Today’s REI Classroom Lesson

Today, Lex Levinrad talks to us about how to manage your direct mail marketing and how to set a dedicated budget each month for direct mail. He shares some tips on getting a higher open rate for your mailings as well.

REI Classroom Summary

When it comes to direct mail, you shouldn’t be trying to do it all yourself. Get a system figured out and outsource everything you can so that you’re spending your time on more important aspects of the business.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Lex: Hey, everyone, this is Lex Levinrad, founder of the Distressed Real Estate Institute, and on today’s REI Classroom show, we’re going to be talking about direct mail marketing.
Mike: This REI Classroom real estate lesson is sponsored by, FlipNerd’s private investor coaching program, and your blueprint to investing success.
Lex: And this is once again, another one of these fields that many of you guys hear about this. You go to a lot of seminars, you log on to webinars, you see workshops, and everyone keeps telling you, do direct mail, do banner signs, but how many of you actually do it? How many of you actually go and spend some money doing this?
I’ve found that the biggest problem with beginners is an aversion to spending any money, and here’s the thing. Just like Ted Turner says, “Work hard. You’ve got to go to bed early. You’ve got to wake up early, and you’ve got to advertise.” So if you’re not advertising, then you’re missing out on a huge potential for your business.
And a lot of newbies that are just starting out, trying to learn the ropes, figure they won’t advertise, because they don’t yet know what they’re doing, but that’s fine. But when you do know what you’re doing, and you know how to buy a house, then what you need to figure out is how can you massively, rapidly, scale it up? And one great way to do that is direct mail. We used to do our direct mail campaigns in-house. We got to a point where we outsource them and the direct mail is very, very powerful. So I’m going to talk about just one specific segment of direct mail.
There are a lot of different things you can do. You can mail out postcards to entire zip codes like we’ve done. You can target specific lists with pinpoint accuracy, so you go just after probates. You can go just after [inaudible 00:01:48] times. Just after home owners and bankruptcy or foreclosure, and there’s a gazillion other lists.
If you’re looking for a good source of lists, two sites I would recommend would be, and Those are two great stable companies that have been doing this a long time. And you can compile your own list. You can download them into a spreadsheet format, or a CSV format, and then from there you can market them.
Now, you can do it in-house. You can certainly do it yourself. You can use a mail merge and mail them out yourself, but if you want to get any kind of scale, I’m going to recommend to you that you go to an outside company. So the one format that works quite well for us is using the yellow letters. Now, with the yellow letter campaign, we typically get a response rate of around 1% to 3%. I’d say on average, about 2%.
A lot of people tell you that their numbers are 5% or higher. It just depends on the campaign and who you’re mailing it to. The more targeted you get with your lists, the better results you’re going to get. We found we get very, very good results and we go after absentee homeowners that are in a certain age group that are approaching retirement.
So if you go after people that are approaching, let’s say age 65 that have owned a property for 10 years or more, but don’t live in the property, especially if they live out of state or in a different town, those people are often more inclined to want to sell their home as they’re entering retirement. That’s a good list I found. Probates is a fantastic list.
But each list that you work with is going to need a specific specialized skill sets to understand. You can’t market and spend thousands of dollars a day sending out to a probate list and not know anything about probates. So if you’re going to do that, learn a little bit about probates, network with some probate attorneys, and so forth.
So specifically on the yellow letter, another mistake I see people make is they just try to do everything themselves instead of outsourcing it. So my system is just out source everything. The more you can out source, the more freedom you have. The more freedom you have, the more spare time you have. Ironically, believe it or not, you will actually make more money and you’ll have more spare time. All right.
So I’m a big believer in outsourcing and systemizing everything. If you outsource your campaign, and you do decide to use yellow letters, what we found that works well is invitation envelopes, ivory color, and yellow letters with red writing, and on a handwritten envelopes. So take the time to pay someone, or outsource it to a company. They will actually do handwritten envelops for you.
And then don’t use the bulk mail stamp. That’s what kills people. They put the bulk mail stamp on them. Make sure you use a personalized stamp like a real human being that actually addressed the envelope, on an invitation envelope, so it looks like they’re getting a wedding invitation. They’re much more likely to open that, than if it looks like a piece of bulk mail. And getting them to open that’s half the battle.
Now, when you get to that point and they’re curious, they decide to give you a call, that’s where things come into play, like you having the skill set to understand how much to offer on their house, having a system to pull up comparable sales, and know how much to offer. So it’s going to take you some time. So I recommend you practice your scripts, get good with them.
You can outsource that too, if you have a 9:00 to 5:00 job, outsource it to a center. There’s many companies out there, like PATLive, etc, that will actually handle the phone calls for you, and you can give them the script. If you incorporate a budget even as little as $250 a month to direct mail marketing, and every time you get on average, let’s say a 2% response rate, that would be five leads per month coming into you.
If you bought just one of those houses, and you flipped it for even just a $5000 profit, that would be a huge return on your $250 investment. And I can tell you for a fact that if you mail out, and you do it once or twice, and quit, you won’t get much results. But if you commit to, let’s say six months of mailing a specific budget, $250 a month for six months, I bet you at the end of those six months if you look at it, you’ll have at least one or two houses that you flipped, and if you look at what you made on those versus what you spent on marketing, in the next month, you’re going to double or quadruple your marketing campaign.
So consistency is key, it’s kind of like the hare and the tortoise. I see a lot of beginners that just say, “Oh, I’ll spend $5000 in one month,” and you’re blowing your money way too quick. Spread it out, or rather make a one year campaign at an affordable budget that you can afford. Think about what number they’re going to call. Think about who’s going to answer it, what they’re going to say, how they’re going to create an offer. Plan that whole thing out, and systemize it, all right?
So that’s some tips on direct mail marketing. For REI club today, this is Lex Levinrad, founder of the Distressed Real Estate Institute. If you’d like to learn more about me, you can visit my site, And till I see you on the next FlipNerd show, go out there and let’s get some direct mail marketing going on.
Mike: Are you looking to change your life through real estate investing? If you’re interested in either getting started or taking your business to the next level, please check out FlipNerd’s private program at This is the most robust real estate investor coaching, networking, and mastermind on the planet, and designed for your success.
If you’re ready to roll up your sleeves, ready to take personal responsibility for your own success, and ready to dive into a world class, instructional coaching program that provides you step by step instruction to help you achieve financial freedom, then you should apply today. Spaces are limited, and candidates are only considered after an application and interview process. Our 12-month investor program is unparalleled. Think you might be a fit? Learn more today at
Please note, the views and opinions expressed by the individuals in this program do not necessarily reflect those of, or any of its partners, advertisers, or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds, and get access to hundreds of off-market deals, vendors in your market, to help you and your business, and you can start networking with thousands of other investors just like you. Get your free account now at
Please check out the FlipNerd family of real estate investing shows, where you can access hundreds of expert interviews, quick tips, and lessons from leaders across the real estate investing industry. They’re available at, or simply search for FlipNerd in the iTunes store.