Category Archives: Absentee Owners

Outsourcing: Scrubbing Leads

Outsourcing is a big topic.  It’s sort of a fad now, but it’s also just the way business is run. Us small-business owners have to leverage technology and time in a smarter way to make sales, build our business and still have time for being human: relationships, rest, eating, helping.

I actually don’t like outsourcing because it involves managing people, something I’m sort of terrible at.  Lock me in a closet with a book, pen and paper and some good music and I’ll emerge days later happy and well.  But I need to involve people in my business to honor the other obligations in my life and take good care of myself.  And in order to do that I must outsource, AND prioritize what I outsource.

I start with WHAT I HATE MOST or WHAT IS MOST EXPENSIVE (measured in time or money or both).

It just so happens that scrubbing leads hits every one of those criteria.  To buy a new absentee owners list to replace the one I have would be well into the hundreds and hundreds of dollars, and to do it myself would take hours and hours that could be better spent talking with sellers or doing marketing.  

I also HATE, HATE, HATE scrubbing lists.  Any repetitive task makes me feel dead inside; it drains the life right out of me.  And there’s no pressing need for me to do this one (unlike other repetitive tasks, like feeding my children!).

So I’ve made it a priority to outsource this consistently.  Here’s a look at the instructions I came up with for my VA.  It’s simple, and really all that’s needed since I have a good VA and will also do a quick chat with her to answer a few specific questions.

Screen Shot 2014-08-27 at 11.51.24 AM

I believe next up will be data mining for my probate leads!

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Filed under Absentee Owners, Planning

How to Scrub a List of Leads

What is “scrubbing”, other than cleaning tubs and toilets?

When you “scrub” a mailing list, you’re cleaning it up.  You’re getting rid of dead leads that are no longer viable, and updating leads with new information – making sure you have current contact information.

What are you looking for when scrubbing a list?

  • Properties that sold to someone else  – either an investor or a homeowner – should be removed.
  • Properties that don’t match your criteria.  For example, even though I only market to residential single- and multi-family properties, sometimes a condominium or apartment ends up on my list.  If I discover it when I’m scrubbing, I can choose to remove it.
  • Leads who have changed their mailing address.  A real estate investor’s leads move often, and having the correct mailing address is essential with direct mail.

How do you scrub a list?

If you’re doing this on your own, like I just did, then you do it painstakingly.  I went lead by lead, researching the property on the assessor’s page to confirm it hadn’t sold in the last 6 months (many had), and then cross-referenced the owner name and mailing address, updating as needed. It was not my kind of work.  But it did the job – about 40% of my old leads were no longer good.  What a waste it would have been to include them in my new mailings!

An Alternative: The Revolving Door

But, depending on your marketing strategy, you may never need to scrub your lists.

If you stick to purchasing general leads and researching targeted leads, then your leads can work like a revolving door: they go into a campaign (where you hopefully contact them at least 6 times), and then you forget about them.

For targeted leads based on an event (probate, eviction, vacants, divorce, etc.), you can research or buy leads every month and send to whomever is on the list. Be sure you schedule at least 6 follow-ups of some kind, but then you can forget that list and move on to the next list the following month.

For absentee owners, whose status remains the same for a longer amount of time, you can set up a campaign, then when your campaign ends (say, in 6 months),  you buy a new list and start all over.  The new list will leave off any leads who sold, and update the address of the ones who have moved.

Everyone does it differently, and the revolving door is just one idea.  There are a lot of factors to take into account, including how you deal with leads once they come in, what kind of database options you have available to you (less if you have a Mac), whether you want several people or just yourself to be able to access and edit it, and how much information you really think you need to track.

But my mantra for this year is something I read from Tracy Caywood: that the most effective marketing is implementation and consistency. You can’t perfect something you haven’t started yet – so let’s get to work.

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Filed under Absentee Owners, Evictions, Marketing, Planning, Probate

New Year, New Marketing Plan

Last year was a wash for me.  I switched to postcards and they performed miserably.  I struggled with a lot of personal elements in my life, and felt myself sort of go limp, like my toddler does in protest when she doesn’t want to do something.  I am a master at looking busy while doing absolutely nothing, and that sort of self-sabotage happened a lot last year (in the form of research and planning).

I don’t have a lot of regrets about last year.  Thankfully, I can have slow months or years because we don’t depend on this for our full-time income.  But we might one day.  And we also have financial obligations my business is responsible for, and my lack of diligence last year put us in a tight spot.

But we all have ups and downs, and those help with growth.  At least,they do for me.  It’s scary for me to do real estate – for all sorts of reasons – but building resolve and courage is what I’m shooting for (not for eliminating the fear).

So here’s how 2014 is looking:

My Resources

  • I still have my accountability partner.  She means more than I can probably understand, and I know of at least two times when I was actually resolved to quit but she talked me into hanging in there.  So I’m glad to have her help as I move forward this year.
  • My husband will be helping.  He’s already a big part of the business: he helps stuff envelopes when I’m behind, knows about every deal I negotiate and works out strategy with me.  But this year he’s officially coming on board to help.  He’s going to be in charge of tracking and mailing our marketing campaigns, maintaining our leads database, skiptracing, and basically anything related to data.
  • Last year I blew through the marketing reserves that had built up from previous deals. So we’re back to leaning on our Freedom Fund for all marketing costs.  A Freedom Fund is something I learned about from my friend Shae Bynes.  It’s an amount of money that comes out of our personal budget to go toward the business.  Right now we have it at $300.  Once we close on a deal, at least $1000 or more of the profit will jump start a larger marketing plan.

My Marketing Plan

  • For January, I scrubbed an existing list of Tulsa Absentee owners (by myself!) and I ended up with 101 leads.  We also scrubbed all of the probate leads I had and it whittled down to 77. They all got a yellow postcard sent through Click2Mail.
  • We created a follow up campaign so that all of these leads will automatically be sent another postcard each month for 4 months, and we created reminders to schedule 2 more rounds after the 4 months are over (Click2Mail only allows you to schedule 120 days in advance).
  • For February, we’ll research probates and create a campaign of up to 125 leads.  We send out a professional letter and create a follow up campaign of 6 yellow postcards.  (This totals about $300 – my max budget for the month.)
  • For March, we’ll see.  There’s a good chance we’ll have a deal by then.  If  so, we’ll consider implementing our $1000 marketing plan (still to be finished).  If not, we’ll probably repeat February’s plan.

It’s nice to have a plan.  Everyone tells me how important it is.  And I’m usually on board – I LOVE planning.  But implementing is more important than a good plan, so I’m excited that I’ve already touched 178 leads, and without doing any additional work they will receive 4 more postcards.

I hope you’ve had a hopeful, productive start to the year as well!

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Filed under Absentee Owners, Fear, Marketing, Planning, Probate

How to Create an Absentee Owners List on the Cheap

I’ve been sending letters to absentee owners since the beginning of 2012 and I like the results I’ve had.  Each investor will have his or her own opinion, and I tend to agree with other investors that wholesalers should focus on more targeted absentee owners (like vacant houses, evictions and code violations).

But overall, a general absentee owners list is a great gateway, and you will get deals, especially if you approach them using a drip campaign, one where you plan to contact them every 4-6 weeks at least 8 times, if not perpetually.  (My friend Sharon Vornholt says that she keeps mailing to her lists until either 1) she buys the house, 2) someone else buys the house or 3) the seller asks to be removed from the list. )

So how do you find a absentee owners?  Below I’ll give you some different ideas, including free or very cheap options.

1) Make friends with a realtor.  The MLS is a goldmine of info, and depending on where you live you could get a list of absentee owners with it, but you have to have access. You could agree to send your dead leads to a realtor in exchange for information or lists off the MLS.   You could also arrange to be an unlicensed assistant for a realtor: do some administrative tasks for them in exchange for access to the MLS.

2) Ask a title company.  This may be a better option if you already have closed deals or happen to know someone, but call around and explain that you’re planning on buying several houses this year and will bring them your business.  Then ask if they could prepare a list of absentee-owned properties for you.  Title companies have access to this info and they might agree.

3) Listsource.com. I use them and have gotten a list of 250 names for about $60.  Not bad.  You can customize the list to only include absentee-owned properties, and use other criteria like sales date, equity amount, zip code, and type of property.

4) Drive for Dollars.  Not only is this a common sense way to add leads (most of us already drive all the time anyway), but the leads you gather are very targeted, which means they are generally much more motivated than a general list compiled from a database.  When you’re out, try going different routes and look for tall grass, closed blinds, lack of personal touches and belongings or notices taped on doors.  Go on trash day and make it easy (no trash cart usually = vacant!).

5) Search your county assessor’s page.  In a pinch, if you have no money for a list and no other option, you can look up records on your assessor’s page.  I don’t personally know of any assessor’s page that includes a search criteria for absentee owners, so you’ll have to look one-by-one, and it will be tedious, time-consuming work.  But I’ve gathered leads before while I’m already on the site, researching other properties.  I’ll quickly look at each property in that same subdivision and add the absentee-owned houses to my list of leads.

6) Pay a VA.  You can hire a virtual assistant to do the research for you.  Depending on which country your VA is from, the amount you pay can range from $2-3/hour all the way up to $10/hr.  I hired a local person to assist me with my mailings and she’ll do some of the more complicated lead-gathering that I do.  But for an absentee-owners list, it’s probably cheaper to just buy a prepared list.

7) Buy a list from your county assessor.  If you’re into Excel or programming, this could be an excellent option for you.  Thanks to the freedom of information act, we have a right to access public records and most county assessors’/appraisal districts’ offices are happy to oblige.  In fact, my county assessor has a ready-made absentee-owners list available for $50.  What made it difficult for me to use was the fact that it was 4000 records long and I’m not very Excel-savvy.  It would have taken me hours to filter for the criteria I wanted (and I actually did end up giving up after several hours!).  Another option to is to buy the list and then hire someone on Fiverr, Elance or Odesk to create Excel macros or create a new spreadsheet based on filtered criteria for you.

This is on my mind because it’s time for me to go through my absentee-owners list and scrub to be sure they’re all still good leads.  It’s such a chore to research each lead manually, and I’m debating on just buying a new list (which would automatically clean out my old, dead leads).  I’ll probably end up doing it myself (with my assistant’s help), but it’s nice to know about options.

How do you get your absentee owned leads?  How do you scrub your lists?

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Why I Stopped Using Yellow Letters

I know dozens of NR [New Rich] who don’t accept Western Union or checks as payment.  Some would respond to this with, ‘You’re giving up 10-15% of your sales!’ The NR, in turn, would say, ‘I am, but I’m also avoiding the 10-15% of the customers who create 40% of the expenses and eat 40% of my time.’ It’s classic 80/20.
– Tim Ferris, The Four Hour Workweek

When I started marketing in 2010, I heard a lot of buzz about the yellow letter.  You know – The Yellow Letter.  That keyword alone gets 4400 hits a month in the US on Google.  Lots of investors use them and have great success, and when I started marketing again at the beginning of this year, I started with yellow letters too.

The yellow letter is a great way to grab the attention of a homeowner.  You usually send it to owners of vacant properties, or at least absentee owners.  It’s got a vague, bare bones message with a bold call to action.

They tend to get great response rates.  With the one and only yellow letter campaign I’ve sent this year, I got 15.2% of homeowners to call me back.  That’s Uh-Mazing.  Typical response rates for direct mail are in the 1-3% range.

The Yellow Letter is short, mysterious and bold.

But guess what?  All were tire-kickers.  They just wanted to know what they could get for the house; they didn’t need to sell.  And that makes sense, doesn’t it?  They were calling to figure out who I was, what I do, and why I wanted to buy their house.  Because I didn’t tell them.  They were NOT calling because they necessarily wanted to sell their house.  They were calling because they were curious.

On the one hand, having a compelling call to action is great for marketing.  You want that clincher, right?  You want something that pushes them over the edge to give you that call or to go to your website.

But if they’re not calling because they want your product, then you’re wasting your time (at least, that’s been my experience).  And how can they want your product if they don’t KNOW what your product is?

After talking to hundreds of homeowners this year so far, I’ve decided that weeding out those who are not motivated and/or only want full market value is essential to me running a successful business that makes money and serves others.

Using a professional or white letter helps me do that.  I use the professional letter (or postcard) to explain exactly who I am (an investor), what I do (buy houses as-is), and why they should sell me their house (close quickly, no repairs to make, can offer cash).

With the professional letter, most people who call me know who they’re dealing with and are serious about their intention to sell.  My response rate is much lower (5-10%), but still very good.  Giving up a higher response rate is worth less time answering phone calls and filtering out bad leads.

For me, using professional letters/postcards is the equivalent to putting out a sign in front of your store front. It needs to be easy-to-read and clearly convey what kind of business you have.  You want to spend your time serving customers, not explaining your business to passers-by who are simply curious about your shop.

Right now I’m in the process of converting many of my letters to postcards, which seems like a GREAT idea since I can almost completely outsource the entire process.  (Tim Ferriss would be so proud!)  Down the road, I’ll get back to you on how the postcards compare with the professional letters.

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Filed under Absentee Owners, Marketing, Planning

Rental Deja-Vu

Last September I mentioned that we bought our first rental, which ended being here in the Tulsa area, and not in OKC, where we consider home.  It was unique because, not only is it an amazing already-remodeled-with-long-term-tenants-and-property-manager-in-place-with-owner-financing turn-key rental, but also because I got that property with my OKC marketing.

Two weeks after closing on that house, I got a phone call from an elderly lady about a letter I sent her. She has a house in OKC  she wants to sell, but – and here’s the deja-vu! – she was more interested in selling a house she owned in Tulsa first and would sell it with owner financing.

We negotiated back and forth, and finally struck a deal.  It took two weeks for her to get the contract back to me, but we finally closed last Friday! WHOOP!

To add to the bizarre deja-vuness of this deal, we also plan to keep this property as a rental, since we acquired it with owner financing – too good to pass up.

Here are the details of the deal, for those who are interested in seeing  what kind of owner financed deals are possible right now:
A 2/1/1 with 1365 sqft, and huge extra den with fireplace.
-The ARV of the house is $100-110k.
-It was in rough but still decent shape (the disgusting, pet-stained carpet was the worst), but the kitchen has new cabinets and the bathroom was recently updated.
-Quick research told me I could rent it for anywhere from $775-925/month
-I made three different offers: all cash (very low), short-term owner finance (3 years), long-term owner finance (7 years)
-We finally settled on a purchase price of $70,000 with $2k down, principal-only payments of $350 for 3 years and I pay closing costs.
-Did you catch that I got this deal with an interest rate of ZERO PERCENT?  The monthly income was more important to her than interest, and when I explained that to maintain my minimum cashflow requirements, I could offer either lower payments and higher interest or higher payment and no interest, she went with the latter.
-That means in 3 years, when the full balance is due, I will only owe around $56,000 on a house worth $100,000.

The reason this deal was worth keeping (instead of wholesaling) is the terms.  Since we want rentals as part of our long-term plan, we couldn’t pass this up.  We don’t have $50-60k sitting around to invest, and didn’t want to have to qualify for a loan or put a huge down payment down.  This was a great way for me to acquire a property that could cashflow, without a lot of money up front, and with plenty of equity from the get go.

The cashflow won’t be amazing at first.  Here’s how it breaks down:
$850     Rent (confirmed by property manager as the conservative rental rate expected – possibly more)
-$350    Debt Service (to previous owner)
-$120    Property Taxes
-$90     Property Insurance
-$127    Maintenance/Vacancies (15%)
-$62     Private Investor (who is funding the rehab; 1 year note)
=$101 Profit

This isn’t smokin’ hot cashflow, but I know that I will not lose money in the next three years while I’m building that equity and payment history.

The payment history is important because in 3 years, I’ll refinance the loan balance.  This is fantastic for me, since I won’t need to get a new loan; I can refinance since I already have a loan on the property with the previous owner.  Since I’ll have already established payment history, have proof of consistent cashflow, and have 50% equity in the house, I won’t have to put down a large amount or jump through (as many) financial hoops,

Other people have pointed out that in 3 years this would also make a great flip, which we may do.

I’m quickly falling in love with owner financing.  It’s so much simpler and cheaper than getting a loan, and can be easily structured  to make both you and the seller happy. Give me a few more deals, and I’ll probably be able to tell you about any disadvantages of owner financing as well.  😉

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Filed under Absentee Owners, Motivation, Planning

Professional Absentee Letter

Yesterday I put 100 Professional Letters in the mail.  I call them Professional, because well, they certainly look it compared to the handwritten yellow letters I wrote with my first campaign!

I printed them, using Mail Merge, signed them in blue ink, and then hand-addressed the envelopes – the same as with the yellow letters.  This time I included a return address, so that I can track down those with the wrong address.

Here’s the letter I came up with:

I hope I’m getting close to what I was shooting for: personal, but professional, and not gimmicky.  It took me a total of about 2 1/2 hours to prep these letters, and that includes about 2 hours of yelling at Mail Merge – hopefully it’ll be a lot less if I do it again.  It took me 10 hours to prep the handwritten yellow letters.  That’s a huge difference!  I’m hoping the response rate will be similar to the yellow letters – I would love to have a reason to stop handwriting letters.

If you have anything to add, I’d love to hear it!

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Filed under Absentee Owners, Marketing, Probate

Absentee Marketing Campaign, Take 2

I’ve finished 100 handwritten yellow letters.  You can read all about it here.  I have a 10% response rate so far, but since many of the letters went out just a few days ago, it’s too soon to know what the final count will be.

10% is a great response rate for direct mail.  But of the ten calls I’ve gotten, only one seems truly motivated enough and in the right circumstances to go anywhere.  I appreciate all the information out there for investors on marketing materials and response rates, but what about actual conversion rates?  Which materials most often convert to sales, and does it always correlate to response rate?  That’s an article that would be worth reading!

As Shae pointed out in this article on BiggerPockets, in her own experience the yellow letter got responses, but failed to deliver the conversions she was hoping for.  So since my hands are so cramped from writing, and since I’m disappointed with the motivation level of my callers, I’m going to do my next 100 letters differently.

I was torn between sending postcards and letters.  Postcards would be so easy, and I’m craving easy at this stage.  But I know that the message is all-important.  What you say is just as important as how you say it and to whom you say it.  I don’t have a reliable postcard, nor am I tech-savvy.  So coming up with a postcard would be more risky for me.  (Although yesterday I watched an interview with Sharon Vornholt who said that she has gotten postcards to work for her absentee owners.  Something to look into…)

I got a 15% response rate from my probate letters in 2010, and I’ve always been curious about why that was.  I tweaked Vena’s probate letter, so I couldn’t chalk it up to her letter alone.  The more I think about it, I think it was the tone of my letter: I was respectful, professional, but also personal.

I got confirmation of that last night watching Sharon’s interview.  She described the type of letter she sends to probate leads and it sounds very similar to my own.  That was so nice to hear (I’m doing something right!  I have good instincts!).

By the way, the interview was fantastic, so follow the link and have a listen.  It especially resonated with me, because, although I’ve dabbled with lots of different types of sellers, I feel most comfortable and have done best with probates and absentee owners, which is what Sharon does as well.

I’ve been working on an absentee letter that is the equivalent of my probate letter.   Something that sounds professional and respectful (no screaming, gimicky, all caps, one-liners), but also very personal.  I’ll post my finished product when it’s ready.  I’m curious to see how much faster the process goes, and obviously excited to track the marketing stats for it.

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The Yellow Letter for Absentee Owners

Hello, all.  I’ve rallied the troops (well, myself) and have put together my most recent marketing campaign.  The other local investors didn’t work out, so I struck out on my own.  Due to many circumstances, I decided to do a version of virtual wholesaling in Oklahoma City.  You remember that I’m currently in Tulsa, for my husband’s job, so it’s been an interesting challenge preparing to invest remotely.

Here’s my Yellow Letter for this campaign.  I sent a batch out a week ago, and this simple letter has gotten me a 10.5% response rate and counting.

Why I think it works:

1. Handwritten = Sincere
People are more likely to open mail if it’s personal.  The envelope is addressed by hand in blue ink. The letter itself is handwritten, so they know a real person wrote it.  It indicates to them that I am more likely to be sincere, and not just spam or a large business (which people dislike more than mom-and-pop operations).

2. “My husband and I” = Legitimate
I always include “my husband and I”, even though I do most of the legwork,  because when people see that bit of information about me, I become a Real Person.  I have a husband, so I seem more responsible and legitimate.  I assume “my sister and I” or “my partner and I” would create a similar effect.  It’s actually an interesting sociological phenomenon that if you are able to pinpoint someone to a specific position in society, they feel more comfortable with you.  I am not just somebody, I’m Kelly who has a husband.  Strange, huh?

3.  A Bit of Mystery is Intriguing
I don’t write a return address on the envelope.  Also, I don’t explain myself in detail in the letter.  I sound most likely respectable, probably sincere, but who I am?  Why do I want to buy the house?  What would I offer?  They don’t know, so they are more likely to call to find out.

It’s extremely inefficient to handwrite hundreds of letters, but starting out, it’s worth a 15% + response rate (I’m hoping for somewhere between 20-30%, but I’ll report back).  Some people hand-write one and then make color copies on yellow notebook paper; but to me, that screams “sham”.  If I were to open that letter, I’d think they were trying to trick me into thinking it was really handwritten, when close inspection shows it is not.

It would be better to print letters and then sign them by hand, and have someone else hand address them.  Or hire someone to hand-write yellow letters.  That’s something I might consider in the future, when my time is better spent elsewhere.

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