Using Direct Mailing to Find Wholesale Real Estate Deals
Step 1: Find Useful Lists
When you start direct mailing, the most important factor is the list to use. A typical, untargeted direct mailing campaign has a 1% response rate. With the right list, you will get a much higher response and generate more leads.
Here are the best lists to consider:
Out-of-state landlords are owners who do not live at the property or even in the state. This is one of your best target groups. Out-of-state landlords often defer maintenance because of the hassle of hiring and managing contractors from a distance. They are also much less emotionally invested in a property they are not living in.
Out-of-state landlords often own more than one property, giving you the possibility of wholesaling more than one property with the same owner.
How to Find an Out-of-State Landlords List
When searching for an out-of-state landlords list, you can get them from the following locations:
- Tax Assessor's Website: Start by checking the local tax assessor's website. However, on many of these sites you will have to put together the list manually as you can only search properties one by one.
- Tax Assessor's Office: Some tax assessor's offices will sell you the complete list of property owners in the area as an excel spreadsheet. You can then sort the list by out-of-state addresses. While not all tax assessor's offices will do this, it is worth asking.
- List Provider: You can also purchase the list directly from a list provider or data broker. Search out a few in your area to get the information you need.
Inherited or Probate Properties
The second list you will want to target are probate properties. Probate is the legal process that settles a deceased person’s final debts and passes on their assets to those named in their will. Usually, the heirs would prefer to sell the property than turn it into a rental or live in it themselves.
Inherited or probate properties are generally in need of repair and already vacant. For the convenience of a quick sale, often managed from a distance, those who inherit these properties are willing to sell at a deeply discounted price.
How to Find Probate and Inherited Properties Lists
Probate records – meaning cases that have entered or completed the probate process – are available to the public. You can find them in the probate court office. This is sometimes called the circuit course, orphans’ court, or surrogate’s court. An estate is generally probated in the county where the deceased person lived at the time of death.
At the court, you can look up recent probate records. It is a good idea to have a clerk help you look up recent records, as it can be a time-consuming process. The advantage is that the list cannot usually be purchased, which means you will have much less competition.
Pre-Foreclosure Property Owners
Pre-foreclosure lists are an excellent place to locate highly motivated sellers willing to make a wholesaling agreement. These properties will often have deferred maintenance and can be sold significantly under market value to clear the debt.
How to Find Pre-foreclosure Property Lists
You can find pre-foreclosure property lists:
- Manually: You can put the list together manually using the county recorder’s office to gather the information
- List Provider: You can usually purchase a list of pre-foreclosure properties from a list provider.
- Title Company: A title company will also sometimes be willing to provide a pre-foreclosure list.
When looking at a pre-foreclosure list, be sure to check the date of the lis pendens. This is the date of the notice of default filing. More current lis pendens are generally better for your direct mailing campaigns as these property owners are still early in the pre-foreclosure process.
Expired listings are properties that were listed with a real estate agent but did not sell. These are excellent wholesaling opportunities. You create a win-win where the listing agent can still get a commission on the sale, the owner can sell the property, and you get a price in your target range.
How to Find Expired Listings
A real estate agent can help you search the Multiple Listing Service (MLS) for expired listings. They should be able to send you a current list of expired listings as an excel spreadsheet, giving you an immediate mailing list.
Free and Clear Owners
You can also target people who own their property outright – without any mortgage or other debt on the property.
Usually, free and clear owners have owned the property for many years, even decades. In these cases, they will have purchased the property at significantly less than its current value. You may be able to make them an offer that is advantageous to you, and still represents a gain to them.
How to Find Free and Clear Owners
To get a list of free and clear owners in your area, you can purchase the list from a private list provider.
Delinquent Property Tax Lists
It is worthwhile to obtain a list of property owners who have failed to pay their property tax. This is often an indicator of financial stress. Many times, these properties will also have deferred maintenance and need for updating.
Owners who are delinquent in paying property tax can become motivated sellers to obtain a great wholesaling opportunity.
How to Find Delinquent Property Tax Lists
The local tax assessor’s office will be your source for a delinquent property tax list. Some offices will be willing to sell you this list. In other areas, they will help you put together the list manually. You can ask the clerk to help you obtain this information.
Step 2: Set Mailing Frequency
Once you have your mailing list, you need to decide how often you will mail them. As a rule of thumb, four mailings to the same list will generate significantly more responses than one mailing. For this reason, it is a good idea to set the size of your list based on your budget.
A postage stamp currently costs $0.55. You purchase envelopes and paper for a rate of about $0.15. That means that the total cost of one mailing is $0.70. Add in 10% for calculation error or price changes, and your price per individual mail is $0.77.
If you have $1000, that means that you can mail out $1000 divided by $0.77 equals 1298 letters.
But since you want to send mail to the people in your campaign 4 times, that means you can mail out to a list of 324 people.
You don’t have to be so precise with the cost per letter. Postcards will generally cost less than letters. Other additions will add a few cents to the cost. You can estimate $0.75 to $1 per mailing.
Step 3: Determine What Types of Mail to Send
There are many different types of mail you can send in your mailing campaign. It is a good idea to use a variety and not just stick to simple letters. This ensures maximum exposure and piques the curiosity of the recipients.
Types of mail you can send for a direct mail campaign include:
- Short Letters: Just as the name implies, the purpose of a short letter is to make initial contact and pique the owner’s curiosity. Include a short line about how you want to buy in 30 days and want to talk to them or some other compelling offer without many details.
- Long Letters: Use long letters to describe your business and detail in more detail. The key is to give the seller many reasons to call you and discuss selling their home.
- Yellow Letters: A yellow letter is a letter printed on lined yellow notebook paper and appears to be handwritten. This gives a personal touch and draws the attention of the homeowner.
- Postcards: People almost always read postcards because there is no need to open an envelope. They are also less expensive than other options and good to include as one step in your multi-step mailing campaign. Two strategies to make your postcards appear more personal are to handwrite the name and address and use interesting or unique stamps.
- Lumpy Mail: Lumpy mail has something inside the envelope to give it a lumpy appearance. This can be a piece of candy, a small eraser, a plastic toy, or anything else that is small and will fit in your mailing. The idea is that people become curious about lumpy mail and are more likely to open it.
Step 4: Create a Compelling Message
Now is the time to appeal to the owner to take action. Your messages should be written so that the owners feel you understand their situation and are speaking to them. You want to be empathetic and caring in your message.
There are five main parts to include in your message:
- Compelling Headline: You want to catch the owner’s attention so that they are curious to read more. Think of ideas like, “Sell your house in 10 days, guaranteed!” or “I can make you an all-cash offer in 48 hours or less!”
- Empathy Statement: You want to specifically acknowledge the owner’s situation. This should be tailored to your list. The empathy statement for a pre-foreclosure list would be about helping owners avoid foreclosure. An empathy statement for out-of-state owners would be about the difficulty of managing properties from a distance or about tenant problems.
- Offer Benefits: You want to specifically state the benefits to them, such as no agent commission, no repairs needed, no stress, quick sale, no-hassle, etc.
- Call to Action: Here, you will create a sense of urgency and ask that they call you or visit your website right away.
- Contact Information: Be sure to clearly state how they should reach you. Usually, this will be a phone number, but it can also be your website with a good lead funnel where they can enter their information.
- Bold Promise: Here you finally convince them to take action. Mention something like “close in 48 hours”, “all-cash offer,” “sale complete within 10 days”, or another bold statement.
Step 5: Set up Your Inbound System
You can receive responses directly on your phone, but if you are expecting a large number of responses, it is worthwhile to set up a professional system to receive calls and inquiries.
Best Inbound System Options:
- Google Voice: This virtual service will redirect calls to your phone number. It records and transcribes voicemails and emails them to you for review.
- Call Center: You can create a simple script and intake form and hire a call center to answer calls and email you the lead sheet for review. This is a better option once you have grown your wholesaling business.
- Website: You can also send people to your website squeeze page where they can input information. This option is less desirable than the other two because it depends on people accurately entering the URL for the squeeze page and inputting their information, but it can also be used.
Step 6: Send the Campaign
Now that you have your mailing campaign ready, you just need to select postage. In the US, you can choose between first-class mail, presorted first-class mail, and standard mail.
If you plan to do regular mailings, it can be worthwhile investing in a postage meter so you can post large batches of mail quickly. You can also outsource this whole step to a company with the knowledge and equipment to select the best option for you.
Step 7: Track Your Results
You want to track every part of your mail campaign to understand your return on investment. You’ll also want to note what letters were returned, so you can remove those names from your mailing list. A good way to keep track of all this information is in a Microsoft Excel or Google Sheets spreadsheet.
Here is a list of items to track:
- Returned Mail: Remove these names from your list for future mailings.
- Responses: Note how many responses you receive from your list in each of your four mailings. Also note responses depending on the type of mailing you sent out (e.g., postcard versus letter, etc.). This is the most important factor you will be tracking.
- Cost: Note the cost of each mailing. Postcards will generally cost less than regular or yellow letters. This information will help you with future mailing campaigns.
The key to successful mailing campaigns is in the response rate. For that, you want to give the feeling that you personally care about the seller and that they will get to know you. This is not mass-marketing. You want them to feel you are a neighbor reaching out.
To increase your response rate, try the following:
- Use brightly colored or odd-shaped envelopes
- Use stamps rather than a postage meter
- Personalize the letter with the seller’s name and address
- Include a handwritten note
- Use colored stationery
- Use an envelope with a see-through window
- Write your notes on unique or personal letterhead
Putting It All Together
Consistency is the key to direct mailing. Professional marketers expect around a 1% response rate. To increase your response rate, repeated exposure to the same list and a personal touch will be the keys.
Don’t be discouraged if you don’t get any responses from your first mailing. Most people won’t respond until the third or fourth mailing. Sometimes, sellers will look at your mail for months before deciding to call. You want to consistently reach out so that they choose to call you instead of another investor when they are ready.