I began investing in real estate in 2020 but didn’t start wholesaling until 2024 and spent a good portion of the year figuring out what works and what doesn’t, spending a bunch of money in the process. I then started building out processes around what was working. In this post I’m going to go over how I run my direct mail campaign.
I originally learn the basics of direct mail from the Flip with Rick YouTube channel. This is not an advertisement for their channel and I have absolutely no affiliate with them.
Data
The first thing you want to do is get the best possible data you can get. I focus my campaigns mainly on pre-foreclosures and I get my data directly from the county courts. I wanted to make sure I was only marketing to motivated sellers that really have a need to sell. I do not want to waste time or money on tire kickers wanting to see how much we would give them or what their house is worth. I also limited my markets to counties with populations of 100,000 people or more. It is extremely difficult to find buyers in rural markets. I run my direct mail weekly. At the end of each week I get the pre-foreclosure data and upload it to google drive. From there you need to clean your data and get it into a good and usable format. I have a VA for this now but when I first started I was pulling and cleaning all of this data manually. My VA, Grace, has given my hours of my life back every day.
- Focus on quality data. Garbage in means garbage out
- Choose your markets (population >= 100k)
- Focus on a motivation. You want sellers that NEED TO SELL
- Clean your data
Marketing Lists
I run my direct mail on a weekly basis. Once the data is clean, it gets uploaded into PropStream. Any record that fails the import is manually analyzed and then imported by hand. Since I run weekly, I have 4 marketing lists (Week 1, Week 2, Week 3, Week 4). This ensures that potential sellers receive a mailer the week after the mortgage company opens a foreclosure lawsuit and that they receive a mailer once a month. Depending on where we are in the cycle the new data gets added to one of the weekly marketing lists. Once the data is in PropStream, we remove any property that doesn’t meet our quality requirements. I verify is hasn’t been sold recently and we verify that its not currently an active or pending listing on the MLS. I only market to SFH, Condos, and small multi-family (2-4 units). Any other property types are removed from the list. I also verify that there is enough equity in the property for a deal to even be feasible. From there the list gets exported from PropStream and converted to an excel file in the direct mail company’s format. The postcards I send have a cash offer that is a percentage of the ARV. The higher the percentage the more leads you will get but the harder it will be to negotiate price. I started out at 79% but am now sending at 90%. My reasoning is that I wanted to increase the lead flow and I have enough experience to deal with objections at this point. The direct mail orders are placed on Monday and Tuesday and the mailers go out every Friday. I’ve found that mailing on Friday has the best results. This entire process is run by my VA.
- Upload data to PropStream or your preferred REI data platform
- Run mail in weekly cycles (Week 1, Week 2, Week 3, Week 4)
- Remove data that does not meet quality requirements (equity, MLS status, property type)
- Export current weeks list and reformat to direct mail companies format
- Place orders so that they are mailed on Fridays and land Monday through Wednesday
Lead Capture
You really need to use a CRM. Its too difficult to keep track of everything at this stage without one. I’m using Go High Level. Its not perfect, but it covers 80% of what I need. There are 3 ways I capture inbound leads (phone call, text, and online form). The name of the game here is SPEED!!! You need to answer every inbound call, text, and form. The faster you can get to them the better. The gold standard is to answer every call immediately, and respond within 60 seconds to inbound text and forms. If you’re doing this by yourself this isn’t always possible. You could be on another call, you could be away… life happens. This is where a quality CRM comes in handy. You can set up automations that auto-respond to inbound calls, texts, and forms when you can’t. There’s nothing worse than an unanswered inbound lead.
- Use a CRM
- Leads come in via 3 methods (call, text, online form)
- SPEED IS KEY!!!
Disqualify or Close
Once you have the lead its up to you to either close them or disqualify them.
Metrics
All of my metrics are tracked on a spreadsheet and updated weekly if not daily. You want to track the following metrics:
- Cost - Total money spent on mailers
- Mailers Sent
- Mailers Return
- Inbound Calls
- Inbound Texts
- Inbound Forms
- Total Leads
- Lead Conversion Rate - Total Leads / Mailers Sent
- Offers Made
- Offer Conversion Rate - Offers Made / Total Leads
- Offers Accepted (verbal or tentative) - Sellers who verbally agree to accept your offer
- Offer Acceptance Rate - Offers Accepted / Offers Made
- Purchase Agreements Signed
- Purchase Agreement Rate - Purchase Agreements Signed / Offers Accepted
- Deals Closed
- Leads Per Deal - Total Leads / Deals Closed
- Cost Per Lead - Cost / Total Leads
- Cost Per Purchase Agreement Signed - Cost / Purchase Agreements Signed
- Cost Per Deal Closed - Cost / Deals Closed
- Return on Ad Spend (ROAS) - Revenue from Deals / Cost
- Cash Convergence Cycle (CCC) - Time it takes to your marketing dollars to yield revenue. I track this in three ways since direct mail takes multiple touches. I calculate First Touch CCC, Average Touch CCC, and Last Touch CCC. The basic formula for CCC is Mail-to-Lead Time + Lead-to-Contract Time + Contract-to-Close Time. For First Touch CCC, you would use the date you first mailed the lead to calculate Mail-to-Lead Time. For the Average Touch CCC you would use the average date you mailed them and for Last Touch CCC you would use the last date you mailed them to calculate the Mail-to-Lead Time.