How To Use Direct Mail to Grow Your Real Estate Investing Business (Part 2 of 4)
Ok, let’s pick back up from a couple of weeks ago and dive into some of the basics of direct mail, starting with the LIST.
Who should you be mailing to? Who are the best targets for finding motivated sellers? And which group tends to have the greatest potential?
The answers? It depends.
There really is no one specific target or mailing list that is the BEST for any given market. Each market is different, so only testing can give you a straight-up, truthful, answer.
But to make things easier … I’ll give you a summary of what I’ve personally found to be the best target prospects over the years in the markets my team and I have invested in.
How important is list selection?
Here’s an instructive quote by Joy Gendusa, CEO of PostcardMania, on the importance of targeting the right prospect:
“First, you have to get the idea that ‘marketing is persuasion’ out of your head. You aren’t convincing someone to buy from you. You are showing the recipient … why you are the best choice in your industry. You know they are already going to be interested in your products or services, because you are going to make sure of it by finding a mailing list filled with prospects who are HIGHLY likely to be looking for what you offer.”
Well said. Direct mail is more of a rifle, rather than a shotgun marketing approach. It allows you to pinpoint and aim your message towards a market that’s eagerly looking for an answer you can provide.
And selecting the right list is one of the major keys to a successful direct mail campaign.
Here are some of my favorite targets …
1.) Out-of-Area Owners – these are owners who live out of the area, in another city and/or state.
Burned-out landlords have been a great source of deals for me over the years, and targeting absentee-owners has been one of the primary ways I’ve found them.
Landlording is not easy game. And many choose to go at it alone … which I think is crazy move, especially if you’re managing property from a distance.
But many owners do it. And I’ve seen it break even the most well-intentioned and determined landlords. They go from beaming & proud property owner … to burned-out, frustrated landlord pretty darn quick – especially after an eviction or two.
Absentee owners may also be property owners who have moved from their primary residence but failed to sell their previous home, or owners who inherited a property from a relative.
2.) Inherited – Many people who inherit a property aren’t prepared or really don’t want to become instant property owners. Maybe the property is in disrepair. Or vacant. Or maybe it has current tenants so now they’re instant landlords, which they really weren’t prepared to be.
Another possible problem is they may find themselves in an unwanted partnership with other named heirs, like a brother or sister or other family members.
Plus, many who inherit a property see it as a windfall and found money anyway, so they’re often willing to let it go at a discounted price.
This can be a goldmine if worked consistently and diligently. You can find a good source for leads at USleadList.com.
3.) Eviction Records – This is another great avenue for finding burned-out landlords. In my experience, someone who’s going through the process of evicting a tenant is probably the most motivated type of seller you can find.
Been there a few times myself in the early years so I can definitely relate. It’s draining emotionally, physically, and financially.
And for a while, it can make you really hate rental property. Not good.
But maybe a good thing for you!
4.) Probate - When a person passes away, depending on how their estate was set up, their home often ends up in probate. So what is probate? Here’s a good definition I found …
Probate is the legal process by which property – owned by a person who is deceased – has been passed to his or her heirs after the death. In other words, probate is simply passing title or determining “who gets what” when someone passes away, either by looking at the will, or if none exist, then under the laws of intestacy, or laws that determine the hierarchy of heirs. In other words, probate affords for overall management and supervision of the distribution of the deceased person's assets in accordance with the instructions left in a Will or in keeping with the state's statutes (if a Will does not exist or cannot be located).
Often times, the family needs to deal with emptying out the home, cleaning up the property, making necessary repairs, and then either renting or selling the property … which can be a pretty overwhelming task.
Rather than dealing with all this, many heirs would prefer to just hit the EASY button, which can mean selling quickly and ‘as-is’ to an investor at a discounted price.
I was at an investor conference a couple of weeks ago, and one of the people I got a chance to meet was 30+ year veteran who has bought and sold over 1,000 houses in his career, and has renovated entire neighborhoods. Guess what he says has been his greatest source of deals?
Yup … probate leads!
This topic of probate marketing is so important and so critical to your success as a real estate investor, I want you to …
SAVE THE DATE – Wednesday, July 16, 2014 (9-10PM EST)
Why? I’m interviewing one of the nation’s foremost experts on probate marketing … and he’s agreed to spill the beans and hold nothing back.
If you’re serious about your real estate investing business, this is one interview you definitely don’t want to miss!
More details coming your way soon in the next couple of weeks, but for now – I encourage you to put that date/time down on your calendar.
5.) Pre-Foreclosures - When someone stops making their mortgage payment, the bank will eventually begin the process of foreclosure. So you can reach out to an owner either during the delinquency stage (before an official Notice of Default (NOD) is filed … which officially kicks off a foreclosure proceeding), or you can begin marketing right after the NOD is filed. Both times can be lucrative, and would just need a slightly different pitch/tone.
When I first got started, one of my primary targets were pre-foreclosures after an NOD had been filed. The approach was simple: Yellow postcard #1 was sent within a couple of days after the NOD … yellow postcard #2 (with some kind of reference to postcard #1) was sent 10 days after that … and yellow postcard #3 (with a reminder that postcards 1 and 2 were previously sent) sent 10 days after PC #2 was sent.
Simple, sequential marketing at it’s finest. And it worked like a charm.
So anyway, those are some of the best targets I’ve found over the years. Where and how do you get these lists?
Here are a few ways you can build your list:
* County/Public Records – It’s manual labor to go this route, but the trade off is it’s free. You’d be surprised at the amount of information you can find through county/public records. In one of the markets we’re in, we’re able to find NOD, bankruptcy, eviction, and even divorce filings!
* Driving for Dollars – This is the process of getting in your car and driving around (ideally in a specific geographic farm), looking for properties that are in in bad shape. Maybe it’s boarded up … or the grass is 3 feet high … it looks abandoned … or maybe the city has red-tagged it with some kind of code violation.
Once you spot one of these properties, you then become a detective and try to find the owner through one of the online search services, or maybe by simply asking a neighbor.
Lots of manual labor involved again, but again, it’s low cost … and it can really pay off if you commit to doing this on a consistent basis.
* List Brokers – This is the quickest & easiest way to acquire a list, but it’s also going to cost you some money. From an ROI and time-saving standpoint though, this probably makes the most sense.
Here a few list brokers used by many investors: ListSource, MelissaData, and Click2Mail.
One of the big benefits of using a list broker is the ability to narrow down your list based on goals/criteria. Here are the type of filters you can typically run:
* Number of Bedrooms/Bathrooms
* Age of owner
* Years of ownership
* 30-90 day late payments
* NOD filed
* And a whole lot more
Anyway, there you have it … those are the basics of list selection. We’ll pick back up in the next week or two with types of direct mail you should be considering.