Direct mail waste of time if campaign budget isn't large?

Question

Hello, new investor still trying to figure things out.

One goal I had with my efforts was to take money from my first couple deals and use some of that to put it into a direct mail campaign to have a steadier flow of leads but I was recently told by another investor that unless you have big money like the more established "big shots" in town your efforts will be a waste because I won't be able to compete.

I get where he's coming from and I always here most people having success with wholesaling are direct mailing. When he brought this point up I realized that I never thought about this dynamic of low budget person competing against someone with deeper pockets.

Fellow investors, what are your thoughts?

Michael Quarles · Answer

Good to meet you Tevin.

There are two steps before sending mail that makes mail perform much better.

• Understanding which geographical area to market to. We run a marketing algorithm on ever market to find the sweet spot of the city. This is after we determine the cities viability to be prospected to begin with. 
• Which list and the filters to use.

Just because you send mail doesn't mean you'll have the success you are hoping for. The two previous steps help considerably.

However your question was more of about budget over other factors.

As with anything we do the more we do it the better results we will have. If you only have a 200 dollar monthly budget do not use direct mail unless your list has qualified on multiple list filters. Example; an address is on primary list i.e. an equity list and on a sub list like divorce list and pre-foreclosure list. Those folks I would send to even if it were only 200 dollars to do so.

After deciding to mail the next important aspect is lead capture. Basically how are you taking in the calls? Live, voicemail, call service etc. Which creates a need for a very good script. Your script should filter for you without damaging the nurturing phase of prospecting.

You can listen to two live call here. One is an Alex station and the other is a Ryan station. This is linking to the marketplace since I cant post the audios here. Listen for the seller reducing their value on their own. the second house we purchased for 80 and it was worth 130.

After the original stage of capture the lead followup is paramount. We send the prospect 29 email, 7 text messages, call them 9 times more during the first 90 days. It all organized inside of our CRM.

Getting back to small budge marketing. If I only had 200 a month to spend on marketing then I would be a walking and talking billboard. Passing out business cards. if you pass out business cards on purpose I know without a doubt that a bx of 1000 cards will produce a result.. And business cards are inexpensive. Use the Red and Yellow ones.

Also all of the folks in your mobile phone who know and like/love you will be your eyes and ears looking for opportunity. All you have to do is ask them to.

Cold calling works well. However it is a hard practice to do in the beginning.

Make it a little easier by calling FSBOers and making appointment to buy.

Let me apologize f i made you gun shy on direct mail with a small budget. I would rather be honest and lose opportunity then to give you bad advice.

Good house hunting.

Roland Paicely · Answer

I was going to add my 2 cents.  Then I read what @Dennis Rodriguez posted and I couldn't have said it better.  He's right on point.

Dennis Rodriguez · Answer

You need to define big money. To some people mailing 100 letters every month is BIG money and they can only commit to sending 20-30. To others, BIG money is $30,000/month in marketing. What I tell our clients is this, start with an amount you can commit to for 5-6 months without starving to death. If you can only commit $200/month for 6 months then go with that.

We see clients wanting to go BIG and send 5,000 letters and then they quit for the second month because they didn't get the results they wanted. We explain this to them but some are fixed into the go big or go home mentality. On the other hand, we have clients who send 400-500 letters every month steady and they get houses to keep them motivated to invest and slowly grow their business. Mail what you feel comfortable mailing consistently and don't worry too much about the big dogs in town. They are mailing and they will continue to mail but the pie is big enough for you to get some deals if you know what you are doing. Remember, getting the phone to ring is only part of the equation.

Good luck,

Tevin Russell · Answer

@Michael Quarles

I'll look into this some more.

All of this is reinforcing the fact that my lead capture needs to be just as on point as the marketing if not more because there isn't anything worse that putting in the work to get the lead just to let them slip through the cracks.

Brian Chesla · Answer

@Tevin Russell the methods work great!  Best thing to do is combine the two but if you have a tight budget, go with the RVM its a bit cheaper.  You can hit 10k people for $1k - a lot of bang for your buck!

It's like anything else, it's not a magic wand and you have to put in the work to make the leads work out because your phone WILL ring!

Tevin Russell · Answer

@Brian Chesla

Thanks for the site, i'll check this out.

How are these methods working for you?

Brian Chesla · Answer

@Tevin Russell you can cut your costs in half by doing a RVM or VB campaign.  Checkout REI Market Pro they have an excellent programs to choose from.  You'll find something to fit your budget.

Tevin Russell · Answer

@Chris Turner

Sorry I missed your post, but if I don't want to 'starve to death' like Dennis put it, probably around 200 per month now as I haven't had any 'deal money' to reinvest into marketing yet.

Wasn't sure if this was even worth bothering with seeing as how this isn't a whole lot.

@Eric Adoboyea seems like me and you had similar outlooks on how this stuff works listening to successful people doing it.

Tevin Russell · Answer

@Dennis Rodriguez

@Roland Paicely

Dennis you pretty much answered my question but in that conversation I had, the number used was something around 20 - 50k per month on mailers when referencing the 'big money' guys.

I definitely appreciate both of your answers and it gives me much more clarity on this topic.