TL;DR
- SMS effectiveness is declining — carrier filtering blocks 20-40% of investor texts before they reach recipients
- Channel ranking per 8020REI recommendation: Direct Mail > Cold Calling > Skip Trace > SMS
- Best use case: Follow-up channel for warm leads, NOT primary cold outreach
- TCPA compliance is non-negotiable — violations run $500-$1,500 per message
- If using SMS, AI-targeted lists reduce wasted messages on unlikely sellers
When SMS Still Works
SMS isn't dead, but its role has narrowed significantly. Here's where it still delivers value:
Follow-Up Sequences for Warm Leads
When someone has already responded to another channel — returned a mail piece, left a voicemail, visited your website — SMS follow-up makes sense. You have implied interest, response rates are 5-10x higher than cold SMS, and you have a defensible consent argument.
After Mail Piece Delivery
A text 5-7 days after a mail piece arrives can catch sellers who saw your mail but didn't act. "Hi [Name], I sent you a letter about [Property Address] last week. Still interested in discussing options? - [Your Name]" This sequence consistently outperforms mail-only campaigns.
Opt-In Situations
Website form submitters, inbound callers who didn't convert, previous responders — anyone who initiated contact can legitimately receive SMS follow-up. These campaigns see 8-15% reply rates because the recipient expects communication.
When SMS Doesn't Work
Cold Outreach to Purchased Lists
Client Results
“We stopped cold SMS entirely after carrier filtering hit 35%. Now we only text leads who've responded to mail first — our reply rate went from 2% to 11% on those warm leads.”
— Houston investor, 68 deals/year
This is the highest-risk, lowest-reward use of SMS. You're blasting messages to people who never opted in, using contact info from skip trace or list purchases. Carrier filter rates are highest here. TCPA exposure is maximum. Response rates have dropped below 1% in most markets.
If you're doing cold SMS to purchased lists, you're paying for messages that don't arrive, accepting liability for messages that do, and getting minimal response for your trouble.
High-Filter Markets
Some markets have particularly aggressive filtering. Dense urban areas, markets with high investor activity, and regions where carriers have received complaints see higher block rates. Test your delivery rate before committing budget — send test messages to your own phones using the same platform and messaging.
Without Proper Documentation
If you can't prove consent, you shouldn't be texting. "They were on a list I bought" is not consent. "They own a distressed property" is not consent. Prior express written consent requires a clear, written agreement that specifically authorizes text messages.
The TCPA Reality Check
What Qualifies as Prior Express Written Consent
- Signed paper or electronic form
- Clear and conspicuous disclosure that texts may be sent
- Specific authorization for the type of messages you'll send
- Includes the phone number to be contacted
What Does NOT Qualify
- Purchasing a list with phone numbers
- Existing business relationship (this covers calls, not texts)
- Property ownership records
- Skip trace data
- "Implied consent" from any source
Documentation Requirements
Keep consent records for at least 4 years (statute of limitations plus buffer). Record the source, date, IP address (for electronic), and exact consent language. Many investors use compliant platforms that timestamp and archive consent automatically.
Real Penalties from FCC Enforcement
The FCC has issued citations ranging from $40,000 to $225 million for TCPA violations. Even small operations face five and six-figure settlements. The per-message penalty structure means small campaigns create massive exposure.
SMS Campaign Economics
Use our [SMS ROI Calculator](/resources/sms-roi-calculator) to model your specific scenario.
Here's what the math typically looks like:
Cost Structure - Platform fee: $50-200/month - Per-message cost: $0.02-0.05 outbound - Skip trace for numbers: $0.10-0.20/record - 10DLC registration: $15-50 setup + ongoing
Realistic Performance (Cold SMS) - Delivery rate: 60-80% (after filtering) - Response rate: 0.5-2% - Lead-to-deal conversion: 2-5%
Example: 5,000 Cold Messages - Cost: ~$300 (messages) + $500 (skip trace) + $100 (platform) - Delivered: 3,500 (70% delivery) - Responses: 35-70 (1-2% of delivered) - Deals: 1-3 - Cost per deal: $300-900
Compare to direct mail at $2,000-3,000 cost per deal, SMS looks good on paper. But factor in TCPA risk and the declining delivery rates, and the picture shifts. Use the [Unified Campaign Calculator](/resources/campaign-calculator) to compare all channels side by side.
The Multi-Channel Approach
SMS as Part of Sequence, Not Standalone
The most effective SMS use is integrated into multi-channel sequences:
Example Sequence - Day 1: Mail piece arrives - Day 7: SMS follow-up ("Did you get my letter about [Address]?") - Day 14: Cold call attempt - Day 21: Second mail piece (different messaging) - Day 28: Final SMS ("Last check-in on [Address] — happy to chat if timing changes")
This sequence uses SMS to reinforce mail and calling, not replace them.
When to Drop SMS Entirely
Consider removing SMS from your mix if: - Your delivery rate falls below 60% - Response rates drop below 0.5% - You've received any TCPA threat letters - Your market is heavily saturated with investor texts - You can't maintain proper consent documentation