When Do You Stop Mailing to a List

Question

Hello,

I have been mailing to a pre-foreclosure list for four months now and it's been less then exciting.

I'm not going to quit this list until I get to at least 6 mailers but I am wondering what some more successful direct marketers have to say on the subject.

My first mailer was a big postcard (which was too big. I had to pay 1st class postage on them so it kind of defeated the purpose of starting small and cheap with a postcard to weed out the returns.) I don't think my message was clear enough because I got 0 responses and I mailed about 1200.

My second mailer was a small (A4 I believe) bright blue envelope with a half sheet of yellow paper inside with a hand written font in blue ink saying that I buy houses. I got 8 responses from this one (0.82%) off 854 mailed.  I made 3 offers off of this mailer but no bites.

My third was a professional typed letter on letterhead and I have received 1 response (0.12%).

I'm in the Tampa Bay area and it's pretty darn saturated with investors here so my list is probably getting quite a few letters other than mine.

My main question is, when do you stop one list and start another one?....Or do you ever quit a list? I would imagine that with a pre-foreclosure list, at some point, all the names/addresses will be out of date.

Any input or constructive criticism is welcome.

Thanks,

Ben

Account Closed · Answer

First where are you getting your preforeclosure lists? What does the message say? I did pre-foreclosures in St Louis for 8 years before I moved to Orlando. Because I created the list myself directly from the sources (foreclosing attorney websites) that started the lis-pendins and because it was in Missouri their date of the auction was only 30 days after the lis-pendins was filed so I only had one shot at getting to the owners. I sent out personallized letters with my family picture on it and it did not appear to be from a typical investor. It was a heart felt letter that told them I can give them 8 ways to stop their foreclosure, just call me to help them decide which method worked best for them. I got an average of an 8% return calls on my 1 letter. To test out another method I prepared my letter, the 8 methods to stop foreclosure and put them in an opened FED-EX packet. I wrote in the letter if they wanted to compete the form about their situation and returned it in the FED-EX package I would help them with no obligation. That did not increase my calls. So I stuck with just the letters.

When I got a person interested in me helping them by buying the house I would negotiate with the bank on a short sale. When it came close to closing I either sold the house to another investor or end buyer, depending on the condition of the house.

Because I got the info directly from the attorneys website sometimes I would get my letter to the owners before the attorneys sent their registered letters. Those conversations were very lively.

Now that I'm in Florida I don't do pre-foreclosures any more because the time from my first contact to closing can take several years.

I hope that helps.

Simon Stahl · Answer

Wow, this thread somehow took a weird and unexpected turn. First, pre-foreclosures and short sales are not the same! A pre-foreclosure can be listed as short sale and then it can indeed get complicated because you have to deal with the bank, but usually they are not.

There are two ways to stop the foreclosure: 1. you pay the outstanding amount and bring the mortgage current or 2. you completely pay off the bank and close the mortgage. Either way will stop the foreclosure process.

Now, if you mail to pre-foreclosure lists, you probably hope to buy the properties for about the amount that is left on the mortgage. If that is more than the value of the property, then there is no point in trying to buy it. I would not want to sell my house either for less that what I owe the bank.

For the original question about when to stop the mailings: I wonder about the same. I would try go from where you had the most success and try to adjust it somehow to increase the response rate. Let me know when you find the golden solution, I am also looking for it :-)

Johnny Kang · Answer

@Ben Smith

Hey I've done enough direct mail campaigns to know what it's like to not get the results you were hoping for, so I'm with you on that.

Just so I can try to give some pointers, can I ask why you chose pre-foreclosure list? I ask this (and I had conversation with someone else this week about it) because pre-foreclosures, from a transactional stand point are more complicated than properties with equity and the short sale process is usually a long one. Also, unless you've done short sales before, doing a short sale can be a little daunting without someone with experience helping you. On top of that, as you have mentioned, at some point, the list you have will be out of date. (all lists go out of date, but due to the fact that there's a possible inevitable pending court date, sellers might have a little more urgency than your general equity list. And yes, "possible inevitable" makes sense if you think about it for a second. :)

To address your main question, what class neighborhoods are you targeting? A class? BCD?

If you've been targeting A class neighborhoods, do a split test and send post cards to B, or C class neighborhoods and see if you get better response rates. Split testing and tracking is important so you know how to adjust.

And if you don't mind sharing what your post cards look like, I'll see if there might be things you can change. But if you want to keep that private, that's totally fine. Ask someone you know, if they were in foreclosure and got your post card would they call you?

Michael Haynes · Answer

@David Dachtera, Thanks for the comment. The pre-foreclosure listing thing sounds like a waste of time to me. When I started studying 35 year ago on how to make money at home, it was always pointed out that "Selling Information," was the the number one way. The idea is to print pamphlets that solve problems that people have. The age old one is how to have a washboard stomach or how to lose weight. You have a series of steps to follow for your advertising scheme and it starts with local Penny Saver type Flyers that allow you to place an ad for FREE. You try many different problem solving pamphlets that cost a Dollar or more. The theory goes like, "Do you know how to make a million dollars?" "You find something that everybody wants that you can sell for a dollar and just sell a million of them." 7Elevens do that every day. That is where your testing stage starts. The pamphlet that gets those checks coming into your P.O. box is the one to expand on. There are hundreds of these FREE ad publications available across the country. You can get lists of them and put ads in all the States for cheap pamphlets that solve a particular problem, just send a check with postage to my P.O. box. From there you can get TV time on Public Broadcasting stations and from there are all the Infomercials that you see after midnight that are cheap to pay for. That's where Carleton Sheets, who started here in Tampa, Florida on Davis Island got me interested in Low and No Money Down. Carleton had the longest running infomercial in the business. I bought his course which I still have. We live on the Hillsborough River across from the Lowry Park Zoo and there is a hill from here that runs up to Waters Ave. I just noticed that on top of the hill, next to the new WaWa gas station, a local Wholesaler has his face and ad on the a huge billboard with Sell Your House for Cash etc. This last two years the Wholesalers here have polluted every street corner in town with the 1x2' white plastic signs on the ground with their ads for all kinds of houses for sale for cash...investors special...fixer upper...house with mother-in-law apt...you name it. They include their phone numbers and sometimes the web site. You can look them up on their web sites and get the weekly lists of properties that they have to offer and some of the ones a couple of years ago, that interested me in my neighborhood, have been rehabbed and look great. Most of the signs advertise properties on the East side of Tampa which I consider the War Zone. But, they have ways of snatching up distressed properties for cheap and flip them without any fixups. That's what confuses me about pre-foreclosures. If your ending up buying for Retail from the Bank, then, what is the sense? A Flipper has to be looking for distressed properties, selling for cheap. Cheap to me is 50% of Retail which I consider a good Auction property. Your supposed to Buy something with the Profit already priced into the Deal...not be a Retail buyer who has to fixer up and rent for the Buy and Hold and Hope that in ten to twenty years you realize some kind of Equity Appreciation. That's a waste of time unless you live there and sell it tax-free as your Residence after buying it for cheap. You can try to buy properties for Low and No Money Down, but, that takes a lot of work like the original thread talked about with all the problems of Lists. Do all the List guys see that as a way to gather "the Low Hanging Fruit?" Got to be another way because there are so many Wholesalers with cash deals here in Tampa and where are they getting all those properties for cheap?

Johnny Kang · Answer

@Ben Smith

Yes, that might be a niche market not too many people are tapping into.

I would make "Headache" the same size font as your 1st line "Is Home Onwership Becoming a Headache?" and make "We Buy Houses For Cash" bigger to avoid people thinking it's for a headache specialist, as you said. lol (You don't want a marketing piece that causes confusion at the subconcious level)

Post card looks ok, but the house on your site's landing page is a bit on the dark side... As in something you see in a horror movie... Sorry that was the 1st impression I got. :)

Google "we buy houses" and see what other sites look like. Pick up some themes or ideas you like and incorporate it to yours.

David Dachtera · Answer

@Ben Smith,

I understand your thinking on your target recipients, but the truth is people in trouble tend to go into denial as a coping mechanism. "What? I'm a little behind. I can catch up if everything goes my way." ...which, of course, it never does.

@Michael Haynes,

In a nutshell, pre-foreclosure technically begins on the due date of the first missed payment. Most lenders declare a loan to be in default after three missed payments, though the Notice of Default / Lis Pendens (depending whether or not you're in a judicial foreclosure state) may not be recorded for some time thereafter. Then, the "pre-foreclosure" status of the property becomes public knowledge. Until then, it's only known to the lender and the home owner. Some time thereafter, the lender will arrange for the property to be sold at auction and issue public notice of that at the appropriate time. The actual foreclosure occurs when the property is sold at auction.

That's the short-short version...

Tax sales are a whole other animal...

Ben Smith · Answer

Thanks for the responses everyone!

@Johnny Kang I chose pre-foreclosures with equity just because I figured there may be a sense of urgency to sell with some folks and also there may be a chance that they have equity and we could come to some kind of an agreement. No other reason really. I didn't want to start with absentee owners just because I figured a lot of people probably start there and they probably get the most mailers.

The areas that I'm mailing to are more along the lines of B and C class neighborhoods.  I could try to dial in different areas with different mailers. Though with so few responses I think it would be hard to see a trend.

I also wanted to see what people might say about putting your website on mailers. I feel like I could miss out on leads from people that might "take a step forward" by going to my site but don't actually input any info when if their only option was to call me, I'd at least capture that response data.

Michael Haynes · Answer

@Ben Smith, Hello I am a bit confused at how the pre-foreclosure process works. My girlfriend has her house on top of the hill at Rivercrest Park that is  listed for sale.  Two houses East from her house is a pre-foreclosure at 4701 N. Clearfield Ave. that is noted on Zillow.com. with a blue dot. You can look anywhere with Zillow.com and find blue dot houses in pre-foreclosure status. So, here you have a property that may interest you for some reason and now you want to get in touch with the Bank? Lawyer? Mortgage Company? The deadbeat owner who hasn't paid the monthly payment for three years? Zillow.com says that it is worth $171,000...what a joke. This is an example of what I am seeing with the national search for properties that have numbers that work, but, may be total wrecks like this 2/1 house. This place is in shambles in our beautiful neighborhood. They bought the place for 37K and somehow got an Equity Loan for 80K or more. Now, the bank is owed $135K or more and it is almost in Foreclosure? There was supposed to be an Auction two months ago and we did not see any auction that Saturday. I think the grandmother still lives there and she asks the neighbor for advice, but, cannot afford to get a lawyer or pay any money at all to the bank. The bank makes like they are going to do something, but, if they show all their non-performing loans that are on the books, they would have to declare bankruptcy or their stock value would plummet. So, they are allowed by the government to hide all the houses that are not paying the mortgages. At Auction I was told that the bank will not let the properties be sold for less than the amount owed. No one would pay more than land value for that house, which can't be more than $50K and the bank won't sell for that price. That is why it is hard to pick up properties for cheap at the Tax Lien Certificate sales. There are groups that would pay for the chance to own one of those properties by bidding down the interest to zero and with a Foreclosure Sale in three years the bank would step in and buy it back? From my point of view you have to have someone in the bank to deal with and go around all the bureaucracy and lists and postcards if possible. Don't the lawyers who handle the Foreclosures, self deal to their friends all the good properties? Find one of them. The Mayor and all the politicians meet at one of the Social Clubs once a month to show their contacts where the new roads are going in and the next baseball stadium and extension to the toll road to have the big guys buy for cheap before new developments get started. You have the money to buy some farm land out in that direction and ten years from now the highway goes through and you make a housing development or own the four corners where the gas station and pharmacy or shopping center will be built. We wondered this last ten years when the "war zone" houses were being burned down in Ybor City and now you see that the termite infested, wooden, wrecks were burned for the insurance and new homes were built next to better ones that were rehabbed and the old Cuban cigar center took off again. How do pre-foreclosure houses work? I get postcards and all kinds of letters every day, offering to buy my CG half acre on the highway near the AFBase. They sent me an offer to give me a fair price, in three days, cash for our home on the River and my 3/1.5 down by Old Port Tampa. Why? They won't give me half of what they are worth Retail. I owe money on all three and there is no way I would sell for less than I owe and take the hit when I can sell them all for a profit. I take the handwritten, buddy letters and the machine typed and the offers to help me out of my misery and pay cash in three days etc. and throw them in the garbage. If you read some of them, they come from out of State. I live in Tampa, Florida. Why would a guy from Billings, Montana be interested in a house or property that they have never seen and don't live next to? I do not have an education in real estate numbers. I do not understand most of the alphabet soup of terms that I see you guys use when talking on BP, so, I Google Search for them and read about their meanings, which does not do anything for me to make money with RE. I watch the guys on Shark Tank and Mark Cuban and wonder where was I when they taught about all those ways of making businesses work? I trade Futures and the idea is to Buy Low and Sell High or visa versa, on any time frame that you can understand. Kind of like if you are a Market Maker and you Wholesale properties that you picked up for less than half price, some how and are dealing them to the...Flippers who buy the Corn or House for one higher price and do something to it to sell it at a higher price which may not even be Retail. There are the Investors who want a Buy and Hold for Equity Appreciation over the long term who really take on the Risks and sometimes, like me, are able to sell some properties at a profit after renting them successfully for ten years or more. So, there is a pre-foreclosure near to my girlfriends house that we just lived in for ten years, that she refied down to 3.5% and accelerated the paying down of the Principal, who now wants to sell that property at a little tax-free profit as her residence and  we moved to one of our rentals where we plan to do the same in five years or more. How do you offer to buy that pre-foreclosure for land value when the mortgage is $100K more than that?

Robert Wilson · Answer

Take what works... And do more of that.

What one small thing could you improve with your 2nd mailer to make it convert better?

When Do You Stop Mailing to a List

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