How to get leads from mailers and what mailers work

Question

I have done a few flips of single family detached in the Denver metro area.  I don't want to buy deals from wholesalers. I want to find my own deals and buy direct from the seller.  I would love any help I can get or direction to great threads about this subject. My questions below are regarding using mailers - thanks in advance for your help!

My questions about mail campaigns:

1. What companies are you using and having success with?

2. What type of mailers are you sending and how much does it cost?

3. How often are you sending them?

4. What is the response rate and actual deal rate you've had?

5. Who are you mailing to?

6. Any advice would be very much welcome.

Thank you very much!

Owen

Jeff G. · Answer

1. Not really "hand written" yellow letters are awesome. Don't rely on them as your only mail peace though. Different people respond at different times to different mailers.

2. I use 99 cent yellow letters from yellow letters complete. They're wonderful.

3. Not as often as I should. Ideally, you're hitting your entire list every 6 months... but you've got to work up to that.

4. I've had a 4-7% response rate from my yellow letters. That's huge. Most direct mail gets sub 1%.

5. That depends.

6. Pro Tip: Always skip trace your returns (undelivarable) mail. You'll find deals no one else will by doing this one simple trick after every mailing.

Account Closed · Answer

You can get lots of information from your county assessor's office, tax collectors, and recorder.  If you're tech savvy you can put that info together yourself and identify some good leads.  Court records, code violations (especially when the code violation indicates if the house is vacant or not), and crime reports can identify good leads.

There are people out there who specialize in that sort of work, as well.

Ray Lai · Answer

@Owen Brumback

Welcome to BP and hope your campaign goes well. Since you wanted tips, this might help:

1) Attend your local REIAs and network, you need to build a buyer list of investors that will buy your properties and network with other people in our industry. Do not spend too much time on this but at least know a few guys at your local REIA that are actively flipping that you can sell to when you get your first assignment. 2) Next develop your strategy, build a list of at least 200 properties to mail to. Response rates are typically 0.5-2% so the bigger the list the better. Options include driving for dollars, absentee, probate, using listsource if you are not in a competitive market, buying lists that are exclusive for your market type  3) Start a sustained direct mail campaign. First batch with postcards using first-class, then follow-up with yellow-letters using standard mail. There is no point in starting if you cannot sustain because statistical data shows that responses typically occur after at least 3+ mailings. You want to use postcards first since they are cheaper and some may bounce so you can remove the bad ones off your list and skip-trace those so you do not waste money mailing to bad addresses. If you wanted to, you can even skiptrace the bad addresses to find where the owner moved and target the right address.   For fulfillment you can do it yourself to save money if you are broke, but ultimately if you want better response rates and focusing your time on value-add, then you will want to outsource fulfillment to a shop that has economies of scale and can offer you great rates.  Remember, a campaign usually does not get a response until 3+ mailings. A lot of newbies quit after 1 or 2 letters without realizing that people do not open the first letter they see. Focus and sustainment is the key. I would recommend a different marketing piece every 4 weeks for 5-7 months from past data analysis, but you should test this out for your market and see what works best response rate wise.

Also, when you become more advanced you will want to do split testing and other methods. You should always be tracking your response rates and seeing what lists work bests. It is always best to include a website and a local phone number on the postcards as well to maximize your responses.  Another protip: If you are in a competitive market, deals are harder to find however if you do find a deal, someone will be much more likely to split the profits and show you the ropes if you make a friend in the industry. It is better for them to get half the profits than no profits, and you gain invaluable experience as they take you through the process with them.

DO NOT go half-cocked and mail without having an understanding of the legal requirements for your area for assignment contracts. That is how you get in big trouble.

Another recommendation: If you want to make even better money, invest in yourself and become a licensed real estate agent. That way you can buy houses from distressed homeowners (wholesaling) and sell the homes in good condition for a nice commission. You also learn a lot like how to run comps and get direct MLS access which is nice.

Make sure you shop around if you are outsourcing your direct mail. Different shops offer vastly different prices, quality and service.

Account Closed · Answer

Part of the pricing depends on if you want exclusive leads or not.  Listsource will sell you, for 8-10 cents a lead, the same leads they sold to the investor before you.

Jeff G. · Answer

It varies, but ballpark 8 to 10 cents a lead. There are YouTube tutorials on how to find different kinds of leads, look there.

John Spina jr · Answer

@Jeff G. How much does it cost for those leads? I kind of find list source a little confusing maybe because it just seems like a lot of information to log into the criteria search. Im looking to get into my first flip. What would be the best method to apply to list source. Also whats your method when driving for dollars? I know you said that driving hasn't brought you any leads but lets say one same across that fit your criteria, would you just ring the doorbell ask begin to present yourself to the homeowner? or would your just leave a note in the mailbox?

Bill S. · Answer

@Owen Brumback here is my experience. I am not a big dog in this world so take my experience as a data point not the gospel.

1) I do my own mail and us a local VA for a small. I tried using one company and found it clunky and had no success.

2) I do one professional style letter and I do it for around $0.70 ea. I do know that the other advise regarding variety is good but I can't do that myself and I have had some success with what I am doing.

3) each person on my list gets a piece 1x a month for 6 months.

4) my response rate is around 0.5-1%. I feel like I average one deal every 6,000 mail pieces.

5) I won't share this in a public forum (no so much because I don't think there are enough deals to go around but because I don't want to muddy the waters and have the sources of my lists pull the plug because there are so many people requesting the information). I will say that it wasn't my idea and I got the idea for all my lists from public forum posts and several of them have already been mentioned. If you want to meet in person, I would be happy to share my approach with you.

6) the name of the direct mail game is volume, consistency and quality of list. A list the has names with multiple pain points will do better than one generated from just one criteria without any pain.

Jeff G. · Answer

@John Spina jr, if you want to buy a list go to ListSource. I started with absentee owners. You might find that too many people in your area hit that list. The next list is the 100% equity list. You'll find sellers AND cash buyers on this list. Also, check craigslist frequently for leads. You'll run into a ton of wannabe wholesalers but you'll find leads too.

I do occasionally drive for dollars. Mostly that's just an excuse to get out of the house and have a Sunday drive. I have never gotten a deal from driving for dollars, but that's fine, because I have gained something else valuable: familiarity with my local market that I would not otherwise have.

John Spina jr · Answer

In regards to flips, what type of criteria are you searching for your mailing list? Also what would you suggest is the best list provider? Ive never done direct mail and I'm looking to start my first flip. Any suggestions on how I could get started? @Owen Brumback @Jeff G.