I've been getting into whole sailing and I'm trying to budget for 1000 leads. My question is out of 1000 people who one might do direct marketing to how many respond and go under contract?
Expect to get zero results. Especially, when you don't have a good mailing list. It is wholesaling' not 'sailing' if you are going to be in the business. I do direct mail campaigns with 5,000 letters and it is not uncommon to get zero results. Don't believe what people tell you about the results of you will lose a lot of money.
Quantity is important, but repetition is even more important. You need to be ready to do this for months and months. I'm sending out 1,000 weekly and working to increase that. I send to each person at least 3-4 times.
How many of those that contact you will be low. Disappointingly low. It will also depend on your list. The more motivated the owner, the more likely they will eventually contact you. If you were blanketing a relatively affluent area without filtering that out, you probably wouldn't get anyone. If you were zeroing in on those who are typically way more in need to sell their property (pre-foreclosures, tax delinquencies, etc., etc., etc.,) your rate will be higher, but still pretty damn low.
Thank you for the info Berry
Something else to consider. Be professional and make sure your materials look that way. Don't misspell things. You misspelled wholesaling above, and then my name when you were literally retyping what was right there.
I think attention to detail and good communication skills are both critical in any business.
(Now if I had a dollar for every time someone misspelled my name....) :)
Some great info above. Don't expect a deal mailing just 1000 pieces and don't believe anyone who claims to close a deal mailing just a few pieces. Truth is marketing costs money and if you don't risk them, you won't learn. My suggestion would be to save up more money so that you can do 5-6 touches to that 1000 records. Make sure the records are motivated and your list is up to date. For now, you can focus on marketing strategies, that cost less. Get those 1000 records skip traced and start cold calling. Network with people and tell your friends and families what you're doing. I have heard many people closing deals from word of mouth. Good luck!
Here were my numbers a few years back when I was still a mere mortal doing... OMG dare I say this... Direct Mail Marketing,
Yuk. Every time I say this I feel like I am in a Harry potter movie and someone just mentioned Voldemort! We DOn't Speak Its Name Here.
Anyways... my numbers.
3000 to 5000 mailers.
30 to 70 calls.
3 potentils, if lucky 1 deal. Remember when I was doing this then I did not yet have a website. I was following advice from people on BP. (BIG MISTAKE).
After that I said "screw you all I will do it MY way".
Don't EVER, and I mean EVERRRRRRR do any sort of marketing without having a credible website.
Every marketing effort will be 10X'ed if you have a website that is credible.
Dude, forget DMM. Take it from someone that has strategically done it all, tested it all quantified it all and analyzed it all.
Remember my saying:
How Do You Expect To Be A Successful REI When You Are Doing The Exact Same Thing As 97% Of The people That Failed Are Doing?
Answer this question. If you can not justify that answer, you need to try something else and ask that same question until you can justify it.
@Joseph O'Kray I do know people who do smaller mailings and have had some success. As it was mentioned above, the list is important. You don't want to mail to the same people that every other investor is mailing to. It can be tough to stand out even if you send 5 letters to someone who is getting multiple offers from 20 other investors in your area.
You should consider mailing to people who aren’t on every other investor’s radar. Absentee Owners have been popular for a long time, and are apparently still somewhat effective (people are still mailing to them) but they are getting multiple offers to buy their home.
There are some owner-occupied segments with people who share motivating factors for selling their home.
Seniors with Long-time Ownership: often ready to downsize or transition to assistance.
Homeowners with Low Financial Stability Scores (FSS): Struggling financially and likely ready to cash in on their asset.
Both these categories have additional advantages in that they probably don’t haven’t been updated and may have deferred maintenance. They won’t be expecting the same money as their neighbors with the shiny new kitchen and fresh paint.
A list broker can help you with some of the new owner occupied segments as well as the absentee.