Direct Mail Marketing With Kathy Kennebrook
Episode 504: Direct Mail Marketing With Kathy Kennebrook
The primary step to closing any deal is to first get in touch with sellers. One of the ways to do that is through direct mail marketing. Today’s guest is none other than Marketing Magic Lady herself Kathy Kennebrook. In this episode, she shares why direct mail is the optimal method for finding high-quality motivated sellers. She breaks down the advantages of direct mail marketing from cost to long-term returns you may not expect. Kathy also shares some insights from her book, Real Estate Principles: Your Personal Path To Prosperity. Tune into this episode to get helpful real estate advice you can apply for your own business!
Watch the episode here
I’m with Kathy Kennebrook. We’re going to be talking about Direct Mail Marketing. That’s the biggest question of the day. I hear it every day, all day long. How do I find a deal, Mitch? We’re getting ready to talk to Kathy and we’re going to hone in on the direct marketing mail piece, and 24 other ways to find all the motivated sellers you might ever need. How are you doing, Kathy?
How are you, Mitch? It’s good to see you again.
I’m doing good. This is a big topic. The rubber meets the road when you find a deal. Nothing happens until you find a deal and make a deal.
With our current market being the way it is and with the current market shift that we’re going through now, finding the deals becomes even more important to the success of everyone’s business.
People say, “It’s getting tough to find houses now because it’s a sellers’ market and everything is going for over list price and there are multiple offers.” I said, “If you walk down the regular street, that’s what’s regularly happen.” You got to get off the regular street. We got to go over here on the street where the chaos is. The death, divorce, bankruptcy and the transfers. Wherever there’s chaos happening, there’s a piece of real estate associated with it somewhere. Something has got to happen with it. Either you’re going to get it or someone else is going to get it.
I tell people that I live where there’s chaos, great change and sudden change. That’s where I do my business. Where should we start with this topic? We’re going to be talking about direct mail. Give us a little bit about your history. How long have you been in the housing business and how long have you been using these direct mail techniques?
We started with direct mail from the very beginning. The very beginning is twenty-plus years ago now. Time flies.
It’s not rocket science. It’s not like we’re inventing things, although things in technology and cultures change. You got to keep more from the same old idea. You got to keep taking advantage of the new technology and the time saving or the targeting. Honing in on the target better, faster, easier, and then adjusting your message. Mailing out for our customers is not new. How you do it, when you do it, and how often you do it might change all the time.
What I do is completely different than anybody else does. I don’t understand why but it is. The reason that we originally got into direct mail marketing was when my husband and I got married, he was the shy guy that didn’t like talking to anybody. We figured that if we could get the sellers to contact us first, it would make him more comfortable. What we found was that everyone had a bit of that, including the sellers that we were dealing with. That was number one, then we started honing in and targeting specific kinds of sellers who were much more likely to want to work with us. Within each one of those lists, we refined that criteria in such a way that the more highly motivated sellers were contacting us and we were putting together deals.
There’s something else that I did and the reason that I say what I do is different from anybody else. We put a response mechanism in the direct mail campaigns that we do that tells the sellers what I want them to do, and what information I need from them in order to determine if there’s a deal there. If you don’t tell your seller what you want them to do, they’re not going to do anything at all. If a seller has given you the information that you need to determine if there’s a deal there, then the deal is pre-screened when it hits your desk and you’re not wasting more time or obstacles with the people that don’t want to deal with you. Nobody else does that. It’s amazing.If you don't tell your seller what you want them to do, they're not going to do anything at all. Click To Tweet
Everybody is a marketer, no matter what business you’re in. If you’re not marketing, your life is going to be tough. If you’re married, you market every day to your spouse. Tell us why you pick mail campaign over everything else.
We wanted to be reaching the sellers that nobody else knew about, and sellers who would never get our message in any other way. You know as well as I do that when you see an advertisement on television or whatever, it’s there and it’s gone. It’s easy for you if you get an email to hit the delete button and it’s gone. It’s the same thing with not everybody spends their day on the internet and not everybody reads the newspaper. Direct mail marketing makes it convenient for the seller to hold onto your piece and have it when they need it. I’ve proven that over and over. When we do direct mail campaigns, we get responses now, next week, next month or next year because they hold onto those pieces until they need our service, and then they contact you. You’re constantly sowing seeds for future deals.
The oldest direct mail piece that I’ve ever received a deal from was six years old.
I believe it. That’s about right.
When they showed me the postcard, they said, “You probably want to see this postcard.” I said, “Why?” He says, “It’s because this postcard is old.” They said it’s about six years. I looked at it and thought, “I haven’t used that color scheme and all that for a long time.” I said, “How does this happen?” He said, “We knew that this property would have to be liquidated sooner or later.” People don’t live forever. She was my mom or my grandma or whatever it was. We put it in the file along with the will and the other important papers so that when it came time. We figured if you were still in business after all this time, you must be doing something right. We called the number and you answered. We figured you’re still in business.
We did a deal like that where it was an estate and the daughter was going through dad’s desk. She had found two letters from us because we do residual mailings. She said the same thing, “If you guys have been in business this long, you know what you’re doing.” We’re in the middle of buying that one now.
There’s a lot to be said for that. Where do you start? I guess it all starts with the list. How do you know who to mail to? You don’t want to send it out to anybody. You’ve got to send out to a target.
I live in Florida. I’m in the geriatric capital of the world. I’m getting that myself. I can say that. For me, it’s out-of-state owners because we have a lot of people that are vacationing here, they bought retirement homes, we do a lot of state and probate, and I do a lot of vacant homes and things like that. What I suggest to your folks is to first take a look at your demographic. What does your demographic look like? What kinds of sellers are you going to be dealing with, then figure out which list you would like to mail to first? There are a number of different ways to get those lists. They can get it from their property appraiser, assessor’s office or the tax collector’s office.
If they’re working with me, I provide the resources for the list brokers no matter where they live in the country. There are a lot of good ways for them to get reliable lists. Anytime you’re doing a direct mail campaign, mail out 100 pieces so that you are testing that list. How many bad addresses you can get? How many responses you can get? How many deals did we make? If you get letters back that are marked vacant or deceased, the post office did your job before you get busy. That’s how I tell them to hone in on these lists that they’re going to be looking for.
You made an interesting comment there. When you get a mail piece that comes back or return-to-sender because no one is there by that name anymore, that’s a high-quality lead. If your letter didn’t get there, no one else’s letter got there. That’s one of the things that we do. I bought 100 houses a year for decades. It’s about 2,000 houses. I’ve been a prolific buyer. One of the things that we do is when we mail out, we mail out 10,000.
I live in a city with two and a half million people. If we mail out 10,000, we’re trying to get the 400 or 500 return postcards because after that, maybe we get a call or maybe we don’t. We’ve got those 400 or 500 returns and we’re going to town on those trying to find out, “Where is this guy that used to live here that owns this house that doesn’t live here anymore?” If my letter didn’t get to him, no one else’s letter got to him. That’s been a big one for us. We’re skip tracing. We have gotten pretty good at finding people. You get these lists, you start to hone them down, you start to get your little tracking, and you’re starting to do some score carding. You say you do 100 at a time. Why 100?
Do you mean 100 letters at a time? No.
I thought you said you do 100 letters at a time. I thought that’s low.
I’m talking about the testing list. When you have a brand-new list in front of you and you’re testing that list, I want you to mail out 100 pieces. If that list is going to be what you need it to be, and then start. I don’t want them to go out and mail 500 to 800 pieces and find out that they’ve gone bad list. That’s one of the things I always tell a person to do. When you’re testing a list, mail out 100 cases to find out whether or not this is going to be advantageous or a good list for you to continue to use.
We only mail out about 1,500 pieces a month total over the 2, 3 or 4 lists that I use. The reason for that is not only am I targeting the list, for example, out-of-state owners, but within that, we’re using very specific criteria to hone that list and even further to hone in on the most highly qualified sellers in each group, which is why my response rates are excellent. I’m getting 4%, 5%, 6% to 7% response rates from my mailings because we’re honing. Because we’re using that response mechanism, the quality of the deals and responses that we’re getting are so much better and higher.
What you’re saying is you’re not only doing the out-of-state filters. You’re also putting other filters down there. It might have out-of-state and nuisance and abatement judgments. That means fewer people fall down into the bucket, which means higher but they’re more qualified. Your theory is you put on a lot of filters so you don’t have to mail a lot. You’re only mailing to the top 1,500 prospects in the whole city.
Some of the other filters might be the oldest sale dates or the highest equity spreads, and things like that. We’re using real specific filters within each list and they’re different depending on which direct mail campaign we’re doing.
Tell me some more. We got the list now and the filters. What’s next?
Do you send them out to land on a certain day of the week? I know some people believe that they should land on certain days.The more ways you get a seller to contact you, the more they will because you’re going to be reaching them at their comfort level. Click To Tweet
I don’t feed into that. They get mailed every day. We have people that do the direct mail campaigns for us. Maybe they did 100 letters now or 200 tomorrow. They’re getting mailed on a consistent basis. That’s something that I would say any kind of marketing that you’re doing in your business needs to be consistent. You’ve got to do something all the time. Not mail out 300 letters now, and a month from now, mail out 200 more, and then you wonder why you didn’t get a good response. You want to be very consistent in what you’re doing.
You want to be tracking where your responses are coming from. Which direct mail campaigns are working well for you? What response rate are you getting? You need to track what’s going on in your business because you’re going to end up taking a piece of the profit from each deal and putting it back into your business to the things that are bringing you the highest response rate. We got to respond to the sellers. When the responses hit my desk, typically, I get every virtual and everything I need from the seller.
For example, I had a seller that contacted us and he sent us this mail in a 9.5 X 11 envelope with the class on top of it. I opened it up. In there, he’s got a copy of a plat map, which I didn’t ask for. He’s got a copy of his deed, which I didn’t ask for, and then in the envelope, there’s a two-page letter telling me everything since his grandfather built the property and seven photographs of the property inside and out. Is this a motivated seller? This is what I deal with daily on my desk because we’re telling the sellers what we want them to do, and what we want from them in order to determine if there’s a deal, and nobody else does it but me.
Do you send them letters or postcards or a combination of both?
Letters, and the reason that we do letters is that number 1) We want to address the seller specific situation, number 2) We want to give them that response mechanism, and number 3) We want to give them as many ways to contact us as we can. We’re giving them phone numbers, email addresses, mailing addresses, website addresses and so forth. The more ways you give a seller to contact you, the more of them are going to because you’re going to be reaching them at whatever their comfort level is. We got to have more space.
You also wrote a book called Your Personal Path to Prosperity about how you might navigate this creative real estate environment to become financially free. If you guys want a copy of that book, go to 1000Houses.com/Dmail. They will get you an eBook and you can download it. It will also give you a link to the Marketing Magic, which is all about how to do this direct mail marketing campaign. You can go try to figure it out on your own yourself or you can work with Kathy and her team. They can get you on the fast track to getting this done. Do you want to talk about what Marketing Magic is about, how someone gets involved, and why they would get involved?
I sure would. My Marketing Magic system consists of twelve different direct mail campaigns with all of the directions you need to do each one. You pull that section out, give it to the person who’s going to do the mailings for you, and you’re ready to rock with your direct mail campaigns. I also provide 24 other marketing techniques and samples of all of them in there. I also discuss compiling other types of mailing lists that you might want to be looking at like the evictions, divorces, people that are getting married, obituaries, estate sales, and things like that.
This is the only marketing system they’ll ever need to do all the deals that they would want today, tomorrow, next week, next year, on and on. Over the years since I developed that product, it’s honed and updated. We’ve done a complete update to it in December 2020. Now all of the forms, letters and everything are on USB so we did all of that. I’m going to include a whole bunch of bonuses for them. I’m not going to go through all that with them right this minute, but when they go to your page, all those bonuses and exactly what we’re offering are laid out there for them.
To get the whole thing and spilled out for you from A to Z, go to 1000Houses.com/Dmail. This is a good opportunity for someone who’s new in the business, young in the business, and hasn’t got a pipeline full, and you’re a little bit concerned about how you’re going to do that. This is a good place to start because you got the expertise of someone who’s been doing it for a long time. They’ve organized it for you. You’re shortcutting the whole thing. You’re paying some price and some people don’t like to talk about price on the show like this. I like to know the price myself so I can tell it, but I always preface it with this. Kathy has got a price. It’s August 24th, 2021. She can change your price at any minute if she wants to, up or down, but how much does it cost to get involved with you now?
$1,197 and on top of all the other bonuses, they also get me for a full year. They get my personal email address so they can ask me any marketing question that they have. Once they invest in my system and they’d start to implement, they have me for a full year at their disposal. I’m not leaving them flying in the wind. I want to help them succeed and do a super good job with their marketing so they can start getting some deals done. Now is a fabulous time to start with direct mail marketing for a couple of reasons. One is we’re moving toward the holiday season.
For example, our property tax bills come out on the 1st of November. We start increasing the number of direct mail campaigns that we do from October to March. That’s when we do the highest number of deals in our business. That’s number one. Number two, you’ve got property tax bills, you’ve got the holiday season, they’re opening everything, they’re reading your letter, and then with this market shift, there are people out there who are looking for a solution and don’t know what to do. There are so many good reasons to get started, get moving and get some deals done.
The price again is what?
What’s the average profit on a deal? Would you guess, Kathy? I’m going to say $20,000. Would you guess about that? If you had to pay $1,200 to find a $20,000 deal, then you had the knowledge and you had all the things that came with it. Even after you paid for it, you still had it and you could still use it again and again. This is a stupid, no-brainer idea. If you’re sitting there flat-footed now and don’t have a game or don’t have enough deals, this is a no-brainer. Bring your $1,200. You do what you’re told, which is the easiest thing to do. Do what someone is telling you to do, and find another deal. You find one deal and if it’s an average deal, you’re paid for 12, 13 or 14 times over.
The deals after that are infinity because you don’t have anything invested anymore, so you’re still good, and you’ll learn some things. You’ll learn some techniques and you won’t have to invent the wheel. That’s what you’re paying for. If someone has sat down and already got all the pieces of paper, all the forms, and all the scripts, if you paid an assistant to help you set it up yourself, you’d probably pay the assistant $1,200 and you’d have to go through all the anxiety of figuring it out.
I wish I had it with me many years ago. It was already done and already in place. I didn’t have to procrastinate and didn’t have to figure out what to do next. All the steps were right there for me.
Tell us one of your greatest successes from a campaign like this.
One of the largest deals we’ve ever done was with a Major League baseball player. He was a pitcher for a Major League Baseball team. He got a shoulder injury and the career was over. The house had been partied in hardly. Down here in Florida, the house was 13,000 square feet. For us, that’s big. Three-story house. We don’t have basements. If we had a basement, it would be underwater. It had 11 bathrooms, 6 bedrooms, a two-story game room, two and a half kitchens, sauna, jacuzzi, trophy room, the whole nine yards. It’s a gorgeous house. It had been on the market for $1.2 million and hadn’t been sold because it had been partied in hardly.
When you walk into the game room, it had this beautiful big game room, corner fireplace, kegerators, the whole deal. When you walk into the room, the carpet in the room had beers. Do you know what beer smells like after twelve months if that house had been on the market? It smells like money. We bought that house for $650,000. We did about $80,000 of rehab to it. We put it back on the market. We sold it for $1 million cash and walked away with $159,000. That’s good stuff. The baseball player did a marketing package for us for the buyer. We had all the signed memorabilia and we put a package together for the buyer. It’s really cool.
I go out there to hit base hits all day long. That’s what I try to do. It’s a typical deal. I can’t help it every now and then. I hit a double and a triple. Every now and then I hit a home run or I hit a grand slam. If you’re out there kicking the ball around, you can’t help it. I want you to get a copy of the book, Your Personal Path to Prosperity. I also want you to check out what’s all included in this Marketing Magic system.You can do whatever you want to do in your business that makes sense to you. Click To Tweet
Jumpstart your way right into getting some leads right away. Go to 1000Houses.com/Dmail. You’ll be able to get in contact with Kathy. She’ll give you all the information you need. If not, make a decision, at least have some questions and call and get them answered. Everything will be over there. Is there anything you want to say before we wrap it up, Kathy? This is good for new people and for veterans because sometimes veterans stray away from the things that made us the money or we get off the basics. This is a basic which needs to be consistent. It needs to be all the time. You did say you have a season from October to March that you ramp up a little bit because you got the income tax built.
For everybody, that’s going to be a little different.
It is always good during Christmas and New Year’s. People say, “No one is doing anything during Christmas.” Let me tell you, no one is except for you and the one guy that desperately sells his house so he can have a Christmas. I’ve learned that if I stay open during the holidays, I have broken all my records in the month of December. If I decide to stay open in December, I’m the only one that’ll be answering the phone consistently and taking care of business. Chaos, death, divorce and past due bills don’t care if it’s December, April, January or March. There are as many of that stuff happening in December as in any other month. When someone needs to do something, they need to do something. I attribute the fact that I broke all my records in December because everyone else was off drinking eggnog. I decided I was going to bust ass that year.
I put a house under contract on Thanksgiving Day in 2020. That was the only two days the seller was going to be in town. I swear to you, this is true. The seller was in my kitchen mashing potatoes and I was writing a contract. You’re absolutely right.
I don’t doubt it. Check out Marketing Magic, 12 direct mail campaigns plus 24 additional marketing techniques to help you find all the motivated sellers you’ll ever need. Check it out at 1000Houses.com/Dmail. Anything you want to say before we wrap it up?
I’m looking forward to working with your folks. Besides the direct mail, there are 24 unique marketing tools in there. There are some good free marketing tools in there. If we have some beginners on the call with us, that’s another thing too with the direct mail. Even if you’re only mailing, I’ve got a stack of letters and testimonials from students who are only mailing 50 or 100 letters a week and they’re doing deals. It’s not like you’ve got to spend a lot of money to get yourself started. That’s another thing. The system is completely flexible. You can start now. You can do the mailings yourself. You can hire someone to do the mailings for you. I have company resources for companies that will do all the mailings for you.
The system is also completely flexible in that way. However you want to start is completely up to you. It’s a tool you’re going to use today, tomorrow, next week, next year or ten years from now. Your business and you will grow and change. Like you, Mitch, years ago, 10 to 15 houses a month was nothing. Now I’m moving to being an older fart. We’re doing fewer deals but more luxury-type properties so our paychecks are bigger. My rehab guys love it because they get to stay on one project longer instead of moving from house to house. They get to stay on one project longer and our paychecks are much bigger now. For me, that larger paycheck and fewer deals is where I want to be now. Years ago, we were doing 10 to 15 deals a month. You can do whatever you want to do in your business that makes sense to you.
I hope the newbies out there were paying attention. Sometimes if you can only afford to send 100, 200, 150 or 50, then you send what you can send. What happens is you’re being consistent until you get lucky or until you make a strike, then you’ll make $10,000, $15,000 or $20,000. Now, you have a budget and you’re starting to roll. If you’re new out there and you don’t have a lot of resources, you have to do what you can do until you hit one. Be careful when you hit one. You got to roll some of that money back into your business. You can’t take it all and buy a boat or something. You got to keep feeding your business.
I’m sure she talks about the importance of putting the money back in. For every deal you make, you got to make some money back out of it to replenish the advertising budget that made that deal happen. That’s common sense but a lot of times, that piece gets missed. I have private lenders and I borrow money from my private lenders. I always borrowed $2,000 extra than everything I can add up because it costs about $2,000 on average to find a house that you can buy for $0.50 on the dollar. People are like, “What’s the other $2,000 for?” “It’s for the advertising.”
I do the same thing.
I do about 100 houses a year. If I did not get the $2,000 from my private lenders for the house and borrow it back, that would be $200,000 a year. In five years, that’s $1 million because I didn’t take that little bitty $2,000 out on every transaction.
We’ve always done the same thing with our business as well. Back to your point, Mitch, there’s a whole section in my manuals that covers their budget, how much they should be investing, and what each thing costs. I completely cover budget in there for them as well. I want them to have every tool that they can possibly have to grow their real estate investing business. I also teach them how to work with realtors in their business. What kinds of deals should realtors be bringing to them? Now, maybe not so much, but this market isn’t going to stay forever. As your market changes and as the demographic that you’re marketing to changes, my system will work with them no matter what happened.
When you said now, maybe the realtors are not so much. I find that not to be true because now, the fruit is hanging so low that it’s so easy. When they find a dump, they don’t want to jack with it. When they find something that’s broken, slab or fire or whatever the case may be, they don’t want to mess with it because it’s too easy now to get a listing and sell it in a day.
That’s true. It’s a good point.
Kathy, this is exciting. I hope people do this. This episode was a little salesy than I normally do. I’m big on the content, but on this one, it’s such a no-brainer. I know Kathy for a long time. I know she puts out a quality product. She’s saying you’re going to have her for a year and her email address if you sign up. I don’t see how you go wrong with this. The only way you go wrong is if you buy it and you don’t do anything. If you’re going to buy it and not do anything, then don’t waste your money.
If you’re going to buy it and follow through, it’ll always work. It’s a matter of, “Do you work it? Do you know how to work it? Have you been paying attention? This works. It’s only a matter of time.” Check out 1000Houses.com/Dmail. That’s it, Kathy. I appreciate you taking the time to be on. I wish you success with this. I wish all you all out there who are foundering. I hope you pay attention here because this can be a way to get your pipeline full. There’s no doubt about it.
I appreciate you having me on the call again. We work really hard with your folks that come to us from the show. If they have questions, I’m more than glad to help. They have me one-on-one for a year to answer any question that they may have by email. They call me the fastest guru in the East, West, North and South because I’m receptive. I support my students and my customers. I want them to be successful. I want them to do as well as we have.
There’s no doubt that you’re passionate about it. You do fulfill because this isn’t the first time or the first thing that we’ve pushed that you do. We would know by now if you were shallow, and you’re not shallow. You’re very deep and you care a lot about your people. I know enough about this. What you’re talking about, that $1,200 is a real value. I know you said at $1,197, but I’ll call it what it is. It’s $1,200. It’s no big deal. $1,200 is nothing. What it’s going to cost your ass is if you don’t figure out a way to find some houses because if you’re trying to get away from that job or you’ve lost a job and you’re trying to find an income, you don’t have any time to waste either way. Check out 1000Houses.com/Dmail. Kathy, I’d like to thank you for being here.
Thank you for having me again, Mitch. I appreciate it. I’m looking forward to working with your folks. The folks in your group that we have worked with that have come off the show, they’re so excited and they’re hungry to do more deals. I enjoy working with those folks. Thank you to everybody who was on the show and thank you for taking a few minutes to read. I hope you get to implement it because this is such a great way to build a strong cornerstone for your real estate investing business.
I like to thank everybody for stopping by to get you some Kathy Kennebrook and learn about her Marketing Magic. Check it out, 1000Houses.com/Dmail. That’s it. We’re out of here, boys and girls. Bye now.
Thank you. Bye.
About Kathy Kennebrook
Kathy Kennebrook is the ultimate success story. She spent 12 years in the banking industry and another ten in sales logging thousands of miles each year in order to make a living before discovering the world of real estate. After attending some real estate seminars and club meetings this 4 foot 11 mother of two got really excited and turned on and before you know it she had bought and sold hundreds of houses using none of her own money or credit.
Kathy holds a degree in accounting and co-authored the book Walking With the Wise Real Estate Investor which also includes real experts Donald Trump, Suze Orman and Ron LeGrand. She developed a direct mail system that drives in motivated sellers by the herds begging her to buy their properties. She is the nations leading expert at finding motivated sellers using many types of direct mail marketing. She is known throughout the United States and Canada as the Marketing Magic Lady. She has put together a simple step-by- step system that anyone can follow to duplicate her success.
Kathy will show you how she generates an upper six figure income by mailing a handful of letters throughout the year to highly selected targets by knowing exactly what to send them, who to send them to and exactly how to deliver it.
The secrets that she is discovered will increase your business several fold if you implement them and make it easier for you to find the highest number of motivated sellers with the least amount of work. The philosophy The Less I Do, The More I Make is incorporated into her life and into the system you will be hearing about.