There is no better way to reach potential sellers than through direct mail. As powerful as social media currently is not every homeowner is connected all of the time. With direct mail you have a much better chance at actually reaching the people you really want to target. The most successful direct mail campaigns typically have two things in common. The first is that they are committed to mailing several times. The second is that they spend additional time and money getting a list they really want. With the right list in mind your letter can have the impact that you are looking for. Here are five targets to consider for your next direct mail campaign.
- Pre-Foreclosure. The goal of any direct mail campaign is to get your phone to ring. Not only do you want it to ring but you want the callers to be motivated to act. According to a recent study nearly 50% of homeowners who are late 30 days eventually lead to foreclosure. Your goal as an investor is to reach these people before they get to that point. Once a property goes into foreclosure the deal becomes difficult to close. If it gets to that point you now need lender approval. You are also subject to any local state foreclosure laws. Instead of waiting until they get to foreclosure you should focus on homeowners in preforeclosure. This can be anywhere from thirty to nine days late. Once a homeowner hits 120 days the lender can start foreclosure. Reaching them before this point still gives them time before the lender drops the hammer. A foreclosure stays on a credit report for years and can make any future borrowing difficult. Helping a homeowner sell before they get to this point would be a win for both parties.
- Free And Clear Owners. In addition to motivated sellers you also want sellers that are easy to work with. A preforeclosure seller may be motivated to sell but without equity it turns into a short sale. A homeowner that owns the property free and clear has multiple options. There is no minimum sales price to cover the mortgage balance owed. They can sell as quickly as they want at the price they are comfortable with. You never know why someone wants to sell and when they may be looking. Targeting a list of owners with a free and clear title will lead to easier deals if they decide to move forward.
- Landlords. Landlords are a great list of homeowners to target. There are a large handful of landlords who entered the business out of necessity. When the market shifted last decade they found a way to rent their property and rent elsewhere. In many cases this saved these landlords from possible foreclosure as well as saving money every month. Even landlords who purchased as a long term portfolio addition could make great direct mail targets. There are two types of list you should consider with landlords. The first is an eviction list. Eviction is one of the worst nightmares for any landlord. Not only do they not have money coming in for several months but they have to deal with the process day in and day out. Many of these landlords are broken by the eviction and simply want to move on. There may be nothing wrong with the property other than poor management and a weak tenant screening process. The other landlord list is out of state owners. The same concept applies with out of state owners. They may be tired of wasting money on property management for a property that is barely breaking even. They may be willing to take any reasonable offer just to get out from the property.
- Tax Defaults. Tax defaults can be a great way to take ownership of the property. Tax liens are treated very much like mortgage liens. In fact they can possibly be place ahead of a mortgage lien in some cases in certain states. With a tax default the homeowner is delinquent on their tax payment for at least 30 days. When that happens the town will begin reaching out to the homeowner trying to receive payment. If they can’t get payment they will place a lien on the property. If the delinquency has not been satisfied for a predetermined period the town can actually put the property to auction and evict. Tax liens and default rules vary widely based on the town and the state but they usually prompt action either way. Considering the relative obscurity of the list your chances for leads are greatly increased.
- Divorce. The final list that you should consider is with the recently divorced. There are many examples where divorced couples cannot agree on who will stay in the property. Instead of working on an agreement they end up selling and splitting the profits. The process of putting the home on the market and trying to find a buyer may not appeal in time sensitive situations. These sellers will often take a discount simply to sell the property and move on. The key to reaching these sellers is not advertising their recent divorce. Your letter should be generic in nature for sellers who are looking for a quick transaction. While the couple may not agree on anything while married they are often in lockstep about selling.
A good direct mail list should generate leads which directly turn into sales. Who you send your letters to is the most important part of direct mail. The right direct mail target will yield great results.
