Scaling a Wholesale Business through Direct Mail Marketing

More frequently than market conditions, strategic marketing determines success in real estate. In this Mastermind episode Tarah Fernandes, Co-founder of a successful wholesale firm, discusses how direct mail marketing and team-building have driven their growth and efficiency over years.

Many real estate organizations have unequal lead generation, generally resulting from unclear regulations or poor marketing strategies. Although direct mail is costly, Tarah’s business has been transformed by its consistent, reliable supply of leads. She emphasizes that success in this field hinges on consistency—regularly implementing well-planned actions instead of waiting for a rare large transaction to blossom.

Maintaining continuous success will depend on tracking KPIs including response rates and lead conversions. Tarah underlines that basing your strategy on facts helps you focus on what works and eliminate superfluous tactics. This allows investors to modify their strategies and increase their overall returns.

Their great closure rate on contracts, well above the industry norm, comes from proper delegation. Building a disciplined staff of lead managers and acquisition managers to appropriately handle and convert leads was a crucial component of their expanding strategy.

The path to success is to create momentum by means of small but consistent actions, strategy development, and real-time data-based plan modification. Younger investors should have a regular marketing schedule and be careful in monitoring results, Tarah counsels. In real estate, survival and growth depend on keeping discipline using appropriate tools and perspective.

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Key Takeaways:

1. Wholesaling Business and Team Growth:
   Tarah and her husband Billy started their wholesaling business in late 2020 to generate passive income and reduce travel for work. Their 16-person team focuses on off-market property deals with a high closing rate of around 70%. (00:01:03 – 00:01:14)
2. Direct Mail Marketing Strategies and Budget:
   Direct mail accounts for 85-90% of their deals, with a $100,000 monthly marketing budget. They emphasize tracking KPIs, testing new lists, and using Ballpoint Marketing and Aria Print Mail for campaigns. (00:03:45 – 00:04:22)
3. Mail Campaign Response Rates and Data Sourcing:
   Despite a slight drop in response rates to 3.5%, they maintain performance using data from Prop Stream, Deal Machine, and local databases, employing a hybrid lead-handling model. (00:06:15 – 00:07:03)
4. Response Rates, ROI, and Lead Handling:
   Tarah discussed tracking response rates and ROI. The acquisition team aims to add $125,000 to the pipeline monthly, equating to about seven contracts a month. (00:08:25 – 00:09:40)
5. Marketing and Sales Strategies Discussion:
   They discussed expected ROI for marketing spend (4-6x), performance of TV advertising, and the process for managing leads, prioritizing based on potential profitability. (00:11:30 – 00:13:15)
6. Real Estate Investment Strategy and Marketing:
   They focus on wholesale deals, using inbound channels and referrals. Testing of custom postcards showed no significant difference in results. Consistent marketing efforts are emphasized. (00:14:50 – 00:16:10)
7. Lead Manager Commission and Accountability System:
   The lead manager earns a 4% commission on closed deals. There’s a structured system for acquisition managers to generate leads, with an expectation of at least five calls per day. (00:17:45 – 00:19:05)
8. Direct Mail Marketing Strategies and Mistakes:
   They focus on a mix of wholesaling and retail, with a family-friendly appeal. A significant error involved sending the same letters to the same people, resolved using REsimpli’s filters. (00:20:30 – 00:22:00)
9. Improving Direct Mail Marketing Consistency:
   Tarah emphasized the importance of consistency and organization in marketing, using unique tracking numbers and keeping records. (00:23:15 – 00:24:50)
10. Direct Mail Marketing Best Practices and Challenges:
    Regularly check response rates and conduct test calls on new phone numbers. Challenges include oversaturated niche lists and maintaining consistency. (00:26:10 – 00:27:45)