You get that first magical list that you anticipate as being the answer to finding truly motivated sellers. It doesn't even dawn on you the hours you spend typing up the letters because you're so focused on all the great deals to be made. It seems like the letters are just burning a hole in your hand by the time you get the stamps on them and to the post office. Next week rolls around and your hopes were just about dashed by the time got that first call from a seller who received one of your letters. Now we're talking! It becomes obvious shortly into the conversation they're just “fishing” around and trying to find just how much you would pay for their property and no they are not in any hurry to sell. What happened? Why didn't you get more calls from truly motivated sellers? Everything you heard about direct mail in real estate was that this is the way to go in having a system set up for motivated sellers to find you.
The “Real World”
After you've read the above scenario know just two things right now:
Many new investors using direct mail without guidance sometimes experience these types of results and get discouraged from using direct mail again. These individuals will tell you, “oh, I tried mailing out letters and postcards once but I didn't get many (or any) deals”.
Direct Mail Finds Truly Motivated Sellers!!
Now, this latter statement is what I hope by the time you finish reading my points will convince you that a well thought out direct mail plan is extremely effective but takes some thought on your part. You need to be more sophisticated than just throwing darts in the dark hoping you hit something. Sure, the majority of your letters/postcards won't be responded but did you know that a success rate of substantially less than 1 can still make direct mail very profitable for you in real estate. Read on my friend!
What Makes A Great Direct Mail Campaign?
Now let's get into what you really need to know in starting your direct mail campaign. Get a organized game-plan together on how you are going to make sure that you get as many motivated sellers calling you as you can handle!
Define Your Target Market
You need to know what you're hunting so to speak. Just an “I Buy Houses” message to your market doesn't come close to what you need to do in direct mail. There are many, many ways to make money in real estate and finding the truly motivated sellers with direct mail means your message should be reflective of the target market you are seeking. For example if you are targeting pretty house properties that are in pre-foreclosure then included in your message the seller doesn't need to know you take over properties with tenant terrors or that buy junker houses. They need to be informed that you can possibly take over their payments and know how to find tenant buyers that will help resolve their situation so they can move on with their lives. Define your target market because the message you send needs to reflect accordingly.
Generate Your Mailing Lists From Quality Sources
I've seen many types of mailing lists that weren't worth the paper they were printed on. If you're keying into pre-foreclosure properties then make sure the source providing the information is reputable and you can test out on a month or two basis before being tied into a one year contract or paid up front fee. Later when you find out the information is out-dated and inaccurate then you're stuck.
Another example is you may be into finding absentee owners. These are a great source of deals if done correctly and basically these are owners of a property where the tax bill is being sent to an address different than the subject property. Ninety nine times out of a hundred that is a prime target for a tired landlord or junker deals to be made. However, it can be quite frustrating when you find out the information you purchased hasn't been updated for over a year on the property tax records. Ouch! Come to find out after doing a little investigating almost half the properties you would have been sending letters/postcards to changed ownership. You paid for but didn't receive quality information. Make sure before you buy mailing list or property tax information that you have a chance to do a test basis on some of the material. Most all reputable companies selling quality information will have no problem sending you a small bit of test data to look over.
Don't Stop At One Mailing
This is a key principle that many investors seem to never grasp the concept of. If you have fulfilled the prior two steps in securing quality mailing list material and you know exactly your target market, then send them multiple mailings. I have my software system set up where for example any category that I key into will receive letters and postcards from me. The text messages will be incremental in nature building up and playing on different angles and ideals trying to prompt them to call me. Sure, I'll get most responses from the initial mailing but many times it may take a little bit more persistency to get the seller persuaded. I'm glad I didn't stop with one seller sending out only five letters. On the sixth letter we finally put together a deal and netted me over $8,000 quick cash. With another seller it was actually over a year of mailings before he came around but the deal got done.
Let Your Letter And System Pre-Screen The Sellers
Time is my most important commodity. I don't have the time to talk to unmotivated inflexible sellers wanting all cash and retail value for their property. You don't and won't have the time to waste either with these types of sellers. Sure, some will get in under the radar but for the vast majority of the sellers that receive your message they will know a few things very quickly. You are an investor and expect to make a profit and yes you have many creative ways to buy properties. In fact you can probably even close within 48 hours if you run through your due diligence checklist. However, the message in your letters/postcards needs to state that if they need all cash and full retail value not to call you. However, if they have some considerable degree of flexibility in either the cash price or terms then to call you as soon as possible. You need to be seeking quality of sellers and not quantity of sellers fielding fruitless phone conversations.
Direct Mail Is A Investment Not An Expense
Make no mistake it does cost money to initiate and maintain an effective direct mail campaign. When you put together the cost of postage, letters, envelopes, postcards then you're talking substantial monies dedicated to this marketing medium. In a prudent investor's budgetary considerations these are costs that most like to consider. When you're experiencing success and know how to effectively secure quality mailing lists or generate them yourself then you soon change your mindset that you simply can not spend enough on postage. Let me try to explain from the sense that just because you don't like to spend gas for your car should mean that you don't ever put gas in it. If you don't realize that fact then you aren't going to be going anywhere fast and you can make the same comparisons if you don't consider direct mail costs as an investment in your real estate business.
Summing It All Up
Direct mail is one of the best ways to find motivated sellers or rather have them find you but take some time and forethought from thought to finish on what you're trying to accomplish. Your goal is to find truly profitable deals and the means you go about doing this are contingent upon your target market, quality of the mailing contact, multiple messages to same contact, pre-screening ability, and finally your commitment to direct mail and an investment in your real estate business. Be organized and focused in your direct mail campaign and soon you too will be finding all the motivated sellers you can handle!