How should you qualify a quality wholesaling lead?
This question can be so elusive to answer. I hear many different responses when this question is asked. Most of all, I hear you never know when a lead is a quality lead until you start vetting the deal.
I beg to differ because when wholesaling, the majority of the time it’s not necessarily about vetting the deal, but about vetting the seller.
So let’s briefly discuss what a quality lead is and how to qualify a lead.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
What is a Quality Lead?
I can give you a very basic definition: A quality lead is a lead that has potential when worked to be productive and increase your bottom line.
We all should know that every lead is not a quality lead, but some find it difficult to distinguish between the two. So using the basic definition above, how do we clearly qualify a lead?
How Not to Qualify a Lead
If you’re not exactly sure how to qualify a lead, this is a good problem. This means you have leads coming in. In this market cycle, it is not as easy as some make it seem. So if you’re facing this problem, congratulations.
Every lead is valuable initially. Again, in this market it can be challenging to get leads. When you do receive a lead, you have to know how to cultivate it.
If you’re receiving inbound calls, making outbound calls, or door knocking, you have to be objective when cultivating a lead. An issue that I’ve had in the past was overlooking leads. I would disqualify some leads if they would say things like, “If you can’t give me retail price, don’t waste my time.”
I learned from that mistake after seeing a property sell for less that what I offered.
After kicking myself, I called the seller and asked why. They told me that the investor they sold to happened to call when they hit a rough patch and needed to sell immediately. Because I disqualified the lead, I lost thousands, but learned a very valuable lesson. I learned no matter what is said, I have to be consistent and persistent to be successful.
When speaking to sellers, you can’t always take what they say at face value. If you disqualify a lead based on a single conversation, you could be losing a lot of money. So I changed my approach.
How I Qualify Leads Now
I make sure I set aside quality time for each lead. I clearly document the conversation with the seller and speak with them multiple times to validate what was said in the prior conversation. Sellers can overlook details sometimes intentionally because they are guarded. Knowing this, I do not rush the conversations. I aim to get as warm and fuzzy as possible to diffuse the tension of the seller/buyer scenario.
Without getting into details, I ask a lot of leading questions. At the end of the conversation, I reiterate what we discussed and quickly review their answers with them. I then schedule an appointment to view the property and further the conversation in person.
During the in-person walk through, I review what I believe I can do for them and what they can expect. I’m a strong believer that no lead should be left unresolved. You must get a firm no or yes before killing the lead or closing the lead. In most cases, we still follow up with the sellers even when we receive a firm no. Remember, things change over time.
Finally, please remember leads are too expensive to go uncultivated. Use an open-ended approach when qualifying any lead. Each seller you speak with has a different story, and that story may evolve.
Don’t do what I did and disqualify a lead because you don’t know the right questions to ask.
Curious what specific questions I ask? What’s on your list of conversation points?
Comment below and we can chat!