Doug was born in Colorado Springs, CO and raised in Carlsbad New Mexico. After high school he ventured west to the sunny coast of Southern California. It was there he met his beautiful bride Andrea, who happens to share his entrepreneurial spirit!
As newlyweds, they ventured back to Colorado and started Mountain High Concessions, a Kettle Corn vender for special events and sporting/concert venues. Mountain High Concessions became the first Kettle popcorn vender for the Denver Broncos at Mile High Stadium. They were itching to get back to So Cal and they sold the concessions company and got started in Real Estate!
16 years and 3 kids later, they are the proud owners of one of Southern California's largest wholesale real estate purchasing companies! They operate the business together along with our incredible team! Over the past decade he has worked as a California Certified Residential Appraiser from 2003-2010. Since 2008, he and Andrea have purchased and sold over 250 properties in Southern California and manage their in-house rental property portfolio.
In this episode, Doug shares with us how he started by sending out about 1,000 postcards each month that had the ‘Urgent Notice’ message on them to absentee owners. His response rate then was about 2% to 4%…which is incredible!
Too bad everyone else started doing it and now the response rates are much, much lower. Typical investor response rates on direct mail is around .5% (half a percent).
Doug is now mailing around 20,000 pieces PER MONTH! He’s definitely dialed in his message and list in order to be comfortable mailing that much.
Instead of post cards, Doug now mails letters that are more professional. They have his business name and logo on them. He also includes a picture of himself and his family.
I think this is where direct mail for real estate investors is headed. Too many people are mailing yellow letters that come across as “iffy”. If you get a letter in the mail from a complete stranger that says they want to buy your house and to call them…and that’s all…your BS meter is probably being pegged.
Doug uses propertyradar.com for his lists. They are only available for west coast states. He used to get his lists from listsource.com (where most investors still get their lists).
His criteria for his absentee owners list is:
House older than 20 years
Bought 4+ years ago
With more than 60% equity
Less than 3,000 sqft
Many investors have trouble figuring out what benefits to motivated sellers to list in their letters. Here are some we discussed in this episode:
We buy As-Is. Make no repairs.
Fast Cash so you can Sell Quickly
Sell without dealing with Tenants or Family Members
Pay No Commissions
Skip the Hassles
Have Confidence the Deal with Close
To come up with your own benefits, just put yourself in the shoes of motivated sellers. Consider why you would seller to investor rather than the conventional way of listing with a Realtor.
Be sure to check out the show notes page at http://flippingjunkie.com/44 to download your free guide from Doug entitled, ’11 Tips to Working Successfully with your Spouse’
Danny Johnson is the host of the Flipping Junkie podcast and today he shares with us incredible tips for driving for dollars in a world where technology has made things so much easier.
In this episode, we discuss:
What driving for dollars is
When to drive for dollars
Where to drive for dollars
How to drive for dollars
What to do after you get the addresses
Common questions about driving for dollars
How to outsource driving for dollars
Check out the show notes page at http://flippingjunkie.com/43 to download a pdf of all the points talked about in this episode so that you have a roadmap for driving for dollars more efficiently.
Justin Colby is the Co-Founder and President of The Science of Flipping, Omni Investment Group and Phoenix Wealth Builders. The Science of Flipping is a free Podcast on itunes, Omni and PWB are both professional real estate investment companies specializing in purchase, rehab, and flipping of distressed property in the Metro Phoenix Area.
In this episode, Justin shares his story of getting started and struggling through 9 months to get his first deal. He simply didn’t have any money to get started and had to door knock and do things that cost very little.
In starting out this way, Justin was forced to learn the most efficient ways to get deals. This continued as he began using direct mail to generate motivated seller leads.
He shares with us that he had just sent out 47,000 direct mail pieces. So he’s grown over the years but knows what it takes to get started with very little money.
An important fact that he shares is that most direct mail response rates are below 1%. This fact tends to be ignored by most investors just starting out with direct mail to motivated sellers.
They might send out 500 mail pieces and only get 3 calls. This is very disheartening if you aren’t prepared for it. This is the reason we figure more than 80 to 90% of investors discontinue or change their list after only mailing one time!
When starting to send direct mail, you want to send as many as you can afford to send at least 6 times. You’ve got to mail the same mailing list your postcards and/or letters at least 6 times. The reason is that studies have shown that, for direct mail in general, 80% of sales happen after 6 touches.
Don’t be the guy that mails once and quits. Also, don’t be the guy that mails 5 times and quits. They’re almost equivalent.
The guy/gal that mails 6 or 7 times will generate a very disproportionate amount of motivated sellers leads.
Regarding whether to use postcards or letters and first class versus bulk rate or metered, it all boils down to which will be cheaper so that you can mail more pieces. When on a budget, you should always defer to what will allow you to send more.
In this episode, Justin also shares with us what he says in his postcards and letters. This is super valuable information.
We also talk about the A/B test he performed that cost him $15,000 and didn’t show any measurable difference.
Listen to the show to find out what the test was so that you can benefit from his big expense and save some money for yourself.
Joe McCall has been investing since 2006 and has an excellent podcast called the Real Estate Investing Mastery podcast that he does with Alex Joungblood. He’s doing deals in multiple markets across the us while traveling for months at a time in Europe and traveling the us in an RV. He’s been teaching and coaching investing since 2011.
In this episode, Joe goes into incredible detail on how he set up and runs his direct mail marketing for motivated sellers leads.
We talk about the lists that he targets and how to get them.
He even shares when he sends postcards and when he sends letters.
A funny story during the interview was when Joe realized that he had been sending a postcard for years that he got from FlippingJunkie.com and didn’t put two and two together until that moment.
Bonus: get that postcard here http://flippingjunkie.com/41
Joe focuses on absentee owner mailings using postcards. When there is a lot of competition, he focuses on high equity owner occupied houses.
He gets his list from Listsource.com using the following criteria:
Bought at least 10 years ago
At least 40% equity
At least 3 bedroom house
Owner at least 55 years old
Specific zip codes with lots of rehab activity
One way Joe finds the most sought after areas is Trulia heat maps. He targets a county and the heat map shows cheap, median and expensive houses. There is even a table of data that can be sorted to show the most popular areas.
During the conversation we shared some numbers for the typical marketing spend per deal for investors. The numbers vary between $1,000 and $3,000 per deal and go as high as $5,000 per deal for some very competitive areas.
Mailing intervals for probates should be about once per week for the first 6 weeks or so. Mailing intervals for other lists usually are spread out from 30 to 90 days in between mailings.
One recurring theme throughout the episode was the discussion of how most investors fail to answer their phones. If there is one thing you can do to eliminate 75% or more of your competition, it’s answering your phone or calling back a seller IMMEDIATELY. Take that to the bank.