Finding Motivated Property Sellers – My Leaflet Campaign Results

In my hunt for motivated property sellers I recently did a little experiment to see which advertising methods worked best for me and which performed the best cost-wise.

To re-cap, the three methods were:

  • 10,000 A5 leaflets (delivered in my local area)
  • 30 Postcards (in shop windows)
  • 3x5mm advert in local newspaper for one month

And here’s how they fared..

Finding Motivated Sellers – Results So Far

My first campaign this year to find motivated sellers is nearing it’s end and I can now reveal how it’s going so far. To re-cap, for those who aren’t aware of what I was doing, my plan was to use three different methods of advertising to find motivated sellers and see which worked the best for me.

Although this was an ‘experiment’ as such, please use it as a guideline only as all campaign results will be varied according to different factors involved such as;

  • The time of year

  • Distribution area

  • Advertising material

  • The property market situation in at the time

  • Length of time the ads run for

The three methods I tested were:

  • Distributing 10,000 A5 leaflets – I designed and ordered the flyers which cost £59.00 for 10,000. These were delivered to my local area by 7 distributors I recruited from ‘Gumtree’. The distribution took approximately 2 weeks to complete and I paid them £30.00 per one thousand leaflets distributed. Cost in total: £359.00.

  • A6 post cards in shop windows – Originally I had planned to use 30 post cards but I found it very time consuming driving around looking for suitable shops, in total I actually used 22 postcards in various shops, Newsagents, Post Offices, corner shops etc. All placed for ONE month. Cost in total: £44.00 (roughly £2.00 per ad per month)

  • Advertising with the local newspaper – I placed a small ad in my local paper (3x3cm) which ran every day for one month. I noticed there were 4 other investors advertising in the same paper at the same time so the competition is tough. Cost in total: £114.00.

22 A6 Postcards

10,000 A5 Leaflets

Local Newspaper Ad’

Totals

Cost: £42.00

Cost: £359.00

Cost: £114.00

Total Cost: £515.00

Calls: 2

Calls: 12

Calls: 5

Total Calls: 19

Deals: 0

Deals: 1

Deals: 1

Total Deals: 2

As you can see from the table above I received a total of 19 calls from the campaign. I reckon I missed 5 or 6 calls which were marked as ‘number unknown’ on my mobile (or the ‘Bat Phone’ as I call it!) due to not being able to answer it for one reason or other – another good reason to use an ‘All Day PA’ !

From this I can conclude that I won’t be using postcards again, it’s not the first time I’ve tried it, I had the same results from a previous postcard campaign….so that is dumped!

I received 12 calls re the leaflets, one of which got me a deal as follows:

A lady called Lynn rang to say she needed a quick property sale because she’d divorced her husband last year and he was pestering her for his share of the property sale because he had a lot of debts to pay off. I won’t tell her whole story (it was quite shocking) or I’ll be typing for a month lol (I’m a good listener!) but to cut a long story short Lynn and her two children were planning to stay with her mother until she was offered a council house – she’d been told by the local council she couldn’t be re-housed until her property was sold.

The property was a 2 bed semi in the LE5 area of Leicester (ex local authority) and wasn’t on the market with an Estate Agent, she said she’d been meaning to put it on the market but hadn’t gotten around to it so decided to call me when she received my leaflet.

After speaking with her for a while (quite a while!) I arranged to go and see her the next day. It was an ex local authority property in fairly good condition, it needed a ‘paint job’ but was a nice little house (brick structure) with a conservatory and a good sized garden. It could’ve done with a new kitchen but for rental purposes it would suffice with a good clean.

Lynn said it had been valued at £95,000 last year by an Estate Agent, I said I’d do some due diligence and get back to her asap with an offer. The good point was that there was no mortgage on the property, and the vendors were going to split the proceeds between them. Rental value is £475 – £500 mth.

After DD I found it was actually only worth around £88k so I called her back and gave my reasons for this and said I could offer her a very quick sale with all legal costs paid for £66k (25% BMV) She said that was too low and would have to speak with her ex husband and get back to me, so I left it at that and thought that was another dead deal. BUT she called me back exactly one week later and asked if I could go any higher, I said I’d speak to my director and call her back ( a chance for me to work out how much more I could offer)

I already had an investor interested in the deal, friend and colleague Anthony, who I’d met a couple of times at the Derbyshire Landlords meeting over a year ago, he’d recently been in touch saying he was looking for deals in Leicester (he lives in Newark) so I called him to see how much he was willing to pay. He was very interested, had the deposit ready and said to offer £68,000 (which was about 22.5% BMV) so I called her back and said this was the best we could do and reassured her it would be a very quick sale.

Again she said she’d have to speak to her husband but called me back the same day to say they’d accept £68,000! I gave Anthony the good news and we agreed I’d get a ‘finders fee’ of £2k , he said he’d get his solicitor to send out paperwork for her to sign the same day (my finders fee would be written in to the agreement and sent to my account by the solicitor on completion of the sale) and appoint a solicitor for the vendors.

The vendors signed the legal paperwork and the sale is now going smoothly. Anthony is keeping me updated and expects to be completing around 15th June. Lynn is happy to finally get her ex husband off her back and has started packing and moving her belongings to her Mums house, she’s planning on taking her Mum and children on a nice holiday. Win Win 🙂

 So… I spent £359.00 in total for the leaflet printing and distribution, on completion I’ll be giving my distributor a bonus of £200 (as promised)  so that leaves a profit of £1,441 , I’d have liked a bigger profit but there’s always the next deal 🙂

Newspaper Ads and a Lease Option

I had 5 calls in response to the ad I put in the ‘Leicester Mercury’ (my local newspaper) one was from a guy looking to sell his one bed apartment, again in LE5, which was almost in negative equity so was an ideal situation for a Lease Option deal.

More about this deal and the versatility of Lease Options tomorrow as it’s 8.15pm and I’m going to relax with a well-earned glass of red now 🙂

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Have a good evening!

My Plan Of Action

If you don’t plan where you’re going then how’re you going to get there?

Right then, here it is, my ‘Plan of Action’. It’s nothing special or clever but it’s a plan which I intend to follow and hopefully reap rewards from. Remember you’ve got to have a plan and act on it if you want to get anywhere, procrastination is the opposite of decision and is the ‘killer of all dreams’ (which I have to admit I’m guilty of at times)

As I’m not currently in a position to buy property I’m looking to trade instead, ie; get an option agreement on a property, use finance from a JV partner to fund the deal and take a finders fee, or an assisted sale- I’ve completed on an assisted sale previously – read about it here:  http://singlemumtopropertyinvestor.com/2010/09/19/how-i-made-more-than-12k-in-7-weeks-using-none-of-my-own-money/

I have a couple of investor friends who’ve agreed to JV with me this way. Or, if an opportunity arises to do a Lease Option that cash flows well then I’ll do this as well.

I’ve spent a lot of money in the past on leafleting, PPC, newspaper and online ads but never measured the results or compared the different strategies to calculate the cost of each lead I obtain or, more importantly the cost of conversion per lead. ie: I may get 16 leads from a distribution of 10,000 leaflets but if only one of those converts to a deal then the cost of that deal is going to be considerably higher. It all boils down to what you want to be paying per deal and is it worth your time, money and effort?   It can be ‘swings and roundabouts’ and its difficult to measure it exactly as there are lots of other factors to consider like:

  • The time of year (Christmas and summer holidays are not good times to advertise)
  • Your availability. Will you be available to answer telephone calls or will you use a call centre? If you don’t answer the caller will immediately call one of your competitors!
  • People skills. Are you comfortable talking with people and making them feel at ease?
  • Negotiation skills. The longer you’ve been doing it the better you will get.
  • Marketing material – What your leaflet or advert says is vital. Is it going to make people want to call you? There’s a lot of competition out there!
  • Your distribution method. Are your leaflets being delivered correctly by your team? (or being dumped?)
  • Your ‘Team of professionals’ ; The people you choose to work with to complete the deals, brokers, solicitors etc, if they’re not doing their job efficiently you can easily lose the deal

I’m intending to use three forms of advertising and compare costs and leads obtained/converted for each method to see which performs best. The three I’m using are:

  • 10,000 Leaflets
  • 30 Postcards (in shop windows)
  • 4 Local Newspaper Ads

I’ve already designed and ordered my flyers, the cost so far for that is £112.00 (for 10,000, they should be with me around 21stMarch.  I put an advert on my local ‘Gumtree’ site yesterday (15/03/12) saying:

‘Owner Drivers Wanted For Leaflet Distribution For Local Property Company. £30.00 per 1000 paid plus bonus of £200.00 (paid on completion) if a lead turns into a deal’

So far I’ve had 19 applicants, well it was 20 but one of them lived inRomania, so I’m not counting him – he sent me his CV, gotta give him credit for trying though lol. I’ve replied to them all saying I’ll be in touch when the flyers are ready for delivery.

In my experience it’s much better to have lots of distributors delivering small amounts (ie; 1000 each) rather than a couple delivering thousands. Why? Because they might be keen to do a few but get bored after a while (it is a tedious job) and therefore be more inclined to dump them!  I don’t use the mail companies, they’re expensive and tend to deliver your leaflet with 10 others! (which subsequently get dumped in the bin)   Also, make sure the distributors all live near to the areas you want covered as you’ll have to drive out to pay them for their work (after checking to make sure they’ve delivered correctly) and you don’t want to be driving for miles (time is money!)

I’m currently writing the Post Cards and will be taking them out to local shops in the area, there are not many places that let you advertise nowadays but I’ll just have to drive around and find them. The cards will say something similar to my flyers…’Houses Wanted, Guaranteed Quick Sale’ etc

The Newspaper Ads will say something similar, but these ads will be a bit shorter as they’re expensive – around £120.00 for 3 insertions for a 5cm ad – and will be shown for two weeks on three consecutive days each week, ie; Thurs, Fri, Sat.

I’ve designed a Vendor Contact Form which I’ll refer to when dealing with enquiries which also has a field asking where the vendor saw my advert so that I can log which method they are responding to and therefore see which advert has been most cost effective overall.   As I want to start each strategy around the same time I’m currently looking at starting around Thursday 29th March (which incidentally is my birthday!) as by then I will have my flyers back and have all the necessary paperwork etc in place.

I think I’ll give the campaign about a month to 8 weeks then draw up a graph to show comparables for cost/conversion for each strategy etc, as that will be interesting, although I’m rubbish at maths!

Well that’s it for now, I’ll post more as I start the campaigns and keep you up to date. Feel free to ask any questions – or make suggestions!   


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