Does direct mail marketing still works???

Question

Hello guys! Im a rehab and sell investor in NYC...before pandemic I have been buying properties from the auction in court but now it has been closed and no one knows when it will open again So I want to start marketing for properties but don't really know what work these days...some people say direct mail some say phone calls,SMS Can you guys please share what works for you and perhaps what company you use for what ever works for you

Thank you so much in advance

Derek Carroll · Answer

I've purchased three properties this month as a result of direct mail.  Everything works, but pick one, get serious about it and build a system where you can measure results.  Once you have metrics to measure, and the numbers make sense on spend vs return, just push your foot harder on the gas.

Jerryll Noorden · Answer

Although most here mean well... I think...I hope? It is all wrong!

Here is the reason it does NOT work!

First: Analyze What You Are Doing/Saying!

Imagine I have a room filled with people. Now as (bad) luck may have it, NONE of these people want to sell their house (but you don't know that).

Now here comes the investor enters the room and says "Everyone over the age of 60 go to the right side of the room",...

and a bunch of people go to the right side.

Now , the investor says, everyone that is an absentee owner go to the right corner of the right side...

again a bunch of people go to the right corner on the right side of the room.

Now he says, anyone that has 90% equity stays in that corner and the rest go away...

Bunch of people go away.,

Brilliant!!

Now we have in the right corner a ton of people that are over 60 years old, are absentee owners and that have 90% equity!

How many people will sell their house to you?

FRIGGIN NONE!!

All the people in that room did NOT want to sell their house, remember?

Lists, filtering lists, and all that crap  DOES NOT INDUCE OR INCREASE MOTIVATION. You need to filter the population based on motivation. NOT the "probability" of someone to be motivated based on criteria that has NOTHING to do with motivation!

Just because someone is having a garage sale is there more probability he needs to sell their house? NO absolutely not!! There are way more people doing garage sales that do not want to sell vs people that do garage sales BECAUSE they need to sell, right? Well ok then.

Also, there are WAY more people that need to sell their house that are not doing garage sales then there are people that need to sell their house that are doing garage sales.

That "filter" absolutely makes little logical sense.

Awww... you did a garage sale list and you got deals? Congrats, we simply call that luck!

You are not improving your chances by filtering a list.

The ONLY way DMM works is if you send a crap ton of mailers BLINDLY! The more people you send the more chances you have., It is literally shooting in the dark.

I am not saying you can not make a deal using DMM.. but it based on luck, ZERO strategy.

The simple truth is that if you send a mailer to every single person in this country , sure of course someone will bite! this is simply because you reached everyone, both motivated and non motivated sellers. The motivated ones will respond. But they don't respond because you have a great system for filtering the list. They respond simply because you so happen to have reached them.

So people please make sure you turn on that sexy brain of yours and start thinking!

Yes there are exceptions to lists (like the inheritance list etc. etc.. and I am not talking about those lists.). I am talking to lists in general, and doing lists because Joe Shmoe over there told you to do so, because a podcast on BiggerPockets told you so or because you see 97% of the people doing so.

Ask yourself this. How many of you do DMM?

90%? OK...

How many investors fail?

About 70? 80? 90%? 98%?

Not sure about you, but from my math it is evident that obviously what ever strategies (DMM/lists) they are using... ARE NOT WORKING!!

Second: Use Common Sense (People!)

If I showed you a field of airplanes.. thousands of them!!

... and I told you, 3% of all these airplanes will reach their destination... the rest will crash and burn. Everyone that said "DMM works", i dare you to send your family off on one of these planes and say "Have a good flight dear.. and good luck, fingers crossed".

No? You won't do it? Then you admit you were wrong telling others DMM works. Would you buy a car that would start 3 times out of the 100 attempts? No? Would you by a TV that turns on 3 times every 100 times you press the power button? No?

But it is ok with you to gamble with your money sending a ton of mailers and 3%  will contact you? (And from this 3%, 80% are telling you to get them off your list.. so it is FAR less than 3% success rate).

AGAIN I didn't say you can not make deals from DMM... but does it work? NO!

You need to redefine your definition of "it works"

EVERY single one of you that said "DMM works", or "everything works"..  Try to understand the following.. "everything works" is NOT the same as "it is possible".

Now realize this:

For every investor that responds to this post saying that their DMM is working fantastic, there are about 400? (I have no clue how many, but I promise you .. it is MANY)  investors, these strategies did not work for them but remain quiet!

Third, Use Math!

Can DMM work?

Well agian... define that.

Look at the graph below. The blue line represents the "cost/deal". How much you have to spend to make one deal. The orange line represents your profits.

When you take some initial conditions into account like the open rate % of your letters, how many leads you get before you make a deal etc. etc. this is what your typical DMM chart will look like.

These are randomly chosen numbers waaay in your benefit. What this basically says, is that you need to spend about $7K (a more accurate graph would boil down to $7K) for you to about break even between profits and costs.

So You will absolutely make deals if you spend more than 7K/month on DMM.

So if you do make money with DMM if you spend more than 7K why am I telling you it doesn't work?

Well, because if you had 7K to spend every month, do you know HOW MANY deals you would make and WAY more efficiently doing PPC or facebook ads? A LOT More!!!!! A LOT MORE!

So based on this.. Going for DMM just doesn't justifies it.

Now, Proof!

THIS method (my method... the awesome method)works. Here are the results of this awesome method.

Compare that with DMM, where you have to put continuous work money and effort and the second you stop, the leads stop. No people it does not work.

Lesson To Be Learned:

I didn't write this message to convince the DMM supporters that replied to change their mind. I have tried for 3 years now. Not going to happen... but YOU.. the newbie, the ones that want to make it. That do not want to wing it, and rely on luck... for YOU I am writing this.

I am writing this to warn others, the newbies and the ones that are here to learn, NEVER to follow ANYONES "personal opinions" on what works and what doesn't. Everything mentioned thus far on this thread are personal opinions!

Notice this. Scroll through BP, go do it. Go to every post. NO ONE shows proof, results data, evidence. Everyone is a self proclaimed expert without any evidence of it. Everyone swears by their methods but no one shows any proof.

USE your head! Analyze, be smart!

Now  this should have inspired you to stop following others just because THEY said it worked for them. Learn how to think on your own and learn how to crunch your own numbers to make an educated decision.

Now, there IS indeed a place for DMM. Absolutely. But it is not wise to do it like most people here tell you to do it.

Consider this.. if it DID work, ... WHY are SO many people failign at it? Why are you asking "if it still works?" Right? If it DID work you wouldn't be here asking. With SOOOOO many people doing DMM how come so few investors are successful? Right? There is that "logic" and "common sense" again...

Monkey power!

Bill P. · Answer

@Vladimir Barman while any type of marketing works here and there, I find that deep networking has the best results.

Ian Austin · Answer

I would say YES it definitely works. But it's really about the long game. You're not going to get a response off the first letter. You have to send a few and stay top of mind to be able to convert them. Having a multi-targeting effort really helps as well, including cold-calling. I'm doing direct mail right now for probate leads. It's a smaller list and much more targeted than other niches. What I do differently is I send out a postcard or letter and then I immediately follow that up with a text or email. This increases the touches that you hit each potential lead. To do this successfully, you reference the letter or postcard that you sent them in the text/email so they know exactly who it is. This increases your conversion rate. I also include an ebook they can download to provide the seller with more value. This comes as a QR code that they can scan once they receive my letter/postcard. What if you can get all this done with the touch of a button so that it's completely automated? I have a great direct mail guy. Please feel free to reach out if you have any questions. I would love to help!

Nick C. · Answer

It works. But response rates have gone way down in the last 8 years, so you're going to have to spend more per lead. The institutional wholesalers are spending many tens of thousands of dollars a month in mailers. Sellers are quite saturated by mailers, it's all about standing out and getting it to the seller at the right time.

Justin Reed · Answer

Check out wholesaling and direct mail. You can buy and sell anywhere without visiting. It works for land and houses.

I'm direct mail acquisition machine. I pull assessor data (with a direct link) of the type of properties in the areas I want and send ALL the property owners an offer. I scrub the list to remove things like properties with a mortgage, duplicates, etc. and spend a tremendous amount of time on pricing, because although these offers may be a lot less than retail, they are not out of the question. I explain in my offer letter to sellers that I am a serious investor, not and agent/broker, I pay cash, and are prepared to close as soon as x days.

Then I sit back and wait for the motivated sellers to call us. You can of course edit this model to fit how exactly you plan on purchasing and what specific property type you are looking for. Believe me - it works like a charm. That is how I GET THERE FIRST. By the time a deal reaches the MLS or a lead source, someone else has already beat you to it. Also, knocking on doors (aka "driving for dollars") is an outdated way of doing this and honestly isn't worth your time. It's no longer about possible subject to leads - we now have DATA and computers and direct mail to get there first. Please feel free to reach out to me if you have any additional questions - I would love to help!

Braden C. · Answer

@Derek Carroll Gave you fantastic advice. There are a lot of ways to find deals and they all work if you have the right systems in place. With direct mail you're going to get a lot of incoming calls, do you have the ability to answer those calls yourself or will you need someone to do it for you? Do you have a CRM setup to manage those incoming leads? What does your follow-up process look like? Those are just a few of the important questions to ask yourself before sending out mail. Good luck!

Does direct mail marketing still works???

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