Building A Marketing Machine – Part 4b, Direct Mail (Preparation)

If you haven’t read part 1 of the Direct Mail series, I suggest you stop and read THIS post first.

Go ahead, I’ll wait….

Good? Ok…

There are a number of items that you’ll need to accomplish at the preparation stage. Some – quick and easy, while others may take a lot of time to refine. But remember, great preparation yields great results.

The first thing you’ll want to decide is what are you going to do with these properties? Are you a rehabber, wholesaler, builder, buy and hold investor, or are you looking to do something else? Your answer to this question will determine what prospect type you’ll be mailing and what your message should be. Once you have an understanding of what you’ll be doing with the properties, you can move on to identifying who your prospects will be and how you will find them. Be creative when thinking about how you can find these people. The more creative or targeted your niche is, the better your results will likely be. Here are some ideas:

• Absentees – those who own a property they don’t live in
• Equity – owners who have a lot of equity in their house (small mortgage) or those who don’t have a mortgage
• Tax Liens – owners who owe back taxes
• Mortgage Lates – owners who are behind on mortgage payments
• Code Violations – owners who have received a building, health or other violation on their house
• Probate – property of a deceased that has to go through a court process in order to be distributed to an heir/beneficiary or sold
• Inherited – someone who has received a home as part of a will or through probate
• Pre-foreclosure – owners who have received notice that the bank will foreclose on their house if they don’t become current on their mortgage payments
• Evictions – owners who have evicted someone from their house/apartment
• Driving for Dollars – houses that are visibly in disrepair

Now that you have some good list options, where should you begin? Personally, I would start with a driving for dollars list. This means, you proactively drive around with the purpose of finding houses in your search area that are visibly in disrepair. Is this time consuming? Absolutely! But that’s exactly the reason why I recommend this list over others. It takes time, and many investors won’t do it for that reason. So that means you gain access to some nice untapped prospects. The other reason I like driving for dollars prospects is that you know their home is in disrepair. This ensures that there is room for value creation which means it’s a good candidate to buy for a renovation or possibly a tear down. Ok, so maybe you don’t have the time to drive around. What do you do then? While all of the options above could make a good list, I’d go after the most difficult lists to find. Remember, the more difficult or targeted a list, the higher your probability of scoring awesome deals. Let me give you a couple of examples. In Massachusetts, it’s really difficult to find probate leads. You can either go to the County Courthouse or find them in the newspaper and then you still have a lot of research to do, which takes a shit ton of time. But how many people do you think are actually doing it? Not many. So this is a great list to work because you won’t have much competition. You can also look into combining lists to compile a “Super” list. For instance, when I find that a house on my driving for dollars list is also on my tax liens list (which means their house is in disrepair AND they owe taxes), I know they are likely to be in a difficult situation. And I generally find that the more difficulty people are having, the less likely they are to reach out for help. So this is a great audience to help out of a bad situation. You can even combine more than two different lead types, which becomes an even better list. Most investors don’t experiment or work their data this way so you’ll have a huge leg up on your competition.

Now that you have some ideas about the lead types, where can you find this information? There are a lot of different resources out there, but here are my two favorites due to the quality and breadth of information they provide:

• Listsource – great service and really robust. You can find lots of different leads including absentees, equity, and pre-foreclosures (some states aren’t available). Sign up to access the service and play around with it, it’s amazing how creative and specific you can get.
• MLS – I’ve used my MLS to get absentee owners, oversized lots (for redevelopment), and do more of my research for my driving for dollars leads.

The next step is setting up your lead database. This is where you will store all of your leads, track whom your mailing, when you’re mailing them, what type of mailer you’re sending them and if they responded to you. If this sounds like a lot of information to track, well it is. It took me many months of fine-tuning to make sure I was able to capture all this information and summarize it in a meaningful manner. If you want to see exactly how I track things in excel, I’ve provided the details in a previous post about Creating a Lead Database. This is one aspect where having some basic knowledge of excel and computers will help tremendously in leveraging your direct mail process.

Once your lead database is set up, you can input all of your leads. Then you’ll be ready to start creating some mailing campaigns, which I’ll explain in my next post.

Oh, by the way…if you’re interested in getting the actual Lead Database that took me months and months to fine tune, sign up at the top of the page to get it for FREE!!