All Forum Posts by: Brian L.

I gotta say that being a month away from my first direct marketing mailing, the debate on PC's vs. YL is very interesting to me.

My understanding is that they do two different things:

1. Yellow letters: Get more, but less qualified lead responses. These get more people on the phone and is a clear call to action. 2-5% response rate. These tend to be shorter "Hey, I want to buy your house, so call me..." type letters.

2. PC's: Lesser response rate (1-3%, though could be lower), but more qualified leads. PC's are more educational of your business and the types of issues that you alleviate. PC's tend to be more informational about your business.

This sound right?

As such, I plan to use both. Coming from a marketing background, I know that not everything works all the time with everyone. Some people that may be motivated sellers may contact you because your YL hit them at the right time. Others may need more information to make the call. I plan to alternate YL & PC's.

So, I went into Listsource and pulled an absentee owner list with the following criteria:

EQUITY(%): 40 to 100 %
PROPERTY TYPE: Residential: SFR
CORPORATE-OWNED: Exclude
OWNER-OCCUPIED: Absentee Owned Out-of-State
TRUSTEE-OWNED: Exclude

I didn't include any type of purchase date component as I'm planning on long term campaigns and a new investor owner may get very sick of owning at some point in the future. If so, I want to be the obvious call. This spanned 3 counties in densely pack Northern NJ. I was a little surprised to only get less than 1000 results.

Few questions:
1. Does this make sense from a data point of view? I know NNJ isn't necessarily your market, but I thought it would be more.
2. I thought I read somewhere to only include SFR's. Is that right? Why exclude multifamilies (2-4)?
3. Are Trustee-Owned properties that difficult to wholesale?

Thanks folks!

Thanks Michael Quarles. Very good info.

Thanks gents.

1. Dev Horn, I plan on a sustained long term effort. I read a recent article by Sharon Vornholt that said that 81% of deals from direct marketing come after the 5th mailing. Also, 90% of people give up after the 3rd mailing. What does this tell me? That to be successful using direct mail, I need to mail to them as long as they are a prospect. Just because I want to buy for a given time period doesn't mean that they want to sell at that same point. When they do want to sell, I need to have my marketing front and center. Last man/woman standing in direct marketing wins.

2. My target audience can be larger or smaller depending on the number of towns I add. As I live in North New Jersey, there are prospects in several towns nearby that fit my criteria. These towns are well within 45 minutes from my home (barring traffic). I think I will start with one town near me that has about 700 prospects. I can always expand to more towns to add prospects. Budget allows for significantly more, but I think it may be a waste as I need to test my systems (intro call, qualifying leads, my lead collection system, negotiating, finding buyers, accurate ARV estimation, repair estimation, etc). Right now, my two biggest stumbling blocks are repair estimates and ARV. I bought the BP repair estimate ebook, but am thinking that I need to bring in a professional for the first few wholesales until I'm comfortable.

3. Interesting. I am up in the air with yellow letters vs. postcards. While I understand that postcards are cheaper, it seems like response rates are less. Someone please correct me if I'm wrong, but it seems like response rates are as follows:

Postcards: 1-2%
Yellow Letters: 2-5% (& potentially higher)

If these response rates are correct (anyone?), then the 2x cost of yellow letters is getting you 2X the response rate.

That said, I plan to test by sending 5 mailings as follows and then repeating the cycle:
1. YL
2. Postcard
3. YL
4. Postcard
5. Postcard

My hope is that this gives me the best of both. Thoughts?

So, 250-500 letters a week should get me 2-25 calls a week, assuming 1-5% response rate for yellow letters. Wide range, but seems manageable

What's a manageable sized direct mail campaign for the first time?

I need to test my letter, test my business processes and properly follow/work every lead knowing that I am not an expert in ARV and repair costs. I want to effectively handle the flow as I will have a huge learning curve.

Basically what I'm asking is what should be a large enough mailing to get me leads to work on, while at the same time knowing that too many leads will go wasted. Is it 200? 500? 1000? 2000? Thoughts?

Thanks for the welcome!

Ankit Duggal thanks for the REI recommendations. Will be headed to MREIA on Monday 4/15 for Sub2 discussion.

For both @Ankit Duggal and Chris Masons, what are your thoughts on sourcing deals in NNJ?

My eventual rental portfolio will likely not be in NJ.

Hi, new member here from Northern New Jersey.

This is my second go around investing in real estate. I started in '07-'08 as a passive financial partner on a few flips, but stopped as I was also starting a different business venture that grew much more than anticipated. My 15 year professional corporate background is in finance and also sales/marketing. My recent business venture has taught me that I am a serial entrepreneur and at the same time miss the creativity of REI.

Currently, my long term goal is to ultimately hold a rental portfolio. In the interim, I plan to get there by:

1. Wholesaling: Since you make money on RE when you buy, it is essential to my strategy to direct market and find the best deals possible directly without middlemen. My goal is to be able to market effectively, find a constant flow of potential deals and learn the mechanics of the deals. While I understand that wholesaling is less risk and less capital required, I do have a substantial marketing budget.

2. After I have become proficient at sourcing and selling wholesale deals, I am looking to partner with a successful rehabber in my area to teach me the fix/flip portion of the business with my own generated leads. I am hoping that partner is a customer of my wholesale deals, so that they have a vested interest in helping me.

3. After I have cut my teeth learning the business from a partner, I plan to start eyeing properties to accumulate. At the same time, I plan to continue wholesaling and flipping properties as they fit me.

While I ultimately hope to do this full-time, my goal is to do part-time for at least the next 2-3 years. I have read 1000's of posts here so far (and they've been a great help!) and numerous RE books.

On a different note, I used to attend GSREIA. It doesn't look like they are still around. Can anyone recommend a good REI club in NJ?

Thanks,

Brian