Direct Mail Tire Kickers

[Tom Scott]

My first direct mail campaign is now beginning its' second month. As expected, most of the calls that come in are folks that just want to know what I am up to. They throw out huge numbers for their properties and hope I'm dumb enough to take the bait. So my question is, other than that first phone interaction where you find out if they are serious, is there really any use in doing any real research and following up with these people (i.e. making a formal offer)? 

I think it's generally pretty easy to tell they aren't seriously motivated within a few minutes on the phone and then when they throw out that number that is 40% higher than market, or refuse to give you a number at all, it would seem a forgone conclusion that no deal is to be made with that particular individual and that I should just cut bait and run. Thoughts? 

Tom

[Dev Horn]

Real estate investing does not work based upon offering 70% of FMV (Fair Market Value).  That's just LOW-BALLING.

The "REI Formula" is OFFER = 70% of ARV (After-Repaired Value) - Repairs

The best house for REI is a crappy house that needs a lot of work. It generally will not sell on the retail market (MLS). Most people will not touch it because of all the work it needs. If we pay cash for that house, the buyer in effect got FMV because that's all someone is willing to pay for their crappy house.