How Much Direct Mail Offering is too much? (CFFL 511)
How Much Direct Mail Offering is too much? (CFFL 511)
Transcript:
Jack Butala: Jack Butala with Jill DeWitt.
Jill DeWitt: Hi.
Jack Butala: Welcome to the show. In this episode Jill and I talk about how much direct mail is too much. Can you send too much mail? I don’t think so. let’S take a question posted by one of our members on the landinvesters.com online community first. It’s free.
Jill DeWitt: Marrid asks, “Hi all. I’m new to the group and I’m going through the steps to get out my first mailer. I plan on scheduling a call with Jack beforehand to get it right, but I’m wondering if anyone has had experience with pricing a mailer too low and what they did to rectify it.”
Jack Butala: I have.
Jill DeWitt: Yeah right. We all have.
Jack Butala: Marrid is a cool name, isn’t it?
Jill DeWitt: It is a cool name. Thank you. Suppose I send out a 3,000 piece mailer to a more expensive area and get zero deals because I only offered $300 an acre. Turns out I should’ve offered three to four times as much. Would you immediately resend the same mailer with a higher offer with or without some explanation as to why you low balled it the first time?
Jack Butala: Yes.
Jill DeWitt: Or send a right price mailer to different acreage range in the same county?
Jack Butala: Yes to that too.
Jill DeWitt: Or would you wait six to 12 months and repeat at the higher offer price?
Jack Butala: No.
Jill DeWitt: Or would you just drop the whole thing, change your name to lookingformethlablandinyourniceneighborhood.com This is so good.
Jack Butala: Who the heck is this person? This is hilarious.
Jill DeWitt: Knowing that you’re forever branded yourself as a crooked kingpin of land flipping. Thanks for your thoughts.
Jack Butala: First of all …
Jill DeWitt: I want to see if that name’s available, number one. Lookingformethlablandinyourniceneighborhood.com. I love that.
Jack Butala: Marrid, whoever you are, I can tell …
Jill DeWitt: Awesome.
Jack Butala: You’re going to be really good at this.
Jill DeWitt: Totally.
Jack Butala: You have a sense of humor about it, which is important.
Jill DeWitt: Exactly.
Jack Butala: To honestly and sincerely answer your question, sometimes these things happen. Sometimes you send a mailer out and it wasn’t priced right. I talk to people every week who say some version of this and then they follow it up by, “Turns out I bought a piece of property anyway.”
Jill DeWitt: Exactly. I did it all wrong. What’d you do? I bought five.
Jack Butala: I sent out, this is a true story, I sent out an incorrect mailer in a northern county of Arizona a lot of years ago. It went to really high priced property for next to nothing. I ended up buying a piece of property across from the county building that we sold for $240,000.
Jill DeWitt: I know, I remember, exactly.
Jack Butala: I bought it for like 10 grand. I don’t remember the exact numbers. It’s actually very conceivable that you’re going to misprice a mailer and then potentially get stumped. I personally have never been stumped, and I don’t think … I talk to people once in a while who say they’re stumped but then they let me know a week later that, oh wait, somebody did actually buy a piece of property.
Jill DeWitt: I know.
Jack Butala: They just jumped the gun. They didn’t wait long enough.
Jill DeWitt: Exactly.
Jack Butala: That said, we got that out of the way, had a sense of humor about this and realized that you potentially could make a mistake. So what? There’s a million ways to rebound from an underpriced mailer. You actually nailed it. I would say send it out again and say, “You know what? I made a mistake. You probably got my offer a couple weeks ago or a month ago and I honestly made a mistake. I’d like to offer you X.”
Jill DeWitt: Nothing wrong with that.
Jack Butala: You’re going to buy a ton of property that way.
Jill DeWitt: I mean talk about making you look good and making you look real and being cool about it. I would respond to that. By the way, anybody who calls you back, when they call you back and they’re unhappy about it, I mean the large percentage of those calls they’re not calling to just vent, you know what I mean? They really do want to sell, you just didn’t have the right price. When you get them on the phone, talk to them. That’s it, too. When they call you think you did it all wrong.
Jack Butala: You know what Jill? You’re an expert at this. When people call back with the hate, what’s really behind that?
Jill DeWitt: They want to sell.
Jack Butala: They want to sell.
Jill DeWitt: They just don’t want that price.
Jack Butala: I agree with you.
Jill DeWitt: They’re calling you for a reason. That’s usually the reason why.
Jack Butala: The opposite of love is not hate. It’s indifference. If someone called you back and they’re angry as hell at your offer price, you’re right, they are a seller. They do want to do a deal, they just don’t want to do it at that price.
Jill DeWitt: Exactly, and they’re calling you to talk to you about it.
Jack Butala: That’s right.
Jill DeWitt: You know what? It’s super easy to go, “Okay, got it. Totally screwed up. I apologize. What is the price that sings to you,” kind of thing.
Jack Butala: When you yell at me I tell myself, “She really loves me.”
Jill DeWitt: [crosstalk 00:05:11]. How often do I really yell at you? How often do I yell in general?
Jack Butala: I think honestly last year maybe once.
Jill DeWitt: Thank you.
Jack Butala: Actually you yell at the kids sometimes.
Jill DeWitt: It takes a while for me to get mad.
Jack Butala: I really like it. I secretly like it.
Jill DeWitt: I’ll go for weeks, but then if I do blow my top then I’m pretty mad.
Jack Butala: I get out of the zip code when that happens. It’s almost never at me.
Jill DeWitt: That’s funny.
Jack Butala: It’s usually at one of the kids and they actually, they should’ve gotten yelled at 16 times ago, but [crosstalk 00:05:36].
Jill DeWitt: That’s true.
Jack Butala: That’s probably why what happens.
Jill DeWitt: I let it go, I let it go, let it go, let it go, and now we’re done. That’s usually how it goes.
Jack Butala: I jump the gun. I jump the gun at yelling at the kids.
Jill DeWitt: You do.
Jack Butala: You don’t have to do anything. They don’t do anything wrong.
Jill DeWitt: Sometimes you just yell just to see what happens. You’re just like, “Watch this and watch them jump.” You just like to yell and you run around laughing, “Ha, I got them right where I want them.”
Jack Butala: That’s true.
Jill DeWitt: That is true. Boy, we parent differently.
Jack Butala: We make good cop, bad cop when you’re gone and then Jill buys them ice cream. I’m so sorry for yelling at you like that.
Jill DeWitt: Geez, what is his problem? I don’t know. Dad’s on a diet. Look out.
Jack Butala: Is that when it happens?
Jill DeWitt: Yeah. It’s often like that. Watch out. Dad’s on a diet. Just say yes. Follow me.
Jack Butala: I’m going to go on a diet more often.
Jill DeWitt: That’s so true.
Jack Butala: Wait a minute. We got to talk [crosstalk 00:06:37] show here Jill.
Jill DeWitt: Okay sorry. Anyway, if you have a question and you want to be on the show reach out to either one of us.
Jack Butala: [crosstalk 00:06:45].
Jill DeWitt: At landinvestors.com. Today’s topic, how much direct mail offering is too much? Just send me to the show.
Jack Butala: You send out too much mail? Can you send out too much mail?
Jill DeWitt: No.
Jack Butala: I don’t think so either.
Jill DeWitt: No.
Jack Butala: I had a call yesterday, a consulting call of somebody, and they asked me this yesterday, “We’re ready to send out 10,000 offers.” I said, “What? 10,000 offers.” And they said, “Yeah, we’re going to send out 1,000 a week. We want to spread it all out.” I said, “No, no, no.” Never do that listeners. Never, ever sparse it all out. Buy the data, analyze it and send it all in the mail and baptism by fire. Here’s why. I’m not joking, I’m not joking, because I’ve made this mistake.
Here’s why. When you’re young you’re looking for a job and you’re like, “I don’t know if I should take this job because I’ve got an interview next week and it might be a better job. I don’t know.” It’s the same thing with this. You don’t want to sparse it all out because you want to stare it down on your desk at a bunch of signed offers and choose the best ones. You can’t do that if you sparse it out.
Jill DeWitt: Good point.
Jack Butala: I just say mail it. What you want to do too is you want to take the risk out of this, like everything, take the risk out of it. You want to make sure that you’re going to buy some real estate, so send as much mail as you can. Shot gun approach, not a rifle approach. The most seasoned real estate professionals fail at this. They use a rifle approach. They see a piece of property and they say …
Jill DeWitt: They zero in on that one property.
Jack Butala: They obsess on it.
Jill DeWitt: They spend a week on it.
Jack Butala: It’s ridiculous.
Jill DeWitt: It doesn’t happen.
Jack Butala: That’s not how you do it. That’s doing it opposite.
Jill DeWitt: The next week they spent it on another one property.
Jack Butala: That’s right Jill.
Jill DeWitt: Great, I’ve evaluated four properties this month. No.
Jack Butala: You could’ve sent out 20,000 offers and bought 50 properties.
Jill DeWitt: Exactly.
Jack Butala: You want to analyze the transaction after the offer’s signed and then reject it or accept it. You want to put yourself in control. The other way, the seller’s in control. You want to be in control.
Jill DeWitt: I’ve got to tell you something funny. This is back to my in the library elevator story with these guys. I’m listening to them talking about diving for dollars and doing this exact thing where they’re going to analyze one property. One guy did say something like, “My secretary said something about data.” Really? What are you guys doing with data? He’s still doesn’t know what to do or he hasn’t figured this out yet. I couldn’t help it so I piped in and I’m like …
Jack Butala: You couldn’t help it?
Jill DeWitt: I couldn’t.
Jack Butala: Couldn’t sit there quietly?
Jill DeWitt: I sat there quietly. I’m like, “Okay these guys are lost.”
Jack Butala: [crosstalk 00:09:16] kick that in grade school?
Jill DeWitt: No, hold on. That’s another story. I never did. No, but did I get in trouble for talking? Heck yeah. Anyway, I finally said, “Guys, you’ve just figured it out. Go back to that data and do it that way.” They’re looking at me like, “What is she talking about?” I tried to explain it and they’re like, “She couldn’t know. Bless her heart.”
Jack Butala: She’s just a girl.
Jill DeWitt: I said, “I don’t know. Call me crazy. We’ve only done over 15,000 transactions this way.
Jack Butala: Did you say that?
Jill DeWitt: But what do I know?
Jack Butala: That’s hilarious.
Jill DeWitt: You have to think, “Wait a minute.” I’m like, “No. I don’t know. 15,000 transactions later it worked for us but do what you want to do.”
Jack Butala: [inaudible 00:10:01] for dollars.
Jill DeWitt: Hello.
Jack Butala: Maybe they’ll do a deal.
Jill DeWitt: I know.
Jack Butala: Maybe you’ll do a deal. Never, ever. Look in the mirror and say that to yourself. Never, that’s the silliest thing ever.
Jill DeWitt: The worst thing …
Jack Butala: You want to ensure the fact that you’re going to do a deal.
Jill DeWitt: Dive in and buy it, too, by the way.
Jack Butala: Should I send 1,000 out, 5,000 out or 10,000 out? I think 10,000.
Jill DeWitt: What can you afford? Do what you can afford.
Jack Butala: Maybe I’ll do a deal if I send 1,000 out.
Jill DeWitt: I would really say …
Jack Butala: I’m going to do a deal if I send 5,000 out.
Jill DeWitt: Right.
Jack Butala: If I send 10,000 out I’m going to do 10 deals.
Jill DeWitt: Exactly. That’s it.
Jack Butala: Maybe 40.
Jill DeWitt: How much do you want to do?
Jack Butala: That’s right.
Jill DeWitt: That’s the only question. What’s your acquisition budget? Go for it. That’s it. There’s really nothing to think about.
Jack Butala: Some people have say this sentence to me, and inside I try to control myself when they say this sentence, “I sent 300 out just to test it.”
Jill DeWitt: I know, that was not a good test.
Jack Butala: That kills me.
Jill DeWitt: Exactly.
Jack Butala: All right, so then you’re going to fail, and that’s going to be your first experience, failing. You don’t want that.
Jill DeWitt: Right.
Jack Butala: You want to ensure your success. Send a ton out.
Jill DeWitt: You know what’s funny? Here’s where I think it’s why, Jack. We were talking with this on somebody the other day. I think people are a little nervous. I think they’re afraid pushing that button. Okay, here it goes. Ready everybody? Stand around, watch me.
Jack Butala: What do you think they’re afraid of? Failing?
Jill DeWitt: I think, one.
Jack Butala: Proof of concept?
Jill DeWitt: No, I think that they’re afraid of, A, doing it wrong. You know what? You’re never going to learn until you just go for it, so there you go. B, I think they’re afraid of sounding like they don’t know what they’re doing. They’re afraid of the learning curve. You know what? You got to get past that.
Jack Butala: That’s why we’re here.
Jill DeWitt: Exactly. That’s why I gave you script. You know what to … You know what? I even tell people you just need to think in your head when someone’s calling you back, what are you trying to get from them? You want to know was your offer in the ballpark, and you want to know what the property is. Where is the property and what’s the situation? If you just think about for a moment, you don’t have to have a perfect script and sound like you’re a pro or anything like that. They don’t want you to be that much of a pro, by the way, anyway. They want you to be a real person that really wants to buy their property. There’s nothing to be afraid of.
I do know people that are afraid of that. The mail goes out and the phone rings and they’re like, “Uh, oh my gosh, I don’t want to sound like an idiot and I don’t want to … What if I forget to ask them something?” So what. Call them back.
Jack Butala: Here’s my advice on that. This will go over perfectly for you. Say, “Look, you know what? Seller, this is my first deal, and I bet it’s maybe your first deal too, so let’s just get through together. I may or may not make mistakes. I’m part of Atlantic Investors Group, Atlanta Academy, Atlanta Investors Group. I have a ton of resources to use in case I get stuck, but it’s my first deal.”
Do you ever go out to dinner and the waiter says, “You know, you’re my first customer.”
Jill DeWitt: Then I go, “Oh no.”
Jack Butala: I say, “What?”
Jill DeWitt: I was just kidding.
Jack Butala: You know what I say? I’m like, “You know what? Good. We’re going to be … I am confident we will be the best customer you’ve ever had in your whole waiter career.”
Jill DeWitt: It’s so hard, but I feel bad saying this, but I won’t tell him that, but in the back of my head I’m thinking, “Well, this is going to go … I can … Just be ready. Things are going to be …” You know what I do? Here’s what I do. I prepare myself that the order might get goofed up and that’s going to be okay.
Jack Butala: How much mail is too much? There’s no such thing. We have a member who mailed a whole state, every single property. You know what he’s doing right now? Swimming in money.
Jill DeWitt: Exactly.
Jack Butala: People ask me, “What’s the difference between all you guys talk on the show about? We’ve got people in your group that are making $100,000 a month. What’s the difference between that guy and me?” Here’s the answer. They send out a ton of mail. That’s the answer.
Jill DeWitt: That is the answer.
Jack Butala: That’s it.
Jill DeWitt: More mail is more deals.
Jack Butala: Exactly.
Jill DeWitt: That’s it. You know what? You’ll know what you can handle. What if you have a day job and you can only do so much? You have the evenings and the weekends to do this. That’s okay. You send out your first batch. You’re going to quickly figure out how much volume came back from that and you can turn it up or turn it down, like, “All right, whoa, I was overwhelmed that month. Okay, I’m going to do half that right now because I sent out 10,000. I think I’m going to do 5,000. I think I can handle that.” Or you’re going to say, “You know, I sent out 1,500 and I think I’m going to do 3,000, and now I’m going to do 4,500, and now I’m going to do whatever.” You could do that too. As you get into this you will get more efficient too, and you’ll get it.
Jack Butala: We spent what over the years? $1.6 million now on data. That’s not even mail. That’s just data.
Jill DeWitt: Just data.
Jack Butala: Which is why Core [Logic 00:15:00] granted us permission to be a licensed provider. They looked back on it and they had said, “Yeah, you guys are qualified.” Do you have a question? Oh, I’m sorry. Join us for another episode where Jack and Jill discuss how to use information, that’s me.
Jill DeWitt: And inspiration, that’s me.
Jack Butala: Take it just about anything you want, including learning how to read.
Jill DeWitt: [crosstalk 00:15:21] maybe. We use it every day to buy property for half of what it’s worth and sell it immediately.
Jack Butala: You’re not alone in your real estate. Ambition. Hear the helicopters?
Jill DeWitt: Over the volleyball tournament?
Jack Butala: There’s a volleyball tournament, so listener, if you hear helicopters that’s why.
Jill DeWitt: Exactly, super cool.
Jack Butala: [crosstalk 00:15:40].
Jill DeWitt: Super fun, cool.
Jack Butala: Information, inspiration to buy undervalued property.
Jill DeWitt: We are Jack and Jill and this was the Cash Flow from Land Show.
Jack Butala: We are Jack and Jill and this was the Cash Flow from Land Show. We are the experts at acquiring property.
Jill DeWitt: Of all kinds, not just land.
Jack Butala: For half price just so we can flip it for way more.
Jill DeWitt: And really fast. Thanks for listening. You are not alone in your real estate ambition.
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