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Article by Scott Rister
Making Big $$$ In Pre-Foreclosure Using Direct Mail!!!

  Making big $$$ in pre-foreclosure properties is just simply one of the most profitable ways to consistently make money in real estate today. The popularity in recent years of investors taking over payments of mortgages on "pretty houses" has grown exponentially as well as other services and individuals keying into those opportunities.

  Now more than ever we have more pre-foreclosures services right at the fingertips of investors to take advantage of. If a company or individual has not already set up shop at your local tax assessor's office selling pre-foreclosure information, then it's probably not far away. The fact of the matter is that information in real estate, and especially pre-foreclosures, is the key that makes it so profitable for more real estate investors each day. Accessing that pre-foreclosure information correctly and then implementing your marketing plan to reach those pre-foreclosure leads in simplicity is one technique that many investors literally live off of daily…..and quite well I might add!

  Before we go much further it's almost an insult in one paragraph to describe why taking over properties "Subject-To" existing financing is so profitable. Just on the front end it is worth mentioning that structured correctly you as an investor can make yourself almost "bulletproof" from a liability prospective. With mortgages in recent years there are just some absolutely fabulous interest rates that are obscenely low from a "traditional" investor financing perspective. I mean who can't make properties cash-flow with 6-8% interest rates? After locating the deals, then it's mostly a matter of then evaluating how much cash (if any) it will take to:

  1. Pay off owner's equity making it worth their while….note that sometimes no money is required and a matter of offering debt relief.
  2. Repairs needed if any to get property in A-1 shape for owner financing specials on tenant/buyer prospects.
  3. Catch up the mortgage payments to be current.
  The great aspect of taking over properties "Subject-To" existing financing is that the three items listed above does NOT mean you must have a large cash reserve to make these deals profitable for you. The standard rule in real estate of "using other people's money" is so applicable here. That money may come from your future tenant/buyers, partners, or yes even your cash reserves for the time being. Even if you have to float the deal with your own cash reserves, if the deal is negotiated correctly then all your money can be recouped once the right tenant/buyer is realized for the property.

  There are simply a number of ways to get your pre-foreclosure leads by either developing your own personal leads or simply just buying the information that is readily available in your area. My emphasis here lies in this one question I want to ask you:

"Once you get a pre-foreclosure lead, how are you going to turn that into big money?"

  If you had to hesitate even a moment or you just don't have a clue what to do with that lead once you get it, then hopefully by the end of reading this you will be more equipped. This is not only to have a game-plan of where you are going with your real estate business, but to develop the vehicle of how to get your message effectively to your target marketing turning the "potential" into "profitable"!

  Moving on, now let's say you have an address and name on a property in foreclosure, so what now? What is your plan to talk to that seller or rather how are you going to get that phone ringing off the hook getting them to talk to you? Well, that is the question to answer and this is exactly what this article is entirely about. Call it what you want: Attack Plan, Method of Operation, Game-Plan, Standard Operating Procedure, Plan of Operation, etc. The end result is the same as you must know how to get that seller talking to you as soon as possible because time is of the essence in dealing in pre-foreclosures.

  From this point on let's just call it your "game-plan" but let's define this one technique that will work for you: Direct Mail!!!!! I don't know how to emphasize it more because direct mail in pre-foreclosure is an absolute lethal weapon to have. Sure there are many ways to get into direct contact with the seller and some are more effective than others and I've tried many:

  1. Going directly to properties and knocking on the door to talk to sellers.
  2. Accessing the eller's phone numbers by reverse CD directories of property this point in pre-foreclosure a seller may have changed phone number or implemented other features to block calls because they are probably getting bombarded by creditors to pay up.
  3. Leaving flyers on doors, cars, or mailbox.
  4. Playing detective a bit here finding out their work place or work phone number to contact them directly there.
  Do you know what has been my experience contacting individuals in pre-foreclosure with the above listed approaches? You're harassing them! You can lead a horse to water, but you simply can't make it drink. What I mean is that until the individual in foreclosure is receptive to deal with their problem then you will have a hard time progressing on that property turning it into a profitable deal. Sure, I've been able to finally track down an individual to make a deal happen but it can all too often be just exhaustive and time-consuming.

  Direct mail is my most preferable approach to getting those pre-foreclosure leads calling ME! I assimilate my pre-foreclosure information personally and do buy from other sources also. When I get that information all I'm really concerned about is the name and address of owner. Sure you'll get all sorts of information about the property being in foreclosure like outstanding mortgage balance, payments behind, lender on mortgage, etc. I just don't need all that information because until that seller is contacting me, then they are not in the motivated category making it worth my while.

  My approach is to use direct mail to get the individual in foreclosure talking to me. The foreclosure information if you're buying it from a foreclosure source is obviously available to others. So yes there is some competition out there and to distinguish yourself from others and getting the individual to contact you will need some creativity. That creativity for me comes in the content and frequency of my marketing message.

  All things are relative to the time of the pre-foreclosure information once you receive it but here is my game-plan that pays dividends for me month after month. My basic approach is mailing to the individual in pre-foreclosure with a total of two letters and two postcards. The seller will receive an alternating letter/postcard each week until all are mailed. The vast majority of leads I will hear absolutely nothing back from, but it just takes one deal to make it all worthwhile.

  My message is alternating and "incremental" in style. I'll list here the body/text of the letters and postcards to give you an idea. Make no doubt that you can tweak your message in many different ways but here are just some examples for you to think about:

Letter #1 (Week #1)
  Do you need to sell your house and F-A-S-T! I buy houses that others simply won't consider because of one reason: I Get Personally Involved. Others just don't take the time to listen how to meet your needs because everyone's situation is unique from the next person.

  I am an investor and do expect to make a profit so if you need all cash AND retail value for your house, then simply do not call me. However, if you have some flexibility and need a resolution quickly so you can quit putting your entire life on hold then give me a call. No obligation, fees, commissions. I just want to buy your house!

Postcard #2 (Week #2)
  If you are looking for someone to possibly buy your house, THEN DON'T CALL ME! However, if you want to already consider your house SOLD, then start packing your bags so you can get on with your life.

  There is a variety of ways I can buy your house and it doesn't have to be a complicated process. In fact I can close in little as 48 hours or as long name when! Give me a call and I'll explain in plain English how the solution to your problems is a phone call away.

Letter #2 (Week #3)
  Life can bring on many circumstances to deal with and unfortunately some of those are not pleasant to work through. Selling your house can be the exact type stress you need relief from and that is what I specialize in. I buy houses no matter what the situation so people can simply make a difficult decision easy, and just move on in life.

  If no obligations, fees, or commissions has an appeal to you then give me a call. I would be happy to meet with you face-to-face and discuss the opportunities available to you so I can buy your house. I hope to hear from you soon.

Postcard #2 (Week #4)
  Well, I can certainly understand if you do not want to sell that property for now. There may come a time down the line that you may decide to do something with it. I would only ask that you keep this card and that way you can give me a call when you're ready

  Thanks for taking the time to listen to my offer to purchase just in case you know where to reach me if you decide to sell. Don't hesitate to give me a call if you have any questions and I do hope to hear back from you soon.

  You can see by the above listed examples that my message is incremental and differing in nature. It's just rare for the pre-foreclosure seller to call you on that first letter or postcard. You just have to put yourself in the "shoes" of the seller and know that if they are in pre-foreclosure then they are probably getting a LOT of mail from creditors. The possibility of the pre-foreclosure seller throwing some or all of your direct mail away is a given! Just know that now and expect it. However, all it takes is one phone call and one deal to see your next big payday dealing in pre-foreclosures.

  A couple of points in wrapping up here:

  1. On all your letters, stamp on the outside in red ink, "I Want To Buy This House!". You can buy stamps like this at Office Depot or Staples costing you about $25. You write in the script you want and mail it to them with the custom stamp coming back to you in a couple of weeks. Before that potential foreclosure seller throws away your letter, they will at least read that red stamped message on the outside. I can't tell you how many people have commented to me on that one technique was the reason they took the time to open my letter and thus call me.

  2. Best success in direct mailing to pre-foreclosures is that you simply must mail to them more than once. I don't have the time or patience to mark on my calendar or day planner when to write the next letter or postcard and that is where my custom direct mail software comes in. It knows the date I enter a contact and automatically calculates when the next scheduled mailing of letters and postcards due. I just have to remember to print my letter/postcards at least once a week and just keep pumping the leads into my database.

    Take a quick check of my marketing program and tune it up if needed so you too can, "Find All The Motivated Sellers You Can Handle!".

    -----         -----

      Take a quick check of your marketing program and tune it up if needed so you too can, "Find All The Motivated Sellers You Can Handle!".

    Visit Scott Rister's Wholesaling and Marketing Forum

    Scott Rister is an author and "real world" investor just like yourself. Scott started investing in real estate over seven years ago for the sole reason so many do which is to supplement income and eventually replace the corporate job. After learning first hand what "down-sizing" in the corporate world means, Scott focused more intently on shifting from emphasis from buying techniques to finding truly motivated sellers. In less than a year Scott has been involved with over 60 real estate transactions that ended up with a check with his name on it. You can learn more about his program at
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