Insurance Agent · San Antonio, TX · Member since 2016 · 100 posts · 36 votes
Context: As stated in the title I recently ran my first direct mail campaign of 1000 postcards here in San Antonio Texas. I got 1 phone call I did go out and make an offer on the house. It was an inherited home with $0 owed and an ARV of $60,000 in a rental neighborhood (comp rent $800 - $900), the prior tenant set the garage on fire. I offered $28k but the owner had an offer from Money Bug for $40k. Seeing as how I had spent some time with him and I found out he was only expecting about $25k before he got the $40k offer, I gave him the "give the little guy a shot" pitch but to no avail.
Question: With a .1% response rate should I remail this list (custom selection aimed at age and equity from PsPrint) or should I get a new list from a new source?
P.S.: I wasn't sure if this post should go under wholesaling or marketing so I just picked one
You could revisit your delivery method, or try a new list. I don't want to be to nosy about it, but even if you spent $200 for the list, $200 for one lead that was viable (even if you didn't get it) isn't terrible.
Another thought: if the only thing wrong with a property is that the garage was on fire (connected to the house or not) you can't offer them 47% of ARV and them be mad when they take a better offer. Now, if you offered $28k and they accepted $10k from some other investor ... then it's salty times. Also, insurance? It's this thing that is supposed to help solve issues like that fire.
You could revisit your delivery method, or try a new list. I don't want to be to nosy about it, but even if you spent $200 for the list, $200 for one lead that was viable (even if you didn't get it) isn't terrible.
Another thought: if the only thing wrong with a property is that the garage was on fire (connected to the house or not) you can't offer them 47% of ARV and them be mad when they take a better offer. Now, if you offered $28k and they accepted $10k from some other investor ... then it's salty times. Also, insurance? It's this thing that is supposed to help solve issues like that fire.
You could revisit your delivery method, or try a new list. I don't want to be to nosy about it, but even if you spent $200 for the list, $200 for one lead that was viable (even if you didn't get it) isn't terrible.
Another thought: if the only thing wrong with a property is that the garage was on fire (connected to the house or not) you can't offer them 47% of ARV and them be mad when they take a better offer. Now, if you offered $28k and they accepted $10k from some other investor ... then it's salty times. Also, insurance? It's this thing that is supposed to help solve issues like that fire.
Thanks for the quick response, I agree I am glad that I at least had a chance to make an offer. I am not at all upset that he took more money, maybe 1 in a million would take less than the best offer they received. I just would be upset with myself if I didn't ask for the sale and present a reason why I should get it.
The 1st question I asked him when he told me on the phone that their had been a fire was "what did the insurance say?" as with too many free and clear inherited houses, the owner had no policy in force.
Contractor · Pittsburgh, PA · Member since 2014 · 885 posts · 359 votes
10y
@Eric H. yikes, that is super unfortunate ... at least no firefighters got hurt when they were there spraying it down, then he would have been hit twice.
Insurance Agent · San Antonio, TX · Member since 2016 · 100 posts · 36 votes
10y
My main thinking for the $28k offer was concern over this 1960's house having to be brought up to electrical code and foundation concerns i had based on sheet rock cracks at the door frames. @Jeremy Pace Do you think I offered too little?
Foundation issues to me are things like: a bowed out concrete block wall, a massive crack in a basement wall or floor, or water leaking into the basement. Some cracks in the drywall could just be an old house getting all old house on itself.
Without all the details, it's hard to say if you offered too little ... but on principle, if the seller didn't take your offer right then out of relief for finally being free of this house hassle, I'd say you offered too little.
Investor · Coeur d'Alene, ID · Member since 2016 · 551 posts · 218 votes
10y
Those cracks look like settling cracks, not a big deal just repair the drywall. As for the fire though was there any water damage? That would concern me more.
I see other posters talking about sending 10 or more mailings before the response, prospect, and conversion rates start to get good.
Why not split test using your current list? I haven't tried mailing yet but I think split testing is used in many types of marketing to allocate spending. I'm still learning about marketing.
Settling cracks are a big deal. Sort of like how grandma's expressions seem to be flattening and her arms aren't swinging while she walks - there's something serious going on underneath. Don't just attribute it to age.
I know some locations are prone to settling issues due to geology, but it could also be poor quality construction or the result of a homeowner playing Handy Manny. Things like failing foundation and compromised structural supports. Ask your GC for more details - it's ok to ask him/her to name the specific cause.
Context: As stated in the title I recently ran my first direct mail campaign of 1000 postcards here in San Antonio Texas. I got 1 phone call I did go out and make an offer on the house. It was an inherited home with $0 owed and an ARV of $60,000 in a rental neighborhood (comp rent $800 - $900), the prior tenant set the garage on fire. I offered $28k but the owner had an offer from Money Bug for $40k. Seeing as how I had spent some time with him and I found out he was only expecting about $25k before he got the $40k offer, I gave him the "give the little guy a shot" pitch but to no avail.
Question: With a .1% response rate should I remail this list (custom selection aimed at age and equity from PsPrint) or should I get a new list from a new source?
P.S.: I wasn't sure if this post should go under wholesaling or marketing so I just picked one
Maybe tweaking the mailers and message can work but the list itself what was it targeting (absentee owners, probates, etc.)? Going with a mailer at least 3-4 times is the best way to achieve success with them. Its a law of averages with mail campaigns.
As for you being overbidded; while it does stink that he goes with the higher offer. But just stick to a formula and if the property doesn't than on to the next one. What I love about this industry is it being about the numbers not emotions. The people who got it for 40K might be getting more than they bargained for on the property. Be patient, positive, and persistent and it will work out!
Bakersfield, CA · Member since 2016 · 543 posts · 281 votes
10y
@Eric H. I would suggest mailing again. Sometimes it takes 2, 3, or even 4 mailers before someone contacts you. Switching up your marketing piece works too. One person may respond to a postcard, while another may respond to a letter. Follow ups are very important when it comes to direct mail.
Also, the response rates differ depending on the marketing piece as well. We have seen on average that postcards get about .5% response, letters get about 8%-9% response rate, and zip letters and greeting cards get about a 2% response.
Insurance Agent · San Antonio, TX · Member since 2016 · 100 posts · 36 votes
10y
@David Pupoand @Claire Trammell Thank you both I will give this list another go, and WOW that's a 16x better result from a letter! It looks like I'm sending a letter!
Bakersfield, CA · Member since 2016 · 543 posts · 281 votes
10y
@Eric H. I should have added, the response rates from letters are more than just quality calls. Postcards are mostly quality calls, while letters have more curious callers, tire-kickers, angry callers, and quality calls all mixed together. BUT, you would then have more contact information and you can begin to build relationships and possibly guide the conversations towards a deal.
Mix it up! Sending a marketing piece 3-5 weeks in-between each other works great!
Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
10y
While I do agree and understand the principal of touches... You also have to be logical. If you got that low of a response rate something is off. Feel free to PM details about what you sent and to what list. I'll give you my honest consultation free of charge.
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
10y
I would first look at the message on the post card and change that before I changed the list assuming the list has some basic criteria to market to the right people.
Contractor · Pittsburgh, PA · Member since 2014 · 885 posts · 359 votes
10y
@Eric H. I love that shot of you on the postcard. Robyn Thompson (spelling? sorry) has this whole thing about family and pets in the photo with you too, to soften it up. Something to think about.
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
10y
@Eric H. I like the softer, more personal postcard! I may not be the best critique, I've never sent out a campaign or needed to sell my house for cash, but the second one would definitely get a phone call from me. Why? Well, you look like a friendly dude who could make the entire process stress free. It's more of a relationship builder, not just cold hard cash to get the seller out of their home. I will definitely be interested to see how a softer postcard works in your market, it also mimics more of a letter too. Thanks for sharing your entire process here, I appreciate learning from you!
Investor · Jacksonville, FL · Member since 2015 · 63 posts · 30 votes
10y
Don't sweat the owner not accepting your bid there is a chance the person who offered them 40 (If that was a true offer) didn't know how to bid on the property. 20k margin on a fire damaged house that only has a 60k ARV is pretty tight. Hold true to your numbers shake the dust off and keep it moving brother!
I like your materials. Did you have a copywriter put that together? What was your copywriter's take on language to inspire a better response? Or am I overthinking this (it wouldn't be the first time)?
Insurance Agent · San Antonio, TX · Member since 2016 · 100 posts · 36 votes
10y
Thanks @Mark Vejnar , I could probably benefit from using a copywriter I didn't use one this go around. I sorta leaned on my gut instincts and associative knowledge I've picked up from sales books, BiggerPockets.com and the various podcasts I've listened to. We shall see how foolhearty that decision was, haha.