$200.00 A Day
I have been on this site for awhile now and it has GREAT advice. I have learned alot and made some new friends (PenPals). The problem I have is I have done mailings to over 10000 people 3 times over (Out of State, foreclosure, pre Forc, and just nice areas) and have done only 1 deal as a result of these mailings and thousands of dollars in postage and letters etc. All I want is to make $200.00 a day so I can quit my day job.
I have 90K to invest but I don't think SFR are going to get me there.
Can anybody offer any good (not sarcastic) advice on how to go about this. I have been looking at a few duplexes, triplexes etc but I don't see the money potential there ( mtg payment vs rents). I would like Apt buildings possibly.
Thank you all for ideas.
What type of houses are you trying to purchase? Sending letters and postcards are great but 10,000 should have gotten you 100-150 calls with the basic premise that a return rate around 1.25% is the norm. Then out of that you should have netted maybe 10 deals. How big is the area your trying to buy in? Maybe pick 1 area and send 800 cards or letters every 3 weeks. I would do this 4 times(12weeks). If no results find another area and repeat. You will get into peoples minds if they see your stuff more. Maybe change your letter or card because your message may not be getting across to them properly. Just need to find what works. Hope this helps.
Ok I exagerrated a little in the number of mailings, it is more like 4500 -5000. 1675.00 in postage over 9 months.
I am targeting SFH in the price range of 30 - 200K but not really bad rehabs, we don't like doing that sort of work.
With 4500 unique mailing addresses, you should have had some deals. That is about the number of my unique mailing addresses, and I have probaby made 10 deals from the letters.
How many phone calls have the letters generated?
Are you good with followup? That is the key. Returning phone calls, looking at the house, and making the offers.
Brenda
Just curious..What did you a net on your one deal?
I think you should narrow your price range down a little bit. Say $120,000 to $180,000 or something like that. Before I did that I got alot of calls that weren't even close to the type of investing that I do, but I did get all the info and got them to investors that would buy them for a finders fee. In the past 3 weeks I netted over $1,000 in just in finders fee's. I have also narrowed my area down to just 2 zip codes. I get calls from 20-40 miles away still and I just try to network with other investors to give the leads to for cash if they do the deal.
Well, a strategy that has worked well for me is SFH with In-law/teen suites. I move into the main side and rent the in-law.
The big advantage is that you purchase at the owner occupied rate even though it rents like a duplex. I usually live there for a little bit and get settled and then buy another SFH with an In-law/teen suite move again and rent out the main side of the house I'm moving out of.
Just another idea.
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Brenda,
10 deals for 4500 letters is still way under the 1% average for bulk mail. Any thoughts as to why? Is there anything you have learned from your bulk mail experience that you would do differently next time?
Thanks,
Robert
Thanks for all your replies. Let me get to answering some of the questions.
Brenda,
Our letters are following the Kathy Kennebrook philosophy where we ask them to call, fax, or mail back to us. Most replies are people that want to sell at Full Retail. When we get a call, fax, or form back, we call them right away and give them a time we will look at the property and call them back with an offer.
When I go see a property I always look up the value and what they purchased for along with when they purchased. I offer several different solutions to purchase. Buy, L/O, Buy w/seller second, and SubTo.
The REIkid,
My first ad in the paper got me a seller facing FC, I put the house under contract for 200K and sold the contract for 210K. This was my first deal and I paid the buyers realtor commission or 3500.00 because I was not that far educated as to place a stip in the contract.
Great idea SavvyYoungster but my other half would not like moving that much. Starting out young I think that is a great start.
Jeff12002,
Very clear as to what we are, what we do, and what we want to do and when.
I answer the phone, we do not have a recording. I do not have a toll free number and since my business phone is actually my cell phone it is very easy to get me. Thanks
Have you tried going by the county and checking out the property books and tax records.
Check to see what your states laws are for tax foreclosures. If you happen to stumble accross a property that has been owned for a while and they are only a few months away or so from being foreclosed on becasue of back taxes you might get a sweet deal on they property you are looking for.
Hey,
It sounds to me there are several issues here:
1) Lack of Focus. You are mailing to, at minimum, four different groups (Out of State, foreclosure, pre Forc, and just nice areas). I say minimum because "just nice areas" is a totally unfocused group. Each of these requires a different approach. This makes any concentrated marketing campaign EXTREMELY difficult. In order to handle a mailing campaign you have to track the results and fine tune it. That is difficult with such a mix of people.
2) Full Offers. If most of the callers are asking for Full Offer, you material is NOT properly conveying your message. For example, if I send 1000 letters out saying "I want to buy your house!", I will get a HUGE number of calls. But they are all going to want full price. On the other hand, if I send out a letter saying "If the price is right, I can pay CASH and close in 10 days", my response rate will plummet, but the callers will know I am not going to pay full price. Put a copy of your letter/message out here and maybe we can help.
Now for my questions:
Excluding preforeclosures, are you sending the same people a letter each month (or so)? For preforeclosures, how many letters are you sending out to each person? And on what schedule?
How many calls are you getting? And from which mailings?
What is the ratio of letters to the different groups? $1675 sounds like a lot of money, but spread out over 9 months, it is less than $200 per month. That is about 150 letters per week.
Robert,
Direct mail will see an average 1%-2% response rate. That is the number of responses you get from the mailing. Even when people talk about 7% or 15% as being a great response they are only talking about responses.
By this I mean it is not converted deals.
Hence when Brenda says 10 deals from a mailing of 4,500 pieces (as you noted), she did not say how many responses she received before further reduction to the 10 actual deals.
You have to mail a lot to get a lot of deals. Each deal should pay enough in profits to easily cover many, many mailings.
John
Quote:
On 2004-09-15 21:52, robertt wrote:
Brenda,
10 deals for 4500 letters is still way under the 1% average for bulk mail. Any thoughts as to why? Is there anything you have learned from your bulk mail experience that you would do differently next time?
Thanks,
Robert
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Hi Bruce,
I answered your questions within the quote and hopefully they are in bold.
Thank you
Quote:
On 2004-09-17 03:58, Bruce wrote:
Hey,
It sounds to me there are several issues here:
1) Lack of Focus. You are mailing to, at minimum, four different groups (Out of State, foreclosure, pre Forc, and just nice areas). I say minimum because "just nice areas" is a totally unfocused group. Each of these requires a different approach. This makes any concentrated marketing campaign EXTREMELY difficult. In order to handle a mailing campaign you have to track the results and fine tune it. That is difficult with such a mix of people.
2) Full Offers. If most of the callers are asking for Full Offer, you material is NOT properly conveying your message. For example, if I send 1000 letters out saying "I want to buy your house!", I will get a HUGE number of calls. But they are all going to want full price. On the other hand, if I send out a letter saying "If the price is right, I can pay CASH and close in 10 days", my response rate will plummet, but the callers will know I am not going to pay full price. Put a copy of your letter/message out here and maybe we can help.
Now for my questions:
Excluding preforeclosures, are you sending the same people a letter each month (or so)? The letters are sent out every 3 months to the same people.
For preforeclosures, how many letters are you sending out to each person? 1 And on what schedule? none, other than we send out every day to LisPendens
How many calls are you getting? maybe 3 calls a month from Lis Pendens and as you may know that these people are only days away from the sale at the courthouse.
And from which mailings? It seems that we do not get too many calls from the Out of State people, we get about 2 faxes of our letter in and maybe another 2 may mail it back a month.
What is the ratio of letters to the different groups? More out of state letters than anything else. 89% mostly the Out of State
$1675 sounds like a lot of money, but spread out over 9 months, it is less than $200 per month. That is about 150 letters per week.
Hey,
I hope I have my math right here!
Presuming everything is equal:
50+ mailing to Preforeclosures per month
445 mailing to Out Of State per month
1335 unique Out Of state address (3 months worth)
It seems to me that you are getting about the same number of responses (phone calls, some form of contact) from the Out of State Mailing as the Preforeclosure, but you are sending out 8 times MORE out of state.
1300+ Out of State addresses is a big number. Your search area must be HUGE.
I would recommend the following changes:
1) INCREASE the preforeclosure mailings to 3 or 4 to the same person, spreadout a few days apart. You are currently getting decent response but, if I understand correctly, you just need it sooner.
2) DECREASE your Out Of State mailings. Have a very small area and/or send once, then again in three and then every six months.
Hopefully that helps!
Well everybody else seems to be concentrating on your mail campaign but if I read this right the only deal that actually got completed came from an ad in the paper.
This sorta matches with my extreemly limited experience of the foreclosure market. There are lots of people working this niche and I think that in most places it is saturated.
I think your move to more commercial type property is a wise move. But you have to learn a new skill set. Financial analysis is the core of that business, not mass marketing.
That said, earning $200 a day ($73,000 a year) on your $90,000 investment would be a pretty amazing acomplishment , a 81% ROI. As a capital investment alone this is probably not possible.
However, it looks like you are also willing to put in a lot of time and effort so with the combination of that and your available capital you should be able to reach your goal in the commercial side of the business. I'd get out of the mass-mailing/house flipping business altogher (since it doesn't seem to be working for you anyhow) and start thinking about how to get into more conventional investment properties.
commercialking,
Could you give me someideas on where to start?
I would really appreciate it.
Also I have some opportunities to buy lots and build spec homes in up and coming areas around here, what are your thoughts on going that route as well?
John,
Quote:
Hence when Brenda says 10 deals from a mailing of 4,500 pieces (as you noted), she did not say how many responses she received before further reduction to the 10 actual deals.
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In my previous bulk mail experience ( I used bulk mail for a previous business), I averaged 3% initial response (I used Business reply postcards) and of the total mailings, 1% would purchase my product. So, if I sent out 4500 letters, I would expect to get 135 responses and 45 sales.
Now, I'm not criticizing Brenda's results, just wondering if my previous experiences were either high, or what other factors are involved. I'm evaluating this because I'm considering doing a bulk mail campaign, but I had different expecations for results based on previous experiences.
Robert
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