writing a neighbor letter on desk

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Most investors have a very simple business strategy:

Get properties under contract and flip them for a profit as soon as possible.

Sounds like a no-brainer, right?

This is the ideal outcome every seller strives for, but how exactly are YOU planning to do this? After all, it’s easier said than done.

When most people are on a mission to sell a property, they’ll start with things like:

  • Calling a real estate agent to list it for sale
  • Blasting an email out to their Buyers List
  • Going straight to Craigslist and listing it for free
  • Marketing it to their local REIA club
  • Listing it For Sale By Owner
  • Standing there, picking their nose because they have no idea what to do next

Some actions will be much more effective than others, but there is one particular action I’ve learned to take every time I'm trying to sell a property. This action wasn’t obvious to me at first (and I suspect it probably isn’t obvious to many people), and I want to make sure YOU know about it.

When I intend to sell a property ASAP, my first priority after taking possession of the property is to send out letters to all the neighboring property owners.

What is a “Neighbor Letter”?

A Neighbor Letter is a very simple, 1 – 2 page message that I compose with the intent of informing all of the surrounding property owners about a few things:

  1. I am the new owner of this property – which (in most cases) adjoins theirs.
  2. I intend to sell this property to someone very soon.
  3. If they want to buy this property, I am willing to give them that opportunity, and I will make the decision very easy for them (offering them cash and/or terms)

This has been a stunningly successful technique for me because, in many cases, I've found that several neighboring property owners would LOVE to buy the land or house next-door to them if they were only given a chance.

Why Neighbor Letters Work

In my case, I am almost always buying properties free and clear for 10% – 30% of market value, which makes it extremely easy to give my future buyer a great price and/or terms that they want.

Because I'm buying properties for such a low price, I usually have a large profit margin to play with, which allows me to sell the property for a very low price AND pocket a nice sum of cash in the process.

Of course, it helps if I can offer seller financing as an option, which significantly increases my profit and the types of buyers I can work with. If the buyer doesn’t have immediate access to funds, I can become their bank (and I will earn a lot more money in the long run).

Putting all these things together makes for a compelling selling proposition and generates a lot more interest in the properties I’m trying to sell.

How to Find Out Who Owns a Property

You can't reach out to your new neighbors until you know who they are and how to get a hold of them.

Since your goal is to send each of these people a letter, it starts with finding their names and mailing addresses (and remember, some of these people will be absentee owners).

There are a few ways to get this information. This video below explains one way to do it with a service called DataTree.

Get the DataTree Discount!

Once you have the mailing address for the surrounding property owner(s) you want to contact, it's just a matter of preparing your letter.

How To Write A Compelling Neighbor Letter

Since your goal is to motivate your recipient to say YES, you need to be sure you're weaving a few key elements of communication and persuasion into your message.

Basic Layout of the Neighbor Letter

  • Introduce Yourself
  • Explain Your Intentions
  • Property Information
  • Explain Why They Should Take Action
  • Lay Out The Consequences Of Inaction
  • Reiterate Why This Is A Deal They Can't Refuse
  • Call To Action (Give Them Your Contact Info)

When I first started writing these kinds of letters, this was the layout I used…

(Note: To avoid stifling your creativity, the examples below don’t contain the exact wording of my letters. If you want the precise verbiage that I use in my letters, you can download my templates at the bottom of this blog post)

Version #1 (Click to Enlarge)

neighbor letter template

I used this format for about three years, and it did a pretty good job of informing each recipient that the property was available to purchase (and I can only assume it gave people a feeling of “exclusivity” since they were one of a select few to receive this notification).

While I never kept the exact stats on this particular letter, I would estimate that I got calls back about 20% of the time, which resulted in actual sales about 10% of the time.

Also, keep in mind this letter technically consists of 2 pages. Page 2 would be a parcel map and/or other property images if available. Parcel maps effectively communicate where a property is situated (including the size, shape, and boundaries relative to neighboring properties). A good parcel map will help your recipient understand precisely what you’re offering them and where it lies relative to their property.

A few years into my investing career, I joined a mastermind group with a few other investors around the country who were pursuing a similar strategy to me. In our discussions, we came up with a new and improved version of this letter, which I’ll refer to as “Version #2” below…

Version #2 (Click to Enlarge)

neighbor letter template 2

I felt like this template was a big improvement from my original letter because it does a better job of identifying the specific benefits that will come with the decision to purchase. It instilled a sense of urgency by identifying what the neighbor stands to lose if they DON’T purchase this opportunity.

This is not a place for lying or scare tactics. The idea is to list some of the possibilities and reasons why, if you were in their position, YOU would want the same opportunity you’re offering them. The benefits of purchasing (and the downsides of failing to act) should be 100% legitimate, realistic factors that you don’t want them to overlook.

Again, I’ve never kept any specific stats on this letter either (so I can’t validate how much of an improvement it was). Still, I would estimate it generates closer to a 35% call-back rate, which ultimately results in about 20% of sales.

Luck Is A Factor

It should go without saying that these letters are NOT a “magic bullet.”

You never know the exact situation of the person you’re reaching out to. You could be offering them exactly what they’ve always wanted, or in some cases, they just won't care.

The key to success is consistency. Sending out well-crafted letters to every neighbor, every time. If you’re seizing all possible opportunities, you will eventually get results.

Is it worth your time and effort to contact these people, even if there are no guarantees that it will result in an immediate sale? Is it worth an extra 10 – 15 minutes of your time to try a few more things for a potential sale?

Well, I can’t speak for you… but after the first few sales it generated for me, I thought it was a no-brainer. If I can generate a faster sale even 5% of the time, why wouldn’t I take that chance??

Considering how laborious it can be to sell some properties (and considering how much faster and easier this could make my selling process – all without the help of a real estate agent), these letters have become the #1 action on my priority list.

Before I do anything else – I reach out to the neighbors.

Want to Use My Neighbor Letter Templates?

Similar to my blog post about my postcard templates, the examples above are only meant to show you the format of my neighbor letters, not the exact wording.

You may very well be a better writer than me. With this in mind, I don’t want to dictate how you compose your written communication. Remember… my letters have evolved quite a bit over the years, so I don't want to imply that my letters have the best copy ever written.

That being said, I know from experience that it requires A LOT of time and mental energy to compose a well-written letter. If you don't have the time or desire to come up with something on your own and test it for years to see what results you get, I understand where you're coming from.

For that reason, I'll make this easy for you. If you'd rather cut to the chase, you can purchase my exact, word-for-word templates below for less than the cost of a roll of stamps.

BONUS!

I will also give you two additional templates that can be used if/when you're trying to BUY from a neighboring property owner. These take the reverse approach and can be particularly useful if you're trying to expand the footprint of a property you already own (rather than the other way around).

Either way – I think you'll find that all four of these templates are nice tools to have at your disposal when the situation calls for them.
neighbor letter kit couponNote: When you sign up as an REtipster Email Subscriber, you’ll get instant access to these templates for FREE (along with a truckload of other free tools, calculators, video tutorials, and more as part of the REtipster Toolbox). No pressure, of course; I just want to make sure you're aware!

About the author

Seth Williams is the Founder of REtipster.com - an online community that offers real-world guidance for real estate investors.

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