Direct mail works - if you have the right list

[Jean G.]

Hello,

I recently tried direct mail for the first time, to try and drum up some deals as they are more and more difficult to come by, and wanted to share my experience. The bottom line is that, as with most of the things we learn on Biggerpockets (in this case I heard a few interesting podcasts on the subject), it really works in the real world, you just have to do it!

So here is what I did: I decided that I wanted to market for small multifamily properties (8 to 100 units), because those are more attractive to me than single family homes in terms of cash flow, hence a better use of my marketing budget. Also I assumed that these received less mail from other investors.

So I went on ListSource.com, I created a list of properties with over 8 units, and focused on more rural areas within a few hours drive (again I suspected that those would receive less mail than metro Las Vegas, so more bang for my buck). I narrowed it down to about 300 addresses which I thought was a good sample size for my test.

I did a quick spot check on the list and it seemed to indeed include the right types of buildings.

Then I decided that I wanted to send a formal printed letter on white paper (not handwritten and not yellow), but that I wanted the letter placed into a handwritten envelope with a real stamp. I also added a picture of our family on the letter, to make it more personal, a tip I heard on a podcast. I used Gobigyellowletter.com who was able to provide the combination I wanted (printed letter, handwritten envelope, real stamp) and off we went.

The cost, including the list, came to around $350.

Letters went out with a few clicks, and a few days later, I started getting phone calls! 

So far I got a total of 17 calls, which comes to almost 6%. That's much higher than I expected, specially considering that my target addresses are not distressed or anything like that. Note that my letters went out a few days before Christmas, I don't know if that affected the results positively or negatively.

However here is the bummer: 10 of the calls were from people looking to sell me a single condo, all of them from 2 specific condo complexes. As it turns out, my list somehow caught these condo owners. The way they are populated in the Listsource database probably shows multiple units because of the complex having many units, yes the parcel and its owner are a single unit. These condo owners are the most eager ones to make a deal, but I don't usually buy condos, so I ended up having to tell each one that my letter reached them by mistake, which didn't make me look like I know what I'm doing. And a portion of my marketing expense ended up being utterly wasted...

I'm working on some ideas to prevent this type of list problem in the future. One idea would be to sort the list by property address, and take a close look at any addresses that repeat multiple times (those would likely be condo complexes).

But the bottom line I want to get across to everyone is: direct mail works. Test it, refine it, scale it and get some deals!

Jean