It’s been exactly one month since I sent out the first 50 letters with my ‘A’ model. Check that article for the how-to. Two letters were returned as not deliverable. One person was kind enough to reply and tell me he wasn’t the owner, one said he has no interest in selling, four property owners replied with an interest in selling, I quickly ruled out three of these by running the numbers offered by the seller, and I submitted a Letter of Intent on one.
For the ‘A’ model, the response rate was 12%, 8% were interested in selling, and I offered on 2%. We couldn’t come to an agreement, unfortunately. Someone else submitted a better offer. No big deal. I’ll keep trying. I won’t forget about the 4 who were interested in selling. I’ll follow up with them later.
I was pleasantly surprised on how many responses I got on this initial tiny test campaign. It does seem like there is value to be had here. I purchased the envelopes with the sticker on the back so the owners wouldn’t think I was licking the back of them during the pandemic. These cost me $2.50 for 45, or 5.6¢ per envelope. Stamps are now an obscene 55¢ each. Letter stamps only went from 2¢ in 1885 and raised by 20¢ over 100 years. 35¢ higher in 1/3 of that time and we now see yearly increases. Paper is 2.2¢ each. Ink and printer I estimate at 1¢ per. Labor is tough to estimate. It took me 2.5 hours to get the information, print, address, stuff, stamp, and take to the mailbox. An extra 0.5 hours was spent getting the additional 50 addresses for the ‘B’ model, which I won’t account for here. My time is valuable, but I’ll be paying someone to do this if it proves profitable. I’ll estimate $8/hr. It all adds up. Nonetheless, money makes the world go round and I’m not big enough to purchase in bulk. Total cost for envelopes and mailing was:
- Envelope 0.056
- Stamp 0.55
- Paper 0.022
- Printer/Ink 0.01
- Total per 50 letters 31.90
- Labor (2.5 hr at $8 per hour) 20.00
- Total with labor 51.90
Ouch. That’s a big expense. Looking at my response rate, that cost me $12.98 per useful response, though. If that one offer I put through became a sale, it would have been totally worth it. I think I’ll continue.
I sent out the ‘B’ model letters to the next 50 apartment owners yesterday. The B model is a little more formal and discusses syndication. We will see how it goes. Let me know how your campaign is going.