If you can't beat 'em, join 'em?

[Kyle McCorkel]

So I've been direct mail marketing for about a year now.  I've had pretty bad results, but this post isn't necessarily about that.

I've come to discover that for nearly all of my "decent" direct mail leads I'm getting outbid by the same company, consistently. I'm analyzing all these leads as either a flip, or a BRRRR, so obviously I'm trying to add value.

Here's an example from an actual lead:

ARV of $290k

Estimated rehab of $70k

MY Offer price = $150k

So, I've found out that this other Central PA company always outbids me on these properties, close on the deal, then immediately list it on Craigslist/Zillow/FSBO marked up like crazy (without putting any work into it).

For the example above, they bought the example above for $175k and then listed it FSBO for $250k!!! They just put in the comments "needs a little TLC". I don't know who ends up buying these properties, but I'm assuming they are homeowners who don't care about making a profit or newbie investors who don't understand the numbers.

Has anybody else done this, or run into this type of situation? How can I compete against this? Or should I just start playing the exact same game?

I'm half-kidding about playing the same game - it seems like this strategy would only work in a market with tight inventory where buyers are willing to buy a property "needing a little TLC" but if the market turned it seems like they'd be stuck with a lot of properties and not a lot of equity (and not a lot of buyers).