How to improve your direct mail game...
Despite all the chanting about “DiReCt mAiL iS dEaD!!” from real estate investors… Direct mail is still alive and kicking.
Unlike social media channels canceling people’s profiles and groups… the post office will (almost) always deliver your mail (as long as Newman’s not delivering your mail). Unlike SMS platforms sending your cold SMS blasts to the spam folder, there’s only one mailbox that every letter goes to. And the biggest proof that real estate investor direct mail is working great… is by the pure fact that most of the biggest investors in every market, use direct mail in a big way.
Here at Ballpoint Marketing, we’re a print shop for real estate investors, and we serve about 500+ wholesalers, flippers, and investors. Most importantly, we’re also a wholesaling/flipping company ourselves. One thing that we’ve discovered is that when real estate investors use direct mail consistently, they become top in the markets.
… They never worry about deal flow.
… They focus on what matters most: Closing deals. (Instead of running around frantically around, worrying about when the next deal is coming).
Yes, I know all this sounds bias; we’re a print shop that makes money selling direct mail to real estate investors. But, think about it… How can direct mail be “dead”? Did people stop opening their mail? (It’s the opposite actually. The surge of Amazon orders increased the dopamine effect that mail has).
Did the post office stop delivering? (Of course not, and won’t for a long time).
What's happened with direct mail for investors?
Direct mail (the way real estate investors do it), for the most part isn’t done the right way and costs way more money than it should.
There are 2 problems in the real estate investing market:
- They don’t execute it properly (poor strategy, poor data, poor list)
- They send what everyone else is sending (which floods the market and motivated sellers become “numb” to typical real estate investor direct mail).
The only solution to these two problems is to send a truckload of mail every week… pushing out the smaller guys/gals with smaller budgets.
Direct mail isn’t only for big budgets
Direct mail is an art and science. It punishes the lazy and those that follow old, washed-up tactics. However, if done right, you can profit insanely even with a small budget. The trick is using the strategies of smart marketers, which we’ll show you here.
In this article, you’ll read about:
- List strategy — Planning and strategy is the first step to a direct mail. Most skip this part, and instead mail out a generalized list that bombs.
- Where to pull great data — without good data your response rates and costs will be in the toilet. That’s because you’re either sending to bad addresses or using old data. We’ll cover 2 solid sources to pulling great data
- How to zig with an awesome mailing piece — Junk mail and yellow letters are old news. They’ve been overused and sellers see right past it. Instead, we’ll reveal to you the tactic and mailing piece that’s worked so well for us and others.
How to send direct mail if you’re a real estate investor
In the topic of direct reponse marketing, there’s a rule that’s been tried made true for decades:
“80% of the success of a campaign comes from your list”
Now… that’s not exactly how the saying goes (I tweaked it for the real estate investing industry). In the actual rule, it’s anywhere from 40%-60% (see this video of Brian Kurtz, direct response guru explaining the 40/40/20 rule). The actual rule goes on to say that 40% of the success of a campaign goes to the list, the other 40% goes to offer, and the last 20% goes to copy.
However, for the real estate investing industry… I raised the bar to 80%.
In our industry, a list is that much more important. It contributes to the majority of a campaign’s success. A bad list is the main culprit for why mailings flop. But, when done right, it’s the main reason why our top clients crush it in their markets (consistently).
So how do you get a good list?
You perfect your list by understanding two principles: List Strategy & Data Pulling. We’ll cover these two topics in the next section…
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NOTE: The strategies in this article come from the excellent book we published in 2021 called “Direct Marketing Guide for Real Estate Investors”. It’s a 35-page book that goes into far more detail than this article. It’s free and you can download it here.
1. List strategy
Fire-ready-aim with direct mail is a sure way to burn money.
Remember what we said, 80% of your direct mail success as a real estate investor will come from a good list strategy and good data. You’ll lose big if you listen to the forums and Facebook groups telling you to pull a generic homeowners-with-equity list (while you’re in a highly competitive market).
If you want to instead enjoy the benefits of proper direct mail like one of our repeat customers Steve Uhlig who recently sent us this message:
“Finally closed the $30K assignment fee while I was in Mexico celebrating my 10 year anniversary the other week. I used to make $30K a year before taxes. It came from a postcard directed to Absentee Owners with equity in the top 10 hottest cash deal zip codes. Targeted owners with 3 or fewer properties. I used Power BI to get a birds-eye of which zip codes had the most cash buyer activity and just focused on those 10 zip codes. Found the end buyer by using the Auto Mailer software to blast realtors in the zipcode who represented cash buyers. The buyer wired in $2,500 EMD to the title, which was treated on the HUD as a marketing fee. The remaining $27,500 balance was handled off the HUD in a cashier's check so the seller did not see the spread. The buyer was fine with the assignment fee.”
Note what he said: He was vacationing in Mexico when the deal came in. Direct mail used properly can create for you a scalable business just like for Steve. It can be a “marketing faucet” for you; where you just turn it on every month/week and it starts your deal flow.
Ok, enough of the podium speech, let’s move on…
The first order of business is the list strategy. Just any list won’t do. Your budget, market, and buying strategy have a huge influence on your list strategy. Keep all these things in mind when you’re planning your campaign. There are three strategies we’ll mention here (more is covered in depth in our eBook “Direct marketing strategies for real estate investors“.
Let’s start with the first…
Niche Lists
If you’re operating on a small marketing budget (below $5,000) and you’re in a competitive market. I would recommend starting off with a niche list. These are small lists that contain some sort of event or a situation where someone is more likely to sell. Here’s a list of niches we approve:
- Divorce (a small list, but divorces sometimes include a house sale)
- Expired MLS listings (This one’s a big winner for us. Many people buy houses with this list. It’s a list of people that have said “YES I want to sell, but my Realtor failed me!”)
- Out of state Absentees with equity (I know a lot of people use this and it gets a bad rep, but this can be a profitable list if you STACK your list. We’ll go over that in the next step)
- Seniors (Slow but super-profitable)
- Tax delinquents (If you can get the data from your county website, this is GOLDEN. Very few things in life physically force a person to sell their home)
- Fire / EMS / Criminal activity / Code Violations. (See if your local departments share this data)
- Vacant (Make sure that you do NOT mail vacant owner-occupants. If no one is there… they’re not getting your mail)
- Pre-foreclosure (this can be very competitive depending on your market. Agents are targeting this one too. Also, keep in mind that your state may take a long time to foreclose on someone so maybe not recommended in certain states like California. See this article on foreclosure timelines)
- Bankruptcy (But with equity. That’s the key. They still have to afford to sell to us)
Ryan Dossey, one of our founders and an active direct mailer, discusses in depth some of the lists he uses. You can find a list of these videos here: https://www.ballpointmarketing.com/list_vault/
To mail these you can either:
- Mail each individually depending on their size and their budget
- Or… just combine them until you reach your budget and mail them all at once.
But… there’s an even more powerful technique that will ensure you get the best bang for your buck. It’s called list stacking…
Stacked Lists
If you want to get REALLY targeted… you can stack your lists together; meaning, you create one large list that only contains individuals on multiple lists.
For instance, there could be a seller that’s on both an expired listing AND a bankruptcy list, or someone that’s on a tax delinquent AND senior list. If someone is on multiple lists… it’s very likely he/she is MOTIVATED. Because EVERY person on that list has a messed-up situation. The best tool to use for this if you’re not savvy with excel is REISift . You can use any number of combinations and lists, the important part of is to make sure that every person on your new list has multiple situations (For example being on a “vacant list” and a “tax lien list”, or an “expired listing list” and a “NOD list”, etc
Targeting wholesaling zipcodes
If you’re a wholesaler, you might want to pay attention to this section.
In your market, there may be zip codes that have more motivated sellers than others. If that’s the case, it would be a wise idea to target those zip codes.
But how do you find them?
It’s actually very simple… Look for zip codes with the largest number of cash sales. Since the secondary (off-market) market is typically recorded as cash transactions, than you can easily pull that data. Ryan Dossey has a youtube video explaining this, found here: https://youtu.be/a3ga1a8dlNg
Combination strategy
What many of our top clients do is a mixture of list strategies. And a successful strategy we’ve seen is to first mail a large list (like homeowners with equity or absentees) with a cheaper postcard like this one. That captures any motivated sellers right now (the ones that have their “hair on fire” and needed to sell yesterday).
Then, they mail smaller niche lists with a more elaborate letter like this one to capture anyone they missed on the first one. Then often… they continue to mail those same lists every month with another postcard, capturing sellers that are still on the fence (and of course removing the return to senders and the leads that called in already).
Volume and consistency
The last thing I want to say about list strategy is this:
Make sure you’re mailing to a large enough list, and/or with enough consistency. There are a number of people who mail one time, to a small general list of absentees owners, and their list is a mere 1,000 in a HOT market like Phoenix.
They mail one time and call it quits.
The objective of a mailing is to build you a list of leads. It’s not to find deals… it’s to collect and record a new list of people who’ve raised their hand to you, so you can start following up.
But sometimes, things are just unlucky. And one campaign might be piss poor. And it happens to everyone. But the important part is you keep going, because one mailing might be a flunk, while another a winner with lots of leads. You need consistency of mailing, especially if you’re only mailing a measly 1,000 contacts with a general list.
The next part of our agenda, once you have an idea of list strategy, is creating/pulling the list with good data…
2. Good data
After you’ve thought about your list strategy, you need a place to pull good data. We’ll recommend two in this article.
County website
This one is a must. It contains the freshest data. All the list platforms like List Source, Property Radar, Propstream, etc, pull from these websites. But, once they pull it and sell it, by the time it reaches you it’s not as fresh anymore and everyone in your market has it. If you want to pull fresh bankruptcy, foreclosure, liens, etc… this is the place to go. And, I guarantee you, most people in your market are too lazy to scrape the data themselves. They’d rather take the “easy” way and only buy data (the easy way is often the mediocre way, and few people get rich following mediocrity).
Instead, you can reach sellers first by mailing to them first.
Here’s how to pull that data…
Every state and every county is different. But you’ll want to google “[county name] recorder” and see if you can find your county’s website for recorded information. The county records all the events (like bankruptcy, liens, auction notices, foreclosure notices, etc) on their website and makes it public. They have a portal where anyone can access (It may sometimes cost some money but it’s well worth it), and you can scrap the data yourself, or hire a VA, or create some sort of software.
Our top clients scrap these websites every week for fresh data and mail those lists every week to assure themselves they are reaching potential sellers first.
Propstream
This platform is incredibly easy to use and pull data from. You can pull various generic lists and niche lists that we’ve listed. They might seem pricey at first ($100 or so a month), but if you pull lots of data every month, it’s well worth it. They have a free trial that you can find here.
3. The Marketing Piece
So now we have a list strategy, and you have the tools to pull good data. Now you’ll need to mail with the right marketing piece.
What has been typical in the real estate investing space has been yellow letters for the last 20 years. It worked well 10 years ago… but the market has changed. Consumers/sellers have gotten these letters all too often and have grown numb to them. They pass it into their “trash pile” as they’re sorting their mail.
The reason for these types of letters being passed into the “trash pile” is one answer: Junk Mail.
The “opening sale”
For years people have been getting junk mail, and they don’t even bother opening it. So “opening” is the first “sale” we have to make when it comes to mailing.
The postcard
Now, what some investors do to “bypass” opening is to send postcards. They’re very affordable. And they get the message across. They’re great for blanketing a large area to look for the very motivated sellers that need help right now.
Keep in mind, that when you use a postcard you’re solely operating on luck: your postcard landing on the exact moment they need help or are looking for help.
That strategy is fine if you have a large enough budget and consistently mail (you have to weed through a large list to get to the actual motivated seller). But that’s the downside of it: it’s expensive for the small-time investor and you only rake in the “hair on fire” sellers. Instead, we rather get the “hair on fire sellers” AND the motivated ones that need to (or can only) sell later. That’s why we send handwritten mailers; in both postcard format and letters.
Handwritten letters
There are 2 reasons why see use such an “expensive” mailer:
- Higher response rates (our letters get on average a consistent 1%-1.5% rate in markets that have a .5% typical response rate)…
- Sellers actually keep our letters.
How do we know they keep it?
Because that is one of the most common statements we hear from sellers, saying things like:
“We kept your letter because it was handwritten!”
We’ve noticed that we are raking in the “NOW sellers” AND the “LATER sellers” (they have a motivational situation but can only sell later). These letters have had the highest ROI for us and our clients.
Good strategy, good data, good mailer
Having these three elements in play stacks the odds in your favor. In fact, just having these three can create a real 7-figure business for you (assuming you have a system to follow up on leads and close deals). That’s what we see in a lot of our clients. Take Mike DeHaan a Spokane, Washington real estate investor who gets 90% of his deals from direct mail.
He says this:
Or take this couple, Billy and Tarah Fernandes who operate in the Dallas Forth Worth, Texas market (highly competitive). And they too get about 80% of their deals from direct mail. Here’s what they once said to us:
Why do they choose direct mail over other lead generation methods?
Because it’s the simplest to scale, has amazing ROI, and there’s no VA to train (as opposed to hiring cold-callers and SMS managers). Now these two investors (and many others), only use mail and they have 7-figure businesses… but imagine if you used multiple mediums together (mailing then cold calling those same contacts, then hitting them with Facebook ads), your ROI would be through the roof. But that goes far beyond the intention of this article (we talk more about that strategy in our eBook here).
Now, if you’re ready to jump into direct mail as a real estate investor, give us a call. We’re happy to help with strategy and answer your questions. Just book a call with our rep here: https://www.ballpointmarketing.com/schedule
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