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Doug was born in Colorado Springs, CO and raised in Carlsbad New Mexico. After high school he ventured west to the sunny coast of Southern California. It was there he met his beautiful bride Andrea, who happens to share his entrepreneurial spirit!
As newlyweds, they ventured back to Colorado and started Mountain High Concessions, a Kettle Corn vender for special events and sporting/concert venues. Mountain High Concessions became the first Kettle popcorn vender for the Denver Broncos at Mile High Stadium. They were itching to get back to So Cal and they sold the concessions company and got started in Real Estate!
16 years and 3 kids later, they are the proud owners of one of Southern California’s largest wholesale real estate purchasing companies! They operate the business together along with our incredible team! Over the past decade he has worked as a California Certified Residential Appraiser from 2003-2010. Since 2008, he and Andrea have purchased and sold over 250 properties in Southern California and manage their in-house rental property portfolio.
In this episode, Doug shares with us how he started by sending out about 1,000 postcards each month that had the ‘Urgent Notice’ message on them to absentee owners. His response rate then was about 2% to 4%…which is incredible!
Too bad everyone else started doing it and now the response rates are much, much lower. Typical investor response rates on direct mail is around .5% (half a percent).
Doug is now mailing around 20,000 pieces PER MONTH! He’s definitely dialed in his message and list in order to be comfortable mailing that much.
Instead of post cards, Doug now mails letters that are more professional. They have his business name and logo on them. He also includes a picture of himself and his family.
I think this is where direct mail for real estate investors is headed. Too many people are mailing yellow letters that come across as “iffy”. If you get a letter in the mail from a complete stranger that says they want to buy your house and to call them…and that’s all…your BS meter is probably being pegged.
Doug uses propertyradar.com for his lists. They are only available for west coast states. He used to get his lists from listsource.com (where most investors still get their lists).
His criteria for his absentee owners list is:
- House older than 20 years
- Bought 4+ years ago
- With more than 60% equity
- Less than 3,000 sqft
Many investors have trouble figuring out what benefits to motivated sellers to list in their letters. Here are some we discussed in this episode:
Benefits of Selling to a Real Estate Investor
- We buy As-Is. Make no repairs.
- Fast Cash so you can Sell Quickly
- Sell without dealing with Tenants or Family Members
- Pay No Commissions
- Skip the Hassles
- Have Confidence the Deal with Close
To come up with your own benefits, just put yourself in the shoes of motivated sellers. Consider why you would seller to investor rather than the conventional way of listing with a Realtor.
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Danny Johnson: This is the Flipping Junkie podcast episode 44. [music] Welcome to the Flipping Junkie podcast. My name is Danny Johnson; former software developer turned house flipper, flipping hundreds of houses. Each week, we bring you interviews, strategies, stories, and motivation to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now, let’s get to it.
All right, I got a great episode today. We’re going to be talking some more about direct mail for real estate investors. I know we’ve covered several different episodes about direct mail. We’re going to continue covering some more because that’s really the main source of great leads and deals for most active real estate investors that are doing a lot of volume across the country, so we’re going to talk some more about that. Today, I’m excited to have Doug Van Soest on the show. He and his wife are flipping houses in California and then also podcasting at Spouses Flipping Houses, is the podcast. SpousesFlippingHouses.com. Their relationship with flipping together as spouses is really similar to Melissa and myself, so I am really looking forward to this interview and I think it’s going to be a great show. Now, Doug was born in Colorado Springs, Colorado, raised in Carlsbad New Mexico. After high school he ventured west to the sunny coast of Southern California. It was there he met his beautiful wife and bride Andrea, who happens to share his entrepreneurial spirit.
As newlyweds, they ventured back to Colorado and started Mountain High Concessions which was a kettle corn vendor for special events and sporting/concert venues. Mountain High Concessions became the first kettle popcorn vendor for the Denver Broncos at Mile High Stadium. That’s a pretty big accomplishment. They were itching to get back to So Cal and they sold the concessions company and got started in real estate.
So fast forward to 16 years and 3 kids later, they are the proud owners of one of Southern California’s largest wholesale real estate purchasing companies and they operate the business together along with their incredible team. Over the past decade, Doug has worked as a California Certified Residential Appraiser from 2003-2010. Since 2008, he and Andrea have purchased and sold over 250 properties in Southern California. They manage their in-house rental portfolio as well.
Doug had mentioned to me that the majority of his leads are coming from direct mail, so we’re going to talk with Doug about that. He also said that 1/3 of his leads and deals comes from his website. If you don’t have a website out there or you have one that maybe is not working so well, check out LeadPropeller.com. That’s our real estate investor websites that takes all the experience that I’ve had in the last 13 years flipping houses and getting leads online, as put correctly into those websites. We stay on top of everything. Things change pretty quickly and at Lead Propeller, I’m staying on top of all that because obviously I’m generating leads on my website and I’ve got to stay on top of it, so you get the benefit of all that research and study and testing right in those websites. So check out LeadPropeller.com. We’re going to go ahead and just get right into the show. [music]
All right. Hey, Doug.
Doug Van Soest: Hey. How are you doing, Danny?
Danny Johnson: Oh pretty good. Thanks for being on the show.
Doug Van Soest: Of course, man. Pleasure. Thanks for asking me.
Danny Johnson: This is one of the first ones that I’ve recorded the video for, so hopefully I’ll remember that and I won’t start looking around my room or acting weird because I know that the camera is on.
Doug Van Soest: No problem.
Danny Johnson: I appreciate you being on the show. I wanted to talk with you – we can get started by just sharing some information about yourself for people that maybe haven’t listened to your podcast or been to your website. Do you mind sharing a little bit about yourself and how you got started with your wife and flipping houses?
Doug Van Soest: Yeah. So we live here in Southern California. We’re in the Inland Empire area, if anyone knows about that, it’s kind of inland from Los Angeles and north of San Diego. Still a huge market. There’s about 5 million people here. But of course, like everybody starts, we read Rich Dad Poor Dad while we were engaged. Since we got married within 3 months, we both quit our jobs and decided to go start our own business selling kettle corn popcorn and we moved to Colorado, started this kettle corn business. Just had a blast doing that, working for ourselves and gathered in the Bronco stadiums and Air Force games and different things like that. But to make the long story short, we ended up selling that two years later and moving back to California because we ultimately wanted to get into real estate. From there, that was 2002, I became a real estate appraiser and just to get my feet wet in real estate and learn and start kind of understanding how it works. During that time, if you remember, everywhere across the country I think was just booming and going crazy. Prices were going up astronomical percentages every month. I was appraising here in Southern California and did that all the way until 2010. My wife in that time period, Andrea, she got her real estate license. But we didn’t buy a house to flip until 2008. That was our first purchase. So really, what kind of the trigger to that was we actually started listening to some podcasts. But in 2005, I had just gotten an iPod for the first time. Didn’t even know what podcast was but I –
Danny Johnson: I didn’t even know that there were podcasts back then.
Doug Van Soest: There were. Not too many but yeah, in fact I searched real estate investing because we were curious about getting into real estate investing on a podcast and I was an appraiser so I’m in my car all day long, driving around everywhere. I listened to this one podcast. It was from these people out of North Carolina. It was like the only one for real estate investing that was out there pretty much. I think it was called Get Real Real Estate Investing. You probably can still find it out there. But listen to that. They were saying that it’s important to go to a local real estate investors club meeting or REIA. I didn’t know what that was so I searched REIA, found a club that was nearby. A couple of weeks later, I went to the club and there was this local guy by the name of Bruce Norris that was speaking. Anybody in Southern California knows the name. He’s an expert in market timing and he’s been an investor forever. Also, hard money lender and educator. Heard him speak and this was 2006 or so. He was saying the sky is about to fall and the market is about to crash, so sell, sell, sell and get out now. This was the first time I had heard of this and I was an appraiser in the market every day. So you can kind of imagine I was a little taken aback and a lot of people were saying, “What are you talking about? The market is on fire. Everything is going great, everybody’s making money.” I came home from that meeting, I just went by myself, I came home and I told my wife, “We got to sell our house!” We just thought it a year earlier, “We got to sell! We got to get out.” Well, let’s wait and see what happens. I’m not blaming her by any means but we both decided well, let’s wait and see and just kind of learn some more. A year later, everything started blowing up and we still own that house. But it pushed us when the markets crashed. This was in 2007-2008. In our area prices dropped by 50 to 60 percent in some areas and we knew that was our opportunity. So this was 2007-2008. This was our opportunity to start buying, get in, and flip some houses. So that’s what we did. Started making a bunch of offers on the MLS to bank-owned homes. It took us a good nine months before we got an acceptance. Once we got that first “yes” answer, we knew from that point forward. We knew we were going to make money on it because we’ve been so conservative on our offers. That deal turned out great and we bought two more and the next following months and we just went full-time after that and really never looked back.
Danny Johnson: That’s awesome. That’s a pretty common timeline, right? I mean, I think we took 6 or 9 months to get that first one and the next ones came pretty quickly after that because you’ve built up sort of the knowledge and then some of the offers that maybe you made before might come back and take –
Doug Van Soest: Yeah. I think confidence maybe had something to do with it too and just the mindset of like, “Oh, this can work. We did get a yes answer.” So there’s something, some kind of mental shift there that you make saying “yeah, this can work” and it really helps to get that first deal under your belt. So that helped us quite a bit. We almost quit. We literally almost quit making offers, like this isn’t going to work. This poor agent, we’re working her to death making offers for us. But I thank the Lord that it didn’t work out that way and we got our deal.
Danny Johnson:That’s cool. When did you make the switch? And you might have still kept making offers on the MLS but when did you start marketing to motivated sellers?
Doug Van Soest: Our sole source of properties from 2008 to about 2011 was MLS, REO properties, bank-owned homes. In 2011 is when we decided to start mailing direct to owner. In our area that was a little bit early, I guess. I think we were one of the first to kind of do that during this market cycle. Because there was still quite a bit of inventory on the MLS bank-owned homes, a lot of deals still there. But we could kind of sense the competition picking up a little bit and of course I had been continuing to listen to podcasts and get ourselves educated and a lot of guys were talking about mailing directly to sellers. So in 2011, we started mailing and probably in 2012 is when the big source of our deals shifted from MLS to direct to owner. I don’t think we’ve purchased a home from the MLS since 2012. It’s been all owners.
Danny Johnson: Yeah. I think we’re pretty similar. I can’t even recall the last time we bought a listed property. I guess as competition goes up, more people tend to start focusing on the direct mail and the motivated seller marketing, just less competition. It’s nice whenever things crash and a lot of people – well, I should never say. It’s not nice when things crash but I mean, like when things crash, the competition sort of disappears. And whenever 2008 was happening, I remember the people that I looked up to in the business that had mentored us and everything would tell me things like there’s no shame in going to get a job again and sitting this out. It just shows you the mindset like when people would talk about nobody knows where the bottom is and just that fear is what keeps everybody out. But to me, we had a fear of going back to work for somebody, so we got to do whatever it takes. We’ll just have to buy it cheaper, buy the houses much cheaper and keep going.
Doug Van Soest: Yeah. That it’s moved from the MLS to direct to owner, it’s still there in my opinion but it’s not going to be forever. Someday it will move again and you just have to stay ahead of the game, if you will.
Danny Johnson: Cool. Let’s go into sharing with people where you started with your direct mail. What kind of list did you use? What did you mail? Then maybe go through the progression of from then to now.
Doug Van Soest: Okay. We focused on absentee owner from the beginning. I think we got a course from Chris Chico. Do you know him? Basically, his postcard, almost verbatim which is this really ugly postcard full of words –
Danny Johnson: Urgent notice one?
Doug Van Soest: Yes. I believe it’s that urgent notice on one side and then on the other side it was just kind of – honestly, I would have thrown it in the trash. If I got it in the mail, I really would.
Danny Johnson: People are still sending them.
Doug Van Soest: Absolutely, yeah. We haven’t sent it in a while but it worked. I mean, again, it was 2011. In our area not too many people mailing at that time. We were getting on average between probably 2 to 4 percent response rate, which was excellent for direct mail. We don’t get that any longer. But that’s what we’re getting then with that postcard and that’s where we bought our first house directly from the owner, was from that postcard and it was just absentee owner mailer.
Danny Johnson: So that postcard basically, like a lot of postcards that people send, just basically I think it was like urgent notice that had the – it was a mail merge postcard so you have the address somewhere on that postcard so people would think, “Oh, what is this? Some kind of notice for this property I own. I better read it” was how that one worked, right?
Doug Van Soest: Yeah. I just did the black and white on white paper, cheapest we could go.
Danny Johnson: You remember what size? Like the 4 by 6 or something?
Doug Van Soest: Yeah, I think it was like 4 by 6 or 3.5 or by… I don’t know what it is but it was a small one. It was the cheapest and that we could do the most that way. Yeah, that’s all it was and it basically just gave the message that “Hey, I’m a cash buyer interested in purchasing homes. I’ll give you some benefits of what we do and give us a call, we’d love to talk to you about your house.” That was essentially it.
Danny Johnson: What kind of numbers did you remember the size of the absentee owner list that you were mailing and the frequency and all that kind of stuff? I know it’s kind of hard to think that far, yeah.
Doug Van Soest: We didn’t go small. We wanted to give ourselves a good chance. So I think at that time I was probably sending out around a thousand a month which for us starting out was a pretty big chunk. Somewhere around a thousand postcards a month cost us around $400 to do that. But we quickly increased it as we saw success, we increased that as we could with the budget we felt comfortable with. But we started adding lists as well so we would have more and more different types of lists to market to. We still continue to mail to the absentee owner list even though it is highly competitive. We still get deals from there today. So I still mail to absentee owner. But today, we’re mailing somewhere around 15,000 to 20,000 a month.
Danny Johnson: Wow! All in one city.
Doug Van Soest: No. Actually, I don’t know how many cities there are in the Inland Empire but our market is the Inland Empire, probably about 20 cities in this area.
Danny Johnson: Wow. So that’s a lot. Is there an estimate of population size maybe?
Doug Van Soest: Yeah. Around 5 million.
Danny Johnson: Five million. And you said about 20,000 pieces a month?
Doug Van Soest: Yeah.
Danny Johnson: Wow. All right. What kind of frequency? Do you still use postcards? Do you do a mix of letters and postcards?
Doug Van Soest: Today, and actually for about the past year, we don’t send out postcards anymore. I send out a letter. Actually it’s a professional letter. I think I heard Joe McCall mention it on your podcast. Postcards still work. I’m not saying they don’t work but we have kind of progressed – I won’t say progressed but we’ve changed up a little bit in our marketing message in kind of how we want to present ourselves to a seller. We started with Chris Chico’s postcard and then we kind of yellow letters for a long time when the yellow letter was kind of new or at least as far as I knew it was knew and not too many people were sending this. We got a great response from that. We would get a lot of just curiosity calls and a lot of people angry and “take me off your list.” But a lot of response from those letters. But maybe 2 to 3 years ago, a couple of years ago I started noticing, I mean, I get mail too from investors and I like to pay attention to what I’m getting and what everybody is sending out there now. And everybody is sending the handwritten yellow letter style, not just letter but postcard. So we wanted to kind of stand out and be a little different. So we’ve sort of branded ourselves, we’re Southern California home buyers. Socalhomebuyers.net is our website and we wanted to kind of make a little bit more of a professional, I guess, impression. Our response rate isn’t great but I’ll tell you that our angry calls have gone way down and our conversions are still the same. So I don’t really care so much about if I get 3 or 5 percent or 1 percent response rate. I want to know how many deals are we buying from the letters. That has not decreased at all.
Danny Johnson: That sounds nice. So you kind of got rid of the problem stuff and the time-consuming interruptions. But you get the same amount of deals though. So that’s really cool. What do you think is a driving force behind the change? Do you think it’s more of people not feeling like it’s a scam or having that fear of like “What is this all about?”
Doug Van Soest: I started noticing we were getting comments. We get a lot of angry calls and mostly I just laugh at them and I save some of the real funny ones so we can have a smile on a rainy day, but there were some consistent themes like people were saying “Who are you? I don’t see any logo on here. I don’t see any website I can go to. How do I know you’re real? You’re just a scam.” That type of message was coming back to some of our angry calls. I don’t want to discourage people. Very few percentage of people will call and chew you out but there’s some people that have nothing better to do.
Danny Johnson: Yeah, you got to be ready for it, right?
Doug Van Soest: You got to be ready for it and just don’t take it personal. But through that and some other things, we decided we’re going to change our approach and be a lot more transparent. Like this is who we are, here’s our website, here’s our address, and I put a picture of our family on there. Here’s my family. We are a small company I just tell it how it is. We’re a small company here locally. We buy and flip houses in Southern California. We’re typically looking for this type of house in this type of situation. If that’s you, call us up. There’s nothing hidden there. It’s pretty clear.
Danny Johnson: Right. I think that’s a big deal because for most people – so you’ll have the people that are intrigued. It’s like this regular Joe wants to make an offer to buy my house because he likes it or something from the yellow letters, those ones. Then the two prospective. So you have somebody that’s thinking in terms of that, it’s just somebody that’s wanting to make an offer on my house just because they drove by and they liked it or something. Even though it’s weird, they’ll still call and be okay to get an offer. But then you have I think where it’s obviously, depending where you are and what the price range is of these houses, things like that, but then you have I think a bigger portion of the population that gets a letter like that and immediately puts up their –
Doug Van Soest: Defenses.
Danny Johnson: Defense wall, the BS meters pegged and they’re trying to figure out. I don’t know if I’ve shared it on the podcast before, I might have, where I started noticing traffic to my website from this bass guitar forum. I was like, “Why are all these people coming to my website from this bass guitar forum?” So I went and I did a search for Danny buys houses on that guitar forum and I found the post. Well, a guy had received my yellow letter and instead of calling me and asking me what it was about, he was making all of these assumptions and putting up all this stuff on this forum that he goes to a lot to see what his bass guitar buddies could make of it. So they were all trying to figure out what it was all about. Some of the guys were saying “I did some research and this guy’s an attorney” and all kinds of stuff. I’m not an attorney. But nobody bothered to just call and find out. And finally, some other investors I guess that also play guitar told them “Hey, they’re checking to see if you want to sell the house. That’s all there is to it.” It’s not a trick or a scam.
Doug Van Soest: You know, like you said, people’s BS meter is high these days and maybe rightfully so. When they’re getting at least in our market, they’re getting probably at least 2 to 3 yellow letter style mailings a month that it’s not so unique anymore and they kind of figure out quickly that this is just a marketing ploy, not somebody who actually just drove by and wrote my address down. Which is what the yellow letter is designed to implicate.
Danny Johnson: I’m sorry, but the ones that are printed to look like handwritten, come on, like I don’t know. I don’t know that they’ll ever perfect that. I know I did it too but I don’t think that they’ll ever really get that right. I just have never seen one that was really convincing enough.
Doug Van Soest: Most people see through it pretty quickly. That’s okay. I mean, they work. They do. It will get the phone ringing and some people will even say, “Yeah, I got your ‘handwritten’ note here,” and they’ll discount that, “But anyway, what are you going to offer?” Maybe they do want to sell. So we just decided to go a totally different angle.
Danny Johnson: So do you mix it up at all or do you send the same business type letter several times the same list?
Doug Van Soest: Right now, we’re sending the same business type letter to the same list, yeah. Our frequency is around four times a year, so once a quarter we try to hit the people on our list. I don’t know if that’s the right way or wrong way. I’ve heard so many different opinions on that. I think that to me, the real important thing with direct mail that I’ve learned five years doing it, is consistency. Don’t just mail once. I think probably 50 percent of getting responses is what you’re mailing and what’s in your mailer. The other 50 percent in my opinion is timing and just catching somebody on that day or that week that they happen to have an eviction or kind of that “they need to have a roof replaced” or lost their job. I mean, there’s so many different reasons people sell but those are some of the common ones. Just being consistent improves your chances of getting your message to that seller at the right time. So to me, that’s half the battle of just being lucky in a sense, catching them on the right day and how to increase your luck is sending them more consistent mail so they’re going to recognize you.
Danny Johnson: That’s a huge point right there so that they begin to recognize you. If you’re sending that same letter with your family on there, I can almost guarantee you, I’m not going to guarantee you because I’m sure there’s some crazy person out there that gets your letter and sends it to other people with his name and number on it, with your family –
Doug Van Soest: With my family picture, yeah. We have that on our website by the way.
Danny Johnson: Oh, I’ve had my entire website completely copied, yeah. it’s just insane. But anyway, okay. It’s just crazy.
Doug Van Soest: They do it with your rental houses on Craigslist, different price and then yeah, we saw our website with our faces, our property photos and videos on there. Totally different name. You just got to watch out.
Danny Johnson: Yeah, that’s insane. But people receiving those letters and then they know it’s coming from you every time, and that’s the biggest problem I think I have with – because I get the postcards and letters too all the time. When you get those multiple times from different people, you never know who it is just because they’re all the same with different names on them. So no one’s ever going to remember that.
Doug Van Soest: Yeah, I’m sure you’ve had this happen before like we’ve sent out a post card the very first time to this list, first mailer they’ve ever received from us and they’ll call sometimes saying, “Well, I’ve been getting your letters or your postcards for two years now. So I guess I’ve decided to finally call.” Again, that’s obviously an indication that timing was right and you just got lucky because they thought you were somebody else. So that can happen.
Danny Johnson: Oh yeah, absolutely. Setting yourself apart. How long do you keep going? So if you do it four times a year, is it after that first year you say, “Okay, I’m going to get another list” or do you keep mailing?
Doug Van Soest: It depends. If it’s an absentee owner list, we will update the list every year or so because some people sell, new people get on the list for the different filters that we’ll put in. The vast majority might still be the same people that end up on that list for that particular area. But we try to keep it fairly current so we’ll download a new list at least once a year. Some lists, I’ll update it every time I mail it depending on the source it’s coming from and what it costs to get that list.
Danny Johnson: Do you use List Source or another?
Doug Van Soest: When we started, we used List Source. Actually it’s a different version of it called REI Source. When we started, we used List Source. Actually it’s a different version of it called REI Source but it’s the same thing. But now, for a lot of our lists, we use PropertyRadar.com and I believe that’s just a west coast service at this point. The owner, Sean O’Toole, used to be trustee sale buyer many years ago and he put out this website. But I believe it’s California, Nevada, Oregon, and Washington only, maybe Arizona, maybe at this point. But it’s a good source. Monthly subscription and you can download up to like 20,000 downloads a month. It’s good chronologic data.
Danny Johnson: Oh, cool. So would you mind sharing your criteria for your lists?
Doug Van Soest: Yeah. I mean, for the most part it varies but for the most part, looking for homes that are a little bit older, say 20 years or older. The reason for that is we haven’t had a lot of good success buying newer homes because the repairs just aren’t as needed and just, I don’t know, our success rate is lower on getting enough margin to make a profit with those homes. So we search older homes, like a chance for deferred maintenance and also the owners haven been around a while so we try to find homes that were purchased – right now I’m searching no more recent than like 3 or 4 years actually. So I’ll still mail the people who bought in 2012. We’ve seen quite a bit of increase in our prices here since then so there’s likely some equity built up. But I don’t want somebody who just purchases last month to be on my list. But don’t go 10 years or 15 years back. I just go about 3 or 4 years. Then also, I have some property parameters. We’re not looking for anything larger than about 3,000 square feet. I try to weed out mobile homes and stuff if possible, I can’t always do that. So that’s brilliant. Some of the lists, depending on where you get them, you can sort by equity. They have an estimated equity. So I’ll put in that, I’ll have 50 to 70 percent equity depending on that area or more. But if your list provider doesn’t offer that, you may have to change it up a little bit. You might want to go 10 years back from the last sale date so that there’s at least a chance of that person having some equity built up. So it kind of depends on your source.
Danny Johnson: You were saying if they bought from 2012 or earlier, you’re probably going to want to make sure that you can also filter by equity.
Doug Van Soest: Right, yeah. 2012 or earlier, they could have purchased in 2006 which in my area they still won’t have equity if they do that, at least they got a loan. So there’s double filter, also have an equity percentage filter in that case.
Danny Johnson: Cool. Do you do anything other than absentee owner?
Doug Van Soest: Yeah. We mail to the inheritance list, if you’ve heard of that. That is US leads list or USleadlist.com, I’m not sure which one it is but…
Danny Johnson: Yeah, I’ll try to find which, I’m not sure either but I’ll include that on the show notes page at FlippingJunkie.com/44, so I’ll include that. I think it’s US Leads, with an S, List. But I’ll make sure and put it on there.
Doug Van Soest: That’s a pretty good list for whatever they do. They get properties that were inherited. We also do probate mailers. We’ve been mailing to probate in our area for a while.
Danny Johnson: I think that they actually hired people to do the probate for US Leads List because I think I’ve met people that worked for them down at the courthouse doing that.
Doug Van Soest: That’s very possible, yeah.
Danny Johnson: So I just tell them, “Hey, how much are they paying you? And I’ll give you so much for it and filter it a little bit more than you filter it for them,” so you get the better ones. But you know that they’re still getting them too and selling them to other people. But, anyway.
Doug Van Soest: Yeah. I think they limit it to like three people per zip code or area. So you know, at least limit your competition a little bit.
Danny Johnson: That’s a lot of work, at least here, to go down and get them yourself.
Doug Van Soest: It is. We have a probate mail service. We don’t do it ourselves. I would recommend if you can have your own person in-house down there getting the info for you, that’s probably a good way to go. We just never have gone down that route.
Danny Johnson: So is that service that you’re using just local to your –
Doug Van Soest: Yeah, it’s local to Southern California I believe. ProbateFox is who he is for probate. There are some other ones too. I think US Probate Leads maybe, I’ve used them before. I think they’re more national.
Danny Johnson: Okay. US Probate List. I guess nowadays, I mean, if you just do some searches for your areas, it’s probably everybody’s area.
Doug Van Soest: Yeah, there’s probably local guys. If you’re in the bigger market, there’s probably some local providers that I would recommend looking to them first.
Danny Johnson: I’ve always liked probate but it seemed like the last few times that I’ve tried to mail them, I don’t know if there’s just too much competition. I mean, have you been getting good response from your probates?
Doug Van Soest: I wouldn’t say the response is real good.
Danny Johnson: Just conversion rate is great.
Doug Van Soest: Yeah. Well, we really go after them so we send them a series of about 7 letters and we call them. We try to call the representative and we do a lot to reach out to them because it is a very competitive list. They’re getting about 30 mailers from real estate agents usually. So we’re not offering to list their home, we’re trying to make our message very different that we’re looking to buy our home. We also don’t have a huge amount of the probate leads every week that come in so we’re able to go a little bit higher. We do a first-class mailing to them.
Danny Johnson: You don’t send the other letters first class?
Doug Van Soest: No, we don’t send the – oh, the professional letter? No. Actually, we use YellowLetterHQ.com. Great service by the way. Lowest price yellow letter and professional letter that I know of online. Todd’s a friend of mine. He’s got a great company there in San Diego. It’s standard mail but it’s a live stamp.
Danny Johnson: Oh, cool.
Doug Van Soest: It’s not that normal one that’s kind of red, white and blue. Actually there’s a little different color to it so a lot of people may not even know that it’s not first class because it looks to me like a first class letter when it comes through.
Danny Johnson: Yeah. That’s the important thing, is having that live stamp on there that looks like somebody took the time to do that, right?
Doug Van Soest: Yeah.
Danny Johnson: What kind of costs are those? I guess it depends on how much you’re mailing, right?
Doug Van Soest: Yeah. But I think if you do a thousand or more, it’s 55 cents and that’s a letter with a live stamp on it.
Danny Johnson: Folded and stuffed and everything.
Doug Van Soest: Folded, stuffed. That’s cheaper than I can do it in-house. The caveat at least right now it’s a window, so it’s a window letter, meaning that the address shows through. But you can have that address handwritten in the handwritten font. Also, if it’s a yellow letter, then you’ve got the yellow line paper showing through too and it looks a little different. So that’s what we do.
Danny Johnson: Do you use any other fonts? If you have a special font, do they allow?
Doug Van Soest: Yeah. He’ll do a custom letter. I think there’s a few, maybe you just set out the template initially but they’ll work with you and as long as the font works with their printing system, I think you can do that.
Danny Johnson: That’s pretty cool because I think there’s websites that you can create your own font with your handwriting.
Doug Van Soest: There are. I’ve done that actually.
Danny Johnson: Did it work out?
Doug Van Soest: I think it’s called MyFont.com. It still looks a little bit like –
Danny Johnson: Yeah, where they join, right? Where the letters join and stuff.
Doug Van Soest: But it looks pretty good. So if you want your actual handwriting on there, you can do that and create your own font.
Danny Johnson: Yeah. Mine’s horrible so it looks like a jumble of mess, I don’t know. All right. Okay, cool. So you do the absentee owners and some of the probate inheritance. Now, is the inheritance list, it’s different than the probate?
Doug Van Soest: It is different than the probate. I couldn’t tell you exactly why. It’s inherited properties and not just all inherited properties because they’re probate. So however they find them, through trust, the transfer or their various means, I really don’t know how they get the leads but there’s quite a bit more than I would get just through my probate provider.
Danny Johnson: Interesting.
Doug Van Soest: And yeah, so far they all seem to be in inherited properties when they call. And that’s specifically what they’re selling they say is an inheritance list. It’s a good list. We’ve been mailing that one since 2012.
Danny Johnson: Have you checked the county records for some of those property lists to see if the owner name has like a state of or something like that?
Doug Van Soest: No, I haven’t. I haven’t really gone into that.
Danny Johnson: That’s one of the ways that they… anyway. Yeah, I could get into that if my brain starts working on all of this stuff. Okay. So those. And any other list that you like mailing to?
Doug Van Soest: We’ve been mailing to owner occupied lately. And you talk about getting a low return, as far as call rate, that’s probably the lowest. But it’s also not a lot of people are mailing to it for that reason. Obviously, you’re going to have to have the right motivated situation. But the call rate is really low but we still have gotten some pretty good deals from that.
Danny Johnson: Are you including age in the criteria for that or no?
Doug Van Soest: I’m not. Same criteria that I would use for absentee owner, we’re applying to that as well. I would prefer an older home and somebody who’s lived there for quite a long time, probably have a higher likelihood to purchase that property. But every time we buy one, there’s always some underlying motivation just as with any home we buy directly from an owner. When we talk to these people, we come from the approach of let’s get real, what’s going on with your situation, what’s going on with the house. If nothing’s going on or we just can’t get any sense that there’s real urgency to sell and their property is in pretty good repair, we say, “Man, just list this house. You’re likely to even get more for it. Let me refer you to an agent or if you have an agent you know, list the house and see what you get.” Half the time they’ll say “Yeah, I’ve already been planning to do that.” Or the other half, you’ll finally get the real reason. They might say “Well, we don’t really want to list the house. We don’t want people trudging through our house. We don’t want the neighbors to know we’re selling.” Or maybe you find the real reason at that point. So we are. We’re looking for a win-win. If it’s not a good scenario for them to sell to us, because we can’t just give you the price you’re looking for, that’s usually the only reason that wouldn’t be good for us to buy your house, then we’ll refer them to another direction. And sometimes we then get the real reason.
Danny Johnson: It’s really respectable to that too. Honestly, you can’t be so hungry for a great deal that you’re willing to not let somebody know about an option that they have. I mean, if that option is there and we’ve done it in the past too, it’s like, why are you selling in this way? Why don’t you list with the realtor? The house is in great shape, you’ll get more money, the market is pretty hot. I think they’ve already thought through that most likely anyway and so they appreciate you being willing to advise them on that. So yeah, it’s just the way to be.
Doug Van Soest: Yeah. We definitely feel that’s the best.
Danny Johnson: Good to hear that you do that too. What else do you have? You don’t send any postcards at all anymore, it’s just strictly letters.
Doug Van Soest: Yeah. We don’t send postcards anymore. We do send postcards in a follow-up mailer. So, follow-up is huge by the way. When I checked it around the beginning of the year, close to a third of our contracts, houses we put under contract in 2015 came from some sort of follow-up. Meaning we didn’t buy that home on the initial contact negotiation for whatever reason. But we are diligent and deliberate about following up.
Danny Johnson: What did you say the percentage was?
Doug Van Soest: Almost a third. It was like 30 percent of our purchases. When someone gets into our CRM, we do so many leads now that each one is very expensive when you get them. And if they called you once, there’s a likelihood that they are going to sell if not to you, to somebody at some point. So we want to stay in front of their mind and in their eyes so if we can, we’re capturing their email and they’re going on an email trip campaign. Every couple of weeks they’re getting an email from us following up. They get a text message from us every 30-45 days. They’re getting a voice mail from us in a system and they’re getting a postcard every month, hopefully if not, at least every two months. So the way we have our system set up is they’re going to get about 35 contacts from us over the next 14 months if they got in our CRM.
Danny Johnson: That’s awesome. You never want to stop contacting them until they tell you to stop or that they’ve sold it, right?
Doug Van Soest: Yeah. And quite often we’ll get a call 3 months, 4 months later. They’ve just gotten an email or just gotten a text message from us. Okay, what was your offer again? Maybe something has changed or a little more motivated or they’re ready to sell now and it’s marketing. You got to stay in front of them. So follow up big. If you’re spending any money on mailers and things like that, don’t just try to make a deal the first time and then forget about them. They got to stay in some kind of follow-up system.
Danny Johnson: What kind of response rate? You had mentioned that your response rate in the beginning was higher when there was less competition. These days, do you mind sharing your typical response rate on your mailers?
Doug Van Soest: I think now, we’re averaging about half percent, right around there. We do get a little bit higher response rate in kind of the further out we go from the coast. Property values tend to be higher on the coast and you have just maybe a little bit more competition or just a different type of seller that owns those homes. We may get a quarter percent response if we’re mailing to the real competitive area. Whereas maybe we get a 1% response kind of in the High Desert or Palm Springs, the outlying areas. But on average, yeah, it’s probably about half percent right now.
Danny Johnson: You said to expect a little bit lower with the owner occupied.
Doug Van Soest: Yeah, yeah. We may send out 4,000 owner occupied letters and we might get 10 calls sometimes.
Danny Johnson: Is your message at all different for the owner occupied versus the absentee owner?
Doug Van Soest: No. Same professional letter.
Danny Johnson: It just says what you guys do as a family and, you know.
Doug Van Soest: Yeah. It states clearly what we do, buy and sell houses. Some of the same things you’d see on any of these mailers or any of these websites. You know, as is, you don’t have to pay commissions, that kind of thing. Some benefits to them to considering selling to you. Then it has our website, has a phone number, has an email. Different various ways they can contact us along with our logo. Just trying to set us apart to look a little more professional, like we’re actually a local organization that does this and go check us out, you can verify. We have testimonials all over the website.
Danny Johnson: Are you including testimonials in letters?
Doug Van Soest: I don’t but that was just to save space. I think it’s a good idea. I don’t think that’s a bad idea to do that.
Danny Johnson: I remember when I first started doing direct mail, I went all out and got some $160 textbook that was out of print for 20 years and had all these examples through history the best direct response letters ever written. I spent probably a month coming up with these crazy letters that were based on these things. Some of them were just weird. It was like connect the dots and it had a thing that said cash or something. Then it had this message about that and I spent all that time doing that. I mailed them out and the response rate wasn’t any different. Maybe you’ll set yourself apart a little bit more but really, time is better spent just, like you said, being consistent.
Doug Van Soest: I wouldn’t have anybody spend way too much time on crafting your postcard or your letter to get it absolutely perfect. I mean, get something that’s pretty good that definitely has the right phone number on it. I’ve made that mistake. Just get it out there. You can adjust and test and send different messages as you go, but the most important thing is being out there and being consistent.
Danny Johnson: By the way, yeah, with the phone number thing, somebody has been – I guess they used a postcard I provided or something and they left my website on there though because I consistently get leads on my website from Alabama. I don’t know. I need to find out somebody on the ground there to start looking into those things. But it’s been a while since I’ve gotten one but there was a time where I was getting once a week, it was crazy. So somebody was mailing my mail with my web address on it.
Doug Van Soest: They’re marketing for you.
Danny Johnson: Yeah. I need to provide more of the free postcards and stuff, maybe increases the chances of more people mailing with it. But this has been great. I guess I pretty much covered everything I wanted to cover. Some people do struggle though with that message. We say just tell them what are the benefits and the typical things that you see on websites and other letters. But if people haven’t been around for long and haven’t seen those, they struggle with what those benefits are. I mean, would you mind sharing maybe some of the ones that you typically use as benefits to the people you’re mailing to?
Doug Van Soest: Sure. When I try to think of benefits, you try to put yourself in their position. Why would someone want to sell their house to you versus just selling it on the market? What are some of those things that would cause them to want to sell it quickly or just without the normal process of going through an agent. As is, make it clear that you don’t have to repair anything on the home when you sell it to us because that’s a pretty big deal. We flip a lot of homes so we’ll rehab a house the best we can, put it on the market and inevitably, more than half the time we’re still having to fix something because the home inspection comes through, the termite report, the buyers want something else, they request this fixed or that fixed, and you’re still spending another couple thousand dollars on a rehabbed home. So every house is going to have repairs that are going to need to be fixed if you go through an agent and termite inspections that reveal stuff. So that’s one.
Another one would be fast cash, if people need to sell quickly. It could be for any reason that people need to sell quickly Sometimes they lost a job or got transferred or had some other – it’s not even a distress situation sometimes. Sometimes they might have an opportunity they think that they want to make an investment over here but they need money quickly and they need to get that money from the house they own. So fast cash. Sometimes it’s an occupant situation. Maybe the tenant is bad and they can’t get them out or there’s a family member living there that they really don’t want to have to be the one to tell their niece that they can’t live rent-free anymore and move out. They just want to sell the house to somebody else and let them be the bad guy and deal with it.
Danny Johnson: It’s amazing how often that happens.
Doug Van Soest: It’s very common. So, stressing the fact that we’ll take it with the occupant no matter what the situation is. Things of that nature. What’s another one? No commissions. Obviously, we’ll pay all your closing costs. You have to educate them a little bit too. Because a lot of those people have not sold a house recently or ever maybe. They’re unaware of what it costs them to sell a house through an agent. So you explain the – if you have room in your marketing or at least when you talk to them – going to explain the commissions to the agent, the title fees, the escrow fees, termite inspection and whatever repairs come out of that. You start adding those up and it gets to around 10% or more of the price of the house. So they save all of that, plus the hassles. Another one, just the big one is the hassle and headache of going through listing your home, hopefully getting a buyer that can hopefully get qualified, hopefully the house appraises, hopefully the lender doesn’t drop the ball, hope and hope, hope all these things go right in order for them to sell the home. We speak from experience, at least what we know. We sell houses all the time. These things fall out of escrow all the time. We just don’t know who’s on the other end when you get into a contract with somebody. So if you can provide cash as is quickly, that’s a benefit to people.
Danny Johnson: I think that’s a bigger fear than a lot of people think is that: once I agree to do this, is it really going to happen?
Doug Van Soest: Right. Instilling confidence in them that you will close, you do this a lot. And you have to speak from confidence if you’re going to convince them. I mean, you have to believe that yourself. So I’m not the kind of investor to advocate just get everything under contract and then hope that you can find a buyer to wholesale it to or hope you’re going to close on it. No. I mean, we intend to close on every one of these transactions. Even if we’re going to wholesale it, if we can’t find a wholesale buyer, our intention is “okay, we’re going to close on it ourselves and do the deal because it makes sense.” So obviously you have to have that mindset going into it and if you’re speaking honestly and truthfully and believe that, it will come across.
Danny Johnson: That just ties in perfectly with how we opened this up when you get your first deal and then you get the next one and the next one so quickly after that, it’s most likely because of that mindset shift and the confidence that comes with that. It shows and people are looking at that whenever they’re talking to you if you feel like you’re really unsure, it’s going to be tough and that’s why that first one is so hard.
Doug Van Soest: There’s different selling techniques out there and a lot of them work but I’m just not a fan of the pressure close, you need to give me an answer in one day because I’m looking at 10 other houses and you’re only putting that kind of undue pressure. Sometimes that can work and I’m not saying it doesn’t work, but that’s just not how we operate. I don’t want someone selling me that way when they’re selling anything to me. So we just approach it from more of a professional angle and like this is our offer, this is what makes sense for us, hopefully it makes sense for you, let’s work together.
Danny Johnson: Yeah, because you think about it from their perspective. If they get an offer from several people and you have the soft close and that you just say, “Look, it’s got to work for both of us. This is the number that works for me. If it works for you, great. We can move forward and you’ll know that it’s a done deal. Then you have somebody else that comes in and like you said says, “I need to know within 2 hours because I’m looking at all these… I’m buying lots of houses. You got to let me know or else I’m just not going to be able to do it.” And then try talking about it afterwards. Everybody’s gone, they’re talking about who to accept the offer from. They’re mostly like been rubbed the wrong way by that guy, they don’t want to work with you. I don’t know how many times we’ve gotten calls where people wanted to sell their house to us even though we offered less than somebody else just because they liked us more.
Doug Van Soest: Right. When you build rapport with someone which is key and really genuinely care about solving their situation, their problem, whatever it is that they’ve got going. And come across as trustworthy and someone who’s going to do what they say, yeah, that speaks volume. Money is not – you might think that that’s the sole motivation for a lot of these sellers but it really isn’t. Getting the highest price isn’t always – sometimes it is but it isn’t always the #1 factor on who they’re going to sell to. They want to know who they’re selling to, that they can trust them, that they can kind of relate to them, that that person cares and that they can kind of get onboard with you in what you’re doing. We don’t hide the fact we’re an investor and we’re looking to make a profit. That’s not hidden anywhere in any of our messaging. Whereas some people may try to skirt around that. So I think there’s something to be said about that and again, there’s lots of different techniques to be taught for selling. That other angle is taught quite a bit but for us and kind of the culture of our company and for me personally, I don’t like to pressure sale so we definitely take the soft approach. That being said, we do say “Listen, I know you’re going to be getting other offers. You probably got four other appointments. Please give us the chance if you get a higher offer, let us know. We’ll see if we can come up and beat it. If not, we can’t.” Do what you can to try to still stay in the game if you have a little room in your numbers.
Danny Johnson: Yeah, and if you know that they’re getting other offers, don’t wait for them to call you back. Follow up with them sooner too.
Doug Van Soest: Yeah, definitely follow up. Very important.
Danny Johnson: Well, awesome. Well, Doug, thanks so much for being on the show and sharing all this great info on direct mail and marketing to motivated sellers.
Doug Van Soest: Appreciate it, Danny. Hope it was good information.
Danny Johnson: Yeah. No, it was. Doug actually sent over a great PDF to share with you guys and I’ll have that on the show notes page at FlippingJunkie.com/44. That’s the episode number 44. So FlippingJunkie.com/44 and you can download that one. It’s 11 Tips To Working Successfully With Your Spouse. Is that right?
Doug Van Soest: Yeah. We didn’t really even get into that but my wife and I, we’re working together since we got married really in all of our businesses and we still continue to work together today. I know there’s a lot of people who might – Danny, you work with your spouse. Even if it’s not your spouse, there’s a lot of people that partner up with their brother or their cousin or their father or mother. Or somebody who you have a relationship with outside of the business. So there’s that two dynamics going on there. Sometimes it’s not easy. Some people just can’t make it work where they work together. So if you want to work together or plan to or are working with a loved one, there’s some great tips in this little ebook that my wife put together on how to work together and still stay in love.
Danny Johnson: Yeah, that’s pretty important to do. It’s really awesome to have somebody with you excited about it and you guys both working towards the same goals is really, really awesome. And when you can include them and get them involved, yeah, it just changes everything.
Doug Van Soest: Yeah, it’s huge for us. I don’t think either one of us would be doing this if the other one wasn’t completely 100 percent onboard with it. So, those people who do it solo without the support of your spouse, kudos to you. I don’t know how you do it. But it’s important.
Danny Johnson: That’s a great PDF and professionally done, so very much well worth getting. Is there any way that anybody out there listening, if they want to get in touch with you, how can they best do that? How can they find you?
Doug Van Soest: Yeah. We actually have a podcast as well so we’d love to have anyone who wants to listen. Head on over to SpousesFlippingHouses.com. That’s our website and the name of our podcast too. SpousesFlippingHouses.com. You can contact us there. We have another free gift there for people.
Danny Johnson: Cool. Yeah, check it out. It’s a great podcast, everybody. And thanks again, Doug. Another thing. We were talking about the things that we haven’t comment before we stated recording and I guess we both have a son with the same name. That’s not a real common name, so that was pretty cool.
Doug Van Soest: Yeah. Weston. Not too many people out there with a kid named Weston.
Danny Johnson: But now there’s going to be a bunch of them.
Doug Van Soest: Yeah. Now it’s huge. It’s going to blow up.
Danny Johnson: All right. Well, have a good one and keep in touch.
Doug Van Soest: Yeah. Thank you, Danny. Thanks for having me on. I really appreciate it.
Danny Johnson: All right, take care.
Doug Van Soest: Take care.
Danny Johnson: [music] All right, another great episode. Thanks to Doug for sharing all that helpful information. You should check out his podcast and go to the show notes page at FlippingJunkie.com/44 where you can get that PDF download for working successfully with your spouse and flipping houses and real estate investing. I just wanted to reiterate a little bit about the message there on following up and when you get a lead, you spend so much money to get those leads that you just got to keep staying in touch with those sellers until they either sell or tell you to stop calling them and contacting them. It’s one of the main reasons why I created REI Mobile and use REI Mobile ourselves in our business to keep track of our follow-ups of all these people because as you start to get so many leads, it’s very difficult to keep track of all these follow-ups and keep track of all the notes and everything that you recorded for communications and stuff like that for all these leads. So check out REIMobile.com. That’s the exact system that I use and you can get an account there and work with team members and assign tasks using our Deal Flow Engine, all that kind of stuff, very cool. Regarding the follow-ups, we’re actually working on some new technology for the follow-ups to leverage some other means of contacting people and setting up and automating these follow-ups. We’ll be releasing those very soon. It’s going to be very cool doing some drag and drop kind of stuff to set these things up. Can’t wait to show you guys. But you can get started already. We got a lot of cool stuff in REI Mobile, a lot of people really loving it and if you haven’t checked it out, go to REIMobile.com. You guys have a great week and we’ll see you next week talking about some more marketing to motivated sellers. Have a good one.