Who to Mail? The ever-present question asked by every one of our new students and new investors. What is the one list that will make you the most money? Well, the answer is simple, you have to listen to the show! Listen in and get Dave and Mike's ideas on who to mail?
David: Alright guys welcome back to the Discount Property Investor podcast. This is our host David Dodge joined by co-host Mike Slane, hey Mike.
Mike: Hey Dave, hey guys, thanks for joining us again.
David: How you doing buddy?
Mike: I'm doing great. Real excited about everything we have got going on, feeling a little overwhelmed last week, but I think we are all back on track and ready to kick some butt.
David: We do have a lot going on that is for sure.
Mike: So I guess if you are a first time listener; we always encourage you guys to go out and check out our free wholesale course. You can find that at freewholesalecourse.com. If you are a St Louis local like ourselves; we would encourage you to come visit us at the REITRACTION even we have coming up. We are both pretty excited about that, so October 7th we have got the REITRACTION.COM up, it's live now, and we are having a little event for some of the local people. Anyone is welcome to attend if they want to come from out of town. We do a full day event on real estate investing and where to get started.
David: It is going to be an awesome event. October 7th 2017 is going to be the event. It is about two weeks out from today and... we are going to be hosting it here in St Louis Missouri. You can purchase tickets at REITRACTION.COM. We are going to have some guest speakers come in and talk about the different ways to make money in a real estate business, how you can make money with flipping properties, wholesaling properties. Obviously we highlight that a lot in this podcast... rental properties, financial freedom, hard money we are going to have a lot of good stuff in there guys, so check it out, and you can purchase tickets online at REITRACTION.COM. Mike, we should give a coupon code out today to our listeners.
Mike: Yeah we may as well. If you can come join us... which one? Gaintraction? Yeah if you type in the promo code Gaintraction; you get 50% off the ticket and... at that price point you are just helping us cover the cost of lunch, lunch is provided and the cost of the room. So definitely guys we look forward to seeing you guys... we know a lot of people are already registered so... we are pretty excited about it and again, we just have to get a lot of stuff finalised on our end to make sure it s a great event.
David: That's right, October 7th from 8-4pm, the location is going to be Spazios, that is in West Port. So yeah, what are we talking about today, Mike?
Mike: Yeah let's jump into the topic... so who to mail is I guess what we are shooting for, right?
David: We haven't really talked about this so much in recent podcasts, but we are going to dive into today who we are actually mailing. We talked a lot about mailing. As a wholesaler you have two ways to go about getting leads. This is the highest level; there are lots of ways to get leads. You can either get people to reach out to you or you can reach out to them. You are either cold calling outbound, calling sell by owners, rentals, for sale on Craigslist and so on and so forth. That is going to take a lot of energy. It is going to be an energy budget you are going to have to do that. You are going to be calling them, reaching out to them. The other way is to have them reach out to you. So that comes down to marketing, direct mail, bandit signs, online advertising and so on and so forth. At the Discount Property Investor we do both. We have people in the office outbound calling. We also have lots of campaigns that we do to get people to call us. So today we are going to focus just on the mail side of our marketing. We are going to talk about what we are doing and what you can do to get your phone ringing, to get people to reach out to you and call you and say, hey I am a motivated seller... I need to sell my house, I have a property I need to sell... you are a cash buyer, are you interested? Let's talk.
Mike: Yeah Dave, I like the way you break that down. You are either hunting or fishing.
David: There you go.
Mike: So you are either hunting and looking for sellers to pick off, and that is when you do some of your marketing, you are hunting for them. Or you are fishing... you are throwing lines out there and hopefully they come to you. I am sorry, I guess your fishing is more your marketing. You are throwing stuff out there and hopefully they call you. The hunting is where you are actively cold calling and actively trying to find those people. So it is just an easy way for me to think about it, obviously I messed it up here but...
David: No that's alright.
Mike: Hunting and fishing, both of them are important... the more money you have to spend the easier it is just to fish I think.
David: Mike, let's talk about this real quick because we do a ton of direct mail strategies. Anybody that we can think of that would have motivation we mail to them. But for the new people, the people who are just getting into the game... they don't know who to mail. Who would you recommend would be the number one, number two... places to mail? Personally I think it would be vacants or absentee owners. That is what I did when I first started and I had a tremendous amount of luck with it. How about you? What do you think would be the one or two top sources to mail?
Mike: I think to me at this point it really doesn't matter; just get your mail out. That is kind of one of things I tell people, just get your mail out. But if I was starting out with a limited budget again, I would go to a combination of the hunting and fishing. So I would develop my own list, I always think that developing your own list is going to be a much higher calibre list than you can go buy online, but it takes more time. So by doing that, what I am saying is I would go drive for dollars, go look for vacant properties in areas that you want to buy the property in. I would do more than just mail them. I would get out the car; I would leave a postcard on it or... a door hanger. But I would write down all those addresses of those vacant properties that are in areas that I am targeting and I would mail those people letters. So I would develop my own list of vacant spread while driving for dollars. That is the number one I would say. Again, that is a combination of the hunting and fishing.
Mike: ... going out, finding it and developing your own list. I think that is going to be the biggest bang for your buck, because you are going to have a list that nobody else has. When you are cultivating your own list... and that is why it is the higher value. The second one and the easiest one I would say... kind of similar to you Dave; it's... the absentee or vacant property list that you can buy on line. I am sorry, absentee or yeah, vacant property list that you can find out there.
David: That could be the same but could be different. You could have an absentee owner that has a vacant property. Or your could have a absentee owner that has a renter in that property. So typically your absentee owners are going to be landlords but they could also be vacant. Then of course vacants are just vacants, people don’t live there. They are all absentee owners for the most part because they don’t live there. But those are two different lists that you can segment. Again, when I first started I was mailing to those two groups primarily. Now there is a lot of... people on those lists so, when I first started mailing to those lists I chose postcards; because I could reach most of those people for less... cost per person. Whenever you are going and you are buying these lists you are going to see that you are going to have the highest number of people on your absentee or vacant property list compared to some of the other lists you can get out there... and either purchase or create on your own like Mike said; driving for dollars. What are some of the other lists we mail to, Mike? We mail to divorces, we mail to probate.
Mike: So those are two that you can pull from your county records. I don't know of any service that is actually pulling all that together for you again. So again you can get a V.A or do it yourself and subscribe to it. To us it is... what is the name of the service? It escapes me right now.
David: Are you talking about divorce?
Mike: Divorce and probate, it is all public information so it is posted on... it's like the Missouri Lawyers... some website that they have out there. So again that is something you have to search for.
David: It is not going to be something that is easy to where you are... just going to be able to log into the website and download that list, right? There is going to be a little bit of effort that goes into either daily or weekly... then copy and pasting that information, right?
David: That is something we have our V.A's do at this point.
Mike: Yeah that one is a little bit more difficult to get. Oww a great list and again this is just... most likely a giant free list in your area... so because information is public; your county most likely has to give you this list if you request it, or they already have it available on their website if you go out and look for it. It is anyone who is delinquent on taxes. So you can go out to your county... here in St Louis it is kind of a complicated list to pull down... and actually analyse and get the data out of. But again, it is a giant list... every property owner that is late on paying their taxes. So you can make a couple of assumptions on them... they are not always true. But if somebody isn't paying their taxes... in my brain they probably don't have a mortgage on the property. i think a majority of people with mortgages are going to escrow their taxes. So... again you can almost bet that it is a high equity owner and they didn't pay the taxes for whatever reason. You will get calls from people... oh I know I didn't pay the taxes I got three years. They will say that here in St Louis because the property isn't taken away for three years without them paying their taxes. But again, there is some reason why they didn't pay it. They either... haven't set the money aside or whatever. So that is a great list to go out there, free and easy way just to get a huge list of people to mail.
David: Okay, I like that, it's good. Another lead source we use to mail to is US-Lead list. This is probably the most expensive list that we purchase; I believe we pay a dollar, maybe a little less, little more per lead on this list. This list is primarily people that... it's a transfer of trust I believe; don't quote me on that. But it is a list that we purchased; you can go to USLeadlist.com. I do know that they... only sell the list to three investors per county. So... there are two other investors in the market of St Louis here who are mailing to that list. That's okay; we just mail it as well.
Mike: They are very limited to, we don't even get the full list anymore because we stopped buying it or something and someone else picked it up. So... if... yeah that is definitely a good one though, a great source. So let's talk about... okay we have a plethora of lead sources out there, we have named some free ones, a paid one there. Then obviously you can go to direct mailers and find their... find their list as well, they will sell you lists as well. As well as the... what is the big one? List source, Listability.
David: Those are the two biggest.
Mike: You can find the list... but let's talk about really who to mail. So again, you have this huge number of leads that come in and... what we do once we get a huge list; we want to filter it down because quite frankly we don't want to mail to everyone who has back taxes. So here in St Louis a lot of people haven't paid their taxes. Those properties are up in north St Louis. So... if you are familiar at all with St Louis; north St Louis is not... a great area... there is a bit higher crime rate, part of the reason St Louis is always ranked so highly on those lists of crime happening. Anyways... so you want to get familiar with your city, or whatever your market you are working for that matter. You want to... first I would say; eliminate some of the zip codes. So here in St Louis... I actually have it pulled up right now on another... page. I have zip codes to avoid spending marketing dollars in. I just have a whole list of them, so any time we pull up a list; I check it up against that, I filtered out those zip codes and just delete them, because we do not want to spend the money marketing those leads when we just know that the return... is going to be more difficult, going to be an uphill battle. Those properties are usually very distressed and... just very difficult. So who to mail... my point is you have to be familiar with your city to know what zip codes are not great, you want to niche it out. Especially... so we get back to our person just starting out, or someone with a limited budget. You want to niche yourself down into maybe even one specific neighbourhood... depending on how large it it is; one specific area and become the expert on that area, become the person who is able to get that lead before anyone else. That's... again I think that is how you are going to make the most money in this game just starting out. Just really niche out to one area. That is a great example Dave, just the other day Dan... one of our affiliates; he put a property under contract. I think it was out in Lake St Louis or
Mike: Yeah so...
David: Or Lake St Louis; one of the two.
Mike: Somewhere in one of the areas he works for us. Put it under contract and threw a sign in the yard that says 'We buy houses'. Any property we are buying we put a sign in the yard that says, 'We buy houses', if the owner is okay with it. They... called and said; hey I saw you guys were buying the property there, would you be interested in this one?
David: Yeah, this one was like two or three doors down.
Mike: I think it was right next door.
David: Maybe it was, yeah.
Mike: Or right across the street or something. Very, very close. Point being; niche yourself down to an area so people in that area know that you buy houses here. That's huge and that was an area we bought one in, and I think we flipped it; it was a wholesale or a wholetail. But point being; if you are an expert in that area your name is going to get around. So anyways kind of digressed a little bit there. Back to who to mail. Nicheing out your zip code, anything else, Dave you wanted to touch on in that?
Mike: No, I like that. Really I think you should focus more on reducing the negative zip codes as much as mailing the positive zip codes. The problem with only mailing to the positive zip codes is you are going to have higher competition in the nicer areas. If you are only mailing to two or three zip codes; you are limiting your possible results. So we still mail to 30 or 40, sometimes 50 zip codes here in St Louis, but we reduce out the 5 or 10 worst ones. So that is just my two cents.
Mike: Oh absolutely! Again I am speaking back to the person with a limited budget... you just want to be careful because if you mess that mailing up... you are going to get a bunch of leads that you might not even want to go up into that area and run an appointment. So... just be thoughtful of that after you purchase your list, or before you purchase your list rather... and just be away for that. But you're right. Definitely focus on getting the mail out there.
David: Absolutely. So other than... the lists that we have talked about; there are tons and tons of lists out there that you can purchase or go online and scrape either yourself of V.A's. Driving for dollars like Mike mentioned is a great way to do it. You can just drive round and find houses that look like they need work, vacant or... just tall grass for example. Write down their address and go on the county tax records. You can figure out where the person who owns the property lives and drop them a letter in the mail to them. When I first started I was handwriting letters. I didn't even purchase a list; I was doing just like Mike said, I was driving around, I was finding properties that looked like they needed work or the owners didn't really care about them... is kind of what I thought about when I saw the property. I just decided I am going to mail them a letter, and I am going to offer them a solution to this problem. I am going to say that I am an investor and looking to buy these properties... are you interested in selling this particular property? I am interested in buying properties in this neighbourhood or this area. I have a couple already and looking to buy a couple of more in the next couple of weeks or months or whatever the case is. Open up the conversation, there really isn't a whole lot to it other than just say that you are an investor, a buyer, are you interested in selling? From there you can dive deeper. But in the beginning you just want to get them to call you. The letters I was writing in the beginning were so simple. I was using yellow papers on a big notepad, went up to OfficeMax and bought a stack of legal pads and I got a sharpie. I would just say, hey I am interested in buying your property at... property address. Please call me, David, then I had my cell phone on there. That's it. When I first started I was using my cell phone, I was writing them. Then I would put them on an envelope, I wouldn't use a sharpie marker because it was too big, I just used a pen, write the address, Mr and Mrs Seller, John Doe, Mike Slane, David Dodge; whatever the name was, then the address, a stamp on it and I would give it out. When I first started I had a budget of maybe 50-100 bucks a week for the first couple of weeks. I got the mail out there so... don't let the size of the list or the cost in the beginning deter you from getting started. It can simply be mailing the letter to somebody on your street.
Mike: It's funny. My story is the exact same, Dave. I was listening to another podcast and met with another investor here who was trying to get started, or had been a little bit further ahead of me. Exact same thing; just get the mail out there, start writing letters. Exactly like your story; had the yellow pads, wrote the letters myself for... gosh I don't even know how long, probably six months. Well maybe not that long, maybe three months. I was using... just red ink on the yellow letter and... ended up starting to push them through my copy machine. So I would literally copy everything and just write the address and the name on it.
David: I started doing that to.
Mike: I was just tired of writing everything.
Mike: Eventually I scaled up a little bit more and wanted to the hand written look. So I hired one of my friends to do it for me. That was one of the ways I was able to consistently get my marketing out there... was just by having someone else do it. Then that way; all I had to do was answer the phone because... it is a difficult thing to keep doing that, answer the phone, run appointments, all that stuff that quickly becomes overwhelming. So again, it was kind of like my first assistant. I paid them to write the letters for me and made sure they kept going out. Gave her the list, she wrote maybe 25-50 letters a day and just kept the mail going that way. It is important to identify that list whatever it is. Again I... really am a strong advocate of reaching out when you are first starting especially... nicheing out your specific area, target area, and hitting those people hard. Even following up with them; that's another thing we haven't even discussed on this episode is... you mail them once and that's great... but quite frankly these people probably get mailed if they are a hot prospect, high equity, absentee owner... they have owned it for 25 years or something. They are probably getting mail all the time. So you want to make sure that you mail them again and kind of stand out. So that is one of the other things to touch on is the mail piece itself... there is no silver bullet mail piece. There is no one piece that is going to make someone call over the next necessarily. But if you can stand out that is what is going to help.
David: I agree completely Mike, that is such an important thing. People are always looking for the secret mail piece. The piece of mail that is going to get just a little bit higher response rate. But all means there are tricks to increase your response rates. However, in the beginning... don't hesitate, don’t worry so much about having that perfect mail piece or... having everything perfect; just get the mail out. At the end of the day; if someone is truly motivated... they are not going to care if your mail piece is all white and black or if it has a nice pretty yellow or red or pink logo on it. At the end of the day they are in a situation where they need a solution that you can provide for them. If they have a number and a name to call and say hello to, I got your mail piece, I have this house that I can no longer afford... help me and get this off my hands, will you buy it? That's all that matters. So get it out there, say that you are interested in buying your property, this is my name this is my phone number. You can even put an e-mail on there if you want, but that's what matters. Do not worry about making it pretty, shiny and sparkly... and having glitter in the envelope because none of that matters; it's irrelevant.
Mike: Period. Me and Dave are not naive; obviously certain things will increase response rates and all that. But the point is; when you are starting don’t over think it, just do it. Thank you Nike, just do it.
David: While we are talking about increasing response rates; there are tons of ways to do it. But what me and Mike have found... if you are doing enough it doesn't really matter. Back to the point; we are providing a solution to someone's problem. The main thing you can do to get somebody to open your letter... well there are two things; a hand written or hand written fond on the outside of the envelope will increase people opening the letter up. Two, the type of stamp you are using. If you are using a printed stamp; people are just going to notify that as junk mail immediately versus a sticker stamp. Those are the two things I would recommend doing... but it is not the end of the world if you want it printed in black ink and regular font and use a printed stamp. If you do enough of it you are going to get motivated sellers. Do not worry about it that much, just get the mail out like Mike said.
Mike: That's what we do, that's what I was working on before we picked up the call was sorting through out lists. Podio has to work hard sorting through all those seller leads in the system... to spit out the ones I want to print.
David: That's right. Mike just one last think to wrap this up... so we have mentioned a ton of different lists that we use, that we purchase, that we create... driving for dollars is a list we create. We also create lists from Zillo and Craigslist... we have virtual assistants that are scraping lists for divorces and probate... so on and so forth. Where was I going with this? Oh, window stop mail is what it was. So we create all of these lists, we buy these lists, we mail them, okay? You have probably heard several times that... the money is in the follow up. So I want to re-iterate that, the money is in the follow up. So we continue to mail these lists until they tell us that the property is sold... or... what is the other reason, Mike?
Mike: What did you say? The property is sold or...? Why would we stop?
David: The house burnt down or the house is sold. Stop mailing or we will change the frequency, make it much less obviously. We are not trying to be annoying to people but at the same time... we may be offering a solution to a problem that does not exist today... but it may exist in 6 months or a year. So often times they may say that they are not selling today. Okay, great, no problem. Then we will go in and change the frequency of that particular lead, of that particular... home owner from monthly or every 6-8 weeks down to every 6 months or yearly. So again the money is in the follow up. The last thing I want to leave you with... from myself here today is if you do get a list, and you mail that list one or two times and don't of success off of it; don't give up. You got to keep mailing. I read numerous stats out there, but I think it takes between 5 and 7 touches on average to get somebody to agree to work with you, or call you... there are people we have been mailing, especially on the probate list... we have been mailing for 6 or 7 years. At this point we may only mail them quarterly or even every 6 months. But they have been getting letters from our company or someone at our company for 6 or 7 years. Often times we will get calls and people will say, hey... I have been getting your damn letters for 6 years, but I am ready to sell now.
Mike: The thing is it puts you in the running because a lot of the time people collect letters and you see that. You will show up at an appointment and they will say they had 10 people and you are the only one who answered the phone. Or, you are one of three that answered the phone but came out today. It will put you in the running... you are one of the buyers there, that is the whole idea, to get in front of the decision maker so you can try and buy that house. That’s the business we are in; fierce competition... that's part of it. So Dave... why don't we go ahead and wrap up. I got a quote here we can wrap up the episode with. "Direct mail does not cost money, it makes money".
David: It makes money, so true. It costs a little bit upfront but at the end it is going to make you money, so you have to do it and it is going to prevent you from having to spend countless hours cold calling... and just doing all these other things we still do... but it is going to help out. If you want to be successful in this business... every dollar spend you are going to make 2,3,4,5, maybe 10 dollars back.
Mike: Alright guys, thank you guys so much... we look forward to seeing you guys are the REITRACTION event. Check that out online, REITRACTION.com. Or, if you are not local and want to get started in wholesaling check out our freewholesalecourse.com. Thanks guys.
David: Thanks guys.