Marketing (Yellow Letters ETC..) HELP!!!

[Matthew Rubsamen]

I have started a company here in Colorado and we have set out to "Flip Houses" which is not the issue. The "Flipping" part is simple, more difficult is finding DEALS! We used www.yellowletters.com and mailed out 1000 letters to non-owner occupied home owners with 0-60% LTV (some equity).

You wouldnt believe it... we got about a dozen calls from uniterested parties! Has anyone had a better outcome mailing to OWNER OCCUPIED versus NonOWner OCCUPIED???

What are some other ways you have gone out and found deals. I am literally driving around and mailing to homes that look run-down/distressed etc!

[Bill S.]

@Matthew Rubsamen so I'm a bit late to this. I'm not in your market but I have relatives there so I have a bit of understanding of the nature of real estate where you are.  Here are my thoughts.

1) 1,000 letters is way to few to get a deal with one mailing. At a 2% response rate (20 replies which is really good in my market ) you are well below the threshold to get a deal. Newbies shouldn't figure on more than 1 deal in 100 replies and it's probably more like one in 150. You can do better than that if you get lucky but it's a one time thing. I mail 6K pieces per month and for the last 9 months have done 1-2 deals per month. That kind of gives you an idea of where you are. 

2) Your area is very expensive. People have money. Having money gives them options. Options means few people will lean on you to buy their property. The advise of most is to target the properties valued in the bottom 1/3 of your market. So mailing $1M homes will have a much lower success rate than mailing $100K homes with all other things being equal. Your area has most of it's inventory above the $500K mark.

3) Non-owner occupied homes are hardest to do because they are most heavily marketed to. The margins tend to be larger on non-owner occupied but there are few deals as well.

Having said all of that,

1) Keep mailing. It's a marathon not a sprint

2) Mail to more address. Target a larger area, target the lower priced homes. Figure out a way to get more targeted lists if you can't afford more mailings. Scour court records to find legal actions that may trigger a need or desire to sell. Evictions, HOA law suits, quit claim deeds, divorces, liens, lawsuits, taxes owed, code issues and the list goes on. It takes time to build those lists but your conversion rate is much higher. It's just hard to make your list large enough to keep steady deal flow.

3) Develop a more focused list as I mentioned in item 2

4) Add owner occupied to your equity list. The deals tend to be smaller (less equity) but the response rate tends to be better. 

5) Do the math backwards. Figure out how many deals you want and then back calculate how many mailings you need.

6) Direct mail works you just have to do it consistently. Every month for 6 months at a minimum. Targeted lists have the highest response rates. 

Perseverance is the by word.