I hope you have had a good real estate week. While you are hunkered down trying to avoid getting sick, hopefully you have been working diligently. Let me help you. This post is for people who want to find off-market apartment deals.
What is a Yellow Letter?
It’s not necessarily yellow. I think that they used to be yellow. Or maybe they were written on yellow legal pads. The idea is that they are supposed to be in a friendly, layman manner, rather than thousands of mailers sent out from a factory. That method would technically still be a Yellow Letter, but it’s not really the spirit of the name anymore.
The Yellow Letter introduces the prospective buyer to the owner and asks if he or she is interested in selling. It ends with a call to action. The hope is that the reader will respond favorably an bring them to the next step: contacting the prospective buyer.
These letters are sent out with almost no research done on the property. That comes later. The idea is to get out as many letters as possible, hoping that a small percentage will respond.
6 Steps to Writing Yellow Letters
- Write your letter. This is the most difficult part, but it doesn’t have to be. Look at this as an experiment. You will be changing the letter over time to find the one that works best. Put your name and reply address at the top, then the owner’s name and address, then the body. In it, write a little about yourself. Here’s an example:
I’m a small real estate investor in [your town]. I have purchased [whatever apartment deals you have done, briefly]. I’m interested in your property at [address]. I can pay cash [if you can do that] -or- I have a good relationship with [your bank] and have a history of being able to close. I’m not looking to nickel and dime you on repairs. If you didn’t use an agent, you wouldn’t have to pay a commission.
- Keep it Brief. No one wants to read a book that is mailed to them (see, the last phone book that was dropped on your front step), that’s annoying. Just give them the facts. Your name/address, a little of your history to convince them you can close, and a statement showing them why they should talk to you.
- Use their own property information. Make sure you write down the address you are asking them about. Maybe you drove by and liked it, say that. If there was some detail you really liked, tell them. Owners love to be complimented on how well they are taking care of their property. It also tells them that they are not just the faceless recipient of a 1000-letter marketing campaign.
- Sign the letter. Hand sign it. In blue ink. It’s less likely that they will think you just printed them off. And for goodness sakes, don’t just print your signature in color, it looks bad. You can tell.
- Write it by hand? I don’t believe in this. It takes too darned long and who writes a hand-written letter anymore? Weirdos. That’s who. I don’t even write letters to my Mom. I send her texts. Sorry, Mom. Hand-write if you want. It’s not likely to hurt you, but get a hand masseuse for afterward. Keep in mind – you are writing to multifamily owners, not just homeowners. A little bit more professionalism is indicated.
- Hand-write the envelope. Yes. Do this. People are much more likely to open it if it is hand-written. It gets your foot in the door.
Wait! Where Do I Send the Letters?
Get that letter written first, because it is the hardest step. Now is the easy part. There are a bunch of list companies out there that will take your money and give you some owner addresses. This is perfectly fine, but you are in a great situation, looking for apartment buildings. These things have a distinctive look from space, and you can use your favorite satellite mapping program to find them if you want. Once you figure out how, you can get a virtual assistant to do it for you.
Fire up Google Maps and look at your preferred city. Do a search for the city and it will show you the city borders. Go to satellite view and zoom in.
Do this very systematically. Go to the satellite view and carefully follow streets, searching for properties. What you are looking for is larger rooflines, usually squares or rectangles, with cars lined up outside. Have a look at this neighborhood. Google is helpfully telling us about one apartment building over in the right side. See the building in the middle left? That’s an apartment building. It’s larger than the houses and pretty rectangular. The white building on the top is not. It’s probably a warehouse. There are no vehicles or grass or trees, which you would expect in an apartment.
Next, pull up your county’s Geographic Information System (GIS). On mine, I can click on the parcel, and it gives me the owner information. I can also take the address information from here and go to my secretary of state website to find more details about the owner. Do this process for each building and keep a spreadsheet of property addresses and names/addresses of owners.
Take this information and do a mail merge. Not too scary. Go here for help.
Start with 100, a good goal to do in a day or two. Do 50 with one text and another 50 in another way. In your spreadsheet, keep track of which letter you sent and when you got a reply. Whichever one has a better reply rate can continue and be modified with further A/B testing again.
How Many Mailings?
How badly do you want to buy an apartment building? There is no best number of mailings. Plan to do one per month for at least six mailings. That will give you a six-month campaign. There are a lot of people with no interest in selling, who will throw your letters away, but suddenly have a change in their job or family or something else, and they will hopefully think of you. But they threw away your letter! Good thing there is another one coming next month. They will already feel like they know you and they can sell without an agent and you will already be one step closer to victory.
Each mailing needs to be different. Don’t just send the same letter a bunch of times. These need to be as personal as you can.
The cost is minimal. It doesn’t take much time. Get going. Just do 100. That’s all. See if it works for you. I’m sure it will. Let me know.