This is going to depend on your budget. The one thing to keep in mind is that you have to send out enough to have a sound idea of what your response rate is. If you only send 200-300, there are to many variables to really take the response rate as what to expect in the future. But if that is what you can afford, go for it.
If you send more like 1000, then you have a better idea. That said, you don’t want to throw a bunch of money at a campaign until you test it. Find a balance that you are comfortable with.
3. What % goes to ugly houses, REO's, FSBO, for rent etc?
Ask yourself what kind of deals YOU want to find. I would pick one thing and focus on it at first. Your mailer should be focused on the needs of one target market. If a letter is geared to FSBOs AND Ugly Houses and etc, then it will not be effective.
How many resposnes do you get?
This is going to vary widely depending on the message in the mailer, the packaging, the media used and many other factors.
Typically, if you get over 1% you are doing OK. If you get 2% or 3% you are doing well. If you get 5+%, you are doing great.
Do you play with the content and format of the mailings to garner better responses?
Yes. Always test, track and tweak your marketing. I don’t do any marketing without being able to track the results. Tweak something and go again to see what result it has. Go for incremental improvement. That is the trick. There is not failure, just feedback.