I’ve had a number of questions resulting from last week’s Tip re my comments on direct mail vs. the web as a means of reaching note holders. Did I mean to say that the internet is LESS important than direct mail? Absolutely not. A combination of both mediums is the most effective approach, depending on which market you’re going after. Why is this? Well, when you consider:
The note market is LARGE. The industry has expanded so much over just the last few years– in addition to private note holders who take back seller financing (best reached by direct mail if they’re not actively looking to sell at the moment– more on this below), we now have hedge funds who buy large portfolios of non-performing loans from banks and then resell them to other investors– sometimes after doing loan modifications to get them re-performing. Probably best directly identified and reached by way the internet (although you can also reach them through direct mail or indirectly through professional referral sources generated by direct mail).
Then there is a whole other market made up of the many private investors who create their own notes by taking back financing on their own properties and do this over and over every year. That’s a huge market unto itself. Again, most likely best identified and reached by way of the internet but you can also contact them through direct mail or referral sources.
And then there is the market which has traditionally been our “bread and butter’ long before these other markets became so large– and that would be the private “Mom and Pop” note sellers who take back seller financing when selling their home to increase the pool of potential buyers who can’t all qualify for conventional loans because of the lending crunch that continues to this day.
And THESE are the people who are best reached AS A WHOLE by direct mail. Why? Well, when you think about it, these people aren’t always actively looking to sell their note. Sure, they probably have or have had an IDEA about selling it but they may have tabled the issue for a while or perhaps have just become accustomed to receiving the monthly payments and THIS is where a direct mail campaign is highly effective because they are NOT looking on the web for a note buyer at the moment.
Your mailing reaches them directly, and they hold it in their hand and it grabs their attention— and if they have a need for cash, they CANNOT ignore the message. And, what’s more, there are NO competing messages coming at them at the same time as yours.
(If you think about it and pay attention to the direct mail that you yourself receive on a daily basis, I’m sure you notice a lot of attractive four-color postcards from various venues or businesses or politicians. These advertisers know that the majority of these mailings will be discarded but the return on investment is still well worth it for the new business that results from the mailing. Believe it, they crunch the numbers had have the whole mailing thing down to a science. And, these companies WOULD NOT be spending on direct mail if it did not work so you can take your cue from what works in the real world).
Can you get the email addresses or phone numbers of private note holders? Well, I would ask you: where you are going to find them? Unless they come to your website and request a quote or get in touch with you directly and give them to you, there is no real means of obtaining them. And the public records where the notes and mortgages are recorded are not going to contain the email addresses or phone numbers either.
But, let’s carry this train of thought a bit further. Even if you did have the email address, your message may not even be read by the note holder or it may get dumped into another folder etc. It’s just too hit-or-miss whereas direct mail is a sure shot.
And, I don’t like the approach of cold-calling note holders on the phone, either– even if I had the phone number. It’s too time-consuming and my experience has been that the INTERESTED parties will respond to your mailing and call YOU.
If you think about it, no one’s going to call you unless they have a NEED, and these are the only calls I want to get. And, a need for CASH is a POWERFUL motivator. Need I say more?
So, just get your mailings out and then field the responses. You’ll be much more efficient that way and do a lot more business.
If you want to see the direct mail list that I use to find and market to note holders (which I’ve been using with outstanding results for years– it really zeroes in on my target market better than anything else), you can find it here.