Wholesaling to Owners Facing Foreclosure
For the real estate wholesaler, time is money and anything that takes a lot of effort to get results is often a waste of time, thus a waste of money. So, here are few tips to help you make your yellow letter direct mail campaigns as effortless as possible so that you get more ROI from your efforts!
Believe it or not, just like probate properties, pre-foreclosure properties will have a better response to handwritten letter strategies for real estate wholesalers. Why? Because the same reason they work for probate properties – it makes the person(s) receiving the yellow letter feel like they have a personal connection with somebody that cares.
What Should You Look For In Areas For Pre-Foreclosures Leads?
Think quality leads instead of quantity when it comes to leads. Focus on zip codes that will have the most foreclosures to create your target area.
Then get familiar with that area so that you can make informed decisions of the pre-foreclosure properties that you want to approach. The more you know about an area, such as new road construction or rezoning in the works that could have a negative impact on investment.
Get informed on local issues in the area you’re targeting, such as school district boundaries being realigned. These can often make a difference in resale value.
Do your due diligence on any pre-foreclosure and house and determine it if is a “diamond in the rough” or is it a gem that promises high resale.
After you have identified and qualified the pre-foreclosure homes you want to target, it is time to contact the current owners with your yellow letter direct mail campaign. You may send out as many as a thousand annually, which seems like a lot. But if you can close ten to 15 of them with an average profit of $10,000 each, that’s pretty good business!
What Will Get You The Best Response?
Professionally written letters work best. This may require you to pay for a professional, but that is a small investment to make when you look at what you may get back in return.
If you don’t get an immediate response from your first effort, don’t be discouraged. Homeowners in pre-foreclosure are usually in denial or shock, even angry. Create a plan to contact them again every two weeks, then weekly as their foreclosure time nears.
Avoid form letters and postcards, make every yellow letter a personal letter, each time a little different, and always reference your previous letter.
Each yellow letter should have your individual signature and always use a first-class stamp, not pre-printed postage. Use envelopes with “ADDRESS SERVICE REQUESTED” just under your address so if the owner as moved, the post office will have the address of the current owner.
Timing is everything and Saturday’s mail is usually received more receptively. By mailing your yellow letters on a Thursday, they will arrive on Saturday.
Appeal To The Owner’s Emotion With Empathy
Your yellow letter should have empathy for the owner. This is a difficult, hard time for them. You want them to feel you are on their side. Let them know how you can help such as offering them cash for their equity or assist them in finding a place to move to. Remind them by selling to you for cash will keep them out of foreclosure and it is on their credit for years.