Are you looking to find more off-market real estate deals to invest in?
If so, direct mail marketing might be for you!
Direct mail is one of the most common marketing strategies amongst real estate entrepreneurs. It's quick to start, doesn’t require a team, and many investors see a significant return from it.
However, there are many nuances with direct mail marketing that can make or break your success. Many new investors hear about this marketing strategy on a YouTube video or at an investing seminar and dive right in and begin blasting out thousands of postcards. Unfortunately, many of them are sorely disappointed with their return rate.
Our goal in this article is to prevent that from happening to you.
The most experienced real estate marketers have honed this strategy so they get consistent results from it. We’ve put together the tactics they use so that you can jumpstart your marketing and start finding stellar off-market deals.
Whether you are looking for your first rental or your next flip house, direct mail can help you get there!
What is Direct Mail Marketing?
Direct mail marketing in real estate involves sending mail pieces to homeowners to let them know you are interested in buying their house.
In other sectors, businesses will send mail to every house in an area. However, real estate investors often target specific homes based on factors that indicate they might be motivated to sell. These factors could be either financial issues or problems with the house itself.
The most common types of mail real estate investors send are postcards and letters because they are the cheapest and easiest ways to get their point across.
Who Should You Mail To?
The most important decision you can make when sending direct mail is who you will send it to. The design of your mail piece can play a significant role, but nothing else matters if you aren’t getting in front of motivated sellers.
If you have a specific area or neighborhood you want to invest in, you can canvas that entire area by sending every homeowner a postcard. However, you can expect the response rate to be much lower when using this method.
Instead, most real estate investors elect to send mail to lists of homeowners across a larger area. These lists could either be compiled manually from driving for dollars or generated through list services that create targeted lists for purchase, based on your criteria.
How to Generate the Best Mailing List
What makes direct mail marketing so tricky is that a large percentage of other investors are doing the same thing to find deals.
So how do you stand out from the droves of other investors? The easiest way is to target a different audience!
However, this is easier said than done. With hundreds of thousands of homeowners in your area, how do you choose which ones to send to?
First, you’ll need to choose some criteria to filter by. Most investors start with something that would indicate the homeowner might need to sell soon. Here are some common filters:
- Vacant houses
- Absentee owners (e.g. owners do not live in the subject property)
- Out-of-state owners
- Homes in foreclosure
- Elderly owners
- High equity
- Home owned free and clear
While these might sound like great candidates, you’ll need to get a little more creative than that. Anyone can watch a Youtube video and come up with this list in about ten minutes.
And guess what? They already are!
Each of these categories is likely getting bombarded with mail from other investors in your area. So you need a way to find motivated sellers that are off the beaten path that other investors frequently tread.
Stacking Pain Points
Most of the filters mentioned above are “pain points,” or reasons for the homeowner to be distressed.
The problem is that just one pain point often isn’t enough to cause someone to want to sell their house. Even though someone has a vacant house, they might decide to hold onto it and wait for the optimum time to sell.
However, if someone owns a house out-of-state and it also has low equity, they might be a little more motivated to sell. This is just one example. As you stack or combine multiple pain points when building your list, your success rate will increase dramatically.
While stacking pain points increases your chances of finding motivated sellers, it doesn’t necessarily get you away from the other investors sending out direct mail to find off-market real estate deals.
So how do you find homeowners who need to sell their houses but aren’t getting mailed to as much?
You have to get creative with your lists!
Just sending out postcards to vacant property owners isn’t going to cut it. Everyone is doing that!
You need to consider what issues your target audience might be facing and how you can find them with your available resources.
Beyond real estate investing softwares that allow you to pull lists of homeowners based on the filters mentioned above, there are list brokers who generate specialty lists. Here are some ideas to get you thinking:
- People behind on their mortgage (AKA, mortgage lates), but no Notice of Default has been filed yet
- Landlords who have filed evictions recently
- Homeowners with code violations
- Homeowners with high credit card debt
These criteria aren’t as readily available, but that means you’ll have less competition if you mail to them. If you want to get ahead of the competition, start talking to list brokers and see what types of creative motivated-seller lists they can offer.
Should You Send Postcards or Letters?
Ultimately, this decision is up to you and is something you can play around with to see what gives you the best results. However, here are some basic guidelines to help you get started.
Letters work great for smaller batches. This is because there is often more touch labor involved with them, which makes them more expensive. Also, many printing and mailing services don’t offer letters, so you might end up sending them yourself.
Postcards are better for larger batches. Not only are they cheaper than letters, but many investing software offer printing and mailing services. This way, you never have to touch the postcards. Another perk that investors like about postcards is that they hit the recipient at the mailbox since there is nothing for them to open.
Mail Piece Design
Aside from mailing to the correct list, using a mail piece that grabs your audience’s attention and gets them to call you is the most vital component of your success. If you’re going to be competing with other investors, you have to find a way to stand out from them.
The best approach to finding the best mail piece for your market is what most other marketers use — trial and error. What works for some people might end up being a flop in your market.
Some people go overboard and create a fancy and professional design, while others stick to letters and postcards that look hand-written. Freelance graphic designers and advertising writers can also be hired through websites like Fiverr and Upwork. Our best advice is to compare the results of different designs against each other to find what gives you the best response rate.
Are You Ready to Find Your Next Deal?
You can definitely find great deals with direct mail marketing. Many investors have found the bulk of their deals with it and are still using it today.
The key for most real estate marketing methods, including direct mail, is consistency. You cannot generate one list, send out a batch of mailers, and expect your phone to ring off the hook. Many homeowners don’t respond to the first mailer they receive, so follow-ups are essential.
If you choose to use direct mail to generate real estate leads, we hope you implement some of the tips and tricks here to increase your success rate. Get creative with your lists and work hard to determine the mailer design and message that resonates with your audience.
If you do these things, you’ll be well on your way to finding consistent, profitable deals!
Get fast, reliable funding when you find that next deal. Apply today, and get a loan commitment within 24 hours, pre-approved up to $5M so you can make a winning bid!
Jordan Fulmer is the owner of Momentum Property Solutions, a house-buying company in Huntsville, AL. They specialize in buying houses in tough situations and renovating them to either sell or rent. Jordan also runs the SEO side of their business and regularly writes content about real estate investing, home improvement, SEO, and general real estate topics.