouragement. I've read a few things about people averaging a deal per 20 calls. However, they probably filter their leads a lot more, where right now I'm just catching every single person who calls. The vast majority of people I speak to want full market value, and the few who haven't were upside down. I could certainly cut down on the number of people I speak to by creating a long voicemail to filter the tire kickers, but right now I figure I can use the practice in talking to sellers.
    I'm not getting a 15% response rate. Although some of my individual batches of letters have been above that rate, my overall average is around 10%. I've mailed over 1000 contacts at this point, but of course it's a numbers game and I'll just have to mail another 1000.
    So far I haven't done any follow up mailings. All 1000 have been the first contact. I'm starting my second cycle this week, and plan on hitting them once a month after that.
    My buyer's list is okay, but not great. That being said, I'm fairly confident I could move a deal if I found one. Right now I'm looking mainly for a rehab project for myself.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    I've lost some motivation over the past few weeks, and need to get back in the right mindset. I have to remember that marketing is a numbers game, and if I send enough letters, I'll eventually be successful. The only way I fail is if I quit.

    I think part of the reason I'm starting to doubt myself is because I haven't been setting small goals like I did at the start of the year. I've been going through the motions of mailing the letters and talking to sellers, but I haven't felt like I've made any progress since I haven't set benchmarks for myself. I need to keep moving forward even if it still takes a while to find success.

    This week marks the first "second mailing" that I'm sending. I originally mailed this batch across 4 weeks (about 50 per week) in January. I condensed it into one group and will be mailing all of the leads this week. My response rates dropped really low last month (averaged 6.5% vs many 10+% from the end of January). I had been experimenting with different ink and some decorative stamps. I'm going to go back to what I started with and see if the response rates increase again. Hopefully I learned a few things not to do.

    I've also been working on finding cash buyers in my area. One idea I had was to search the tax records for owners including the term "Investors" or "Holdings." I've been looking through the results, and when I see an LLC or company that owns a number of properties, I note the address. I will be sending these folks a letter to see if they're interested in acquiring more properties. My main goal right now is to find a rehab for myself, but in case an opportunity presents itself, having a buyers list definitely doesn't hurt.

    Goals for this week:
    Record at least 1 call so I can critique myself on the phone.
    Send letters to the investors I found in the tax records.
    Make follow up calls

    0Reply
  • Gary Parker
    Real Estate Professional · Salt Lake City, UT · Member since 2010 · 608 posts · 163 votes
    13y

    I like your idea of recording yourself. I use to door knock foreclosures and I would always write down the objections people gave to me when I asked them questions.

    1Reply
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