All Forum Posts by: Cornelius Garland

@Rick MacGills I think "war zones" get much more of a bad rap than they deserve. Think, these people need to sell property just like people in affluent areas. Oftentimes, this is their only asset. Unfortunately, more often than not, a Realtor isn't going to give the same attention to a seller with a $20k property as they would to a seller with a $300k property. That's a difference of a $600 commission and a $18,000 commission. Additionally, selling the $300k property will likely be a smoother process for the agent. Economically, it just doesn't make sense for the agent to direct considerable effort to the lower-priced property, and this is understandable. However, the seller is done a disservice because they aren't receiving the same treatment as the seller with the more expensive property. This is the perfect opportunity for a wholesaler to come in and provide value because a deal in this area will be worth your time.

The key is market diversification. I market to neighbohoods where the average property is worth $10k all the way up to $500k neighborhoods. As long as I can make my desired profit, I really could care less where the home is located. Once you have a system in place for screening your leads, each deal should require the same effort and you should know quickly if it's worth your time. A $500k home seller could be more of a headache to you if they aren't motivated to sell and you're trying to make the numbers work to close the deal.

There are cash buyers in your area that only focus on the problem neighborhoods; you just need to find them. I suggest conducting an in-depth analysis on these neighborhoods and seeing which LLCs have been purchasing the homes there. This will need to be done through your tax assessor's site online and cross referencing the records on the register of deeds site, if needed. I guarantee there are a handful of LLCs buying everything around the same price. I am in a similar situation. We have three buyers that purchase all of our war zone properties. They're looking to completely redesign the neighborhood in the next couple of years. I hope this insight helps you out. Best of luck in your marketing!

@Johnny Kang I just realized I have "mailing 1" listed on the spreadsheet so it's a bit confusing. The sheet actually includes two mailings: one was sent off on 8 SEP 2016 and the other was on 20 SEP 2016. For some reason, I didn't stager this on a monthly basis which I usually do. I think at this time I was also experimenting with bi-monthly mailings and entering a market about two hours away from me. I suggest just sticking with monthly mailings because your prospects will become numb to your message quicker. Additionally, this doesn't give them enough time for their situation to change drastically. I also developed my own way, which is probably inefficient, of tracking my response rate. I put how many leads I mailed in each row, even though I only sent out letters on one day. I apologize for the confusion. 

For this particular campaign, I sent out two unbranded yellow letters to this list. Shortly after, I found the phone numbers and solely cold called them. This was when I was transitioning from direct mail to skip tracing primarily. I stopped tracking the response rate after September, but I still received calls from this list all the way through February 2017 quite consistently. This was just from two mailings! Pretty wild. I guess my message resonated and the list was a good one. I highly recommend a seniors' list if you can find a list vendor that can get this data.

@Johnny Kang

@Ray Lai I made a gradual transition to primarily skip tracing and cold calling. I admit, I was skeptical at first because I was able to quit my job using direct mail to get deals! However, I learned over the past couple of years that you absolutely need to be more consistent and aggressive than direct mail. The reason being is that the seller doesn't have a physical reminder of your business. Therefore, you must followup more often so you stay in the sellers' mind. I've had people save my voicemails, but this doesn't compare to them sifting through their piled up mail and then seeing your letter. We stress followup heavily in our business model. 

I use yellowlettershop.com for my letters. They're only like .78 cents a piece, which is one of the best rates I've seen. Also, I FedEx my really specific lists if I've cold called it several times and can't get in touch with some owners on it. I'll cold call and attempt to make contact with a seller 12 times before I do this. Also, I have the most updated address so I'm 100% sure my FedEx letter is going to deliver. I have my own internal database for skip tracing right now. I reach out to a few different vendors to get my data and I have multi-millions of records in my database that are updated daily. It took a while to create, but I prefer dealing with the technical issues opposed to returned letters. I'm still receiving returned letters that I sent to a tax delinquent list last year...like really?? I'm sure these letters have circled the world twice before they got back to me.lol.

I agree with you about sending a post card first. I didn't learn this money-saving tip until a year after I began sending out direct mail. I learned that I needed to send off a first-class post card initially and see which ones were returned to me. After I received the returned post cards, I skip traced them and updated their addresses. The next month I'd send another post card first class to see how many returned mailings I received back. Then by my third mailing, I would just send the rest of my campaign via standard mail to save some money on the postage. By that time, I had a pretty good idea of which addresses were bad.

@Account Closed Anytime Scott! Please don't hesitate to reach out if you need anything.

@Account Closed I apologize for not specifying what I meant regarding the due diligence. Essentially, I'm just making sure there is some type of equity in the home by looking at when it was purchased. So I'll go check out the deed and see when the last sale date was. If it was between 2006-2009, I can almost guarantee it's either upside down or it has little equity. While most of these homes bought during the recession have been foreclosed on, there are ways to prolong this process in my state so somebody can be delinquent for years before they get foreclosed on. Also, if I see the last sale or deed date is before the '60s, it's usually an indicator that the owner is may be deceased. They would have needed to buy the property at 20 years old and they would be around 70 today. The likelihood of them buying the property that young is not likely so this person is likely deceased. It takes me a few minutes to do these steps to ensure I'm not wasting my team's time writing letters to unworkable leads. I don't analyze the property for repairs or ARV at this stage; I only do this after the lead calls in.

I would start with at least 500 unique owners if your budget is really tight. I would recommend starting at the neighborhood-level and using this as your farm. If you're able to market to at least 1,000, then I would focus on specific zips and tighten your criteria (e.g., 90+ percentage equity and absentee out-of-state owners). I've had success marketing to lists of less than 500, but my criteria was very focused and my mail piece was extremely personal.

I know a lot of people on BP preach mailing to your list 5-6 times, but if you aren't seeing the results you want after the first mailing, I would shift your focus to a different area or list. When money was tight for me, I couldn't afford to keep on hitting a list that didn't work out my first month. You should at least get a 2% response rate. Also, don't be afraid of marketing to lower-class areas. There are investors that just buy in these areas, and I've found that I can move property fairly quicker in these areas because the homes are below 50k. Not only can your savvy investors qualify for buying these properties, but you also are in the price range of where someone who wants to start rehabbing and renting homes can purchase your deals. Please let me know if you have any additional questions. I'm here to help!

@Ray Lai I am huge on analytics and split testing my campaigns so I know what's working in my market and what's not. This particular campaign was actually a test to see if we could generate a deal in another market before we did a larger campaign there using a different list. The criteria I used on my list is super-tight and not very scalable. These were sellers who were absentee-owners and over the age of 65. So there weren't that many, unfortunately. I wish there were more because this list would be golden if there were a couple of thousand in my market! I knew out of any list, this would be the best one to see if we were focusing on the correct zips. I think I'll do this list first when I'm attempting to enter other markets in the future.

Regarding the mail pieces, I'm only using one marketing technique per campaign. So on this absentee senior campaign, I only sent out yellow letters to them acting like I'm just a regular guy looking to buy a home for my family. All of the mail pieces in this campaign were yellow letters that referenced the previous letter. I use cluster marketing in my other campaigns where I indicate I'm an investor the whole time. The only difference in the marketing is the mail piece. The message is generally the same. Please let me know if you'd like me to clarify more on this.

Also, I used a couple of different vendors when I was sending out mail heavily. Currently, I do about one mailing to all of my lists per quarter. I primarily locate phone numbers for my sellers and then have my team cold call them. This reduces the amount of returned letters, which I received a lot of.

@Jonathan C. I've experimented with both, and I use either option one or two depending on my target demographic. For instance, with my absentee seniors' list, I always go with a yellow letter that has a consistent message. While I'm not indicating my brand on the letter, the style and format of the letters are the same, and they build off of each other. My first mail piece will say something like "My name is Cornelius and I drove by your beautiful house at 123 Main St. My family and I are looking for our first starter house that we can call a home. Please call me if you ever thought about selling." The next mail piece will reiterate what I said in the first mailer and say something along the lines of me not hearing from them yet and that I'm still interested in purchasing the home. This strategy has worked well for me and generated a 15% response rate (see attached image) from two mailings. I did this in another market with 608 leads and generated an 18% response rate from three mailings. What I noticed is that the seniors weren't shocked when they found out we were investors. They enjoyed speaking with us and I don't think we received a negative call or voicemail from this list.

I highly recommend using option 2 (cluster marketing) for your other lists. I don't think branding is that important for many lists unless it's an inherited or probate list because these leads require rapport-building. The reason I say this is because you're going to be piggy backing off of other investors' marketing efforts and all of the names and companies blend in after a while to the seller. We closed a deal back in March and the seller swore they received letters from us, when in actuality that was our first time we sent her a letter. We allowed the other investors to touch her several times and our letter sent at the right time so it seemed like it was the 5th or 6th touch, but this was our first time marketing to her. I like cluster marketing because the postcards are cheaper and reaches a different group of individuals who may respond to those verses a professional or yellow letter.

I think split testing the various methods in your market is critical. I know in my market that cluster marketing works very well. I actually noticed a significant decrease in response rate by sending the same type of marketing piece month-after-month. The only list I mailed that didn't decrease a lot in response was the seniors' list. My other lists maintained their response rate, although it wasn't as high as my seniors' list. One downside I noticed with option one is that people may become numb to your message and know it's you mailing them as soon as they see your envelope. At the very least, I would change up the envelope style and color every mailing even though your internal message or mail piece format doesn't change.

@Isiee Koch I had an issue with my ads being yanked when I posted a few mobile homes for sale. I would create another account using a different email and change the verbiage of your ad. See what happens then. I don't think it's time to go in panic-mode...yet!

@Account Closed I'm glad to help. You shouldn't have any issue with using your address on this batch. However, I would advise you to increase your volume. I thought I was making a lot of progress by getting the drive for dollar leads and then mailing them because I was doing A LOT of work. But all of the work I did was misplaced energy because I wasn't focused on volume. I would really considering setting aside some funds for a list and marketing. Your time is much better suited fielding calls from your bulk marketing efforts rather than driving around and locating distressed properties.

I say this because I've been in your situation before. Once you locate the home, you need to do your due diligence to ensure the property has equity, the owner is alive, etc. Then you need to locate the owner's current address, then write and send the letter off. This is a lot of work for one property owner that may not even call you back. So imagine, you'll need to do this for at least 500 homeowners in order to generate a meaningful response. You're doing the right thing by getting started, but I don't want you wasting your valuable time when you can be speaking to motivated sellers now rather than 6 months from now.

@Stuart Thomas Unfortunately, there is no free source for getting numbers. Just think, if anybody could look up your contact information on a website without being pre-vetted, would you feel comfortable with that? I certainly wouldn't be! To get access to reliable phone numbers, you're going to need to prove to the data vendors that you're a reputable company and responsible with sensitive data.

Alternatively, you can use a service that can get you the numbers you need. Please let me know if you have any additional questions.