Which Envelope Would You Open? How to Buy Undervalued real estate with Direct Mail.

By S. Jack Butala

We have been sending landowners offers to buy their land since the
late 1999s.  Just before I sat down to write this, I looked back to find
out that we have sent about 1.2M mailers out over the years.

I’m confident we have made just about every mistake a real estate
company can make in this area.  But I think we have it figured out now.

Here’s what works for us:

Even though we’re always sending out more mailers, the number of phone calls we receive on a daily basis from the letters we sent out from 1999 to 2013 is over whelming.  We have more than 500 acquisitions in review right now.

We figured out how to do the perfect mailer and I’m going to share it with you here:

  • Get great data (property ownership data).
  • Scrub that data down to perfection (remove the owners who probably won’t respond).
  • Put together a compelling cover letter and purchase agreement (or use mine)
  • Stagger the release dates for the letters so you can manage the inbound calls (or just make sure you are ready to manage calls)

If you do these four tasks with precision, you will knock it out of
the park.  Our effective purchase rate is 1.5% to vacant land owners. 
Our back tax mailer rate is closer to 11% (sending mailers to owners
with properties that have associated accumulated back taxes).

Let’s look at these four steps more closely:

  • The only place to get great, fresh data is from a professional real
    estate data company. The kind that have a direct feed into the county
    database and provide all kinds of data about real property, not just the
    simple kind that you and I want which is ownership.  We buy all our
    data from Real Quest/Core Logic which is a division of First American
    Title (FATCO).

Trust me.  Don’t horse around with these data list companies or even
with the data directly from the county.  The reasons for this are beyond
the scope of this Blog.

  • You can get a great list of property owners of all of the buildings
    in Manhattan and send them a letter offering to buy the property for
    $1,500.00 each and you will incite a riot.

Or you could get a list of vacant land owners for properties between 2
– 5 acres in upstate New York where the taxes haven’t been paid in 3
years, there’s no debt and the owner of record is deceased and send a
letter to the heirs of the property with an offer which explains how
this is your business and how you have helped thousands of people out of
this situation.

A heartfelt, professional letter offering help and payment for the land.

Trust me.  If you show them the respect they deserve, they will sell
you their property for just about any price and thank you afterward.  We
have a bulletin board with tons of hand written letters thanking us for
buying their land.

One comes to mind:  A woman called me several years ago after she
received our letter.  We ended up buying her mother’s 40 acre property
in Northern Arizona for $4,000.00.  A few months later, I received a
hand written note from the same women.  She thanked me and told me that I
saved her life.  She and her mother took the money we sent and whet to
Hawaii for the last months of her mother’s life as she was suffering
from terminal cancer.

My point is this:  Many property owners (regardless of property type)
don’t know what to do with their real estate when they are ready to
sell.  They need a kind, well written letter from you offering help and
payment.

  • Letters on colored paper, postcards and other types of processed,
    cheap, disrespectful correspondence don’t work. You are spending the
    money on postage and data, do you really want to slap together the final
    piece of the puzzle? You are free to use my template.
  • When we send out direct mail, we put the whole thing together about
    once ever few months and then “release” parts of it in the mail each
    week. If you do it correctly, you will get tons of phone calls and mail.

Remember, you need to take a look at the deal after everybody has
agreed on the price.  Its takes a lot of time, especially in the
beginning.

So which envelope is best?  The first one.  It’s blank.  You need to at least open it to see if it’s something that needs to be shred etc…

Sincerely, Jack

You are Not Alone in Your Real Estate Ambition.

LandAcademy.com