I was speaking to a fairly new real estate investor recently, and she said she was very disappointed with the results of her absentee owner mailing. She told me that she had sent 200 out mail pieces and had only gotten 10 calls, none of which had turned into a deal. My new friend thought this was a terrible result. I pointed out to her that this was actually a 5% response rate which wasn’t bad at all for a first mailing.
When I questioned her further, she told me that she had only mailed these folks once and that was over two months ago. One mailing and she had already given up. For the next hour or so, over a cup of coffee we had a class in “Direct Mail Marketing 101”.
It’s A Numbers Game
You have to start with the resources you have, and if you can only afford to mail to 200 people then that’s what you have to do; market consistently to those 200 folks until you have a larger marketing budget. But you really need to mail to a larger list to get the results most people want so this should be your long term goal.
On average, real estate investors say that you will need to speak to 20 sellers to find one deal. If you are getting good results with your mailings that would mean you would get 50-60 calls on 1000 pieces of mail which is a pretty good percentage of 5%-6%. Therefore if you want to buy one house a month, you will need at least 20 leads. If you use the percentage of 5%, you will need to mail at least 400 pieces to reach your goal.
It’s Called A “Campaign” For A Reason
Marketing is not an “event” but an ongoing process. In order to be successful with direct mail, you need to have continuous marketing campaigns that go on month after month, mailing to the same targeted list. Your results will start to grow with each mailing. Some statistics say for real estate investors, you will get 85% of your deals when you have done 5 or more mailings. People will remember you if you keep mailing to them. And I can guarantee you that you will be one of the few if not the only one still mailing to those folks after 5 or 6 months. Most of people will throw in the towel long before that time.
Plan for Success
If you stay in the game long enough, you will be successful with direct mail. For a long time now that has been my best source of leads. That doesn’t mean that you shouldn’t take advantage of other marketing activities. You should always have at least 2 or 3 different ways you market yourself, and I will cover some of these in upcoming posts.
I learned about you by following your comments on a lengthy Bigger Pockets forum on investing via probates. Your input was really excellent so I connected to your website. I downloaded and read your freeby ( which was good) and also read your comments on Marketing 101. You have an obvious expertise in this niche and I like your teaching/presentation style. I would like to learn more from you regarding marketing to probates and out of state owners. Could you send me the two links you referenced above for Yellowletters and listsource that would provide better pricing. Also, do you ever share specific examples of the various letter/postcard copy that you use in your sequential mailings. I would love to see your copy from first to sixth mailing. I live in Jacksonville so I need to find out the specifics of how to best obtain the necessary information on probate candidates. Today was a good day as I found you and am excited about you as a valuable resource and mentor moving forward. I look forward to hearing back from you.
I’m sorry Scott. I didn’t get that.
You have to contact my account rep Rashed. He will have to set up your account so you get the special price.You have to tell him you are my student.
One thing I found out is that the price goes up when you add the equity piece and the home values.
One of the gals in customer service said that if you use LTV (on the mortgage) instead of equity (which should give you the same factor), you save 25c a lead. I am heading out of town at 5:00 in the morning for a vacation, but I will check email at least once a day.
Here is his contact information. FYI – it sometimes takes him days to get back to me. They are short a couple of people. Once your account is set up you won’t have to fool with him. Let me know if you have problems with him.
Hi Sharon, I emailed you about the link from listsource but I never got a reply back. I am using your same criteria in my city and we have the same median price range. I omitted bad zip codes. It pulled up like 1600 names so that should be a good starting point for my new marketing campaign. I was wondering if you could send me your listsource link? I am very confident that this new marketing will start getting me deals thanks to you.
For absentee owners, you have to set parameters especially equity. I only mail to folks that have at least 50% equity. Here the average home price is about 140k. So I mail to homeowners that have houses valued at 50 or 60k to about 250K (remember I am buying at about 50% by the time I back out repairs and my wholesale fee.
I also omit bad zip codes. So narrow your list by narrowing your criteria.
I am also going to use a company that has proven copy. Yellowletters.com. I personally hate yellow letters so I won’t be using those. But they have postcards with proven copy. That is the other thing; you have to have copy that converts.
Send me an email tomorrow and I will send you my link. You can save some money on your order by going through my link. I am also in the process of getting set up with Listsource.com and I will be able to offer a better price to people I refer than you can get. I’m not making anything, but you will get a better price.
Hi Sharon, great post about marketing more than once to same list. I made a hugh mistake and thought the more people I mailed to, the more deals I would get. My list was out of state absentee, a few probates, bandit signs and driving for dollars leads. I’ve sent 4000 pieces maybe even more than that without a deal. I used yellow letters for almost all the marketing. Thanks to you I have changed my strategy to using post cards from Click2mail and marketing to the same list every month. One question I have for you is, do you get a lot of people calling that want fair market for their house and then get insulted when you make a low offer? I decided to make a very clear post card and voice mail that says I only help people that NEED to sell quick. I’m just not getting the motivated calls so I’m trying the very direct approach. Any suggestions is appreciated… Thanks
Oh and mailing to a smaller list to start, around 500 owners, instead of thousands which became cost prohibitive and discouraging.
Yes it can. Start with an amount you can manage month after month.
Bouncing over from Bigger Pockets. :). I mailed 5-6 times consistently in 2008 and again in following year or so (people still had denial about CA house values). No purchases came from that. Also, I didn’t have a good database and so I didn’t have a good way to remember to follow up on prospects that did contact me. I’m getting ready to get started again. First step is creating the database. Second, mailing only to absentee/out of state. Third, mail monthly instead of bi-monthly.
How do you change your wording/copy for each drip, if you do?
Hi Tiffany –
I would recommend that you use a postcard for absentee owners. It is cheaper and you just use the same PC each month or you can use a variation of the postcard; they have several to choose from. If you will send me a message at the middle of the week, I will send you some info.
You must have a good list, and you need to mail monthly. I can help you with that too.
Until you get a database, there is one you can get free over at the StrugglingInvestor.com. Scott Costello has one that he developed that is free. It’s right there on his site. Just tell him I sent you. You absolutely must have one. I have been using Act for about 5 years, but I am looking at cloud based software. I will let everyone know if I like the one I am checking out.
As far as follow up goes, noting beats having it all on paper and a calendar. Visual reminders are something everyone needs. You mentioned mailing to thousands; who were you mailing to? One of the best lists is out of state absentee owners, but you need filters such as 50% equity or more otherwise, you don’t stand a chance of getting a house.
I hope this helps. Be sure to read some of my marketing and direct mail posts here. You can search by topic. I hope this helps.
Great article, Sharon! I’m wondering, when contacting absentee owners, do you specify the property you are contacting them about, or just name the city it’s in?
For instance; “I’m contacting you about the property you own at 123 Main St.” or, “I’m contacting you about the property you own in Louisville.”
What do you suggest?
Hi Randall –
I put the name of the property on the letter. I have a field for that in my database, so it just gets slotted in when the letters are merged. Thanks for stopping by!
I like how you reiterated that direct mail is a “campaign.” This type of marketing is not a one-and-done deal that will fix itself but rather a long-term activity that requires your attention for interpreting data and coming up with new ways to be more effective with your campaign. Thanks for the article!
Hi Christopher –
Thank you for your comments! It is a hard concept for some folks to really grasp. When they don’t get a lot of calls off of a mailing they want to throw in the towel. The statistics are a little different for every type of business, but for real estate, about 85% of your DEALS will come at the 5th mailing and beyond. You will get calls, and you will get deals before that. But if you are the one that hangs in there long term, you will see your numbers really go up over time. Whatever your business, you want to be the “last man standing”. What business are you in?
I am still struggling with the fact if this really an effective way to market yourself. Can you convince me.
Great information. I will not throw in the towel. I will let you know how it goes.
Please do Kris. Keep in touch.
Excellent post! I’m going to share it with my online students : )
Thanks Lo. I’m going to be doing some short posts about marketing basics, and also some short videos. I will tell you about his tonight. Thanks for sharing.
Great post Sharon, marketing drives leads and sales..
It’s all about the marketing isn’t it!