Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
In the past all of my direct mail has been to high equity Absentee Owners. I started with yellow letters but found that Postcards really work best to reduce tire kickers and promote motivation.
I am trying a new list and I'd like your opinion on what is the best form of direct mail.
I have a list of 1800 owner occupants, age 65 and over, 70% equity or more and only in the prime zips.
I am thinking because of the higher end area that a typed letter is best, but what is the best message for this group?
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
8y
In a competitive market (as we have today), real estate investors typically buy distressed property for what it is WORTH in its current condition. If you buy a house that has not been updated since 1978, has foundation issues, and a bad roof, you're not paying "far less than what it's worth" if you pay a price that allows you to (a) purchase the property - which ties up your capital, (b) make $30,000 of improvements - which ties up more capital, and (c) ultimately sell it at a retail price so you can make maybe a 10% net after the smoke clears. The people that think this business is about giving people "less than their house is worth" are likely not real estate investors at all, because those of us that do this know we're in a very competitive stage of the RE market and no one is giving their house away. If you are someone that tries to trick seniors into a bad deal, that is not real estate investing - that's just trying to screw people. We most often see that with "wholesalers" who have no idea what houses are worth. Actual cash buyers that do these renovations know that this is competitive business with tight margins and no "easy money" or idiots giving their houses away. If you take advantage of someone, you need to own that - don't put that on the hard-working, honest, ethical investors who are trying to make a big while turning distressed properties into nice homes worthy of a retail price. YOU ONLY GET TO "ARV" IF SOMEONE DOES THE "R".
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Just wondering as I saw your other post on direct mail. What makes you think this is an active market at all? I'd think over 65 folks have already got their ducks in a row in higher valued homes that have equity.
If they have equity, they got it two ways, either dumped cash in for the purchase or they've been there for some time. Either way, seems they aren't to motivated to sell just because they are 65.
I'd think the moving and planning years are younger, 59-62ish, they know 65 is dead ahead and they are usually planning for retirement.
Folks I know at 65+ in nicer homes have no intentions of going anywhere.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
I have never used direct mail, but if I were to, I'd not use a shotgun approach to a thinly defined target market.
The letter would be typed, professional, short and to the point.
It would target the home in a value range, area, equity amount perceived and target some motivation.
Mr. Smith,
Congratulations on your recent promotion with Anderson Accounting to Senior Partner. I'd like to contact you about purchasing your home, assuming you may be interested in acquiring another home in the future.......
Or,
you've achieved your goals moving into retirement and often that means a lot of financial planning. If you're considering moving into your dream home, I would like to speak to you about buying your existing residence......
IMO, before I seek any business relationship with a client or customer, they need to be in a position to be a customer not a suspect but a prospect.
Direct mail is fishing. Go trolling and see what bites. They are, at best from any mailing list, suspects. There is no basis for any motivation for them to act, they may not be in the market and they may not qualify to move in any business relationship.
Talking to qualified prospects who have some motivation to act is more productive and use of your time and money in developing customers.
It's all about the numbers, 50 suspects may yield 1 good prospect, it may take 4 prospects to get 1 client and it may take 3 clients to get one closed transaction. Probably best case, that could be 600 fishing trips to get a closed transaction. Your numbers may be different.
Point is, my letter would be addressed to more qualified suspects containing specific information about them.
What could motivate a seller to change their living situation?
Graduation, new baby, job promotion, job loss, retirement, death of a spouse, inheritance, divorce, incapacitation of a family member, as personal influences then property influences: Zoning changes, rates of appreciation or depreciation of mature neighborhood (rentals moving in) property condition, external factors such as the announcement that the air port is changing flight paths, new factory causing increased noise or traffic conditions, or positive factors that increase values to capitalize on.
So, my letter would address these matters as a reason to act and consider selling (or buying). :)
We actually do a lot of direct mail, and I'm actively testing very similar criteria based upon a suggestion made by Michael Quarles, who has done a LOT of direct mail. But sending carefully designed direct mail pieces to a specific demographic (age, etc.), equity range, home type (3/2+), and price range is hardly the definition of "shotgun approach", from a marketing standpoint. In fact, that is extremely targeted and the reason it might NOT work is because it is SO targeted and you might find that that target group is not receptive to your offer.
Shotgunning is stuff like EDDM (Every Door Direct Mail), door hangers, billboards, bandit signs, etc. I prefer to have about 60-70% of our marketing spend on highly targeted methods and 30-40% on more general (i.e., "shotgun") approaches.
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
12y
To address the original post, we're going after the group with direct mail pieces that emphasize that we are PROFESSIONALS, that we purchase houses with NO REPAIRS REQUIRED, and that there is NO OBLIGATION to get a cash offer from us.
Birmingham, AL · Member since 2012 · 115 posts · 28 votes
11y
@John Horner I know this is an old thread but I was curious as to what your results were mailing to this group and what letter you ended up using. I ask because I was thinking about marketing to this demographic as well and wanted to know if it is worth my time.
@Dev Horn What about you? Did you find any success mailing to this group?
@John Horner I know this is an old thread but I was curious as to what your results were mailing to this group and what letter you ended up using. I ask because I was thinking about marketing to this demographic as well and wanted to know if it is worth my time.
@Dev Horn What about you? Did you find any success mailing to this group?
My results were very poor. 1 postcard to 1800 names and I got 2 calls back. I sent a yellow letter as a second round and I got 6 calls. I have not sent another. This list was worse then the inheritance list from Lance. Lol
Birmingham, AL · Member since 2012 · 115 posts · 28 votes
11y
@John Horner Holy Smokes those are atrocious numbers! Thanks for the update because I was wondering if I should try and market to this group and your results are telling me with a loud and emphatic NO! What list has proven to be best for you?
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
11y
This group (sr. citizens) has produced for us, and we're actively mailing to it (usually every other month) in several markets. but yeah, the best group is absentees with at least 50% equity....
I'm actually developing a new postcard just for the Sr. Citizen. I think it's a group like probate where you don't get a lot of early activity, but instead you are rewarded for building awareness with them over time.
This group (sr. citizens) has produced for us, and we're actively mailing to it (usually every other month) in several markets. but yeah, the best group is absentees with at least 50% equity....
I'm actually developing a new postcard just for the Sr. Citizen. I think it's a group like probate where you don't get a lot of early activity, but instead you are rewarded for building awareness with them over time.
Good stuff Dev, thanks for the insight. Funny I just got a call today from an owner occupied list that I haven't sent to in 6 months, but now they are ready to sell and very motivated. I will certainly keep this in mind for other lists as well.
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
11y
I have a postcard that has a tear-off business card - that can have a life way after the mailing.
On letters, we like to include a phrase like this at the bottom: "Please file this with your real estate records and contact us when you're ready to sell."
You'd be surprised how many people do that. The power of suggestion, I suppose.
Rental Property Investor · San Antonio, TX · Member since 2014 · 44 posts · 14 votes
9y
I know this is an old post, but I'm about to begin my adventure in direct mail. I own 5 rentals and doing 1 flip currently. I'm looking for more flips, but the best ones are kept by wholesalers...go figure. The plan is 7 drips, one every 2 weeks (too aggressive?). Mix of letters and post cards
I'm about to go down to the court house and sift through the probate records in 6 different counties. I plan on making this a monthly endeavor. I wish they'd put these things online. Name, property address, estate rep address. Anything else? Please tell me there's an easier way!
I'm also doing an absentee campaign, 6 counties (again) focused on the 60~80% equity market, $200~$500K range. I feel that's pretty focused, and for 3 counties surrounding Baltimore. I'm getting just over 1500 records from ListSource. Not sure if that's a good number to start with or if I need something larger.
This group (sr. citizens) has produced for us, and we're actively mailing to it (usually every other month) in several markets. but yeah, the best group is absentees with at least 50% equity....
I'm actually developing a new postcard just for the Sr. Citizen. I think it's a group like probate where you don't get a lot of early activity, but instead you are rewarded for building awareness with them over time.
Dev, I was wondering (now that it's been another year) how marketing to Seniors with equity is going? What are messages that seem so work? Just about to start my first direct mail campaign. Thanks!
Dev, I was wondering (now that it's been another year) how marketing to Seniors with equity is going? What are messages that seem so work? Just about to start my first direct mail campaign. Thanks!
Hi Joe - good question! In general, marketing to owner occupants is a harder field to plow than marketing to absentee owners. As competition among local investors has increased over the past few years, we've seen response rates to direct mail decline in most larger markets. In addition, due to increases in property taxes, homeowners are well aware that the value of their home has increased, and that (plus the beloved Zestimates) has led some to expect even more than the home is worth. This combination of higher expectations by homeowners and higher competition among investors has led to a very tight market in many areas. So, REI marketing in general is much tougher than it was 1, 2, 3 years ago - regardless of which type of advertising you're doing. We still prefer to go first after absentee owners before owner occupants (OOs), and we still prefer senior OOs compared to non-seniors. You might find a good intersection in absentee owners over 60 years old with a length of ownership over 15 years. All that said, we see direct mail still performing in all but the most overheated markets, but the marketing cost per deal has risen substantially in the past couple of years.
Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
8y
Dear Geezers,
You've worked your whole life to pay down your forever home, and I'd be very happy to pay you far less than what its worth so you can move into a retirement home or burden your loved ones with your presence!
Please dont do any market research or look at your tax appraisal value, you can trust me! I want to "help" you with the huge weight of living in your very own paid-off (or nearly paid-off) home. Pets? No problem, the county has a shelter!
Years of memories? No more, they can be replaced with the sterile (yet somehow poop-smelling) confines of a brightly lit commercial building and the loving care of underpaid surly attendants.
Investor · Portland, OR · Member since 2015 · 73 posts · 14 votes
8y
Originally posted by @Account Closed:
Dear Geezers,
You've worked your whole life to pay down your forever home, and I'd be very happy to pay you far less than what its worth so you can move into a retirement home or burden your loved ones with your presence!
Please dont do any market research or look at your tax appraisal value, you can trust me! I want to "help" you with the huge weight of living in your very own paid-off (or nearly paid-off) home. Pets? No problem, the county has a shelter!
Years of memories? No more, they can be replaced with the sterile (yet somehow poop-smelling) confines of a brightly lit commercial building and the loving care of underpaid surly attendants.
Sincerely,
Mr. Smiling Real Estate Investor
LOL. Perfect! Does yellowletters.com have a template for this message? Thanks for the laugh.
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
8y
In a competitive market (as we have today), real estate investors typically buy distressed property for what it is WORTH in its current condition. If you buy a house that has not been updated since 1978, has foundation issues, and a bad roof, you're not paying "far less than what it's worth" if you pay a price that allows you to (a) purchase the property - which ties up your capital, (b) make $30,000 of improvements - which ties up more capital, and (c) ultimately sell it at a retail price so you can make maybe a 10% net after the smoke clears. The people that think this business is about giving people "less than their house is worth" are likely not real estate investors at all, because those of us that do this know we're in a very competitive stage of the RE market and no one is giving their house away. If you are someone that tries to trick seniors into a bad deal, that is not real estate investing - that's just trying to screw people. We most often see that with "wholesalers" who have no idea what houses are worth. Actual cash buyers that do these renovations know that this is competitive business with tight margins and no "easy money" or idiots giving their houses away. If you take advantage of someone, you need to own that - don't put that on the hard-working, honest, ethical investors who are trying to make a big while turning distressed properties into nice homes worthy of a retail price. YOU ONLY GET TO "ARV" IF SOMEONE DOES THE "R".