Sent out direct mail for leads, what happens next?

Question

I am new to direct mail, and I have always purchased with an agent through the mls. I just decided to start my first direct mail campaign (very small - about 350 sends). Now, I am realizing I don't really know what to do when/if I get calls back.

I am planning on purchasing 1 property in cash to start. But, I don't know how to write a purchase contract, work directly with an escrow company, etc. Can I get a real estate agent involved- if so, what's the best way to do this? Also, what is reasonable to ask of a potential seller who responds to my mail? Can I request an in-person walk-through of the property? Can I request an inspection? What is typical/ what is possible? Do you ask for photos of the property? How do these conversations go?

Any advice would be much appreciated. Also, if anyone is investing in Humboldt County in California and wants to connect, feel free to contact me.

Lee Ripma · Answer

@Eli Kallison

I’m an investor and I’m also an agent. I do some off market deals, a lot more than your average agent. I find that wanting to use an agent by an off market seller goes up as the property price goes up. In LA I find that sellers I buy from directly often want to bring in an agent to represent them. In Kansas City sellers are much more likely to work without an agent. I attribute this to a couple of things: 1) LA vs KC is a major price difference, LA is actually about 10x more expensive. 2) culture, in KC people are generally honest and trustworthy, much less true in CA. 3) litigious culture, related to 2 but generally more litigious in CA.

I knew how to close my own deals before I ever became an agent and had already done off market FSBO deals.

My advice is to work with someone who knows how to close deals. Lots of people know how to close deals, doesn’t need to be an agent. Also know the culture. And lastly don’t think that because something is off market it’s a better deal, that’s very often not the case.

Lee Ripma · Answer

@Eli Kallison

I’m sure you can read a book on it. Find a local escrow company and ask them for a FSBO contract. It has all the steps. Closing a deal isn’t that hard. It’s knowing what due diligence to do. You’re better off doing the first one with someone who knows what they are doing and what they are looking at. Otherwise you might be the sucker who bought that 1890s house with a zillion problems he didn’t know to check.

Account Closed · Answer

Here is something to think about: your mailer and especially the list play a major role in the success of a direct mail campaign. I once sent out 5,000 post cards, nicely designed and got zero phone calls. I've also sent out sloppy postcards and on 1,000 mailers closed 2 deals. Why? Who knows, but "Nice" doesn't seem to sell.

If you involve a real estate agent, they will naturally want to get paid. Of course you do a walk through. You can't buy a house (wisely) that you've never seen. You can have an inspection done, but over time you will do your own inspection. Remember,they are talking to you because you offer a FAST sale with NO hassles.

Initially, it is best to team up with someone experienced in doing what you want to do.

Alex Olson · Answer

@Eli Kallison I think for your first few deals work with an agent that knows what the hell they are doing and learn from them. Then you could go in without an agent if you feel comfortable however, you will rarely overpay with a buyer's agent but you have to find good ones and commit to them or they will leave you on the dust as time is their most valuable asset.

James Wise · Answer

If you're not doing a high level of volume there isn't any reason to spend the time and energy on a marketing campaign. Just hook up with a Realtor and purchase something that's listed on the MLS. If/When you start doing volume that's when you'll want to develop a marketing arm for your business.

Eli Kallison · Answer

@James Wise there are hardly any homes listed for sale in my area, and no great deals on the MLS right now. It's a relatively low population rural area, which is why I was motivated to start a direct mail campaign.

Eli Kallison · Answer

Thank you all for the advice. It definitely sounds wise to do this with an experienced partner, although I wanted to get started and get my feet wet (strategically).

When meetup groups start up again in my area I will start to reach out to people.

For now, I am probably on my own. Are you willing to give some details about how to close a deal? Any advice for steps along the way?

Patrick Ahrens · Answer

Eli, all great questions.

My question is:

What is your expectation of each of your questions?

Sent out direct mail for leads, what happens next?

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