I have been guilty of walking to the mailbox excitedly, only to throw out all of the “junk” marketing letters. I almost made this mistake last week, and it would have been very costly. Hidden in the midst of postcards and marketing letters was a yellow direct mail letter from a real estate investor in my market.
This simple mistake could have cost me a fortune!
I discussed various methods of finding deals in this post and I think you will agree that receiving direct mail creates an opportunity! For the reasons below, I believe it is in your best interest to answer direct mail immediately!
Your Market is Doing Well
Receiving direct mail is a sign that your market is still doing well. When the economy tanks and housing values are dropping, fix and flip investors won't be spending as much money on mass mailings. Investors will wait until the market bottoms out, and then try to purchase these properties as the market picks back up.
It is not beneficial to buy a fix/flip house in a market where you could get stuck holding onto it for a long time.
Location, Location, Location
Most real estate investors would agree that “location, location, location” is one of the most important factors affecting successful investments. With this in mind, it is reasonable to assume that investors target solid locations for their direct mail advertisements.
Conversely, if you're receiving mailouts or calls about your property then it must be in a great location!
You already knew this, but it is always nice to receive a confirmation that other hungry investors agree with you!
Opportunity to Network
I call all of the direct mail (or return phone calls) I receive about selling my house. Calling them gives me the opportunity to network with fellow real estate investors in the area.
I find it invaluable to network with other investors because it allows me to learn more about the area. The more I network with investors the more opportunities I gain for potential partners, deals, and business transactions.
I have discovered local meet-ups and mastermind groups through networking. Through these networking events, I have been able to improve my team and introduce other investors to my agent or property manager. The more investors you network with the easier it becomes to solve problems as they arise!
Opportunity to get on a Buyers List
My favorite reason to contact somebody that wants to buy my house is to get on their “buyers list.” The majority of these investors will wholesale properties if they don't meet their specific criteria, or they already have several properties under construction. When these opportunities appear I want them to think of me!
More often than not these investors have an email list that gets notified about any property they are selling. These emails are an invaluable resource for deals. It is always beneficial to have extra deals flowing into your inbox, and streamlines your deal-finding process!
Gives You an Exit Strategy
This is also an opportunity to negotiate the off-market sale of your property. Without commission involved there is a lot of room for creative terms. You might be able to negotiate repayment terms that make it worth your while to sell!
This could be an opportunity to sell via lease-option, which is similar to renting but reduces your future headaches. You could also seller-finance the deal to them if you wanted to create an extremely passive income stream.
This also gives you an opportunity to walk away from the property in the future if you have an urgent need arise, or get sick of being a landlord.
Don't throw out these direct mail letters!
Conclusion – Answer Direct Mail
I call every direct mailout that gets mailed to me! I don't ever want to miss an opportunity to network with another investor or get added to the buyers' list of a good wholesaler.
For example, I made two phone calls in response to potential buyers last week. One of these investors had sent me a letter, and the other had left me a voicemail. Of these two contacts one of them offered to help me finance a deal I'm under contract on, and the other already sent me THREE potential deals!
The bottom line is this, keep in touch with these investors, and avoid discarding their letters. You never know when they could help you find your next deal, or provide a quick exit strategy…Don't close the door on this opportunity that just knocked!
