Mail campaigns have been found to be a highly effective way for real estate investors to contact property owners who might be interested in selling.
One category of property owners that have been found receptive to investors’ offers is the Absentee Real Estate Owner. These are people owning a residential property that they don’t live in – they have a different primary address where their tax bill is sent.
Crafting a targeted mailing list of absentee owners can help you make the most of your marketing dollars. There is no need to spend postage on people who don’t fit your profile.
There are quite a few options to consider in finding just the right absentee owners; the ones most likely to be ready and able to get out of their ownership. Be sure to keep in mind your local knowledge and ability to evaluate the properties for investment.
Criteria that can be used in customizing a targeted mailing list for your campaign to find sellers:
Where do you want the property to be located? In all but the more densely populated areas, you will probably want to consider looking at one or more counties so you can further narrow down your search.
Where do you want the owner to live? If you are working with a large enough area, you may have enough properties to specify that you want the owner to live outside the county or even out of state.
Do you want to limit the Home Market Value? Most real estate investors, particularly those starting out, have limits on the amount that they can offer for a property. Depending on your market area and your marketing strategy, you might want to specify properties under $150,000 – or perhaps between $50,000 and $250,000. Other investors want only higher-end properties.
What type of home do you want to buy? You might want to mail to owners of just single family homes and/or multifamily homes. In some areas condominiums are desirable. Some investors also want to include apartment buildings with 5+ units.
Do you want owners who have had their property for a long time? …or are you in an area where there is enough turn-over that you don’t mind marketing to people who are newer owners? You can think of the purchase date range you want to target, such as 1/1/1960 – 12/31/2008 for people who have owned at least 5 years.
Are you planning to promote to people based on how much equity they have in the property? Do you want the owners to have high equity or low equity? Loan To Value (LTV) is a great tool to approximate equity. LTV is a calculation based on the total loans (the original amount on the day the loan was written) and the current home market value. For example, if a person refinanced with a loan of $100,000 and the current home value is $400,000, the LTV is 25%. This equates to a minimum of 75% equity. Don’t forget that they have also been paying down that loan, although this isn’t factored into the equation.
Demographic criteria such as the owner’s age can also be useful if you want to further narrow your list. Some investors feel that older owners may be more interested in selling their property.