All Forum Posts by: Steven Leigh

Great question, but it's not just the amount but the quality.

For example, yellow letters generally get about a 4% response rate, but some of that is people complaining or wanting you to take them off their list. Postcards get about a .5% response rate, but are generally high-quality responses that more often turn into conversions.

So do you just want to get the phone ringing? Yellow letters, Craigslist ads, and even bandit signs might be something to try.

Want more quality responses? Maybe try postcards if you have the budget, or direct phone calls. Phone calls can sort of backfire, though. Calling FSBO ads is one thing, but tracking down sellers and calling them directly can sometimes feel like an intrusion of privacy for them.

In answer to your question, though, I have a custom letter I send that is somewhat similar to a yellow letter, and that is my go-to marketing technique. I experiment with others, but for solid lists, I will send out my main letter because I trust it more.

First, realize it could be a bit of an uphill battle, or it could be totally easy.

Start on the county assessor site and make sure it's not already available publicly. Some sites also let you search for certain criteria, including tax delinquent. Then you can often save the results as a CSV, which is basically an excel spreadsheet.

If you need to call, ask if you can get a list of all the tax delinquent properties in the county, preferably in a CSV or excel spreadsheet. If they ask why you need it, you can say that you are an investor who tries to help out property owners in trouble and help get vacant and distressed properties back into productive use.

Sometimes you will be told there is no list like this. That's my favorite. What are they keeping track of these on post-it notes around the office? Of course there is a list! What they probably mean is "I don't want to give it to you." or "I don't want to work that hard."

The reality is the Freedom of Information Act makes all of this information public record, and they are required to provide it to the public upon request. It really depends on how hard you want to press this point. You can even go to the point of filing a FOIA request if it comes to that, but I would try several different people and being really nice first!

Good luck!

Thanks a lot @Claire Trammell  That's great info. I think YellowLetters or Michael is where I got my stats to begin with, so it's good to know the updated numbers.

I generally see about 8-9% myself, but I have a custom letter that seems to be performing well. Glad to see the yellow letters are matching that, because I might make the switch from doing them myself soon.

Okay, just to clarify, we are getting a few different concepts confused in this thread.

Tax Liens and Tax Deeds: This is something different than what I think @Ray Agosto was asking about. Some counties/states/cities "sell" tax liens on a property. So if I owe $10,000 in back taxes and can't pay it, you could buy that lien, then if I continue to not pay, you could eventually own the house. This is something people specialize in, because it can be pretty complicated.

Tax Delinquent: This is when someone is behind on their property taxes for long enough that the county classifies the owner as "delinquent". Some counties provide a list of delinquent properties, as @Paul Amegatcher said above. Some provide a way to search individually to see if there are back taxes.

I think what you are asking about is marketing to these properties with delinquent taxes, and yes this is HIGHLY recommended. These are people who are basically raising their hand and telling you they don't want their property anymore, so will you please take it?

Google your county and "tax delinquent" or look around on the assessor's page. If nothing else, just start making phone calls. Technically, this is all supposed to be public record, so you SHOULD be able to request all this info. Some counties get around this by providing a way to search individually and they don't want to give you a full list. You might still be able to request it with a Freedom of Information Act request. Do some searching on Bigger Pockets for that term if you get that far and need some info.

Once you get the list, I would recommend you filter to properties that have been delinquent for at least two years, and ones where the amount delinquent is at least $2,000. This might go up or down depending on the average tax bill in your county. Anything less, though, and it could just be that they missed a payment or a fee somewhere.

Good luck!

If you're doing it all by yourself, I would probably recommend weekly mailings rather than all at once. Daily is probably TOO conservative. :)

Average response rate is about 4% for yellow letters. So if you mail out 125 every week, on average you'll get about 5 calls. That's pretty manageable for doing research, making offers, etc. even if you're pretty new to it. They won't necessarily all come in at once, but several will call right after they receive the letter.

If you find you want it to move a little faster, you can always go down to 125 every 4 days, etc.

Good luck!

Yes, ALWAYS be the solutions guy. If you're not the solution for them today, recommend as many solutions as possible. This is something many wholesalers don't get. They get so focused on "What's the lowest price you would take?" and they never take any time to listen to the seller's ACTUAL problem and provide solutions. Sometimes it's you, sometimes it's not. But if you're the guy who helped them out, they may recommend you to someone else, or they may call you back in a month ready to do a deal, etc. You'll also establish a great relationship with property managers and realtors if you're recommending clients to them all the time. 

More importantly, it's just good karma. This business doesn't always have to be about "money, money, money, what's the most money I can possibly make!" Sometimes it's about being a good human being, helping people in tough situations, and sending positive energy out into the world.

The day people stop seeing sellers as leads for their next deal and see them as actual human beings is the day their deals start to increase exponentially!

I agree with many others here. Don't necessarily start from a place of lack and stress, as it will make it harder. However, use the situation as MOTIVATION going forward that you NEVER want to be in this situation again! This will help you a lot later when the going gets rough to push through.

That being said, here are some ways to find motivated sellers. Some are free, some cost money, but it's a great list to get you thinking in the right directions:

http://retipster.com/50-quick-actions-you-can-do-t...

You're not trying to talk them out of using a realtor, so don't go that route. Instead, do the opposite.

Example of what I often say:

If you have the cash to fix up the house and list it with a realtor, and you can afford to wait a few months, that is going to be your best option for getting the highest price. What I can offer is a cash offer, so you don't have to wait around for loan approval, I pay the closing costs, and there are no realtor commissions of any kind. I can also be very flexible, so you can choose your closing date and your move-out date, and I never ask you to do any repairs.

In fact, it's a good idea when you are talking to sellers to give them the other options first.

Why not list it with a realtor?

Why not rent it out to a tenant?

Because once they have given you reasons why they can't do either of those things, they are also realizing that you are the only option left. AND you've built some trust with the fact that you're actually suggesting things that would be in their best interest instead of yours. 

I've told sellers that I'm not their best option, because they were looking for a price that was too high, etc. I even recommended a realtor to them, wished them luck, and we hung up. Then they called me back a few weeks later and said, "So just for the record, what kind of price would work for you?..." 

It's not hard to see why. I gained their trust by giving them good advice in their best interest, instead of trying to push the hard sell. They now see me as a straight shooter who will tell it to them straight. And there is also a lot of power in "pulling away" instead of chasing them. If you start to pull away from the deal, they will start to chase YOU instead of you chasing them.

So you're on the right track, I would just avoid bashing realtors (unless they start doing it first) and just focus on your own benefits. 

First of all, great work on getting your first house under contract!

Second, oh maaaaaannnnnn I feel your pain. This happened to me with my very first contract too. I knew what price I needed to get, and the seller couldn't go that low because they were already bringing cash to the table. So I put it under contract anyway, partly because I was so eager, and partly because I was trying to help them out. I figured I could make it work at that price even if I barely made anything.

So the big thing is, as you said, LEARN THE LESSON to just walk away if the numbers don't work. You'll avoid getting yourself into a situation where you have to back out of the contract. The added bonus is that once in a while, by walking away from the deal, you might find that the seller trusts you even more as someone who is giving it to them straight, and you may find that they come down to your price to make it work. It's not all the time, but it happens. Or they call you a month later ready to do a deal.

So what do you do now? Rather than go back to the seller and ask for a reduction in price, I would recommend you go back to the seller and say you're going to have to back out of the deal. There were more repairs than you were expecting or there was a lot less demand at that price than you thought there would be, etc. Instead of putting you in a position of asking for a lower price, this often puts the seller in the position of trying to talk you back into it. They may ask you what price you would need to make it work. That would be ideal.

But realistically, you need to be ready to back out if it's not going to work. And tell them you wanted to let them know as soon as possible. Be ready to suggest a realtor, a property manager, and some other options to them as well, so you don't just leave them hanging.

Good luck!

If the seller is already listed on MLS, they are expecting to pay the commissions. I will warn you that the MLS is a TERRIBLE place to try to find wholesale deals. Sellers who have gone to the trouble to find an agent, list the home, etc. are almost never willing to take enough of a price cut to make it a good wholesale deal.

On the flip side, when selling my wholesale deals to a realtor representing a cash buyer, I always tell realtors to add their full commission on top of my wholesale asking price. Even if we haggle the price down, I make sure they still get the full commission and that I'm happy with my takeaway. This makes them happy because they get full commission and they are even more eager to work with me the next time.