What to do after your direct mail is sent?

Question

Hello everyone.  I have been trying to get started for a while now and I think I may have gotten the wheels spinning.

Background Info: I live alone with my two two year olds and I work a contractor position to work on cars. I set my own schedule. I have $11,000 in credit card debt currently and no assets what so ever. Therefore, I do not have any money to close on or actually purchase any sort of real estate what so ever.

My Goal:

To wholesale a property by any means necessary (unless it's illegal of course)

Steps I have taken:

I have choosen to use an LLC to separate my business from myself.

I have a buyer website and a seller website through Realeflow (both are unedited and need to be finished)

I have business cards and have atteneded a few recent REIA meetings in my area. At a recent meeting, I spoke with one of the lending vendors at the meeting and they do transactional lending for a minumum fee of $1500 or 1.5% of the borrowed amount whichever is greater.

Finally, I have driven for dollars on every single street in my area (Raytown, MO a suburb of Kansas City, MO) and sent out my first direct mail campaign. I will be sending 100 letters every 2 weeks to the list of 100 properties that I found. I am doing the letters myself and unfortunately I do not have the funds to send any more than 100 letters every 2 weeks. I plan to do this for 3 months consistantly before making any adjustments to get a true idea of my return on my marketing and what may not be working.

So my question is:  Now that I have sent my mail and I know what I need to ask sellers when they call (property details, mortgage info, motivation, etc), how do I get this thing under contract when it comes my way??? I have no contracts prepared, no money for an attorney, and really no connections to real estate attorneys in my area at all. I also dont have a title company that I have choosen to go with. What steps can I take to obtain a good real estate attorney, obtain money to pay for the contracts to be made, and to decide on a title company? Those two things are huge road blocks for me right now even though they should not be.

Any help is appriciated sorry that this post is so long. If you take the time to read it, as Brandon Turner says, I will give you a giant bear hug.

Thanks a lot BP!!!

Rashad Nelson · Answer

Hey Andrew.  Just saw your post and figure to take a crack at some of your questions.  Great work on getting started with your marketing.

*Disclaimer - I'm not a wholesaler, strictly a rehabber, but I'll give this a shot.

So my question is:  Now that I have sent my mail and I know what I need to ask sellers when they call (property details, mortgage info, motivation, etc), how do I get this thing under contract when it comes my way???

Ah yes, before we dig into the potential sellers, do you already have a handy list of buyers you can reach out to once you have a solid deal?  If not, gather up a good list of email contacts from fellow real estate investors at your local REIA, join a local investor Facebook group, and have a good idea on how to create an ad on Craigslist.  An email blast, FB posting, and Craigslist listing will be the three main marketing mediums you'll use as a wholesaler.

Now onto the potential leads.  It's important here to have a standard series of questions to ask any interested parties.  The most important is why they're selling.  If they're truly motivated, they'll spill the beans on why.  If not and say something along the lines of "No reason, I'm just seeing and weighing my options, what can you provide me?", then you'll know that individual is not truly motivated, and you can just move on.

Some investors are open to answering every call that comes their way, having a written list of questions at the ready, and communicate with every person that actually responds to their mailer.  Other investors (including me) view this as a waste of their time, so they set up an answering service that tackles incoming calls with an approved set of questions (a script) and / or a ready made website, that has exactly the same series of questions, that handles incoming leads.  Both the answering service and website can forward the answers/results of those leads to your email inbox to view at your pace / leisure and return calls only to those leads that are genuinely interested in selling.  You also get to avoid those nasty callers who have nothing better to do than return your call with an angry message. However, a website and an answering service both cost money.  I spend roughly $150 / month for both.  I use AnswerConnect (answering service - $100) and LeadPropeller (websites geared for real estate investors - $50).  Both are great.

Once you do get a motivated seller, find out what their property is selling for when fixed up. Best way is to get comps from a local, friendly real estate agent.  For my leads, I use a combination of Realtor.com and RealQuest.com to give me a rough idea of value, and confirm numbers with my agent.  Once you have that number, call your general contractor and line up an appointment to see the homeowner and his / her property.  Kindly introduce yourselves, view the property with your GC, and go over everything that needs to be updated. The more things you find, then the more leverage you have to negotiate a lower price with the seller.  Get a hard verbal number from your GC (be sure to ask him for the worst case scenario number), and calculate your numbers.  Be sure to factor in at least 30% equity for your end buyer - very important for continued business.  If the numbers work, give the homeowner your offer.

I have no contracts prepared, no money for an attorney, and really no connections to real estate attorneys in my area at all. I also dont have a title company that I have choosen to go with. What steps can I take to obtain a good real estate attorney, obtain money to pay for the contracts to be made, and to decide on a title company? Those two things are huge road blocks for me right now even though they should not be.

You're definitely going to need a reliable real estate attorney and title agency - no avoiding this.  A real estate attorney and title agency is an integral part of every investor's team.  If there's a local REIA in your area, then there's definitely some fellow investors there that can refer you to an investor friendly attorney and title agency.  In regards to contracts, you can pull them online, but you'll definitely want your local attorney to review (and most likely alter) the generic contracts you choose to ensure it gels with local state laws.  He/She may charge you nothing for this service if you use him/her exclusively for your deals.

Nutshell:

*Develop a buyer's list and avenues of marketing (email blasts, Facebook posts, and Craigslist listings)

*Solidify your team - Find an investor friendly real estate agent, title agency, attorney (usually works for the same title agency / law firm), and general contractor.  Get referrals from local investors, agents, and other professionals in the industry.

*If you can swing it, think about incorporating an answering service and website into your lead generation strategy.  Costs money, but big time saver and adds an air of professionalism to your business.

I hope this helps.  Good luck man.

Matt Pritchard · Answer

@Andrew Quinn Patsy Archer at Alpha Title is the go to title person for investors here in KC.

There are a lot of great resources online for contracts, etc. that you don't need a lot of $$ for, or any $$ for.  Try @Justin Silverio 's website.  http://www.thebostoninvestor.com/

Finding a buyer here in KC won't be too hard if you have a good deal.  Post it on one of the local FB investor groups or on Craigslist and you'll find a buyer no problem.

@Rashad Nelson has some great points about the process of getting it under contract.  Making sure your numbers are right is HUGE for a new wholesaler.  You don't want to post a "deal" that is misrepresented.  If it costs $35k to fix, you don't want to present it as only needing a light rehab.  A good contractor can help with that.

With the volume you are sending, I don't think you need an answering service.  Not yet at least.   100 mail pieces, every 2 weeks, to the same addresses should produce some calls.  A few will be "remove me" from your list.  A few will want 125% retail.  But you might get one or two motivated sellers out of that list.

While you are waiting on those leads to materialize, I would drive more neighborhoods and areas.  I would shoot for C or C+ areas near you.  That way you can have an additional list to begin targeting if need be.

David Ward · Answer

@Andrew Quinn Make sure you are getting all the return to sender letters from your mailings. Those are hot leads. Those are telling you the house is vacant or owner is deceased. All you need to do is do some research and find out who owns that property and then contact them. I recommend beenverified.com for background checks. You get tons of bang for your buck there.

Kim Tucker · Answer

So are you on the $7 a month discounted version of Realeflow or are you paying their full site costs?

With the full version you get the buyer and seller sites and you NEED to edit and personalize to Raytown or Kansas City or where ever you are buying - just like the instructions say.  You also need to drive traffic to said websites to generate buyer and seller leads.

To drive traffic to your site that collects buyer leads - sharing knowledge on area social media sites like facebook groups and Bigger Pockets (hey guys click on my face to the side to find my website and then sign up as a buyer on my site), gets you buyer leads - not hard to generate buyer leads at all.

To get sellers you want to drive traffic to that site - I do so by optimizing my page with a lot of words that motivated sellers would search for in addition to my city - in your case and in my case - Raytown and Kansas City and all the other cities where I might buy - I have a page set up on my site for each specific city I buy in so Google can find it.  This cost you nothing but a day working on the website.

I also write blog posts on my site specific to issues motivated sellers might be asking - you can't do that with Realeflow - so get a business page on Facebook and make these posts here - this cost is also free - just takes a few hours a week to write the articles and post them to your Facebook Page - make sure your Facebook Page is optimized with all the key words and links to your website for motivated sellers.

Next - I advertise daily on craigslist - I have a template of about 30 basic craiglist ads that I post on about 6 different place on craigslist through about 8 different accounts - I rotate the ads on the different accounts.  Sometimes I start from scratch with the ad and other days when I am busy, I just log in and repost an old ad that has expired - this cost you nothing but about a day to get your system set up and then about 15 to 30 minutes a day.

Now to your direct mail - you are sending only 100 letters that you create - check out click2mail and   Or see what they can do for you - I have found that they can print and mail for me at about the same cost I can do it in house.  But if you are only sending 100 letters then you need to be really targeted with those letter, just a neighborhood or just absentee owners is not going to cut it - otherwise you are probably sending letters to me on houses I bought as an absentee owner and sold 2 years ago (I get these daily from people who bought a list) total waste of your money if you are only sending 100.

And if you are sending the same 100 every 2 weeks, and it is not a really motivated list, like people in foreclosure that go to sale in 21 days, then you might be wasting money.

If I could only send 100 cards / letters every 2 weeks.  I would have a larger list and rotate through that list so depending on the type of seller, they get a card or letter every 2 weeks  or every 2 months or every 6 months.

The most targeted list you are going to build is by driving for dollars and locating 100 addresses of run down vacant houses in the area - but that could take weeks.  So you might want a list of absentee owners with multiple code violations - check with the city of Raytown to see if there is a way to get a list of code violation owners.  Or absentee owners with properties that are always in eviction court.  Or absentee owners, where the owners have owned for a long time and live out of the metro, so it might have been their house and when they retired to the Lake or to AZ, they then rented the house out.  Or abesentee owners that have owned the house for 5 years or more and own it free and clear.  My favorite list is people that own the house, live in the house, have owned it for 20 years or more and own it free and clear - that is the house you will make the most money on when grandma or grandpa are now all alone in the house and are moving in with the kids, to the nursing home, or passes away - someone finds your postcards in 6 months or 6 years from now and give you a call to see if you still buy houses - these are the cream of the crop.

With Realeflow leads you can do a lot of the above sorting and with the $7 a month version you can get 100 leads from their system - narrow those leads as much as possible before you export them to get the best leads for your money.Then, the next thing to do is to watch the list for returned letters.  Cross reference those returns to make sure ownership has not changed, then go drive by the house to make sure it's a house you think would be a good wholesale.  Leave your business card on the door or hand write a note to leave on the door - if it's vacant.  If it's occupied, you might knock on the door and ask about the owners info.  Either way, knock on the doors on either side to see if the neighbors know anything.  Pay $10 for a skip trace to find the owners.  Those returned letters could be gold because everyone who bought your list is getting the same returns, but NO ONE hardly ever (me included) takes the time to track down the owners - so if you are the only one to find the owners of a vacant property, you will be the only one they are talking too.

And don't forget your seller leads you buy from Realeflow, sometimes also have PHONE numbers, so get on the phone and call them.

Hope to see you at MAREI in February - our topic for the month is wholesaleing.

Aaron L. · Answer

@Kim Tucker Thanks for your last post. Very helpful and informative! I've done some investing in Canada (mostly rental houses), but looking forward to learning more about how it works here in Kansas City. I plan to attend MAREI in February. Have a great day.

Andrew Quinn · Answer

@Rashad Nelson Thank you so much for the in depth answer. That team thing is certainly true. I plan to attend all the REIAs i can to do just that. I will probably read over what you said again a couple of times to really let that sink in. Thanks a lot.

Andrew Quinn · Answer

@Kenneth McKeown What I am doing is using a template that I have in publisher that has the background of a yellow lined sheet of paper. I then found a font that looks similar to hand written words and typed my message and printed out 100 copies. I then hand stamped each envolope (with sticker stamps) and used a return address stamp (pre-inked not stickers). I did personally hand write the address on all of the envolopes. I think my printer has a way of doing this but since all the addresses are different I think hand writing them would be quicker. I may not continue to do it this way because for not a whole lot more I can have the software I use Realeflow do all that for me. They have robots that hand write letters its pretty cool. I just wanted to start out doing everything myself so I know how to do everything and know what a finished product should look like. After all the letters are done I take them to one of the mail drop boxes usually found in a grocery store parking lot and drop them all in there. Two weeks from now I will send out another 100. I hope this helps.

Account Closed · Answer

Advantage Title is great as well.

Jonathan Schneider · Answer

@David Ward Great advice about the return to senders. I hadn't heard that before. @Andrew Quinn I admire the tenacity with which you are building your business from nothing. I'm in the research phase of wholesaling as well. Something I'd like to get into, but I don't know a lot about yet. I do have some buyers I'm working with, so if you get something under contract, hit me up. Maybe we can bring together two sides of the equation.

Aaron L. · Answer

@Andrew Quinn I live in Grandview..not too far away from you. Best of luck getting your first property to wholesale!

What to do after your direct mail is sent?

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