6 figure profits by shredding your direct mail list

Direct mail doesn't work! That was my conclusion after spending tens of thousands of dollars & flushing it down the toilet. Postcards, yellow letters, people in foreclosure, absentee owners out of state, inherited property, probate. Yes, I tried so many damn lists the only people making money was the US Post Office, mailing houses & the list companies. Until I finally figured it out & now make 6 figure profits consistently per deal.

To say I was frustrated was an understatement. I followed the damn formulas 1% was the expected response rate, mail more often to the list to catch them at the "right" time.  The only problem was I was going broke. So I did what any smart investor would do... I quit!  I didn't quit the business, I just quit sending mail.  Instead I spent my time and money on studying marketing at a very deep level from the smartest people I could find to understand what I was doing wrong.

Here were my biggest mistakes:

1) My lists was too big.  The lists I was mailing totaled about 5,000 , If I did mail all 5,000 names 6 times a year that was costing me $30,000 or more (postcards & letters)

2) Message was not original " I will buy your house for CA$$H as-is" blah blah etc etc.  BORING!!!!!

3) I had multiple deal envy.  You know the gurus that brag about the number of deals they do per year or per month? I was so damn hungry to do anything I spent my time trying to make multiple crappy deals work.

4) There was no catalyst or pressure point that would give the seller any reason to sell now or anytime soon.  ( The only exception was properties in default, yes there was a catalyst but that list is slammed by other investors <see mistake #5>

5) The list was too competitive, I didn't stand out from the competition. I was just just another postcard or yellow letter in the junk mail pile.

Adjustments I made to make 6 figure deals

1) I cut my list down from 5,000 to 70 names yes that's right I shredded my original list of owners & revamped my whole process on finding the gold.

2) I tailored my message to their unique & exact situation that no one else mailing would most likely know about.

3) My list would be mercilessly filtered so only FAT PROFIT DEALS (FPD's) would be the outcome. One of my fellow investors favorite motto is "You can't make a 6 figure profit on a 5 figure house." Don't be stupid like me & be impressed with volume of deals versus net profit.

4) Have you ever heard? "Silver bullets don't exist in direct mail marketing, it's a numbers game". Well, guess what? I discovered something as close as it gets to a "Silver bullet" in real estate marketing.  I went from receiving 5 calls out of 500 to 3 closed deals out of my list of 70. Simply by laser focusing my list down to a more manageable number.

5) Because of my exhaustive research, customized & personalized message and offer I rarely had competition, and if I did, I kicked their butts!  In one transaction the seller was telling my what the other investor offered and why they would only do business with me. And yes it was just one other investor I had to compete with. In another deal I was the ONLY one who contacted them.

Here is why my change in strategy worked:

1) I stopped chasing skinny deals. That gave me the ability to focus my energy on fewer deals with bigger profits.

2) I was able to spend more money and time on each lead to have more knowledge about each situation & to also make a much bigger impact on the owner when I did make contact. Imagine spending a few hundred dollars on each person on your list versus the guys that spends 50 cents on a postcard or $1.35 on a yellow letter (invitation envelope, handwritten,stamped etc etc.) 

3) Follow-up , it was soooo much easier to follow-up on a few properties rather than doing a 1,000 letter drop each week & following up on the inbound calls.

4) Confidence, I knew so much about each situation and had unique solutions few other investors could offer.  I realized a long time ago that if the only advantage you had in a negotiation is that you are willing to pay more than the other guy didn't make you special and you would be working hard to do volume instead of doing a few FAT PROFIT DEALS (FPD's)

Use my failures in direct mail as inspiration to find your "Silver Bullet" to make more money is way less time & without the pain wasting money on your mail that goes directly in the trash can.

Happy Investing!

Ellis San Jose

@FIBIusa