Direct mail budgets monthly?

Question

I was wondering How much the average wholesaler spends on direct mail monthly? I heard alot about the yellow letter. I am about to do a mail drop.From what I read I am looking at yellow letters and bandit signs to flip the homes.

Thank You

Joel Owens · Answer

One of my friends Brian Rodgers is one of the most best recognized marketers in the world.

He writes tons of copy and marketing for national companies.These so called squeeze pages for the internet and all of that type stuff he was doing in the early 90's.Many are just copying his stuff.

As far as mailers content and getting to the right market is key.Being consistent is also crucial as over time it's like a small ball rolling into a big ball and before you know it you set on auto pilot.

Many make the mistake of sending out a few thousand mailers and then having the wrong message or the wrong audience.They run out of money and poof they are gone.

A much better strategy is to mail to a small group and then track your response.2% is an average response,5% is doing well,8% and above you are killing it!

Your first piece sent out is the control.Everything after that you test and track against the returns of the control.Sometimes people do not respond right away so with each mailers you would need a code for that batch to track.

I do this with my commercial expired mailing campaign.I have spent roughly 40 dollars a month over a year and made 6 figures in commission off of it.I track the number of mailer sent monthly,the number of calls or contact received,number of appointments,number of listings,number of solds,and then track my time into each listing to get a return per hour on my time.

When you break it down to a science you will really see what works and what needs tweaking.Once you have a system down with an excellent response you just grow the volume and the market.

Hope it helps

Bryan Hancock · Answer

It really depends on what your yield measures.  The right copy to the right lists can increase your response rate to 15% or so.  The trouble is that if a good piece of copy is mailed to a poor list you will spend almost all of your time screening unhappy callers.  People somehow feel the need to call and tell you that they aren't selling and/or you are the devil for mailing them a letter.

As with all marketing the idea is to screen adequately to make sure that you are spending the bulk of your time with quality warm leads.  This is no easy task and that is why many real estate investors outsource their marketing to professionals that specialize in the area.  Others do their own campaigns so that they can mix things up as needed.  Both philosophies have merit IMO.

The most important part of the whole marketing campaign is the target list.  You can mail perfect mailers to a cruddy list and get virtually no value for your spend.  You can mail mediocre copy to a great list and do pretty well.

For the OP...everyone has a different quantity of deal flow required and value for their time.  Calibrate your budget accordingly.  I would suggest that you err on the side of underspending to start so that you learn what works and what doesn't.  You can quickly chew through many deals' worth of profit sending out mailers with the wrong message.

Travis Howard · Answer

You really have to get a game plan of who your trying to reach, I use click2mail and on average i spend between .38 to .39 cents per post card, that is with them printing and mailing for me.  you will need to learn their system,  I send a minimum of 5 mailers per property, as you can see it gets expensive quickly if your not keeping up with whom is receiving your mailers and who is not, it also depends what I am sending for, letter and postcard have price differences, postcards are much cheaper than letters,  If you have a small budget I would use bandit signs, they run about .98 cents per sign to $1.25 (depends on size), make sure you check your sign ordinance before ordering them, it can get expensive quickly if they fine you.

Morris Lucas · Answer

I hadn't considered that , you're right. That's why I like this forum, great post

Steve Babiak · Answer

Morris,

In regards to Joel, keep in mind that he works the commercial side of real estate in his business as a broker - the numbers are bigger so his annual income does not require as many transactions as if he were doing residential.

Ben Wilson · Answer

Ed - there's no consistent amount from the wholesalers that I talk to.  Many are just getting started and don't have the budget for direct mail.  I tell people that direct mail requires a commitment to sending out an entire series of at least 5 or 6 postcards to a list, so if it's going to be a one time thing, I suggest other methods until you can commit to sending out mailings consistently.

I tell people to start with signs and build from there.  25 signs every Saturday morning keeps our phone ringing.  Not as good as the leads we get from direct mail, but better than no calls at all.

Morris Lucas · Answer

Amen to that! Seems like most people i notice , myself included tend to get into real estate, then stocks, then internet marketing, etc, etc, and leave at the first failure.

I also live in Gwinnett County, Ga and while i don't really aspire to be a full time agent or broker at this point as my primary focus now is cars, i did want to set my sites on completing about 4 wholesale deals a year. (if i somehow manage to do more, great). This is good information, though, i will keep it in mind to track my mailings/signs etc as i go along, and fine tune it to hopefully have it down to where i can streamline it to a proven system. By the way, do you have a set fee for rei  marketing consultation? Would be nice to sidestep some landmines, unlike my previous ventures.

Joel Owens · Answer

Correct. I am not an agent but a broker and owner of my company and there is a huge difference.

In my state of Georgia you can pass a license test and become an agent.To be a broker you have to go through many more qualifications and put in your time.

The strategy remains the same in that you target a specific audience and test and track.You then become consistent and start getting great results.Most do something  once and hope it sticks.

People constantly cycle onto the next greatest thing without giving what they are currently doing a chance to succeed.

No matter what you do if you don't test and track and be consistent you will have mixed results at best.

Morris Lucas · Answer

Ok you just got me re-focused in a major way. Just hung a bunch of signs last night in the cold feeling like an fugitive hiding behind trees, lol

By u mentioning commission though I assume u work as an agent and don't mean earnings from wholesaling, correct?

At any rate I like the guerilla target marketing concept, I sell vehicles as well and it seems this concept would be useful in many areas, not just rei.

Joel Owens · Answer

Now that is over 6 figures in commission for the year off of about a 450 dollar investment.

I do not do 6 figures a month in commission off of 40 dollars a month ad.Just wanted to be clear.

Direct mail budgets monthly?

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