Success Blueprint: How to Direct Mail to Delinquent Tax Lists
In my conversation with the active wholesaler, fix-and-flipper, and buy-and-hold investor from York, Pennsylvania Mikk Sachar, he explained his process behind how he obtains the majority of his deals and provided his favorite deal source – delinquent tax lists.
In his market, Mikk has found that it is extremely challenging to find quality deals through the standard realtor channel. Therefore, he doesn’t find any of his deals through that channel, including the MLS and REO properties. Instead, Mikk finds the majority of his deals through direct mailing.
His Best Real Estate Investing Advice Ever is to select 1 to 3 different sources that you want to work with and mail to them consistently. Mikk has mailed to a wide-range of sources, including pre-foreclosures, short sales, foreclosure notices from the courthouse, probate, and non-owner occupied list. However, his favorite source, where he has found the most success, is delinquent tax lists.
Obtaining Delinquent Tax Lists
Mikk loves mailing to delinquent tax lists. The county that he invests in has a tax sale twice a year – one in the fall and one in the summer. Any owner that is behind on their taxes at least 2 years are on the tax sale list. That list, for York County, is actually readily and freely available online! With this delinquent tax list, he has access to all of the property address’s and owner name’s that are behind on their taxes. The only additional step is to determine whether or not the address listed is the owner’s actual mailing address. However, this is quite simple: just follow the tax record trail to find the owner’s mailing address. Once Mikk has the owner’s actual mailing address, he will send them a quick letter.
Mailing to Delinquent Tax Lists
The owner is about to lose their home to a tax sale and they have been getting notice after notice in the mail for years. If someone comes in and offers them even the slightest opportunity to make a little money, they will give them a call. Therefore, the direct mail content can be kept simple and to the point. Here are two different letter types that Mikk sends to delinquent tax owners:
Yellow Letter – “Hello (owner’s name). My name is Mikk. My wife and I would love to buy a property in your area. Please call me: (123)-456-7890.”
Post Card – “Hey Joe. My name is Mikk. I am looking to buy a property in your zip code 12345. I see that you own the property at 123 Main St. Please give me a call. I am willing to pay you cash. I am looking to buy a house in the next 30 days and only have a limited amount of funds. Please call me as soon as possible before I commit my funds to another property: (123)-456-7890”
As you can see, the contents of the yellow letter is extremely simple, while the post card contents gives a sense of urgency to the owner so that the chances of them calling are increased.
Talking to Owners on Delinquent Tax Lists
When a delinquent tax owner calls, the first question that Mikk will ask is, “Can you tell me about your situation?” Then – and this is Mikk’s trick – he just shuts up and lets them talk. Eventually, they will tell him everything that he needs to know, so he just shuts up and take notes.
After the owner has said their piece, the next two questions that Mikk asks are, “In a perfect condition, what do you feel your home is worth” and then followed up with, “In a perfect world, what is the asking price that you’d hope to get for the property.” The purpose of these two questions is to determine the owner’s level of motivation. For example, if the seller feels that their home would be worth $100,000 in perfect condition, but are hoping to get $98,000, then they are likely unmotivated. However, if they feel that the property would be worth $100,000 in perfect condition, and they are willing to take $50,000, then the next words out of Mikk’s mouth are, “When can I come see the property?” Mikk finds that the larger the difference between what the owner feels the house costs when it’s fixed up and what they are willing to take, the more motivated the owner is.
Consistency is Key
We’ve discussed the first half of Mikk’s Best Ever Advice, select 1 to 3 different sources that you want to work with and mail to them, but the second half of the advice, consistently, is key! Don’t just perform 1 direct mailing campaign and get annoyed when there is a 3% response rate. Instead, mail to them once, then mail to them the next month and reference the first letter. For example, your second letter can say, “Hey Joe, it’s Mikk again. I sent you a postcard about a month ago. I am still looking to buy a house. I would love to buy yours. Give me a call.” If they still don’t respond, you know what to do right? Mail to them again!
Mikk finds that most people that perform poorly with direct mail will conduct one mailing blast and then give up. On the other hand, if people continue down the road, mailing month after month, they will build rapport and relationships with homeowners purely through postcards. And their response rate will be really good. Therefore, if you are going to start a direct mailing campaign, Mikk recommends that you commit to sending out 5 to 7 mailers to each address over a one year period.