Tagged: What is your acceptance rate?
November 21, 2015 at 8:37 pm #1036
Seth WilliamsParticipantNovember 21, 2015 at 8:37 pmPost count: 12
For those who have been using the same list data that Steve outlines and are sending out blind offers – I’m curious to hear, what has been your overall offer acceptance rate?
In other words (on average) how many mailers does it take for you to get ONE accepted offer?
Note: I’m not talking about your response rate, I’m talking about your actual acceptance rate.
I’ve heard some say it takes around 150 – 200 mailers to get a deal under contract, but I’m curious to get some more perspectives. Does that sound reasonably accurate or way off? What has your experience been? Have you noticed any particular variables that have made this acceptance rate go up or down? If so, what has made a difference?
ChrisParticipantNovember 21, 2015 at 9:04 pmPost count: 252
Hey Seth @retipster
I know Mike @mdugan said he was at .5% (accepted contract) within the first couple weeks of the mailing and he had a few more in the pipeline. http://successplant.com/forums/topic/letterprinting-net-or-others/page/2/#post-595
Luke Smith @luketsmith and @kevinrhatigan Kevin will hopefully chime in but I thought they were in a similar range but they may have ended up with multiple properties because the sellers were selling more than one parcel.
My first mailing of 500ish was a blind offer at about 5% of market value, I had two verbal agreement to sell (one ended up being wetlands and not buildable), the other needed approval from a distant family member, so mine was not the best example.
My second mailing was an open offer mailing, which I’m kind of regretting because as you know, the response rate is very high but many sellers aren’t motivated. I think I’m going to consider sending out blind offers with slightly higher offers of 10-20% or do what you’re doing and send them all to the website and have them submit their info.
Seth, are you happy with sending everyone to your website? Do you feel you are missing out on any deals or are you happy with being able to respond to so many offers so quickly?Luke SmithModeratorNovember 21, 2015 at 10:16 pmPost count: 1262
Accepted offers in the first couple of weeks
Landed offers (really easy ones)
4/8 have multiple properties
3 of those I am still working on closing the other properties, 100 acres of 5acre lots, 85 acres of 20’s 10’s and some 5’s. Lady with 40 plus properties just in the same county she wants to sell then work on the properties in other counties. Her late husband was really into tax lien investing and collecting vacant land. She is set to sign on Tuesday for the first of hopefully many properties I can buy as I want to from her. She travels a lot so I am on my second notary chasing her.
Not sure hit rate per mailer is the right metric. I believe in the 20:80 rule. Or what some people know as the Pareto Principle
80% of your profit comes from 20% of your time (this is huge in all kinds of business and especially in finance when most people are told to diversify)
In finance and especially wild speculation like these offers are. The top 20% could be run again to get the super good responses. Just a way of saying very few sweet replies is all you need.
To get one of those sweet replies you need to send out more mailers. Yea you could send one offer and you might get that sweet reply but to take all the little speculations and turn them into a profitable and repeatable business takes bigger mailings.
Look at @mike and @Kevin. They got sweet replies. They also sent out 2000+ offers. I was too cautious they might all call and say yes to send that many.
My last mailer of 1515 offers just started lighting up the phone and even the fax this time. Maybe in a few weeks I can put some new numbers on here.Kevin RhatiganParticipantNovember 23, 2015 at 9:38 amPost count: 107
In my first mailing I sent out 2,400 and so far have 10 deals. So my response rate is .4%
I have about 11 more sellers who I think will eventually come around and be close enough to my offer amount to accept. So I should end up with a .8% response rate.
I had about 10 more offers that were accepted by sellers but back taxes or title issues prevent me from moving forward.
My mailer went out 10-13 and I am still getting a few calls so there should be more to come.Seth WilliamsParticipantNovember 23, 2015 at 10:05 amPost count: 12
I haven’t done an actual direct mail campaign in a while (mainly because the traffic shows up at my website naturally now, kind of similar to what Steve has going with the 500+ backlog of offers in his acquisition file… after you do this business long enough, deals tend to produce themselves in a residual manner), so I don’t have a solid feel for what the acceptance rate would be today if I were sending everyone to my website before I made the offer.
I have to say though – a .4% or higher acceptance rate sounds pretty sufficient to me. As long as the deals are solid enough from the “4 A’s” perspective, you can definitely work with this. Less than .4% may be getting into the “meh” territory, but it doesn’t sound like people typically see that if they’re going through this process the right way.Luke SmithModeratorNovember 23, 2015 at 11:33 pmPost count: 1262
How much mail do you think you have to send out before you get so much residual that it does not make sense to keep sending out mailers?
What kind of turn around time are you averaging on your properties?
I would like to shorten my turn around time considerably and turn up the volume.Seth WilliamsParticipantNovember 24, 2015 at 7:02 amPost count: 12
That’s tough to say with any precision @luketsmith – just speaking for myself, my residual traffic is more a result of SEO and building my internet presence (much of my property submissions simply come in from organic searches) and I think Steve’s is more a result of sending out tens of thousands of mailers over the years, and people are just holding onto them for a long time before responding (but I certainly don’t want to speak for him, so if you’re reading this Steve, correct me if I’m wrong).
And just to clarify, what do you mean by “turn around time” exactly? The time to close on a purchase, or the FULL process from start-to-finish of sending out a direct mail campaign, buying and selling a property?Kevin RhatiganParticipantNovember 24, 2015 at 8:37 amPost count: 107
My plan for next year is to send out one mailer per month.
I am holding off until early January for the next mailer but that is because we will be away from home at a family reunion for an extended time and I won’t have the time to handle all the calls you get.
But even though we’ll be away from home I will continue to market the ones we have already bought.
My plan is to keep mailing and of course to measure the results of each mailer. I am not going to wait until all the properties I bought from my first mailer are sold. I think if I continue to buy them cheaply I can always mark them down and sell them quickly if I need to.Luke SmithModeratorNovember 24, 2015 at 1:20 pmPost count: 1262
@retipster for turn around time I was thinking more about from buy to sell. Counting when my money is locked up in the deal.
To count from mailer to sale is great for the first deal. If you do multiple mailers the residual should keep flowing and pile up over time so much that a better measurement would be from money going out to money coming back in.
@kevinrhatigan For holiday travel I was thinking that sending the mailer out about two weeks before I get back would have the phone going off when I get back. 1 week for letterprinting.net to do their thing and another week for the usps to get the standard mail out to the first people.
I like your thinking on the just keep mailing concept too. Drop prices as you run out of capital.Seth WilliamsParticipantNovember 25, 2015 at 1:46 pmPost count: 12
Hi @luketsmith – I’ve seen varying turnaround times (from money out to money in). Sometimes it happens as quickly as a couple of weeks, but most of the time (I’d say about 80% of the time), the deals will come full circle within 1 – 3 months.
A lot of your success at selling will depends on how good of a property you bought in the first place (and how low of a price you paid for it), but even more of it depends on your capabilities and flexibility in the selling process.
Capability: How proficient you are at creating good listings and getting the information out in front of the masses.
Flexibility: If/when you don’t see any immediate interest, how savvy are you at changing the variables of your listing, who you’re contacting, what you’re saying, what you’re willing to do, how far you’re willing to lower your price (to name just a few things).
If you can get good at both these things, you’ll be unstoppable.
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