Direct mail source and Phone services

[Kameron Sneed]

What is a good direct mail source to use and also a good phone system(ring central,grasshopper) to use? Just getting started and ready to kick it off the right way and have a strong start to building my business. 

[Ray Lai]

Originally posted by @Kameron Sneed:

Thank you for the response. I am new to this just trying to be put on the correct path and seek financial freedom. Anything else you can tell me about wholesaling before I jump into marketing and networking . 

 Yes Kameron. Besides at a minimum listening to all the wholesaling podcasts on BP, here's a sample game plan:

1) Attend your local REIAs and network, you need to build a buyer's list of investors that will buy your properties and network with other people in our industry.
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're not in a competitive market, buying lists that are exclusive for your market type (we partnered with a guy that does this)
3) Start a sustained direct mail campaign. First batch with postcards, then follow-up with yellow-letters. There’s no point in starting if you can’t 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 so you don’t waste money mailing to bad addresses. If you wanted to, you can even skiptrace the bad addresses to find where the owner moved to and target the right address.

For fulfillment you can do it yourself to save money if you're broke, but ultimately if you want better response rates and focusing your time on value-add, then you'll want to outsource fulfillment to a shop that has economies of scale and can offer you great rates (see attached).
Remember, a campaign usually doesn't get a response until 3+ mailings. A lot of newbies quit after 1 or 2 letters without realizing that people don't open the first letter they see. Focus and sustainment is the key. I'd recommend a different marketing piece every 4 weeks for 5-7 months from 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'll want to do split testing and other methods. You should always be tracking your response rates and seeing what lists work bests. It’s always best to include a website and a local phone number on the postcards as well to maximize your responses.

Another protip: If you’re 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’s 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.

Don't mail anything though until you practice answering some commonly asked questions and know how to educate a seller to the proper number. This is a copy and paste from @ken min who really understands how to communicate and help people through a difficult time they're having which is what you would be doing if you were targeting a pre-foreclosure for example - this was for door knocking but it's the same talk when you do a direct mail list to someone in pre-foreclosure and they call your number. You'll need different scripts for different types of sellers. Here's what he wrote:

"First, I knew it was a pre-foreclosure so I knew there would be a lot of emotion involved. My first goal was to defuse the emotion. I would knock, and say that I was buying houses in the neighborhood and offering a variety of ways to buy the house.

That would usually pique their interest. Normally, they would say "what do you mean by that", which is a perfect opener for the various techniques I use (Subject, To, Wrap, Lease Option, etc) and that it didn't require fixing up the house or house "showings". I told them I am not a real estate agent so those fees could be saved. That would usually get me in the door if they were inclined to talk.

Once I was at the dinner table talking, I'd ask them what their goals are. (Solution selling.) I'd let them talk until they were finished. I'd write down on my pad what seemed to be their key points. It showed I was listening.

I would then ask them how much they thought the house would sell for. Then I would ask how much the principal is. That ALWAYS confused them. Which is good. They didn't know if I knew they were behind on their mortgage and weren't sure of the number.

So, I would simply take my pad and say "let's figure it out". I would write down principal, I'd ask if that included taxes, "does that include insurance", do you have an HOA, is there a second loan on the house, a HELOC or any unpaid child support liens, and then I would say, very casually "about how much will it take to bring the house current?, does that include legal fees? On rare occasion, someone would say "the loan is current" so I put down zero for that number without questioning them. With the others, I would put in the number (arrears) which meant that we all knew the house was in pre-foreclosure without having to use that nasty, emotional word.

I would then ask if a sale date had been set. I already knew the answer. Sometimes they did not know because they had never read the foreclosure notice. (Too afraid of the obvious.) I would tell them that there is always a solution, I had seven solutions available to me at the time, but not all solutions are equal. I would explain the pluses and minuses of each and then ask them which one I could help them with. More often than not, it was to give them "walking money", do a Subject To and take over their loan and give them 30 days to move. I would bring the loan current and that would help with their credit.

Door knocking pre-foreclosures works if you treat them as though they are people, and they are going through a tough time. Few people are in foreclosure by choice. I made a LOT of money using that technique (door knocking) along with my "Seven Ways To Avoid Foreclosure" letter that I posted elsewhere at BP a few months ago."