Dishearten Investor after no response to Mailers

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Dishearten Investor after no response to Mailers

Alex Palma
Marathon, FL · Member since 2014 · 29 posts · 8 votes

Used yellowLetters complete to send a 6 month campaign to outside owners (absentee) non-llc,  who have 50-100% equity in the Florida Keys. I fielded over 150 calls, and had no reasonable leads. I added a new phone number to my phone to avoid people having my number & purchased a UPS mail box because it has real address. I made it a point to call & speak to everyone.  Nothing stuck.  You can imagine after spending $5000 in mailers and not even submitting one contract, it really takes a blow to one's professional business plan ego.  Not sure if to cough up another couple thousand dollars and try a different list algorithm on ListSource or pivot to different plan. 

I will start performing "driving-for-dollars" this week and hope to maybe get some traction. 

Taking calls from "sellers" was interesting. The most common theme I heard was "I have the best home on the block", its amazing how many people really think they have the best house.  Also had some people that were angry because they received a yellow letter, threatening to report me for harassing! lol

I had a local real estate agent hide behind a fake email telling me "I cant be contacting his buyers, that it was illegal". When I answered him, he hid behind his email & text and did not have the fortitude to answer.

Its a tough world out there!!!

Done venting..thanks for reading this far!

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Account Closed
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
6y

@Alex Palma You are an ER doc? Why on earth are you wasting precious time on this? Youve invested years and hundereds of thousands to be a doc. Go be a doc. Do good in the world. Make money. And then just use your high income to invest in passive things!

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  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Alex Palma:

    Used yellowLetters complete to send a 6 month campaign to outside owners (absentee) non-llc,  who have 50-100% equity in the Florida Keys. I fielded over 150 calls, and had no reasonable leads. I added a new phone number to my phone to avoid people having my number & purchased a UPS mail box because it has real address. I made it a point to call & speak to everyone.  Nothing stuck.  You can imagine after spending $5000 in mailers and not even submitting one contract, it really takes a blow to one's professional business plan ego.  Not sure if to cough up another couple thousand dollars and try a different list algorithm on ListSource or pivot to different plan. 

    I will start performing "driving-for-dollars" this week and hope to maybe get some traction. 

    Taking calls from "sellers" was interesting. The most common theme I heard was "I have the best home on the block", its amazing how many people really think they have the best house.  Also had some people that were angry because they received a yellow letter, threatening to report me for harassing! lol

    I had a local real estate agent hide behind a fake email telling me "I cant be contacting his buyers, that it was illegal". When I answered him, he hid behind his email & text and did not have the fortitude to answer.

    Its a tough world out there!!!

    Done venting..thanks for reading this far!

     Did you really expect a different result?  Let me ask you three questions.  

    1 - If you had gotten the desired result, how many replies would you have liked to get?
    2 - How much added work would it have taken to follow up on all your "leads"?
    3 - How frustrated would you be if (when) those follow up calls proved to generate results just as frustrating as you just got with no real results?

    Quantity isn't a good thing.  Quality is.  Try focusing on looking for stacks of needles instead of needles in haystacks.  You'll be less frustrated, and waste a lot less time and money.

    7Reply
  • Ben D.
    CA · Member since 2013 · 64 posts · 58 votes
    6y

    I know there are plenty of investors on Biggerpockets who advocate for the yellow letter strategy, and I'm sure it works in some cases, but I've never been a fan myself.  It's just spamming real estate owners trying to find someone who wants to sell, but for whatever reason is too lazy to call an agent and list their property on the open market.  As an investor myself, I also don't particularly like having yellow letters fill up my mailbox or having spam calls/ texts from investors blow up my phone.

    How about reaching out to some local agents or brokers and discussing the type of properties you're looking for? Or, search the MLS/ Loopnet. Or, attend some local real estate events and network.

    6Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y
    Originally posted by @Alex Palma:

    Used yellowLetters complete to send a 6 month campaign to outside owners (absentee) non-llc,  who have 50-100% equity in the Florida Keys. I fielded over 150 calls, and had no reasonable leads.

    It could be your target market.  You need a stack of needles like @Joe Villanueve is talking about.  Aren't The Keys fancy vacation spots for the most part? 

    Hard to believe nothing came out of 150 calls.  Are you building rapport? Adding value?  Or asking for their hand on the first date.  Be reluctant and serve.

    I would review my MAO strategy. The 70% minus repair model may have worked in the GRC, but people know the market is strong and can look up a value estimate in seconds . Have a bigger end buyer in mind, like yourself or a LL. We pay more. Transaction costs and taxes don't eat our lunch.

    I can pay 95% of FMV and make it work with good owner financing. But that takes more than a call or 2 to get. I can pay 88% -90% of value getting a loan if the value is high enough. What are you offering in general? Who is your end buyer? How soon into the convo do you go for the kill?

    4Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    6y
    Originally posted by @Alex Palma:

    Used yellowLetters complete to send a 6 month campaign to outside owners (absentee) non-llc,  who have 50-100% equity in the Florida Keys. I fielded over 150 calls, and had no reasonable leads. I added a new phone number to my phone to avoid people having my number & purchased a UPS mail box because it has real address. I made it a point to call & speak to everyone.  Nothing stuck.  You can imagine after spending $5000 in mailers and not even submitting one contract, it really takes a blow to one's professional business plan ego.  Not sure if to cough up another couple thousand dollars and try a different list algorithm on ListSource or pivot to different plan. 

    I will start performing "driving-for-dollars" this week and hope to maybe get some traction. 

    Taking calls from "sellers" was interesting. The most common theme I heard was "I have the best home on the block", its amazing how many people really think they have the best house.  Also had some people that were angry because they received a yellow letter, threatening to report me for harassing! lol

    I had a local real estate agent hide behind a fake email telling me "I cant be contacting his buyers, that it was illegal". When I answered him, he hid behind his email & text and did not have the fortitude to answer.

    Its a tough world out there!!!

    Done venting..thanks for reading this far!

    Tons of other people mailing as well. Plus this is an odd time due to covid 19. Hundreds of newbies muddling the pond as well. If all a person had to do to score a deal was send out 5000 mailers and make 150 cold calls then who wouldn’t be a big time real estate investor? 
    Everybody and their gramma is hearing about the easy money in Real Estate investing, no money down deals, and wholesaling is easy promoters.
    So many are chasing the travel the world and take lots of vacations through real estate bean dream. 


    0Reply
  • Alex Palma
    OP
    Marathon, FL · Member since 2014 · 29 posts · 8 votes
    6y
    Great insight guys... I will start my pivot campaign and do some driving for dollars & recall some of the potential sellers. I think my rapport was strong, as an ER doctor I build rapport with patients fairly well. But I will not be muddled by my own grandiose ideas of perfection. This has been a humbling experience, and I will find the inner strength not to be pulled underneath.
    2Reply
  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    6y

    @Alex Palma You are an ER doc? Why on earth are you wasting precious time on this? Youve invested years and hundereds of thousands to be a doc. Go be a doc. Do good in the world. Make money. And then just use your high income to invest in passive things!

    10Reply
  • Alex Palma
    OP
    Marathon, FL · Member since 2014 · 29 posts · 8 votes
    6y

    @Anish Tolia

    Even though I am a physician it does not take away from the aspiration of being an entrepreneur. I think you for the kind comments but restricting myself from an opportunity would not be internally well perceive. But since you mentioned passive, please provide some examples; ?Syndication?

    2Reply
  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    6y
    Originally posted by @Alex Palma:

    @Anish Tolia

    Even though I am a physician it does not take away from the aspiration of being an entrepreneur. I think you for the kind comments but restricting myself from an opportunity would not be internally well perceive. But since you mentioned passive, please provide some examples; ?Syndication?

    Passive like syndications or even owning high quality rental homes. Or just buying a small apartment complex. Or buying into hotels/motels and other cash generating businesses. I have a lot of MD's in my family who are also entrepreneurial. They have their own businesses but related to their field. You could start a medical device company or some app related to healthcare etc etc. I just meant that since you have invested so much time and money in your career, why not leverage that? Anyway, didn't mean to offend, its your life your choice of course.

    1Reply
  • Josh Walker
    Investor · Norman, OK · Member since 2017 · 75 posts · 53 votes
    6y

    @Alex Palma - I have personally invested in over 30 syndications and believe that they are a great option. I have invested in a number of different asset types, markets and with a number of different sponsors. I love discussing syndications with anyone interested.

    Feel free to shoot me a PM if you would like to discuss further. I wish you luck.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Steve Vaughan:
    Originally posted by @Alex Palma:

    Used yellowLetters complete to send a 6 month campaign to outside owners (absentee) non-llc,  who have 50-100% equity in the Florida Keys. I fielded over 150 calls, and had no reasonable leads.

    It could be your target market.  You need a stack of needles like @Joe Villanueve is talking about.  Aren't The Keys fancy vacation spots for the most part? 

    Hard to believe nothing came out of 150 calls.  Are you building rapport? Adding value?  Or asking for their hand on the first date.  Be reluctant and serve.

    I would review my MAO strategy. The 70% minus repair model may have worked in the GRC, but people know the market is strong and can look up a value estimate in seconds . Have a bigger end buyer in mind, like yourself or a LL. We pay more. Transaction costs and taxes don't eat our lunch.

    I can pay 95% of FMV and make it work with good owner financing. But that takes more than a call or 2 to get. I can pay 88% -90% of value getting a loan if the value is high enough. What are you offering in general? Who is your end buyer? How soon into the convo do you go for the kill?

    My thought exactly how many props do you think you can buy in Aspen CO  with yellow letters.. ???   markets do matter when it comes to buying distressed assets.. NO question about it.

    Send out 10k yellow letters in the low value areas of any mid western or rust belt city and you will get plenty of leads and deals.. now you have to deal with that asset class.. but thats the areas direct mail hits the best numbers.

    the guys in know in Portland expect 1 deal per 10k mailers.. maybe 2..  And in Portland we do have a pretty good inventory of older / hoarder / need of major repair props. but UBER competitive for them..   its not like other areas of the country were there might be 3 board ups on one side of one block..

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    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Account Closed:

    @Alex Palma You are an ER doc? Why on earth are you wasting precious time on this? Youve invested years and hundereds of thousands to be a doc. Go be a doc. Do good in the world. Make money. And then just use your high income to invest in passive things!

    No kidding..  last recession My wife worked on a transaction were a very solid Dentist decided to be a flipper.. got caught in that market of course had PG's and his were worth something.  Lender would not let him off the hook like they were doing for so many other investor / flippers home owners.. that one cost him 125k..

    in that Market I could see doing HIGH end flips.. but I would be working with professional HIGH end realtors.. who probably have really good contacts.. and can guide a person to what a deal is and what is not.. what will sell what wont etc..

    Other than that identifying the really ugly stuff and concentrate on those might be a better use of time and resources..  acquiring inventory through direct mail is a process and a system and one really needs to be on top of it.. and you have to create huge volume of inbound traffic to make any deals.

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    WebsiteView Page
    0Reply
  • Michael S.
    Huntsville, AL · Member since 2018 · 577 posts · 864 votes
    6y

    @Alex Palma - as an ER doc with a solid income, you will have real estate agents who will likely be more than happy to do the heavy lifting on finding deals. Why? Because they know you will have the resources to close, either with cash or through a bank you have a relationship with. Find an experienced agent in your area who has expertise in investment properties, and they likely can connect you with off market deals or even wholesalers. Don't waste your time with mailers - picking up an extra ER shift is way more lucrative than talking to people who aren't really interested in selling their property for a deal with mailers. When we get the "yellow letters" in the mail, we like to waste the senders time by asking them for 150% FMV on the property, since they wasted our time cluttering the mailbox.

    0Reply
  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    6y
    Originally posted by :

    When we get the "yellow letters" in the mail, we like to waste the senders time by asking them for 150% FMV on the property, since they wasted our time cluttering the mailbox.

    You don't have to go that far. Asking for market value is enough...haha

    0Reply
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    6y

    Dude, I am BP's biggest oponent to DMM, cold calling, Driving for dollars, and all these other shady stupid methods. The funny thing is that the harder I yell not to do these things, the more pissed off all these stubborn investors get.

    Listen one and listen all for once gaaadamnit. FORGET DMM

    FORGET Cold claling

    FORGET Driving for dollars..

    If you come at me telling me.. "but I have no money"...

    Then friggin GET the money first!

    If you want to be a brain surgeon are you jsut going to cut people's head open and when caught and draged before the judge are you going to say "but I have no degree and I want to be a surgeon".

    No right?

    Look my dude this is what you do.

    Find out what the cost/deal is for PPC, Facebook ads, or any marketing you want to do honestly... and go find that money before you spend a cent.

    I feel for you and I am sorry it didn't get you anywhere, but you saw yourself, not many people are surprised.

    Cut your loses, move on, do it the right way!

    1Reply
  • Patrick Britton
    Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    6y

    @Alex Palma I happen to own one of those places (through the family) and those people don't sell.  Most homes in that area are either second homes, vacation homes, and a small number are short-term rentals.  I'm speaking in general terms here, but the Keys are a crazy wealthy area and if any owner wanted to sell they'd use an agent.  Yellow letters don't appeal to that "type" of owner.  Try anywhere else in Florida, maybe the panhandle? 

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    I agree with @Account Closed. What the heck are you doing working the bottom of the barrel? 

    i would immediately connect with a commercial RE broker and figure out a high quality asset class you can invest in. 

    for example I invest in new build B class small multi fams (currently in contract for 20 units)   


    good luck! 


    0Reply
  • Bruce Runn
    Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
    6y

    As someone who gets 5-10 letters/calls/texts a week, I can tell you I never respond and wouldn't.  Most are from people that can't close their own deals or RE agents prospecting for a listing.  IMHO the mass approach is extremely low effort/low success.  I get  2-4 off market deals a year and only work on high upside opportunities.  I've been doing it for some time so people know who I am and as I've given help to so many people, they are often willing to share to pay me back even though I never expect it.  I show people how to buy/house hack, and answer lots of questions here and in my market so when someone has something they can't swallow, they call me.  Our approach is patience then pounce.  We have worked up to 3 years to get to a yes with periodic follow ups w/o being a pain in the butt.  Just sharing...

    4Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Well, do commercial RE in apartments - As I've had to explain to more than one junior, the easier and more "blind" the communication (eMails, blind form letters, even Tweets), the less likely.

    The absolute best way is phone calls (actually F2F is better, but takes a lot of time/contact).  I know it's hard, but you've got to identify you targets and go after them to sort out who is "real" or not.

    0Reply
  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Forgot, you've got to get your pitch down also since you've got 15-30 seconds to make a connection with them.  Other tough thing (at least for me) is when they start talking - DO NOT INTERRUPT THEM.

    You have a lot better odds if they keep talking.

    0Reply
  • Joe Cassandra
    Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
    6y

    Post your list and follow ups with said list.

    That'll tell a lot of the story.

    If you're getting 150 calls, you should get 2-3 deals out of that.

    Don't let any of the people on here saying direct mail doesn't work because they themselves don't respond to it...that's not how marketing works. They arent the target market.

    I write sales copy for a living. 1 out of 100 people will buy what you're selling and that is success. 

    Again, post what list you targeted and what area.

    1Reply
  • Alex Palma
    OP
    Marathon, FL · Member since 2014 · 29 posts · 8 votes
    6y
    @josh walker Thanks for responding. I sent to a DM
    0Reply
  • Alex Palma
    OP
    Marathon, FL · Member since 2014 · 29 posts · 8 votes
    6y
    @Jay Hinrichs Thanks for the insight. I I thought with 5000 letters I would gain some traction. I was not naïve to think it would be the golden ticket, but was hoping I would crack the door slighlty. Regardless, the experience has brought me lots of knowledge of the real estate market. Getting beat up on the phone has helped me build character. Ironically, I will be placing my first contract on a handwritten letter I sent out rather than from my 5000 letters. The transaction did not come out from the yellow letters but from the actual handwritten letter. Regardless its still a win!
    0Reply
  • Alex Palma
    OP
    Marathon, FL · Member since 2014 · 29 posts · 8 votes
    6y
    @Michael S. I had many of those that strung me along, but I am also used to working in the ER when I have many drug seekers trying to pass me fast ones to obtain their oxycodones. Luckily my wife is a real estate agent so therefore I have access to all the information on the MLS. I have tried to connect with a local agents to find "pocket listings" but they seem to be very close knit and find me as a threat rather than an alley. Therefore I will be looking for alternatives in networking, rotary club, chamber meetings, ext.
    0Reply
  • Alex Palma
    OP
    Marathon, FL · Member since 2014 · 29 posts · 8 votes
    6y
    @Patrick Britton You are absolutely right. This area has many second homes and not many people which are in distress. I was hoping to maybe find a few which were interested in selling and not wanting to hold onto a second property anymore. Regardless, my wife is starting her own real estate campaign and maybe from her own campaign we can siphon some "distressed" properties for our portfolio.
    0Reply
  • Scott Matthew C.
    Real Estate Broker · MI · Member since 2014 · 594 posts · 183 votes
    6y

    @Alex Palma I would be curious to hear your script while on the phone. I hope you're not trying to close them on the phone. From what I've read, the marketing is getting you leads, but I'm betting it's your approach/whatever you're saying that doesn't convert them.

    I hope your goal is to get an appointment. In-person is when you close to get the contract. I would be happy to script an role play for about 20 minutes and then 10 minutes to make some tweaks. 

    I'm a broker/investor here in Ann Arbor, MI, and I've been doing this for about ten years. Don't let my looks deceive you. Once more thing, I may know a thing or two and but just because I have a Broker's license doesn't mean I know everything or that I'm better because I'm not either of those things. I'm always learning.

    Let me know, and I'll make myself available to you. No strings attached. 

    1Reply
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