Today I’m gonna explain my near-perfect process for marketing to motivated sellers through direct mail.
Direct mail is a proven marketing technique that has consistently produced at least one deal for me (and countless others) each time it is employed correctly.
And over the years, I’ve invested lots of love, lots of sweat and even a few tears perfecting a tried-and-true system for generating leads in this fashion.
So I want to take this opportunity to walk through the entire process – from start to finish. After creating this related video for my old blog, I’m pretty sure I can find the necessary words for typing today’s written explanation…
…but words simply cannot describe how much I wish somebody had shared this stuff with me, back during my earliest days of real estate investing!
So put on your proverbial thinking cap (whatever that is), and get ready to reap the benefits of all my countless “trial-and-error” failures with direct mail, because I’m feeling much like a teacher from The School of Hard Knocks this morning.
Are you ready?
Good! (Me too!)
Class is now officially in session …
Keep Your Eyes on Two Targets
For real estate investors, I’ve learned that the best direct mail campaigns should seek to generate leads from two different types of property owners – absentee landlords and recipients of inherited properties.
Both groups include relatively high percentages of “motivated sellers”…
…and you will want to explore your opportunity to buy deeply discounted properties from both types of owners:
1. Absentee Landlords. Without a doubt, the best place to find updated mailing addresses for absentee owners is ListAbility.com.
Although I’m usually happy to work with absentee owners who control at least 40% of their property’s equity, the mailing lists I get from ListAbility.com typically generate leads from owners with a much higher portion of equity – most of whom own their properties “free and clear”.
2. Recipients of Inherited Properties. To find the mailing addresses of property owners who recently inherited their assets, I always go to the guys at USLeadList.com.
Take a few minutes to familiarize yourself with both of these helpful websites, and then continue reading here, in order to learn my three steps for navigating the obstacle course of direct mail marketing.
Go ahead. Take your time. I’ll wait.
You’re back? Splendid! Let’s proceed…
Once you have obtained your ultimate list of potentially motivated sellers and their addresses, you will want to commence each of your direct mailing campaigns with the goal of successfully completing three primary phases.
Phase #1 – Initiating a Dialogue
Now that you know the mailing addresses for a pool of potentially motivated sellers, it’s time to begin seeking feedback from the property owners who are truly interested in selling their properties.
In order to kick-start this dialogue, you will want to “wow” each motivated seller with a super awesome postcard, delivered right to his personal mailbox. Your goal is to educate motivated sellers with a simple yet informative postcard, so that they will be delighted to either (i) submit their property information to your website and/or (ii) call you on the phone for a live discussion about their needs.
In my experience, one of the best (and easiest) ways to process large postcard campaigns is to use Click2Mail.com. This service will only cost you about $0.45 per postcard, which translates into a total cost of approximately $450 for a healthy campaign to 1,000 recipients.
Real World Advice From The Clever Investor: You will NOT want to share your personal phone number with a large number of postcard recipients – unless you want your phone to ring off the hook at all hours of the day/night. And trust me, it will ring. Instead, use Google Voice (free), Ring Central (paid service), or Vumber (paid service) to create virtual phone numbers and secondary lines, in order to keep your private line, well, private.
More Real World Advice From The Clever Investor: Also, I wholeheartedly encourage you to also check out my own Mobile Marketing Machine website and consider your willingness/ability to use a similar approach for fielding online feedback from your own list of motivated sellers. Personally, I think my website features a great system for automating email and texts message dialogues with any leads in “real time”. This sort of online tool will help you nurture your leads to maturity as they come in, essentially “warming them up” for the time when you are actually able to engage in a true interpersonal dialogue about buying their asset.
Phase # 2 – Due Diligence & Circumstance Analysis
Now let’s jump forward to the time when your phone is ringing and your website is hoppin’ (because you’ve bulldozed Phase #1 like it’s your J. O. B.).
It’s time to start “massaging” each leads – figuratively, of course – in order to learn as much as possible about (i) the property in question and (ii) the specific circumstances which make its owner “motivated” to sell.
As mentioned in last Tuesday’s blog post about wholesaling, I always make sure that the seller benefits in every deal I close, but it’s impossible to help the seller in this way without a thorough understanding of exactly what he needs to accomplish.
And that’s why I teach my high-end coaching students to master three comprehensive scripts – all of which facilitate the vital process of building rapport with motivated sellers while identifying their housing concerns and exploring the spectrum of mutually-beneficial solutions:
- A Lead Intake Script
- A Motivated Seller Script
- And an Objections Script
I know, I know… The word “script” carries a negative connotation, because people who use scripts halfheartedly (ie. most people) typically sound stale and rehearsed, and it’s a total turnoff.
But it’s imperative that you’re prepared for any scenario, and developing a mastery of the right scripts is an excellent way to leverage solid market research for maximum advantage in your personal investing business. Just be sure to fully internalize each script, so that you can remain nimble and “human” in your efforts to process motivated sellers through five vital conversations:
- Building basic interpersonal rapport and learning about the property
- Exploring their motivation(s) for selling
- Emphasizing their need to solve the problem(s) at hand
- Describing exactly how you can solve the problem(s) at hand
- Explaining how to implement your solution(s)
The successful completion of this fact-gathering phase should typically result in an on-site appointment with each motivated seller who wishes to do business with you. Using the approach outlined above, I generally find myself with 3-5 such meetings each week – and many of the people I meet with are practically begging me to buy their property at a steep discount to its normal market value.
Which leads me to Phase #3…
Phase #3 – Negotiating & Getting Properties Under Contract
It is good to arrive at your on-site appointment (ie. “the negotiating table”) with as much certainty as possible about how you wish to proceed with the seller and how much you are willing to pay for his property. That way, you can be prepared to present an offer right there on the spot – including any necessary paperwork for taking things to the next level.
Although your personal business model may entail a variety of different transactional strategies, this face-to-face meeting frequently provides me with a great environment to “seal the deal” for Stage One of my preferred wholesaling* strategy. Upon contracting with motivated seller, I would typically proceed to place the asset on my own website for property sales while simultaneously returning to my Mobile Marketing Machine for distributing emails and text messages to potential cash buyers.
*During the last two weeks, I have described my entire wholesaling business model in a couple of thorough blog posts (Part 1 and Part 2), and you may want to use these models to build your own framework for negotiating with motivated sellers and placing their propert(ies) under contract.
At the end of the day, regardless of whether you are a wholesaler, a fix-and-flip investor, a buy-and-hold sorta guy, or any other type of real estate investor, you simply want to maximize your on-site meeting’s potential to get the property under contract in a “win-win” solution for both your motivated seller and yourself.
And then you get to cash out in whatever way strikes your fancy!
Cashing Out & Signing Off
This near-perfect direct mail marketing funnel has produced hundreds upon hundreds of wholesaling deals for me during the last decade, while generating millions of dollars (literally)…
…and I am supremely confident that you too will find success with a similar approach.
Just work this easy system, and don’t be surprised if you quickly find yourself generating 1-4 extra deals per month. Then, instead of panicking (or celebrating prematurely) when the floodgates open, proceed step-by-step through the three phases described above.
You’ll discover just how quickly you can start enhancing your own real estate investing business, and adding to your own current income.
(And please lemme know how it goes for you!)
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