Whoever said “print is dead” has obviously never met a real estate investor. When it comes to building a successful real estate investing business, direct mail marketing is a key component.
I won’t get into the nitty-gritty details here, but there are countless studies that prove that consumers spend more time looking at direct mail pieces (as compared to digital marketing – AKA emails, social media, etc.). Plus, direct mail is more likely to yield a higher ROI.
In other words: It’s cheap. It’s easy. It’s effective.
But, it’s important not to rush into the direct mail process; it’s something that requires strategic planning and evaluation of your results. Sending out a mass mailing to every household in your county isn’t going to get you far (even though it seems like it might).
So, before you even start your direct mail process, you need to develop a solid action plan. A well-rounded plan will include:
- Who you plan to send to first
- How often you will send follow up pieces
- Who you plan to send to second, third, and so on
- How you will acquire each mailing list
The key to your plan is: consistency. I’ve found that the times I’m most successful with direct mail are when I’m sending things out consistently. It may not be to the same exact groups of people every week, but I still make an effort to get something out the door each and every week.
Because, when you use direct mail consistently, you’re going to get results!
Another thing to keep in mind: this is a process of trial and error. You have to try different methods in order to find what really works best. For example, in certain neighborhoods, sellers might be more responsive to postcards. In other markets, you’ll find that yellow letters give you a better response. But to find out what does work, you have to be willing to test out different methods.
When you’re ready to get started, you can begin by developing your mailing list.
Creating a mailing list
There are a variety of ways you can pull mailing lists. Of course, there’s Accelerated Investor Office (my personal fave, I must say, because it will give you highly-detailed results that are updated almost in real time). You could also try options like FlipThisRealEstateList.com or ListSource.com.
Once you have a comprehensive list, start out by testing a mail piece on a smaller group of people (around 100 or so).
Now, you can’t expect to get a ton of results out of this. But, the reason I recommend it is so you can experiment with the process and figure out what works best – before you spend more money mailing to a list of hundreds or even thousands of people.
Make sure you remove any bad addresses from your list. Then, after that initial “test” phase, you’ll be ready to rock.
Let’s take a look at a sample 5-week “schedule” of direct mail pieces. Keep in mind: you should adapt this model to your specific business preferences and market. There is no “one size fits all” direct mail plan, but this should give you the inspiration you need to come up with your own plan.
Week 1: High-equity, absentee owners
During week 1, consider starting with 1 to 3 zip codes in your target area, and focus on a select group (like high-equity absentee owners). Then make a plan to mail to this same group of people about every 5-6 weeks.
I find that the mailing list of high-equity, absentee owners doesn’t need to be updated super often. I usually make sure to pull a new list about every 5-6 months, and that seems to work well for me. So, this should be an easy and quick list to pull – and you can use it for several months before refreshing it.
Week 2: Probate and/or vacant homes
During week 2, I tend to focus on mailing to probate and vacant homes. Now, you want to make sure you acquire your probate list the week BEFORE you plan to mail out your postcards – so you can be ready to actually mail out your postcards or letters during week 2.
Or, if probate is not your thing, you might focus on vacant houses instead. One thing I highly recommend is spending at least 2-3 hours per week driving around your target neighborhoods, looking for vacant properties. This can be done on your way to other properties or appointments, or you can set aside a chunk of time devoted specifically to driving for dollars.
Then, at the end of the week, add all of your vacant properties to a spreadsheet. Find your local tax assessor’s website and look up the vacant properties’ owners. You should be able to find their mailing addresses pretty easily.
You can also pull a list of vacant properties from your Accelerated Investor Office Lead Pipes Premium account. (Just remember that you need to have this type of account; the Lead Pipes Pro account does not include vacant houses.
I usually mail to a couple hundred vacant homeowners at a time. This seems to give me great results, even though it’s a much smaller number than the high-equity, absentee owner property mailing list.
Week 3: Evictions, tax liens, and/or pre-foreclosures
Week 3 is typically when I mail to property owners with evictions and tax liens.
Evictions are a GREAT list. I usually get this list once a month from my county courthouse. In most cases, you’ll have to physically go into the courthouse to request it.
Once you have a list of evictions, you can easily type the addresses into your tax assessor’s website and locate the property owners and their mailing addresses.
Depending on your city, it might not be a huge list. For me, it’s typically only 50-100 people per month. But, remember that most of these people are probably highly motivated sellers.
As you’ll see, these types of lists are typically shorter. But making sure you mail to these shorter lists, in between your mailings to larger groups, is super important.
For properties with tax liens, you can usually get these lists from a county website or FlipThisRealEstate.com. I think some of my best deals over the years have come from owners who are facing tax foreclosures – so definitely look into this. I usually have about 300-400 people on this list, at any given time.
Side note: For tax liens, I don’t necessarily send out direct mail every third week; instead, I like to mail to this list about 3 times per year. Usually in October and April – when taxes are due – and then in May or June.
One other list you might consider for week 3 is a pre-foreclosure list.
Every month, my title company sends out a list of all of the upcoming foreclosure auctions in my city. So, what I typically do – when I receive this list each month – is choose all the properties that look like they might have higher equity, based on my own knowledge of the local neighborhoods. Usually, I send these people letters once a month until they go to foreclosure.
If you’re wondering how to get your hands on these pre-foreclosure lists, here’s one method:
Providing these lists is something that many title companies do for free. It’s usually a complimentary service, because it’s based on information that is public record anyway. So you can easily contact a few title companies in your area and ask if they provide this service.
Week 4: Expired listings and/or high-equity owner-occupants
Another good list to mail to is: expired listings. Hit up one of your Realtor partners and ask them to export a list of expired records from the MLS.
And, finally, try pulling a list of the high-equity, owner-occupied properties in your area. I like to search for owner-occupants who have been in the house for 5+ years (preferably 10+ years), and who have very high equity or even own their home free and clear. You can use Accelerated Investor Office to find these lists.
Now, a quick tip on the high-equity, owner-occupants: at first, these are not going to be your most motivated group of people. BUT, if you keep sending to this list, they become more and more motivated over time, or as their life circumstances change.
Week 5: Take a break
Week 5 is a great time to take a break from mailings, and devote time to evaluating the work you’ve done so far. Go through your direct mail campaigns and determine your response rate for each one.
This is also an opportunity to sort through all of the returned mail that you got back from your campaign. Save all of your returned postcards so you can skip tract and cold call those owners.
Overview of the process
To make the most of your direct mail campaign, you have to be able to accurately determine your response rate.
The industry average response rate is around 3% (which sounds abysmally low, I know – but hear me out).
If you send out 2,000 postcards to absentee owners, and 1,000 to other mailing lists (equaling 3,000 total mailed pieces), you should expect to receive about 100 phone calls. But it only takes about 30-40 phone calls to secure one property deal. So, with 3,000 sent mail pieces, you are likely to find 2 to 3 deals that go through.
Really, it comes down to this: you won’t know until you test! Every community or town will give you a different response rate because of the home prices, competition (or lack of competition), and the overall state of that local market.
Week 6: Start over
Before you start mailing your next piece to the same groups, make sure you remove any non-deliverables from your list. Also delete any addresses for “take me off your list” phone calls.
Then, as easy as pie, you can just repeat the process of that past 5 weeks. Overall, you want to repeat the process for 3 cycles (in other words, you should mail 3 times to each list).
Once you have your results, be sure to evaluate them. Then, you can use that knowledge to cleverly pull new mailing lists for your targeted areas.
Sealing the deal
Direct mail marketing is definitely a “learn as you go” process. The more you test new mailing pieces to new lists of contacts, the more you’ll discover patterns in the responses you receive. It’s kind of like a puzzle or a game... determining the right message for the right people in the right zip codes or neighborhoods.
The more you play the game, the better you’ll get. And, when you’re closing deals that started with a simple, cheap postcard, you’ll be glad you spent such a small amount of money and time to score the best property leads.
To learn more of our direct mail marketing secrets, finding hidden deals and more, join us at our Flip & Fund Summit 10 this December 7-9 in beautiful Las Vegas, NV! Click below for more info!