{"id":173947,"date":"2024-06-12T14:13:01","date_gmt":"2024-06-12T20:13:01","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=173947"},"modified":"2024-06-12T14:13:45","modified_gmt":"2024-06-12T20:13:45","slug":"how-investors-can-build-a-powerful-lead-list-and-keep-deals-flowing","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-investors-can-build-a-powerful-lead-list-and-keep-deals-flowing","title":{"rendered":"What It Takes for Investors to Build a Powerful Lead List and Keep Deals Flowing"},"content":{"rendered":"\n

This article is presented by<\/em>\u00a0DealMachine<\/a>. Read our\u00a0editorial guidelines<\/a>\u00a0for more information.<\/em><\/p>\n\n\n\n

A well-built, up-to-date lead list is an essential component of success in real estate investing. Whether you are a seasoned investor or just starting out, the quality of your lead list has a huge impact on how many conversions you\u2019ll get and how much profit you\u2019ll generate.\u00a0<\/span><\/p>\n\n\n\n

This guide will focus on the importance of list building in real estate investing and explore the digital innovations <\/span>that are<\/span> making successful list building <\/span>easier<\/span> than ever. Beginner investors will find this information especially useful. <\/span><\/p>\n\n\n\n

We\u2019ll cover creating a targeted list of potential investment properties using <\/span>both traditional methods<\/span> and digital tools. We will also provide insights into how software like DealMachine can make building and managing these lists more effective and efficient.<\/span><\/p>\n\n\n\n

What Is List Building?<\/span><\/h2>\n\n\n\n

List building in real estate is <\/span>pretty much<\/span> exactly what it sounds <\/span>like:<\/span> You, the real estate investor, compile a list or database of prospective leads for investment properties, including several <\/span>key<\/span> items of information about each <\/span>of the potential leads<\/span>.<\/span> These will vary depending on your investment strategy, but all real estate lead lists will include the contact details for property owners. You\u2019ll <\/span>definitely<\/span> need these\u2014and you\u2019ll want to make sure they\u2019re up to date\u2014because you\u2019ll use your list to contact your leads. <\/span><\/p>\n\n\n\n

We say \u2018\u2018list,\u2019\u2019 but <\/span>in reality,<\/span> a lead list is more of a spreadsheet.<\/span> The further <\/span>along<\/span> you are on your investment journey, the more in-depth and granular your list will be. Beginner investors often start <\/span>out<\/span> with generic lists they\u2019ve bought from their local estate agent or pulled from their local county tax office, only to realize pretty soon after that it doesn\u2019t <\/span>really<\/span> serve their needs as an investor very well. <\/span><\/p>\n\n\n\n

Let\u2019s discuss the difference between generic and targeted lists in more detail <\/span>to better see<\/span> why the latter is far superior to the former.  <\/span><\/p>\n\n\n\n

Traditional vs. Targeted List-Building Techniques<\/span><\/h2>\n\n\n\n

A good lead in real estate is a lead that is <\/span>currently relevant<\/span><\/em>. You could have a list of thousands of leads, but if most of them aren\u2019t <\/span>relevant<\/span> to what you\u2019re trying to achieve\u2014or worse, are out of date and no longer <\/span>relevant<\/span> to anyone\u2014your list is pretty useless and won\u2019t get you that many conversions. <\/span><\/p>\n\n\n\n

Traditionally, real estate investors would buy property lead lists from their local real estate agents (for a fee)<\/span>, <\/span>or <\/span>they would<\/span> manually compile a list by scouring local tax records.<\/span> Eventually, looking up property details became <\/span>easier<\/span> thanks to <\/span>the digitization of<\/span> property records. Traditional list building can also involve scouring online property ads and social media and even simply exploring your neighborhood for properties <\/span>that <\/span>are<\/span> marked<\/span> for sale.<\/span><\/p>\n\n\n\n

There are several <\/span>problems<\/span> with traditional list building.<\/span> <\/span><\/p>\n\n\n\n

First, a traditional list will <\/span>pretty much<\/span> inevitably be a generic lead list. What does generic mean here? <\/span>This<\/span> means that the properties <\/span>that are<\/span> visible to you via this list are the <\/span>exact<\/span> same properties that are<\/span> visible to all other investors in the area.<\/span> That translates into stiff competition, especially in hot housing markets. <\/span><\/p>\n\n\n\n

Generic lists are also pretty much always static, <\/span>which means that<\/span> they\u2019re out of date almost as soon as you\u2019ve acquired them. <\/span>This<\/span> applies especially to pre-bought lists based on MLS data from your local agent.<\/span><\/p>\n\n\n\n

Think about it:<\/span> Homes often stay on the market for less than a month in competitive markets; if you get your list two weeks into a month, for example, there is a high chance that a good proportion of those properties will already have sold. Lead generation is an ongoing activity for every investor; the faster you\u2019re able to update your list, the better your conversion rates because you\u2019ll only be going for properties that are <\/span>actually<\/span> available.<\/span><\/p>\n\n\n\n

The other major issue with generic lists is that they don\u2019t let you develop much of an individual strategy as an investor. \u201cContact everyone\u201d isn\u2019t <\/span>really<\/span> a good strategy if you\u2019re approaching a disparate group of people. The majority will not be responsive because whatever <\/span>you\u2019re offering<\/span> them won\u2019t resonate. <\/span><\/p>\n\n\n\n

In business outside the real estate niche, lead lists <\/span>are also known<\/span> as audience lists, <\/span>and this<\/span> is a helpful way to think about them. Who is your audience? Are you targeting people who need to sell fast due to financial problems? <\/span>Or <\/span>is your target demographic people who are<\/span> motivated to sell for a completely different reason (e.g., downsizing for retirees or upsizing for young and aspiring families)?<\/span><\/p>\n\n\n\n

One thing is certain: It\u2019s almost impossible to succeed <\/span>long term<\/span> without a clear strategy. You need to have a very good idea of who <\/span>exactly<\/span> you are targeting and know your demographic and the specifics of your neighborhood. A high-quality, targeted list will always be hyperlocal and include data <\/span>that are<\/span> relevant to the exact market you\u2019re targeting.<\/span> <\/span><\/p>\n\n\n\n

Here\u2019s where using digital tools to create your list is <\/span>useful<\/span>.<\/span> <\/span><\/strong><\/p>\n\n\n\n

Advantages of Using Digital Tools<\/span><\/h2>\n\n\n\n

Digital tools like DealMachine enhance the efficiency and effectiveness of list building through automation and data integration. As an investor, you won\u2019t need to worry about integrating data sets from different sources into your lead list because the tools will do that for you. Although no data set is 100% complete, quality list builders get pretty close, pulling data from county records, MLS databases, online property listings, and more. <\/span><\/p>\n\n\n\n

Remember: While digital list builders pull from millions of listings across the country, they will only show results <\/span>that are<\/span> relevant to your specific search criteria. These will be based on current, not stale data, meaning that you can stay ahead of the competition and approach great leads before investors who only use conventional list-building methods.<\/span><\/p>\n\n\n\n

A digital list builder like DealMachine updates the list daily. If a property on your current list <\/span>is sold<\/span>, it <\/span>is automatically removed<\/span>. This way, you don\u2019t need to waste time reaching out to leads that are no longer relevant. <\/span><\/p>\n\n\n\n

Step-by-Step Guide to Building Targeted Lists<\/span><\/h2>\n\n\n\n

All this <\/span>said,<\/span> the best way to build a targeted list will still involve some elements of traditional list building. <\/span>You\u2019ll <\/span>just<\/span> need to be smart about how you use data obtained <\/span>in the <\/span>traditional<\/span> way<\/span>.<\/span> A list pulled from the MLS, for example, may still offer you some good insights into your local market\u2014but in this case, you\u2019ll need a <\/span>larger<\/span> data set <\/span>to be able<\/span> to spot patterns in your local market. <\/span><\/p>\n\n\n\n

With an MLS list, <\/span>it\u2019s always best to request<\/span> data from the past six months.<\/span> That way, you\u2019ll <\/span>be able to<\/span> see where those hyperlocal housing hot spots are by looking at where the majority of sales happened over the last few months. <\/span><\/p>\n\n\n\n

This<\/span> is a good starting point for zooming in on a specific demographic. Now, you are ready to make your search even more granular and effective <\/span>with the use of<\/span> a digital list builder. A list builder will first have you select your geographical area and then ask you to <\/span>select<\/span> your lead search criteria. <\/span><\/p>\n\n\n\n

These can range from property type (e.g., single-family or multifamily), last known sale price, financial status (e.g., preforeclosure), and other criteria that will help you identify and contact leads that are not visible using traditional tools. For example, you can select \u201cabsentee owners\u201d as a filter, <\/span>which will narrow down<\/span> your lead search to vacant homes. DealMachine has over 70 filters that help you <\/span>really<\/span> drill down into a specific audience. <\/span><\/p>\n\n\n\n

You\u2019ll also be able to narrow down your viewing area manually, and you can <\/span>really<\/span> zoom in on <\/span>a very specific<\/span> location here\u2014as small as a couple of blocks.<\/span><\/p>\n\n\n\n

Once you have your list, you are ready to <\/span>reach out to<\/span> your leads. A quality list builder will include an integrated mailing feature so you can start emailing prospective leads with a tailored message right away.<\/span> <\/span><\/p>\n\n\n\n

Every mailing campaign is a numbers game. If you are contacting thousands of potentially relevant leads in a single day, you\u2019re just that much closer to conversions than <\/span>if you are<\/span> manually contacting a dozen people in the area.  <\/span><\/p>\n\n\n\n

Real-World Success Stories<\/span><\/h2>\n\n\n\n

This<\/span> is the power of digital tools in action\u2014and there are real-world success stories that prove that it works.<\/span><\/p>\n\n\n\n

Atlanta-based real estate investor <\/span>Michael Blanchard<\/span><\/a> recently made $150,000 from just three deals using DealMachine\u2019s list-building tool. He achieved this by going very specific with his investment strategy: investing in mobile homes. <\/span>Michael\u2019s exact strategy involved buying land for mobile home use, buying mobile homes, and putting them on the land with permanent foundations, which allows him to qualify for conventional mortgages.<\/span> <\/span><\/p>\n\n\n\n

On DealMachine, Michael was able to find a combination of options\u2014from tear-down projects where he bought the land and put in a new mobile home to flip projects with existing mobile homes. Michael said that what attracted him to this investing niche was the \u201csimplicity and lack of competition, and lack of barrier to entry\u201d (with mobile homes, you don\u2019t need to qualify for expensive construction loans). The strategy has <\/span>definitely<\/span> paid off for him.  <\/span><\/p>\n\n\n\n

Connecticut-based real estate partner investors <\/span>Michael and Ryan<\/span><\/a> have made over $200,000 using DealMachine leads. They are averaging at least one or two deals per month using the hold\/flip strategy and zooming in on vacant homes. One of their most successful deals came after a seller responded to a postcard they sent <\/span>out<\/span> \u201cwithin days of receiving it.\u201d The property was a <\/span>vacant<\/span> three-bedroom family home, \u201cand we <\/span>really<\/span> like vacant because you\u2019re not inheriting a terrible tenant, and you don\u2019t have to worry about evicting.\u201d  <\/span><\/p>\n\n\n\n

Future Trends in List Building<\/span><\/h2>\n\n\n\n

As with any digital tool worth your time, digital list building is evolving and becoming more sophisticated. New digital tools like data analytics and artificial intelligence (AI) are adding more opportunities to dig deeper into seller data beyond property listings. <\/span><\/p>\n\n\n\n

Data analytics and AI are refining real estate investors\u2019 lead searches<\/span>, essentially<\/span> by looking where traditional data sets do not or cannot look.<\/span> From local property owners\u2019 social media behavior to their online searches, this type of data analysis can tell an investor <\/span>a lot<\/span> about what potential sellers want and care about. <\/span><\/p>\n\n\n\n

For example, if homeowners in a specific area you\u2019re targeting are concerned about a local school closure, you may choose to talk about this in your mailings. It\u2019s all about offering potential leads relevant information and offering to solve their specific problem. AI can help you <\/span>not just<\/span> identify what to target in your marketing campaigns but also help you create personalized copy that stands out to potential leads. <\/span><\/p>\n\n\n\n

Ultimately, the fuller the picture you can build of your potential lead, the more likely you are to get through with them with a relevant offer. Remember: Digital tools allow you, as an investor, to get through to people in a more effective way.<\/span><\/p>\n\n\n\n

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This article is presented by DealMachine<\/strong><\/h3>\n\n\n\n
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DealMachine empowers real estate professionals to discover and invest in off-market properties with ease, offering a comprehensive app that guides you every step of the way. From identifying potential investments to instantly accessing high-quality homeowner data for informed decision-making, we make investing simple and effective. Click to start expanding your portfolio today!<\/p>\n\n\n\n

\n Learn more about DealMachine<\/a>\n <\/div>\n\n\n\n
<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

This article is presented by\u00a0DealMachine. Read our\u00a0editorial guidelines\u00a0for more information. A well-built, up-to-date lead list is an essential component of success in real estate investing. Whether you are a seasoned […]<\/p>\n","protected":false},"author":613721,"featured_media":173930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4241],"tags":[],"class_list":["post-173947","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-business-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/173947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613721"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=173947"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/173947\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/173930"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=173947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=173947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=173947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}