Direct Mail Criteria For Up and Coming Neughborhood

[Ryan York]

We have our sights set on a neighborhood we feel will start to grow significantly within the next couple of years. Has anyone had success marketing to a neighborhood like this? I would currently classify the city as a C neighborhood. Decent schools, not great. Above average crime, but declining. Bars and upscale restaurants have started moving there. 

We'll be using postcards to start. Looking to hold onto the properties for at least 3-5 years. 

[Ray Lai]

@Ryan York

You just described a quintessential gentrification play and want validation on your strategy - based on everything you said it sounds good so far as it is a great target. Make sure you also analyze the economy of the region and it's creating jobs and that it's not based on anecdotal evidence of the area being hip. Also note that in C neighborhoods it's harder to attract high quality tenants so project a higher vacancy rate.

Postcards are a good start for you. How many houses are you going to mail to?

Yellow-letters typically have a higher response rates. However, postcards are cheaper.

Pro-tip: Use 1 batch of postcards first and then switch to yellow letters. Why? Postcards will bounce and save you a lot of money from mailing a bad address.

Pro-tip #2: Your campaigns will typically yield a response rate of 0.5-2% (typical but depends on the quality of your campaign). If you're a first mover, it may be higher.

Pro-tip #3: Make sure your market size is big enough (at least 200 targets) and that you can sustain a campaign for at least 4+ mailings. First couple often get thrown away.

Pro-tip #4: How do you improve your response rate? Split tests and tracking your results. There are many things to try from code violations to unpaid taxes. In general, people with more equity (typically older home owners) are more likely to yield deals. But you need to test between all these different types and see what works best for you in your market (driving for dollars/absentee, probate, etc.)

Just some important things to think about. Add me if you want more info on direct mail or just want help in terms of fulfillment that is scalable and price effective.