by Julie Broad
I know that some folks, like Shae Bynes, are anxiously awaiting a campaign update. So … at long last here is an update …
Starting back in October of 2009 we selected a couple of areas within the city of Nanaimo that we liked, purchased a mailing list based on the postal codes of those areas and began mailing out little yellow letters. They are handwritten, simple and basically say:
“Hello my name is Rick Broad and my wife Ruth-Anne and I are interested in buying your home.”
The biggest surprise for us has been the better than 25% response rate! In some postal code areas we have hit almost a 40% response rate!! If you’re doing the math that means over 1,000 calls from the 5,000 letters we’ve sent out and my Dad has talked to most of them!! He works for a pretty low cost (ok, his labour to date has been free) and he is happy to chat with the folks that want to chat, happy to smooth out the ruffled feathers of the ones that are scared and most of all he is happy to hear about the people who might want to sell us their house!
Now … as I discussed in my post yesterday about Tony Peters’ techniques, I am not convinced that this type of campaign is really working for us. And from some folks we know that have done something similar in Sylvan Lake, AB and Edmonton, AB we understand the responses they are getting is similar.
We look forward to hearing what Tony Peters and his wife Jo-Ann do because I think that Tony really hit the nail on the head in the teleseminar we had with him on his creative real estate investing strategies when he said that this type of letter doesn’t work in all markets because it’s too personal. It gets opened but it also gets people’s defenses up.
While I agree I also know my Dad is pretty good at explaining what we’re doing. And all it takes is a simple Google search for “Rick Broad” to find their lovely Bed and Breakfast, their home phone number, mailing address and a ton of other information about them. This does provide people with a lot of comfort because they know that if we were doing something underhanded we’d probably do a better job of hiding our real identities.
Anyway … as alluded to in our previous posts about the yellow letter campaign we have had all kinds of responses from:
- Angry folks because they didn’t get a letter but their neighbours did;
- Scared relatives wondering why we’re mailing their Mom or Aunt or Grandparents a letter wanting to buy their house;
- Curious people wondering how we got their name;
- People hopeful we’re going to pay them big money to move or as Dad says to them “We don’t want to pry you out of your home with money“;
- Two different calls from the police – both of which acknowledged we are doing nothing wrong but the second call asked us to consider stopping because they are taking a lot of calls about our letters;
- A newspaper reporter who ended up doing a story about our unconventional deal finding methods.
Most people are genuinely curious about the letter, and after speaking with my Dad for awhile they are comfortable with what we’re doing. Many of them even want to sell us their house or even if they don’t want to sell it they want to tell Dad all about how lovely it is!
In fact, Dad’s been invited over to look at nearly a dozen homes that are not for sale just because people are so proud of their homes.
It’s really wonderful and heart warming to hear Dad recount many of the lovely chats he has had with people! And he really likes it when people want him to come over to see their garden. He never will … but it makes him feel good to be invited!
At the end of the day we’re looking for a good deal.
And what makes a good deal is that it solves a problem for the seller and gets us a property either at a price that works well or at terms that allow us to avoid bank financing.
That is the bottom line.
We aren’t trying to steal homes from people or take advantage of people. I am sure there are some real estate investors out there that are looking for those sorts of deals but that is not us.
Basically we’re looking for win win situations like:
- Someone that needs to sell but doesn’t have enough equity to sell with a realtor. In that case we could buy the home with terms that work well for us and allow them to avoid losing money on the sale of their home.
- Someone that has to move, wants to know their house has sold, and avoid the hassles of open houses, showings, appraisers, inspectors and a bunch of other strangers running through the house. For the convenience of knowing their house is sold, the flexibility to time the sale how they want it, and avoid realtor commission we want to buy the home for a discount off it’s market value.
- Someone that has multiple properties they have to sell or want to sell because they are tired of being a landlord but they do not want to face the tax penalties associated with selling a bunch of assets all in the same year. In these cases we can structure very favourable deals that allow the seller to minimize their tax burden, get a good price for their properties and keep us from needing bank financing.
Of course, there are other situations that come up too, but those are the main ones we’re looking for. And we’re starting to find more and more of them!
So … our Rev N You with Real Estate newsletter readers know we’ve been working on some deals lately and we’ve gone firm on one last week and are likely to lift conditions on another one this week.
We aren’t going to give you too many details because we know for a fact that people involved in both of these deals have been checking out our website and our blog … but we will tell you a little about both deals and why we like them.
Deal 1 … newer 3 bedroom 2 bathroom rancher in a good area.
This deal has come from our yellow letter! She and her husband are moving back to Victoria and wanted to avoid the hassles of showings, inspections, appraisals etc… and really wanted to know the house was sold. The only thing that we don’t like about their home is that it’s not super close to any schools but there are plenty of children in the area so other families seem to be managing ok! Otherwise this property is a perfect one for us and will show magnificently. At the end of the day we picked it up at a price that is below market, but when you consider that it’s a pretty simple transaction for the sellers at the terms they want and they save on realtor fees I think it was a very fair deal for both parties. And they were truly a pleasure to chat with. When we left with the signed contracts in hand it felt like we were leaving the home of a relative. Meeting wonderful people really is a nice side to this business.
Deal 2 … 4 bedroom 2 bathroom old character home in an area poised for growth
Dad gets a weekly email from a realtor in Nanaimo and we went to look at one of the deals that popped up on the listing sheet that week. While we were there we asked the realtor to show us any other properties under $300k that had 3 bedrooms and 2 bathrooms in our specific areas. This property was on the list. It’s been off and on the market for 2 years. We were able to gather quite a bit of information about this particular property and the owner and were able to structure the deal so it works for us. I won’t say anything more because we haven’t lifted the last few conditions yet but I think it’s looking good to buy it. But the point to note here is that we’re not just finding deals through the letters … we continue to work with several realtors, we’ve posted signs around town, we leave our hideous looking bright orange business cards everywhere, and we’ve got online ads running on a regular basis to attract home sellers.
So the bottom line is that we’ve got a deal from the letters … a deal we’re pretty happy with. And we still have a few more that may come around to us. But there is a difference between the number of leads a campaign generates and the number of leads that convert to deals. And so far this campaign is not converting to deals. But, we’re not ready to give up yet. We just might tweak our approach based on what we learn at the upcoming Creative Real Estate Investing Workshop by Tony Peters.
The letters are extremely effective at getting the phone to ring.
And now for my favourite part … I wanted to share some of the wonderful responses we’ve received from people. These are a few of the ones that make me feel warm and positive about the people in the world.
Some of the best responses we’ve had have come in the form of nicely handwritten notes in return. It takes us back to the days before emails and computers … and it also just makes you love human kind a bit more too!! Check these two awesome letters out and my Dad’s latest stories: