I just want to run by my marketing to other investors out there, maybe I can pick their brain towards how I can improve on things.
My marketing for January / February as been the following:
Yellow Letters to expired listings (30-40% response rate)
Yellow letters to properties with judgements rendered. (<10% response)
Properties with revenue canada liens. (<10% response)
Successions (mostly garbage, mainly because most people that needed to sell have already sold before the succession is posted at the registry office)
NOD’s (good response)
Repeat NOD mailings
I sent about 600-700 yellow letters
Cold calling NOD’s (most effective source of motivated leads)
Posting lots of ads online
All of the above
yellow letters to Vacant houses from lists within the city.
Close to 1000 letters.
January I received about 160 phone calls, February I received close to 200 phone calls. A good 30% of that are people telling me they don’t have a home for sale.
Buying only 1 house a month.
And that 1 house a month is coming only from cold calling NOD’s and mailing to NOD’s.
All the other lists I have been mailing for months to without any houses bought from them. So the other lists have been completely useless.
Again I look for any kind of motivation to get involved so I really don’t think I am overqualifying too much over the phone. If I can buy it at 70% of market value I buy cash, anything above that up to 85% of market value I take an option on it and auction it off, so it’s not like my criteria are extremely strict.
I keep hearing about these other investors buying houses for every 15-20 calls and I’m wondering what the heck is going on. There must be something I’m missing…
I’m running out of new lists to send mailings to and would like input on what I am doing so far.
I am also thinking about expanding to geographic marketing via Post IT notes which some investors have said we quite effective.
I would add out of state owners to your direct mail marketing. I purchase a house every 1-2 months just from this list.
I would also suggest sending more leads to your website that can capture the leads 24hrs a day. If you are receiving 150-200 phone calls a month and only buying 1 house you are wasting a substantial amount of time talking with sellers. Lets assume you talk to each seller for 10 minutes, which I know is a very short conversation and lets assume you take 200 phone calls. That is over 33 hrs of talking on the phone in one month.
Out of area owners are the easiest list to get. I use www.listsource.com you maybe able to get a list from your title company. I have in the past but the data is Raw Data from Tax office.
As far as your mail going out I would have to agree with Michael. Your two yellow letter programs. I don’t know what message it is. But if its the Ron Legrand message in my opinion its over rated. I prefer to take less calls and make quality leads.
Out of area in my opinion is a great list. I mail it each month with a general personalized USPS.com post card. I mail 5,000 pieces per month with all programs. Volume is not as important as the list. Michael has a great list going there. He is consistent with his marketing.
I already detailed my marketing so no use going more into it… From a strictly number’s standpoint I should be doing more deals. Yellow letter calls are mostly trash calls. Sending yellow letters to expireds yields me 30-40% response rate. Haven’t bought a house in months with expireds…
I do send the expired listings out 3-4x a month. So the moment it becomes expired, my letter comes out days or even up to 2 weeks later.
NOD’s I am normally on the ball with ASAP. I do followup mailings to them but I’m merely doing yellow letter alternatives.
I was thinking about adding a “yellow letter” type foreclosure letter. Basically this letter is similar to the NOD cold calling script.
This is where I think I am personally going wrong. I am spending about 1000$ a month on advertising and sometimes less. I feel this is a pathetic number and need to be doing a lot more, but before I start getting out the check book I want to know if there is something I am overlooking… something I am not seeing…
Any comments about my marketing is appreciated…
More yellow letters, less yellow letters, do variety of different kinds of letters, different lists. etc etc
Another footnote is that if I sit down with say 10 sellers I am buying 1 house…
I feel I am not sitting down with enough sellers and that is why I come back to the issue that I am not doing enough marketing, but I’ll get to presentation later.
I have a live person answer the phones. She’s very extrovert and has a lot more patience than I do with sellers so I don’t think it’s a matter of her prescreening too much or too little. I don’t use telephone answering services anymore since they don’t answer the phones… that’s another story.
My script for inbound conversion is basically as follows:
Person: May I please speak with Marie / I received a letter from you guys
Operator: Oh you want to speak with Marie, she’s not here right now but I’ll take the message. Which property address are we talking about?
Operator: And what number can they reach you at?
Operator: Are you interested in selling the property?
Operator: May I have the property address that we are talking about?
Operator: And do you know what the city evaluation is?
Operator: Is it listed with an agent?
Operator: Are you in a hurry to sell?
Operator: When do you need it sold?
Operator: And what is your reason for selling?
Operator: Last question, when is a good time to call you?
So with this I can gauge motivation and time frame to sell as well as flexibility of price. If there is little motivation or time frame I will try and find out if price is flexible over the phone… If not I don’t go…
Is this a problem?
I have access to the MLS as well as a database with every single property sold in the city. So I normally use the database to do a radius comp search and than use Edgar to verify the numbers. I am normally spot on with this.
Could be this. I always try and find the hot buttons of the seller to push the hot buttons. That’s why I use timeframe / motivation as levers to get what I want. I listen to them, I ask them a lot of questions. I ask them about what kind of solution would work for them.
I also have a partner who is much more empathetic than even I am.
I am not timid in person anymore. I’m not afraid of making offers in person and I don’t normally give in right away to sellers and their objections about price / timeframe / etc etc. Although the sellers in the moon I give up… Some investors I know don’t give up and keep going at it where as others like Ron Legrand and his group won’t argue for long with the sellers…
Maybe this is a problem, maybe I don’t stay there long enough in the house to argue back and forth…
Amount I am willing to buy at.
Like I said before, 70% of market value I will buy cash, anything higher than that I will take an option on it and auction it off. I get most of my deals this way… Using options. I will go all the way up to 85% of the value of the house for an auction cuz I normally manage to sell them off at 90% market value, sometimes more depending on condition / presentability.
Example, last deal I did I took an option on property at 130 000 evaluated at about 170 000. Other condos were activeo n the market between 182 000 - 190 000.
I sold it at 158 000 via auction.
My partner says this may be where we are going wrong, that I am too strict on buying criteria… But I remember the days when I did deals at 85-90% of market value and got burnt so hard doing it…
One thing though that seperates me from United States investors is that if short sales were something that is actually done here in Canada, I’d double the amount of deals I would be able to do…
The problem with Canada is that there is a company CMHC that insures all loans at more than 80% LTV as well as 2nd mortgages. The CMHC insures these loans 100% of the loan. Currently, in a population city of 2 million people, there are only 70 REO’s on the market so you can see why CMHC is able to do this.
Maybe this is just an excuse as well… Other investors as well as myself in Montreal have tried this and haven’t been successful shortselling… Maybe we don’t try hard enough…
Whatever, it’s just an excuse, keep hammering at me, I’m not going to stop until I fix this problem. I want more deals and I want to iron out everything I can possibly do before starting to spend a boatload more on marketing.
If there is a posterboy for a coaching system out there I am it.
I would tell you to stop sending yellow letters to expired listings. By your own words, you are getting a TON of calls from it, but never any deals. Maybe try a different mailer that’s a little more targeted. The “I’m interested in buying your house” line will ALWAYS get someone to call who is selling their house, but you need the motivated sellers. So maybe you should target it more to those who need to sell:
property is in disrepair
if you are taking 160 calls and only buying 1 house, SOMETHING IS DRASTICALLY WRONG! For February I mailed about 220 pieces, 4 calls, 1 house that I will wholesale and make an easy $3750! My costs were less than $150 bucks and I only mailed to the list twice; for March I will hit them twice and every month thereafter I will mail at least 3 times to the list.
That said, from looking at your script, I wouldn’t really call that a script, thats more/less a list of questions and doesn’t do anything to build value, make an emotional connection to the prospect or nothing… in my opinion your problem is what is being said (or isn’t being said) to the prospects…
Personally I would do something like this…
Thanks for calling, my name is Tyron and your name is ?
okay, Ms. Prospect, first let me tell you that I am really sorry for this extremely difficult financial situation that you are in and I want to commend you for taking the first step toward getting a solution to your real estate problems! Now tell me a little bit about your situation?
[i](at this point, the prospect will begin talking and in most cases this is where they reveal the pertinent info you need to determine what you can do for them - the more you listen the more homes you will buy)
it is important that you LISTEN, as most people can’t really talk with anyone about their situation so to have someone listen to them vent is HUGE!)[/i]-
Wow, Ms. Prospect, that is really interesting… (at this point, you ask the questions you have listed about their property that are needed)
This is just a quick primer but I would make it much more personal and try to make a connection with the person; look up Bill Twyford his scripts are off the chain and they will increase your conversion…