What do you send in your direct mail?

Question

Hey BiggerPockets Family! I am sitting here as i assume many of those on these forums overthinking about another topic. This is my first time doing a direct mail campaign. I am going with hand written letters and wondering what some of you have seen success with/recommend?

Thank you!

Jill DeWit · Answer

Hi @Roberto Sembiante,

Direct mail to sellers (houses or land) works great and super impressed you see the value. We too, want to "get there first"  - before anyone/agent gets involved.

Here is what we do:

Select an area/zip/house type/mortgage %/whatever we want to target, and use DataTree (best for houses we have found) to download ALL the ownership & property info.

Then, we scrub out any anomalies and strategically price the assets to create offers between about 65-75% of $/sq ft of what is selling in that area. Once you set that price it is easy to run down the whole spreadsheet at one time. (something like all the 3/2 with no pool will be offered $148/sq ft)

From there we merge that data (mail merge) into our letter + purchase agreement, mail, & wait for the serious sellers to call us back.

Sure there is more to it - but that's the idea. We send so many, impossible to hand write, and volume is important. We yield 1-3 deals from every 3,000 house offers AT OUR PRICES.

Hope that helps!

Jill

Jill DeWit · Answer

Excellent questions!!!

I see where you are going @Steve Morris, and I am not a fan of those types of wholesalers as well. They actually gave that word a bad reputation so I don't even use that term any more. I run my operation VERY differently and that is a big reason why sellers love me.

Here is how I do it in response to your comments:

1) You won't be the person actually taking title  I DO take title, pay 100% closing costs to seller because whatever price we agree upon is net to them. I take the leap and buy the house outright. (Actually I have posted examples as proof of this on this site in the past to show my name on title, etc., but I think admin pulled them down.)

2) When you sent the offer over that you didn't know who that person was I know exactly who the seller is and my letters are professional and personalized. Actually I spend a lot of time on the front end picking areas, houses, & pricing.

3) The reason you wrote the price you did was because it was below market to allow enough for you to insert a fee and allow the unknown buyer to make a profit Yes, I am absolutely offering a cash price based on a % off of what is available for sale in the area because I am seeking out run down assets that flippers can do amazing things with. My sellers know they can do all the work to clean it up, remodel, & list with an agent and go for top $ - but they would rather cash out fast. I then mark it up a small amount (don't be greedy) & resell to a flipper or end user. My flippers/buyers love me as they are still getting a house for less than market rate - and they come back for more!

4) That you're not a licensee, however, you expect to make a fee off the sale. Correct. I let the planet know I am the investor, I am not representing anyone, it is my own money and that is why I do not have to be licensed. (Kind of like anyone can sell their used car online - you don't have to be a car dealer.)

5) That since you don't really have experience that something may go sideways and you may just walk without penalty Since we are acquisition machines with close to 16,000 completed transactions, we have the experience. And I am 100% taking all the risk so if it all goes sideways, I could have overpaid for a house & loss is on me.

6) That you are putting $0 at risk in this transaction. Same answer. I am 100% at risk. It's my money so I do a ton of homework before I buy a house. I am not a fan of borrowing, so I currently keep the transaction cost to an amount I can pay cash.

You wholesalers have a really distorted definition of being honest. I know others have done this all wrong and really given my business a bad rap.

Jill

Steve Morris · Answer

"Totally important to always be up front and honest."

OK, so that means you're disclosing:

1) You won't be the person actually taking title

2) When you sent the offer over that you didn't know who that person was

3) The reason you wrote the price you did was because it was below market to allow enough for you to insert a fee and allow the unknown buyer to make a profit

4) That you're not a licensee, however, you expect to make a fee off the sale.

5) That since you don't really have experience that something may go sideways and you may just walk without penalty

6) That you are putting $0 at risk in this transaction.

You wholesalers have a really distorted definition of being honest.

Jill DeWit · Answer

Totally important to always be up front and honest. They typically hug me for making it so fast and easy for them to cash out that it is worth it to them. (And I do send out a ton of mail to find these deals.)

Kind of like selling an old bike at a yard sale. I KNOW I can tune it up, get new tires, paint it...

But I'd much rather let it go for less today & get it out of my garage than do all that work.

Steve Morris · Answer

Most sellers don't know that you're probably selling it below market price also.

Then again, there's that pesky disclosure thing isn't there?

Jill DeWit · Answer

Exactly. Our cover page introduces us, explains how we go their information (legal & public assessor data), and how we complete the transaction.

Most sellers LOVE the fact that no commission $ paid (savings to them), cash close, no need to hold open house or remodel the kitchen, etc.

Steve Morris · Answer

What end goal are you trying to accomplish with your letter?

If it's to buy something, you may want to emphasize your legitimacy and funding sources to consummate a deal.

What do you send in your direct mail?

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