Atrocious results in Dallas

[Account Closed]

Is anyone else getting really bad marketing results in Dallas? We spend about $5,000 per month in Direct Mail marketing to over 10,000 owner occupied and non owner occupied leads. We've been mailing for about 6 months now consistently to the same leads every month and have received a whopping 14 calls and 5 appointments. We checked our mail house and all the campaigns have been sent and delivered so there's no discrepancy there. I'm mind blown right now. Anyone else experience or have ever experienced this? Any help or advise would be greatly appreciated.

[Jack Butala]

Great post, Tiger. Buying undervalued real property through direct mail has been my full-time career since the 1990s. For every 2,500 offers we mail, we purchase a house. For land, we purchase a property for every 250 offers sent.

Here is what works for us:

We have purchased and resold more than 15,000 parcels of land, SFRs and commercial property and continue to do so, every week, all over the county using direct mail as the only method of acquisition.

Source of DATA:

We only use data compiled by professional aggregators.

Specifically, CoreLogic's RealQuest Pro, Black Knight's TitlePro 24/7 and best of all, First American Title's DataTree. The root of the data comes from each of the 3,400, or so, county Assessors databases. Any other source of "leads" or "lists" we have attempted have not yielded acceptable results for us in the past.

The goal of our MAILER OFFER CAMPAIGNS:

We look for a "situation" instead of a “property” or piece of real estate.

Nearly every property we purchase is surrounded by an owner's social situation which catalyzes their choice to sell. A parent's passing, retirement, empty nest, and family downsize are only a few examples. Also in most cases owners are more than happy to sell for a substantial discount in lieu of prepping the asset for sale (cleaning the house or garage, listing it with an agent or generally talking about pricing or math). I call it the "garage sale" mentality. Everyone who has ever held a garage sale knows they are just about giving away their stuff just to get it out of their lives (usually because they are moving). The buyer and seller know a used broom is worth $25.00 but willingly shake hands on the deal at the end for $2.00 solving each other’s problem.

Who gets an offer?

Every owner in the investors' target market where their asset fits the investors acquisition criteria.

For houses, we say something like this: All the SFRs south of 12 Mile Rd., East of Telegraph Rd, North of 9 mile Rd and west of Woodward Avenue that are less than 2,500 square feet, more than 1,200 square feet and have three bedrooms and two baths. For land, it’s a little easier; all the vacant infill lots in 85250.

Properties associated with back tax, foreclosure, divorce, estate, obituary or any other "lead-type" concepts bring you as the buyer into an asset category that is associated with all kinds of reasons why these problematic transactions will not yield the results you are looking for (they are un-purchasable and send you down a rabbit hole). Specializing in any of these categories, in my experience, is driven by an investor's quest to save on postage and in the end, kills most would-be real estate careers.

What does the owner receive in the mail?

An offer which contains the cash purchase price, closing date and a place to get credible information on who the buyer/investor is and why the transaction will get completed as outlined.

Postcards, colored letters, trickery, threats, false notices of foreclosure, dollar bills, and letters of interest are a waste of money and time and will not yield the results you seek. This is the single biggest mistake I see new investors make and it revolves around saving postage.

We use a plain windowed #10 envelope with a business return address which contains a cover letter and an attached offer and space for the seller’s signature. It’s respectful and super clear. Here is an Example. Or PM me for a copy of what we use.

Some helpful tips from our experience:

Only cash offers and cash deals work. Financed transactions involve too many people and variables and too much time.

Leave agent listed properties out of your acquisition criteria (don’t buy from agents/brokers). They “got there first.” You, as a career investor, should be the one to “get there first.”

We find the buyer (house renovator) first. Then we tailor our offer campaigns around “filling his order” so we never end up with property we need to sell after we buy it. The buyer signs off on the deal, before we purchase it. Make him say something like this: “I just did 6 deals in 85258. If I had three more SFRs at $128-$135 per square foot, I would buy them from you right now.”

We only mail offers to properties with no mortgage or very little loan to value. We have all owned cars where we owe more than they are worth. Home owners are not different.

We only target markets with extremely low days-on-market (less than 45 days) and list-price to sale ratios above .91. Take a look at this dataset of some of the large metro areas, Here. Or PM me for the information.

Finally, some practical advice I wish someone would have told me in 1995:

Give your tools away and turn off HGTV. Wholesaling is way better than renovating.

Buy land as well as houses.

Never leave your desk, its inefficient. Driving for dollars, looking at property or neighborhoods takes time away from analyzing data.

Learn to use data to your advantage or become partners with someone who is a born data person (accountant or engineer). Data is the entire key to success in real estate investing.

Never finance property. Buy for cash, sell for cash.

Become best friends with a few national title agents who put your deals first.

Get to know a lot of real estate agents and never complete a transaction with any of them.

Choose a dollar flooring threshold and stick to it (I only work on deals where we net $40,000+ per deal, for example).

“Inside information” will land you in jail on wall street. In real estate, its encouraged and celebrated.

@Account Closed