listsource.com statistics and cost analysis

[Matthew Trotter]

So, I just discovered listsource.com and how detailed you can make your lists of homes to direct mail. Very excited! My goal is to buy rental properties, and I was going to simply use an agent... but I found that the cost of using listsource may be much much cheaper. Here's my cost analysis:

• Costs:
  • Purchase a list of 3000 names and addresses from listsource: about $500.
  • 3000 envelopes: $114 (Amazon)
  • 3000 stamps ($0.49 each) : $1470
  • Total: $2084 or $0.695 per address

Now let's say that, after you send out letters to all 3000 addresses, 5% of call you back. Then, let's say that you visit the properties of 33% of those callbacks. And let's say that you buy 20% of the properties you see. These numbers are up for debate, but I think they're okay.

• Breakdown:
  • 5% call you back: 150 callbacks
  • go see 33% of callbacks: 50 properties seen
  • buy 20% of properties seen: 10 purchased properties
  • unit cost: $208.40 per purchased property
  • vs. agent: 3% of purchase price (usually to the seller, but still affects purchase price)

After reviewing these numbers, I am simply floored by how inexpensive it is to do this. If I get my listsource criteria just right by targeting only homeowners in my target market and no one else, then this can be very lucrative.

Has anyone done this specifically to purchase rental properties for themselves? Would love to hear your experience. I might have missed some costs as well.