I talked previously about doing some direct mail campaigning in attempt to find leads for properties. Well, we’ve spent the past several weeks immersing ourselves in direct mail strategies, and finally started our direct mailing this past week (results of that campaign are below).
For our first mailing, we targeted “absentee owners with equity” – these are basically people who own properties that they don’t live in, but have equity in. These may be professional landlords, reluctant landlords (those who have a property that they don’t particularly want to have but haven’t disposed of yet), those who have inherited properties, and those who own properties that may have been in their families for many years. We decided to target this group of people first, as there is a decent chance they don’t want their properties (they don’t live in them) and there is a decent chance they will have the ability to sell at a low price if they choose to (they have a good bit of equity).
This may not be the most motivated group of sellers, so there was a decent chance we wouldn’t get any deals from the mailing, but we thought this would be an easy group to target at the beginning. The first big decision we had to make was how much of the work we wanted to do ourselves. While we could accumulate the list of names/addresses, write the letter, stuff the envelopes, address the envelopes, set up the phone line, set up the voice-mail, etc, ourselves, we wanted to get a mailing out very quickly and decided to hire a company that could do all of this for us (they were great, and if you are looking for turn-key direct mailing support, here’s their info: YellowLetterMail.com. Full disclosure, that is an affiliate link, so if you order through them, I will get a commission…though I’m not affiliated with them in any other way except as a happy customer).
Basically, we just told them the parameters of the people/houses we wanted to target, and they did the rest.
Within a couple days, we had a list of 1000 names and addresses, and a week later, the mailing was sent. The letters were pre-printed (we could have customized the letter but we let them pick a generic one for us) with custom fields on each letter (name of owner, address), and a hand-written envelope that increased the odds that the recipient would open it. They also set up a local phone number for us; this went directly to voicemail (it could have come to our phones but we didn’t want to be inundated with calls the first time around) and each time someone called, the voicemail system sent us an email with the calling phone number and a link to the audio file. We even got the calling phone number when the caller hung up without leaving a message.
Here are the results of our first direct mail campaign (I think the bulk of the calls have already come through, though I imagine there may be some additional calls in the next couple days):
- 1000 letters sent, targeting absentee owners with at least 40% equity on properties in my county
- 83 Phone Calls Received (7% picked up the phone to call us!)
- Of the 83 Calls, 51 were hang-ups who didn’t leave a message
- Of the 83 Calls, 32 left messages (over 3% actually left messages!)
- Of the 32 Who Left Messages, 5 asked us to remove their names from the list
- Of the 32 Who Left Messages, 27 asked us to return their call to discuss a property
- Of the 27 We Called Back, 25 we either haven’t spoken with yet, were not very motivated to sell their properties or just wanted and/or just wanted to know who we were
- Of the 27 We Called Back, 2 were motivated (or potentially motivated) to sell
Here are the details on the 2 that are potentially motivated to sell:
- The very first person we spoke with owned 3 lots (one of which had an old, uninhabitable house) in nearby neighborhood. The lots total .62 acres and – except for where the house stands – are heavily wooded, so there would be a decent amount of work needed just to make the lots buildable. Houses in the surrounding area don’t support values where building would make sense. The owner was duped into purchasing the lots back in 2007 for $100,000 and wants to be rid of them. We’re not sure we could get much – if anything – for the lots, but we may make a very low offer, perhaps $2-5K.
- The next most motivated person was a gentleman who inherited a house from his parents a few years ago. While he’s not willing to “give it away,” it’s in one of the best school districts in Atlanta, and things in that area sell very quickly and easily. It sounds like he may be willing to sell at a price that would still make the deal worthwhile, and if not, there may be some additional opportunity for making money on the deal. We’re meeting with him early this week to look at the house and discuss specifics.
As you can see, we’re still working each of these potential deals (and still have about a dozen potential sellers to catch up with on the phone).
I’ll post updates as we get more information and if any of them turn into an actual deal. We also have a LOT more direct marketing in the works (we have a very interesting business model that we’re planning to pursue over the next few months), so stay tuned for that as well…