There are four major components to using direct mail successfully, and those four parts all need to work together for direct mail to be a reliable and profitable business lead source.
- Who you are mailing (your list of homeowners)
- What you are mailing (the marketing piece you are sending)
- Your salesmanship, or the “X Factor” that determines success or failure.
- Consistency, which often proves the most challenging for investors.
Let’s take a closer look at each of these four parts to better understand how to use them properly when sending out direct mail.
This is the beginning of every direct mail campaign and without a solid list of potential sellers you have nothing.
The downfall to direct mail is that it is a more challenging strategy for many investors to use. Because of the difficulty, there is a small percentage of investors who use it to generate deals and an even smaller percentage of investors who are actually good at it.
Potential sellers in any given market get mail regularly from newbie investors that want to buy their house and are therefore almost immune to it. So your “we buy houses” postcard or letter most likely goes straight into the trash or you may get a voicemail telling you to never mail them again.
There are many different lists that you could potentially mail to, but the one talked about the most, and probably used by every new user of direct mail first, is Absentee Owners.
The key to creating a strong direct mailing list is to source the leads not everyone mails to. You want to source a list that gives every name and address higher potential for real motivation.
Now that we covered what lists NOT to mail, here are a few that will give you the highest chance of success:
- Probate and/or The Inherited Property List
- Driving For Dollars (custom list created by you….this is the best list you can get)
- Code Violations List
- Tax Delinquent List
- High Equity & Long Term Ownership
- Home owners over the age of 65 + High Equity (this and #5 can overlap a bit)
- Entire Farm Area (saturation list)
- Notice of Default List
This is a curated list chosen from the ones I had a great deal of success mailing within my own business over the past few years. But don’t simply rest on my opinion. Be sure to think outside the box and come up with your own lists to mail.
To start thinking outside of the box, make a list of reasons why someone would be motivated to sell and develop a list of people that would be in that same situation (i.e. behind on property taxes, hence the tax delinquent list; Inherited Mom or Dad’s house, hence probate).
Keep in mind that the harder a list is to generate or find, the better your response rate will likely be. Most other investors will not put in the work to get to this ‘outside of the box’ list. Keep this in mind when deciding on which list(s) to mail moving forward:
Your Marketing Piece
With your established Direct Mailing Lists, you then determine what marketing material to send to each list.There are 3 main types of marketing pieces that Real Estate Investors use on a regular basis:
Handwritten letter (often referred to as the Yellow Letter)
Generally speaking the response rate is highest with handwritten letters, then printed letters, and lastly postcards.
After choosing your marketing material, carefully write your ‘sales copy.’ This is crucial.
If your sales copy and marketing materials are not on point, your direct mail will fail. You have a split second to grab their attention or the mail piece will go into the garbage. Once they open it you only have their attention for about another 3 – 5 seconds.This is why handwritten “yellow letters” work so well for investors. The envelope intrigues the person you mailed it to long enough for them to open it, and then the sales copy needs to be simple. For example, most handwritten letters state something like:
My name is Joe Smith and I am interested in purchasing your house located at 123 main street. Please call me at (xxx)-xxx-xxxx if you have thoughts about selling.
Utilize these principles when sending postcards and printed letters. Also remember to make the letter about them and not about you! Nobody cares that you are the best “house buying company” around. They only care about what is going on with them, so write your sales copy to address their needs and specific situation.
Talking With Sellers — or Salesmanship
Once you have mastered the art of getting your phone to ring consistently with motivated sellers, the real work begins. At this point in the process you sift through your incoming leads to determine which ones are a waste of time, and which ones could potentially be a deal.
(On a side note, if you don’t know values in your area like the back of your hand, then I suggest you figure them out ASAP. Otherwise you will end up wasting a ton of time on leads that should go straight into the garbage).
Once you determine which leads are worth pursuing, it's time to go to work. Rarely do we get a seller that calls and tells us they want X for their property, and X is an amount we are happy to pay. With the majority of your “good” leads you need to talk with the seller, build rapport, justify your price and negotiate!
People often don’t take the time to evaluate and work on their salesmanship. This business is about real estate, but it’s also about people, and the better you are with people, the more successful you will be with real estate.
Now, with that said, the key to getting good at this part of the process is simply practice. You are not going to be perfect straight out the gate, but you can become successful if you continue to talk to sellers, improving with every interaction you have.
We have bought many houses ( for substantially less money than what our competition offered), because the seller wanted to do business with us.
Case in point, yesterday I talked with a seller on the phone that we are under contract with, and he told me he had an offer for $15K more but he decided to go with us because he really liked us and the way we do business.
This part of the process is the X Factor that will ultimately determine your success in directly dealing with homeowners.
You can’t just do one mailing one time, or two mailings 6 months apart. You have to set a consistent mailing schedule for your list(s) and make sure you meet that schedule.
Most investors are not consistent and give up after one round of failed mailers. I’ll be honest — the first big mailer I sent out cost me nearly $3,000 and I didn’t get a single deal. It wasn’t easy, but I kept going.
I then changed my list, changed my marketing materials and sent out smaller rounds of mail until I began to see a decent response. I began to grow the number of pieces I sent out, the number of lists I was mailing to, and now here we are a few years later sending out thousands of mail pieces each month.
The best part is, those mail pieces bring in super profitable deals like clockwork, month in and month out. You need to have faith not only in yourself, but also in the fact that this strategy alone has made many many Real Estate investors incredibly rich. So why shouldn’t you be one of them?
Putting Direct Mail to Work for You
We covered the four major parts of direct mail that work together to create a successful marketing strategy and now it’s time for you to put direct mail to work in your business.
If you are wondering about the extra workload this adds to your business, yes, managing direct mail campaigns is additional work AND that is exactly why so few investors put in the work needed to master it.
Remember — if it was easy, it wouldn’t be worth doing. With practice (and the more you can systematize it) it will become easier, and I can say without a doubt, that mastering the art of direct mail to buy houses was the single most important skill that transformed me from being an average investor hoping to bring in six figures a year, to one that makes seven figures a year.
In the early days of your business, a willingness to put in extra work is what takes your business above and beyond your expectations and sets you up for long term success. I believe developing an ‘outside of the box’ direct mail marketing strategy is well worth the effort.