Real estate investors are a large community that are present all over the United States and the world. Real estate has been a way to build immense wealth and help average Americans save up money. My interest in real estate peaked when I was watching HGTV which is a network that focuses on houses and investors. I had never considered it a viable option, as it requires cash and knowledge on housing markets. Working my 9-5 job and attending school just wasn’t cutting it for me. So, one day I looked up podcasts on REI (real estate investing). The first show that popped up was Bigger Pockets, I downloaded the first episode and began listening to it. It didn’t take long for me to be completely engulfed in every episode. The episodes are an hour long and they are hosted by Josh Dorkin and Brandon Turner. Josh and Brandon are two investors who had to learn lessons of real estate investing the hard way, and they wanted to give others an outlet so they could learn from their mistakes. The show consists of interviewing a current investor on their business model and how it works in their market. Often every investor has a little niche where they succeed. Yet these investors use similar marketing strategies to buy houses for as low as possible. Direct Marketing to real estate investors means sending a genre of communication that can pique the interest of the intended audience, usually a homeowner, so that they call the investor. Direct Marketing can be used to advertise any business but it is very effective in the real estate field. There is so much to direct marketing and how it is an effective form of communication for real estate investors. The people it can reach and the message it relays allows for real estate investors to run a profit-driven business and to help the homeowners who are in need.
Real estate investors do not just send out postcards and other forms of direct marketing to every house in every city. That would be a waste of resources and very costly. Instead real estate investors build lists targeting an audience in which they want to invest in. A very popular list is one where the homeowner has liens against the house for tax negligence. Motivation would be the reason an investor would target that audience. Since the homeowner doesn’t pay taxes, they are in a bind where they might lose the house, so the investor would build a list of all the homeowners with tax liens in a certain zip code and begin their direct mail campaign. Some of the other notorious audiences are out of state owners, owners who have more than fifty percent equity in the house, and other factors that motivate a homeowner to sell their house. There is a plethora of websites where you can build these lists and you can always go to city buildings in certain areas to gather this information also. The next step is to figure out which kind of direct mail fits your needs. There are certain postcards, yellow letters, business cards, and other forms media that an investor can use to intrigue the homeowner. One of the samples of this genre was a yellow letter that someone had posted online for people to use as an example. The yellow letter was a very simple piece of paper that had red pen. The message was simple stating the homeowners name and expressing that the investor was interested in buying the house in cash and if they were interested there was a number they could call. This is efficient because it is clear and concise. Some homeowners would see this yellow letter and it would immediately appeal to them because they are in a difficult situation and this letter gives a solution in a short concise manner. One of the issues with yellow letters is they are visually bland and they illustrate the lack of effort that went into making them. This can be unsettling for some homeowners who are in a tight situation but the letter makes it feel like there is zero interest except on profit. There are actual statistics that investors collect based on their own experiences but these are misleading because every zip code and market will have different reactions. Postcards on the other hand are more aesthetically appealing but can be more expensive to purchase. Postcards tend to be smaller than yellow letters and tend do get the message across faster because all the information is on a small card. The sample I found online was colorful and visually stimulating. It also contained a slogan about not paying on a house you don’t want when you can sell your house for cash in days. This postcard does a good job of getting the point across and persuading the audience based on speed of transaction and the ability to purchase a house they want with the cash they receive. It again contained a phone number which all direct marketing should include as it allows the audience to get in touch with the investor. Every investor uses their own version of direct marketing as they try to appeal to different audiences and as they try to set themselves apart. That’s one of the reasons that this genre is so diversified and you can always find a new example of this media.
Investors have been using direct marketing because it is an effective way to find deals in such a hot market. Direct marketing gives you access to deals that would not otherwise be there or there would be so much competition it would cause the deal to sacrifice bottom-line and make it a riskier investment. As more investors delve into the direct marketing campaigns, more homeowners who fit the lists receive mail. A common occurrence is a homeowner receiving multiple pieces of direct mail from different investors. Often a homeowner does not act on the mailing campaign on the first try. There are studies that suggest it usually takes 6 pieces of mail for a homeowner to respond to the mail. Persistence and consistency are very important with this genre as it allows for the homeowner to receive the mail at a time that is pivotal. A homeowner may not want to sell at first but maybe within a few months the circumstances have changed and therefore the mail received after has a larger effect. The majority of direct mail campaigns are derived from the same postcard or the same yellow letter. With little difference in the media it is important to set yourself apart in the repetition area. There are ways for investors to be creative but that requires time and money. Also, some investors will actually use past purchases and success stories to build accreditation and to motivate the seller. With every mailer the appeal differs, some play on emotions why other plays on circumstances. It truly depends on the investor and what has worked in the past. The majority of investors get straight to the point in the mail and tend to appeal towards logos. It needs to be precise, neat, and organized. The format of the writing needs to be clear like with Times New Roman font. There is rarely slang involved because that causes confusion for the seller and isn’t convenient. The reason behind making sure it is simple but persuasive is the broad audience that you are reaching. Some of the audience may have college degrees while other parts of the audience may not have a high school diploma. It would require too much work to dig into thousands of peoples lives just to appeal to them so it is important to appeal to different backgrounds and situations. Most direct mail comes from an online company that you pay per mailing, the more that the company must customize the higher the price. Since lists can involve based on parameters I would say the audience is strictly based off what investors in that area are trying to capitalize on. You always want to come off as credible and reliable with strong values at the core of your business. No one wants to sell their house to someone they don’t trust. Most real estate investors are truly trying to help people out of bad situations or help others into better situations—it isn’t always about making money. Direct mail can come off as predatorial but in an essence it has the ability to change peoples lives. The impact direct mail has had on real estate is huge, as it is one of the best medians used to meet motivator sellers.
Real estate investors have a multitude of ways for finding deals, one of the most common happens to be direct mail. It is an advantageous way of succeeding in a capitalistic market. Even though it lacks in vocabulary and diction, it carries a strong message, one that can help both parties. This genre has thrived for decades and I can see it only getting stronger as investors find ways to make it better. Direct mail can reach millions of people carrying the same message across different circumstances. I think that is what truly makes direct mail special. Most investors find success with persistence and creativity. Whether it be a handwritten yellow letter or a computer printed postcard the message always makes an impact.
This example of direct mail does a great job of being visually appealing. The photo was taken where the direct mail was sent which can appeal to a hometown emotion. The marketer did a great job of conveying the point without having to use an abundance of text. One of the issues I can see with this example is it does give any insight to those who sent it. Often times you want to include a name so that is doesn’t give off the appearance of junk mail.
This example of direct mail is very simple with a white background and green lettering. It does a great job of getting the point across with very few diversions. This mailer seems to be cheap which is good hitting more houses but it would probably get a lower response rate.
This example of direct mail is less aesthetically pleasing but instead contains important text to persuade the reader. There is a number and website which allows multiple forms of contact. They also make it a point that they can purchase the house in days, not months which is an advantage. The main issue with this one is that it contains no personal feel to it, and can come off as the buyer being profit driven. You want to be sincere when relaying these messages.
This example is a very basic mailer that I believe would just be a template to use for starters. There is little visual appeal. The one good thing to point out is the pattern that every mailer has shared. They tend to say we buy houses cash in any condition in a short time. This is to appeal to an audience who wants out of their homes and is willing to let it go at a good deal.
Yellow letters tend to be placed in an envelope. This yellow letter is very simple and just states they buy houses. The problem with yellow letters is they are often mistaken for junk mail. This example is just a basic rendition of what a yellow letter should be. It lacks visual appeal and content. Again, though the goal is get the point across quick and effectively.
This yellow letter does a better job of being personalized. The investor has used first names to build emotional rapport. It makes it feel like the homeowner is special and the only one to receive the mailing. The issue remains that some people might not even read it since it gives the appearance of junk. There are some ways to combat this but it definitely is hard trend to get over.
Sources Cited
Blankenship, Mike. “10 Tips for Sending Real Estate Direct Mail (with Examples).”InvestorCarrot, 17 July 2017, oncarrot.com/blog/tips-for-sending-real-estate-direct-mail/.
“Direct Mail.” We Buy Houses Marketing Portal, 29 June 2017, marketing.webuyhouses.com/marketing-strategies/direct-mail/.
Cory Boatright | REAL ESTATE SERVANT, www.gobigprinting.com/real-estate-servant/.
Locke, Chris. “Direct Mail Example From Top Los Angeles Realtor.” ActiveRain, 7 Oct. 2017, activerain.com/blogsview/4695382/direct-mail-example-from-top-los-angeles-realtor.
“Real Estate Investor Marketing: The Definitive Guide (2017 Update).” PostcardMania, www.postcardmania.com/blog/real-estate-investor-marketing-guide-2017/.
Feltus, Chris. “How to Get Started with a Direct Mail Marketing Campaign for Your Real Estate Business.” The BiggerPockets Blog, 3 Nov. 2014, www.biggerpockets.com/renewsblog/2014/04/01/starting-your-direct-mail-campaign-for-rei/.
Eric Gross English 2089 Portfolio 