To Buy or Not to Buy Leads…

To Buy or Not to Buy Leads…

3 min read
Ken Corsini

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 houses in Metro Atlanta since 2005.

Experience
With over 15 years of experience in the real estate industry, Ken has expanded his original flipping business into multiple independent real estate businesses, including Red Barn Real Estate, with over 180 agents in Metro Atlanta across four offices; Red Barn Construction, a custom home-building company specializing in modern farmhouses across North Atlanta; Red Barn Renovations, a full-service renovation company; Black Oak Mortgage, a direct lending company based in Woodstock, Georgia; and InvestorSumo, a technology company focusing on CRM and data needs for real estate investors.

Having been involved in thousands of transactions and having owned over 800 houses, multiple commercial and multifamily properties, and more, Ken brings a wealth of knowledge and experience to the BiggerPockets community. He has authored over 100 blogs and currently hosts the “Best Deal Ever Show” on the BiggerPockets YouTube channel. He is also the host of the popular Deal Farm Podcast.

Ken is currently writing a book in conjunction with BiggerPockets called “Profit Like the Pros,” scheduled for release in Fall 2020.

He and his wife also run Roc.Star Kids, a non-profit organization focused on the needs of children and families in the fight against childhood cancer. For more information on this very personal cause, check out their story here.

Press
In addition to HGTV and HGTV Magazine, Ken has been featured on The Today Show, People Magazine, The LA Times, Think Realty Magazine (cover), TV Insider, In Touch Weekly, Life and Style Magazine, The Wrap, The Atlanta Journal Constitution, UGA Today, US Chamber of Commerce, PopSugar, Entertainment Magazine, and a number of local periodicals.

Education
Ken has a Business Degree from the University of Georgia and a Masters Degree in Building Construction from Georgia Tech.

Accreditations
Ken is currently licensed as a general contractor (commercial) in the state of Georgia.

Follow
RedBarnHomes.com
Instagram @kencorsini
Twitter @kencorsini
Facebook

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I’ll be honest, this article is going to be more about my research into this area and less about my experience. Honestly, I’m interested in creating some good dialogue about this topic and hearing from you regarding your experience buying leads. Having talked with other investors about this topic, it seems like I get a wide variety of responses regarding which services are worth the money and which ones are not.

Over the last several years, more and more companies and websites have popped up offering seller leads to investors and real estate agents. For those investors who prefer to avoid MLS listed properties and would rather negotiate a deal directly in an effort to get the best deal possible (rather than buying from a wholesaler) … these types of services can prove to be very helpful. In most cases, the paid service will provide some sort of lead for a motivated seller that the investor can then contact directly in an effort to negotiate a favorable purchase (typically well below market value).

Not having used any of these services for any amount of time myself, I can’t really comment on which types of services seem to provide the best ROI. However, here is a list of the different types of purchased leads that I’ve found in my research as well as some initial observations:

Subscription to a Database That Can Be Marketed To

There are a few services out there where an investor can pay to have access to a nationwide database of potential leads. I say “potential,” because the data provided is really just a starting point – not a true lead.

For example, the service may offer data on people with high equity properties, out of state owners or even owners of vacant properties. These lists are definitely valuable, but require that the investor market to this segment directly and generate their own leads. Depending on how good the data is, this can be a great place to uncover hidden leads, but will definitely require some effort on the part of the investor to draw them out.

Subscription to Motivated Sellers in Particular Counties or Zip Codes

It seems there are a number of services out there that offer subscriptions to specific zip codes or counties.

The investor can pay a flat rate for these particular areas and get some projected number of leads per month that the service generated in those areas. My initial observation to these types of services is that the leads aren’t as good as you might hope and you’re typically competing against other investors and real estate agents who have subscribed to the same areas.

However, even if you spend a few thousand dollars over the course of a year and can snag one or two properties from the service, it can more than pay for itself.

Exclusive Leads in a Particular Geography

There are a handful of services out there that will let you have exclusive rights to a particular geography. In exchange for a hefty monthly subscription, the investor actually receives all of the leads that the service provider generates for that particular territory. While the cost for these leads may be higher, the advantage of owning the lead rather than competing against other subscribers may very well be worth it.

Pay Per Lead

Another interesting service that I’ve found actually lets you pay one price for each lead. Paying for an individual lead may seem expensive, but the question is whether or not it’s cheaper and/or easier than doing the marketing yourself. If you can determine that for every X leads you purchase from this source, you close 1 deal … you can build your model around these metrics.

The bottom line in determining whether or not to buy leads is whether the ROI makes sense. If you’re a seasoned investor and already have proven techniques for marketing and generating motivated seller leads, buying leads may not be of interest to you. However, for those investors that are new to this or simply want to find new ways of acquiring property, looking into new sources of property leads may not be such a bad idea.

We are in the process of exploring all of these different paid lead sources right now in an effort to see if any of them produce as good or better ROI’s than other lead generating marketing that we do. I am hopeful that some of them will prove to be worth the money. I’ll plan on writing a follow-up article in about six months to report back on our findings.

In the meantime, I’d love to hear from some of you regarding your success or lack of success using these different types of paid lead services.

Photo: Refracted Moments™