Direct Mail is the best technique to use when trying to generate leads and find sellers of multifamily properties. It is such a simple and effective tool and it costs you very little. Here are some tips on how to use direct mail marketing in your multifamily investing business.
Direct mail marketing merely involves mailing letters to the owners of multifamily properties in your target area and asking them if they would like to sell their multifamily property. The great thing about this technique is that you can utilize it in any city; you do not have to use it just for your hometown.
Let’s say that you go on vacation in another city. You can find out all of the people in that city who own multifamily properties in your hometown. You then send them a letter asking if they are dissatisfied with the multifamily property.
If they are dissatisfied then you let them know that you would like to buy it. You then tell them when you will be in their city and when you can meet with them. A good response rate is 1% but an average response can be anywhere from 2-5%.
Direct mail is a two-step process. First, you need to identify your target market. Second, you need to deliver your message. The more precise you are with your target market, the more precise you can get with your message.
For example, an out-of-state owner may have a different message than someone who is a local Section 8 owner who self manages the property. An out-of-state owner who does not self manage has a property management company. Your message may be tied to the dissatisfaction of the management company.
A possible message to that owner could be, “Are you dissatisfied with not knowing what’s going on in your property? If you are dissatisfied, I can alleviate that problem.”
You could send the local owner of a Section 8 property the following message: “Are you tired of waiting six months to get your first payment? Are you dissatisfied with people tearing up your property? I’m a local owner and I can quickly take this problem off your hands.”
The more precise you can get on your target market and identify with their emotional pains and create a message that connects you to relieving that pain, the better your response rate is going to be.
Once you have defined your target market and you have narrowed your message to address that target market, you need to figure out how to access those people. The simplest thing you can do is to sign- up with the subscription service at www.propertyinfo.com. It is a paid package that goes straight to the appraisal district database and allows you to sort all owners of 4-20 units; all owners of 20+; all owners in a price range; all owners in a zip code; and all owners that live in a state. An Excel file is created that you can download and that becomes your mailing list.
Direct mail marketing is a great tool for reaching out to prospective sellers of multifamily properties. You need to remember to define your target market and customize your message to address the needs of that particular market. The key to successful direct mail marketing is addressing the needs of the seller.