3 Biggest Mailer Mistakes (HA 011)
3 Biggest Mailer Mistakes (HA 011)
Transcript:
Steven Butala: Steven and Jill here.
Jill DeWit: Hi.
Steven Butala: Welcome to The House Academy Show, entertaining real estate investment talk. I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWit broadcasting from sunny Southern California.
Steven Butala: Today Jill and I talk about the three biggest mailer mistakes that we’re aware of.
Jill DeWit: I have my three. I’m curious to see if my three is the same as your three.
Steven Butala: And I really I have 30-
Jill DeWit: That’s true.
Steven Butala: Actually like 300 ’cause I’ve made them all.
Jill DeWit: I want to see how this goes, ’cause I want to see if you can keep it to three.
Steven Butala: Yeah. I bet not.
Jill DeWit: I know.
Steven Butala: Before we get into it let’s take a question posted by one of our members on the houseacademy.com online community. It’s free.
Jill DeWit: Avery asks, “I have not purchased The House Academy program, as of yet, but I’m curious what is the average cost of sending out a mailer to land a deal? Also, is it typically necessary to mail the owners several times before they usually respond to the offer? Is it likely to do a deal on the first mailing, or will it take several to tweak the mailings?” Oh, and then you-
Steven Butala: I answered this.
Jill DeWit: Oh, thank you very much. This is really cool Steven.
Steven Butala: As the owner of the company I answered it.
Jill DeWit: So, in our online community you will often sometimes find us. So, like in this one, this example, Steven himself went in there and answered the question. So, super cool.
Jill DeWit: Steven’s answer is, “Thanks very much. It takes between 800 to 3500 offers to purchase a house that’s worth about 15 to 30 thousand dollars less than it’s current condition value. This number varies based on your experience. Using offers2owners.com, our mail company, each mailer costs about 55 cents. So, you can spend about 1500 dollars to make about 20000 dollars if you’re really sit and think about the math.”
Steven Butala: So, it’s not the upfront costs that you should focus on, it’s the amount of money on the backend that it’s generating.
Jill DeWit: Right. “At this time we do not recommend mailing them multiple times, although, I’ve heard some rumblings …” Excuse me, “Although, I’ve heard the same rumblings you have about its success.”
Jill DeWit: Yeah. If we ever needed to, we just pick a new area and move on. And there’s so many out there. And once you got a good offer in somebody’s hands it’s funny how long they hang onto them. So, you may think that, “Oh, the yield of this offer was only X.” Well, that was only the yield in that first 30, 60 or 90 days. What do you see two years later? Someones calling you on it, because now they’re ready to sell, and they’ve saved it.
Steven Butala: That’s right.
Steven Butala: Today’s topic the three biggest mailer mistakes. This is the meat of the show.
Steven Butala: I don’t know what the biggest mistake that I can start with is in mailers that I see, but I tell you it has to do with pricing. First of all, there’s no real mistake you can make about where to send mail. If you actually follow our system to the letter, you’re going to pit each zip code against each other that’s in the market. So, if you pick some town in Indiana, let’s say, there’s probably six or seven zip codes there. You get all the data on all those zip codes, you pit them against each other, and choose which ones best. So, that’s where you’re going to start.
Steven Butala: It usually starts with days on market, and some other statistics about how houses are selling, and for how much, and all that. You can really smoke out a lot of future problems for yourself through, we call it, the red, yellow, green test for zip codes. So, that eliminates that.
Steven Butala: If you just choose a market kind of blind, and you send mail out it’s not good. That’s a mistake. That’s a big mistake I see.
Steven Butala: If you send offers out without … Well, if you send mail out, let’s say, without an offer price in it, and a well thought out offer price, you’re not going to achieve the results that you want. You know what? That’s the biggest mistake I see is people sending out not an offer-
Jill DeWit: That’s mine.
Steven Butala: They send out a notice, they send out a letter of interest saying, “I’d like to buy your house. Give me a call.” You’re going to get a bazillion calls and nothings going to happen.
Jill DeWit: That’s one of my three. Yeah, one of my three is no real offer-
Steven Butala: Okay, good.
Jill DeWit: Like you said.
Steven Butala: Good.
Steven Butala: When you actually send an offer … If you send an offer out for a 400000 dollar house for 11000 dollars, all you’re going to do is waste money. So, pricing related issues are number two for me.
Jill DeWit: Okay.
Steven Butala: Number three would be lack of follow through. Not sending one out at all, and then wondering why it’s not working.
Jill DeWit: You want to know what my three are?
Steven Butala: Yeah. For sure.
Jill DeWit: Okay. So, my three are: I told you number one is no real offer. You have a mail campaign, you’re just putting something into somebody’s hand that’s saying, “Here I am.” Okay, well, that’s number one.
Jill DeWit: Number two: bad data. I see a lot of people struggling online to get their hold of data from different places in different ways, and you really have to do your homework, and really search, and go pretty much to the source and get good quality, current, ownership data. You want to know who owns it, where they live, everything about the property, is there a mortgage on it, whatever. There’s so much too that you need to get your hands on to do this right. So, that’s my number two.
Jill DeWit: Then my number three, for a mailer mistake, is just simply not personalizing it too. So, those dear customer … Even if you said … I guess, hopefully if you’re personalizing it you have an offer, but if you send a dear customer one, “I want to buy your house,” which a lot of people are doing, it’s just going to … I just see it as such a waste of your time and your energy, ’cause every time that you send an offer to someone you’re going to get so many people that, “Yeah, I do want to sell.” But you know what? They want to sell at their price, and they want to sell more than the guy next door, because he just got top dollar, ’cause he did his kitchen. And now they think theirs is worth as much, because they have a pool. And you get into this whole big long thing, and you realize this is not who I’m going to buy, this is not what I want to do. This is a mess.
Steven Butala: Every time Jill and I talk about this business, specifically the house business not land, with our friends or people … Because everybody has a lot to say about houses, everybody lives in a house, or, one, they want to live in a house so they have a lot to say. And it all becomes very, very quickly, in my opinion, a personal story about finishes in the house, or, like Jill said, whatever’s in the backyard. And a lot of maybe even like, “Well, I raised my kids there.” I’ve heard people say all this kinds of stuff.
Steven Butala: So, if you want to be successful wholesaling houses like we do, and like our members do, forget about all that. Forget it.
Jill DeWit: You have to be respectful-
Steven Butala: It’s all-
Jill DeWit: They’re emotional.
Steven Butala: It’s all a price per square foot. That’s all that matters. Price per square foot. No emotion. I’m buying it for 20 to 40 thousand dollars … Let’s say, 10 to 40 thousand dollars less in its current condition. Then you can resell it to a rehabber. They’re going to take all of that stuff out anyway. So, do yourself a massive favor and cut those conversations off very, very, very quickly.
Jill DeWit: Right. I like what you said, don’t let it influence your decision, ’cause it shouldn’t, just because they say, “Do you know about the school district?” You shouldn’t go, “Oh, I didn’t account for the school district-“
Steven Butala: No. There’s no financial-
Jill DeWit: Don’t do that.
Steven Butala: Accounting for a school district, or for a wallpaper-
Jill DeWit: The churches-
Steven Butala: There’s a huge financial-
Jill DeWit: Nearby.
Steven Butala: Part of this if you’re looking at a 4000 square foot house versus a 3200 square foot house.
Steven Butala: If somebody says, “Yeah. I did an add on for my now deceased father in-law, and we pulled the permits, and it’s beautiful. You should see it.” All right, well, your head should perk up and say, “Well, yeah-“
Jill DeWit: Exactly.
Steven Butala: “Now it’s priced per square foot.”
Steven Butala: Or my lot’s … I have a three wide lot. Jill and I just did a deal like that. It had a quadruple wide lot, and we killed it. And we still wholesaled it, we just did great on that deal.
Jill DeWit: That was big.
Steven Butala: It’s all square footage.
Steven Butala: We know your times valuable; thanks for spending some of it with us today. Join us next time for the episode called: Member Andrew Peacock Shares House Academy Success Stories.
Jill DeWit: And we answer your questions posted on our online community houseacademy.com. It is free.
Steven Butala: You are not alone in your real estate ambition.
Steven Butala: It’s interesting houses are so interesting. I’ve said it before, but it’s probably worth saying again. It’s so easy to hit singles over and over and over again with houses. But, for whatever reason, there’s this propensity for people to really complicate how they do this.
Jill DeWit: I know. I think people they want to maximize profit-
Steven Butala: No they don’t.
Jill DeWit: You don’t think so?
Steven Butala: No. That’s where I think the problem is, because we have some members who want to maximize profit like Andrew Peacock’s a great example tomorrow. I have to say if you want to … He’s got it all figured out. I mean, one of the most successful House Academy members that I’ve ever talked to is tomorrow, this interview that we do. And he says flat out, right in the middle of the whole interview, it’s just price per square foot. When you sit down at a sellers kitchen table you just let them go, but you’re already there because the price per square foot works.
Jill DeWit: Right. But you do not think that some people are accidentally trying to maximize profit, and that’s holding them back? ‘Cause that’s what I see.
Steven Butala: The HGTV renovators are, and that’s fine-
Jill DeWit: That’s what I’m saying.
Steven Butala: They should. They should. Not wholesalers though.
Jill DeWit: That’s what I’m saying. Okay, we’re saying the same thing. My point is I think that’s the purpose of the show, and why we’re here. Not a lot of people are helping those people think the way we do.
Jill DeWit: If you are trying to maximize profit, and hit a home run every time you do it, I mean, that’s hard to do. If you’re lucky, you’re doing one a quarter. But you know what? Imagine this: How about once a week you hit a single? That’s what we do.
Steven Butala: Once a week? Once a week, let’s do the numbers right now-
Jill DeWit: And you’re going to get-
Steven Butala: Once a week-
Jill DeWit: You’re going to get ahead. Once a week you hit a single you make 40000 dollars. Done. Add that up. 40000 dollars times 52 weeks I’m going to make a nice living.
Steven Butala: That’s millions of dollars.
Jill DeWit: I know. But if you try to do once a quarter make 100000 dollars, you’re not going to get there as fast. That’s my point.
Steven Butala: In a sentence here’s the issue that I see, and I’m not complaining, but if you are this person just think about this for a second. If you have any emotion about this house that you’re buying or selling, or what it could be you’re not going to be a good wholesaler-
Jill DeWit: True.
Steven Butala: You just have leave it out. It’s all spreadsheet numbers, math, price per square foot, and that’s it, which I love.
Jill DeWit: I know.
Steven Butala: But the vast majority of the questions that we’re getting about pricing and stuff House Academy is reasonably brand new to us. Less than a year old. Land Academy is like-
Jill DeWit: Four years old.
Steven Butala: Yeah. So, we’re getting this influx of questions and interest from … And then we’re getting. It’s new for me.
Jill DeWit: I know.
Steven Butala: You know? It’s like-
Jill DeWit: It’s good. It’s fun. It’s a whole new group-
Steven Butala: It’s good-
Jill DeWit: [crosstalk 00:11:34]
Steven Butala: I love the newness of it.
Jill DeWit: Me too.
Steven Butala: But one of the things I couldn’t predict is how emotionally driven these questions are. Well, you nailed it. “Well, it’s got a pool.” Don’t care.
Jill DeWit: We’ll help you. Don’t worry. Wherever you are watching, or wherever you are listening please subscribe and rate us there. We are Steve and Jill.
Steven Butala: We are Steve and Jill. Information-
Jill DeWit: And inspiration.
Steven Butala: To buy undervalued property.
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