All Forum Posts by: Sean OToole

@Justin Howe said "We plan on mailing out 500 letters per month to start. Targeting absentee owners with 30%+ equity and at least 5 years of ownership. Any suggestions to our plan/criteria and tips are greatly appreciated."

Mailings like this work, sometimes. Let me suggest a little different approach that I've seen do better. First target that same list, but add one more criteria - out of area owners. Also, instead of "at least 5 years of ownership", target folks who bought in 2009 and 2010 - they've seen great appreciation, and are also likely feeling the downside of being a landlord and may be willing to "cash in" - always best when deals are win-win for them and you, and that particular group has the upside for that equation to work (unlike folks who bought in 2006).

Next, instead of mailing letters, drive by the properties, and take pictures. Ideally you find ones where the tenants are clearly not taking care of the place. Reach out to the owner, ideally over social media - InMail's on LinkedIn work great. Let them know you are a local investor / landlord and you just wanted to let them know their tenant isn't taking good care of their property. Let them know you are local, and ask if they need help. The key here is that you are GIVING in your initial contact. You have to give to get, and this is where most investors go wrong, they focus on what's in it for them, rather than on what the seller wants or needs.

@Melissa W. No, buying property for 50% of market value is not realistic anywhere in CA. You can buy below market value at trustee sale, but you are doing so in exchange for taking on certain risks, and work. Trustee sales must be paid for in full and in cash, there is no title insurance, your purchase is subject to senior debts, you may have to evict the occupant, and you don't get to make inspections prior to purchase. For all these reasons any discount is well earned by the investors that buy foreclosures at CA trustee sales. @Bill Larsen is correct that 80% of FMV is more realistic. After expenses you would do well to make 10% on your money on a 120 days flip, equalling a 30% annualized return. Even at that, you'll find quite a bit of competition. It's an excellent business for those who are good at it, but it's no get rich quick scheme.

@Michael Roy County clerks aren't typically involved in foreclosure sales in CA, as most CA foreclosures are non-judicial. Your Orange County example is awesome, but is for Orange County, FL, a judicial state, and there would not be anything similar in Orange County, CA.

@Ron S. You are absolutely correct. This entire discussion has been about CA, and even then just non-judicial foreclosures. There are some judicial foreclosures in CA, and those are handled through the court - though still recorded at the county recorder, as is true throughout the nation.

@Ron S. there is no legal requirement to post the notices at the courthouse (see CA Civil Code 2924f). It used to be a common practice a decade ago, but while I haven't checked recently, I'd be very surprised if it were still happening at most courthouses today. Even a decade ago it was a completely unreliable source as other bidders and or homeowners commonly tore notices down they didn't want others to know about. If you want them for free go to the recorders office - it is the only reliable, and complete, source.

Also, most sales in CA are no longer cried at the courthouse. It got so busy at the peak that most of the large counties passed ordinances forbidding public auctions at the county courthouse. Still common in some smaller counties, but now rare at the large counties.

@Ron S. thank you for your business!

@Chuck B. Thanks for the suggestion. 

@Mary Nathan While I know some have gotten calls off a mailer as few as 300, that was never my experience. I typically found that I made $100k for every 10k mailing pieces I sent. I never personally took it to the level that someone like Michael Quarles has, but I don't think no calls on 300 letters is unusual at all. While there are other experts here that can probably go deeper, here are a few things to consider:

1. Your selection - Absentee owners is one of the most popular lists. If someone(s) has already heavily canvassed the area you chose, you may be beating on a dead horse.

2. Your message - Sending the mail, and even using a yellow letter, or cut stamps, or whatever, will at best get them to read what you have to say. If you get that far, then what you say is critical for the next step - a response. When I first started mailing, I found an owner in my target list and I went an interviewed them. I also paid them for each piece of mail they received about buying their home. By doing this, I knew exactly who my competition was, and what they were saying.

3. Number of impressions - Most directly mail experts say that it takes at least 3 impressions before you build sufficient trust / name recognition for them to respond. I always mailed folks a minimum of 4 times. 

There is so much more to direct mail, but you get the idea. Just as an anecdote - the first really successful direct mail investor I met made most of his money by skip tracing the returned mail, not from responses from his pieces. Technology on change of addresses and vacancies has changed since then, but a good example of thinking differently.

On our accuracy, it is really easy in most counties to go to the county and verify. We do this kind of "back testing" ourselves on a regular basis, but we encourage customers to do it too, as I'd rather they get comfortable themselves then take my word for it. Also on non-owner occupied, be sure to read the tool-tip (hover over the field with your mouse), as that explains how we determine that from public records data.

Best,
Sean

@Steven J. that is a common problem with "list" services. They are like a box of Cracker Jack - always a surprise inside, not usually good, and only found after you pay. Look instead for a public records service that allows you to look at every record in your area for a flat monthly fee.

@Benjamin S. let me also add that most data providers have better data the more recent the data is. It depends on the particular county, as various providers have different "depth" (years of history) for each county, you'll note that transfer date for example becomes almost worthless at some point (when you exceed that providers depth in that county). So transfer date pretty much always works great for the last 5-10 and maybe 15-20 years depending on areas, but anything greater than that depth cut off and you'll get very few results. What you really want at that point is Transfer Date > 7 years, or Transfer Date IS NULL. Saying IS NULL, is essentially asking to see all the properties that have no transfer date at all - which should only be those transferred BEFORE whatever the cutoff date is for depth in that county. Hopefully that makes sense.

Best,
Sean

Hi @Derrick Reyes 

I appreciate the feedback. A couple of quick points:

1. We honor absolutely ever cancellation we get based on the time it comes in, even if someone on my team isn't there at the time. We are not trying to trick folks - if you cancel before the trial ends you won't be charged. Only exception is if you cancel in the middle of the night right before the trial ends you might get charged just because we didn't see it in time, but we will absolutely refund that charge as soon as we do see it.

2. @Steve Babiak , and @Travis Hamilton  are both partially right that it's a business decision, but unfortunately its primarily driven by problems with Customer Fraud. Let me explain...

As a trial user you can actually download 1,000's of leads, and then simply cancel. We limit free trials to one per user, but we have a real problem with people using fake information to repeatedly sign up to steal our service on an ongoing basis. As our first step in trying to catch these criminals, we recently started requiring that trial users cancel by contacting support. This gives my security team another data point in tracking down these repeat offenders. We've got a few other things we are trying as well, but unfortunately we are likely either going to have to stop offering free trials altogether, or limit the trials substantially to stop this abuse. More unfortunately it's not a small problem for us - we estimate the cost of this abuse to be more than a hundred thousand dollars annually. This really bums me out, as I just hate to let these rotten apples ruin my belief that even a brand new trial user should be allowed to use everything we offer. :-(

Thanks again,
Sean