Generating & Finding Leads

18 Replies

Hi BP!

I'm trying to figure out what else I can do or subscribe to, with the purpose of generating more leads. To date, I have:

  • Found my niche (BRRRR)
  • Defined my market (KC metro with good schools)
  • Connected with several realtors in the area
  • Subscribed to MLS searches, auction searches, and Craigslist (this last one could improve some more)
  • Joined a dozen or so wholesaler lists

I've ran 100+ properties through my criteria and, so far, only one has made sense by the numbers. I'm considering yellow letters/mailing campaigns as an avenue but it seems like everyone is doing this, too. What else can I be doing to find more deals? Thanks!

Well you could change your criteria! Only sort of kidding, have you done a BRRRR in the KC market? Maybe you're not accounting for something correctly when you underwrite. I see decent SFH BRRRRs fairly frequently. Are you targeting SFH?

@Lee Ripma Purchase Price = (ARV * 70%) - Repairs, right? I’m feeling more confident in my ARV assessment but admit I could get better with estimating skills. I’ve got specific criteria I’m looking for purchase, but what parts do you have your eye on? More so, thoughts on generating more leads?

@Aaron Winters

The leads thing is tough. Would you rather spend 100 hours and $5000 doing direct marketing or relax your criteria a little? Or maybe learn to dial in the numbers a little more? If you've got a target area I think that the approach that @Anton Ivanov details is a good one. I've looked into a lot of deal finding strategies but have realized that you've got to spend considerable time and money to do it. I care more about the time than the money. The other day I called someone who's property I wanted to buy, and spent way too much time on the phone with him. In KCMO people's phone numbers are registered with the property, so you actually can call them. You can look up their names or do a bulk request from Jackson County. So you'll be able to get that list. Maybe you can outsource pulling a list of motivated sellers. 

People will say it's a numbers game for the direct marketing, you've just got to hit a TON of folks with direct mail, FB ads, SEO yourself to the top of the stack in google or buy the adwords that hit for RE motivated sellers (adwords for motivated sellers are very expensive). I tried buying leads from leadgeeks ($150 pop) and they never delivered a single one (I got a refund after 4 months of nothing). Investor carrot sells out of the box websites and will teach you how to direct traffic to them, but it's just a whole lot of work. I did it and ran FB ads. In the end I realized that if I want to do this I should pony up for a professional to do it like https://silverstreetmarketing.com/. I would rather save my time and give a realtor a list and say, any of these you get under contract I will buy and you take both sides of the commission. 

If you're BRRRR properties but you haven't done it, the first one will teach you a ton about the cost and process of rehabbing houses. I would view that first one as a learning experience. Sure, you want the numbers to work, but you're really doing it to learn. Once you learn you'll do better on the next one.

I really like the budgeting of house flipping spreadsheet for estimating repairs and the same guy is working on a new software called flipper force. Once you do it a bit you'll learn the costs and get good contractors.  

The easiest way to find a deal is to make offers on homes that are on the market. Maybe 1 in 10 is motivated and will take a lower offer. Maybe you can offer all cash, or offer something else they want. My last deal was on the MLS, I submitted a cash offer over asking the day of list (which my realtor told me about). I let the tenants stay for 90 days after close. That is what he cared about. Is it a home run deal? Perhaps, it will generate good cash flow for me. Is there a better deal out there? Maybe, but I'd rather do this one now, and then do another and another. Better done than perfect. Better learning than sitting still.

So in conclusion to my rant, if you want to be a marketer, do it. I'd rather find people who can bring my deals and leverage their time, since I want to be a real estate investor. 

Originally posted by @Lee Ripma :

@Aaron Winters

The leads thing is tough. Would you rather spend 100 hours and $5000 doing direct marketing or relax your criteria a little? Or maybe learn to dial in the numbers a little more? If you've got a target area I think that the approach that @Anton Ivanov details is a good one. I've looked into a lot of deal finding strategies but have realized that you've got to spend considerable time and money to do it. I care more about the time than the money. The other day I called someone who's property I wanted to buy, and spent way too much time on the phone with him. In KCMO people's phone numbers are registered with the property, so you actually can call them. You can look up their names or do a bulk request from Jackson County. So you'll be able to get that list. Maybe you can outsource pulling a list of motivated sellers. 

People will say it's a numbers game for the direct marketing, you've just got to hit a TON of folks with direct mail, FB ads, SEO yourself to the top of the stack in google or buy the adwords that hit for RE motivated sellers (adwords for motivated sellers are very expensive). I tried buying leads from leadgeeks ($150 pop) and they never delivered a single one (I got a refund after 4 months of nothing). Investor carrot sells out of the box websites and will teach you how to direct traffic to them, but it's just a whole lot of work. I did it and ran FB ads. In the end I realized that if I want to do this I should pony up for a professional to do it like https://silverstreetmarketing.com/. I would rather save my time and give a realtor a list and say, any of these you get under contract I will buy and you take both sides of the commission. 

If you're BRRRR properties but you haven't done it, the first one will teach you a ton about the cost and process of rehabbing houses. I would view that first one as a learning experience. Sure, you want the numbers to work, but you're really doing it to learn. Once you learn you'll do better on the next one.

I really like the budgeting of house flipping spreadsheet for estimating repairs and the same guy is working on a new software called flipper force. Once you do it a bit you'll learn the costs and get good contractors.  

The easiest way to find a deal is to make offers on homes that are on the market. Maybe 1 in 10 is motivated and will take a lower offer. Maybe you can offer all cash, or offer something else they want. My last deal was on the MLS, I submitted a cash offer over asking the day of list (which my realtor told me about). I let the tenants stay for 90 days after close. That is what he cared about. Is it a home run deal? Perhaps, it will generate good cash flow for me. Is there a better deal out there? Maybe, but I'd rather do this one now, and then do another and another. Better done than perfect. Better learning than sitting still.

So in conclusion to my rant, if you want to be a marketer, do it. I'd rather find people who can bring my deals and leverage their time, since I want to be a real estate investor. 

 Good to meet you.

I choose to be both.. A Marketer and an Investor. And I have bought a lot more than most fewer than some. 

The reality is I can enter your market tomorrow with direct mail, PPC, TV, facebook, etc and capture a really good return. You can't enter mine with the idea that all you are is a real estate investor.

If all you want is a JOB then continue. If you want a way to move out of having a JOB then market. 

Whether it is Sweat or Paid marketing is required. 

As for the Realtor and paying them to get you deals... That 6-7% commision is a marketing dollar so you  in fact are marketing. 

I have bought a 1000 houses.  Have you without marketing?

Originally posted by @Aaron Winters:

Hi BP!

I'm trying to figure out what else I can do or subscribe to, with the purpose of generating more leads. To date, I have:

  • Found my niche (BRRRR)
  • Defined my market (KC metro with good schools)
  • Connected with several realtors in the area
  • Subscribed to MLS searches, auction searches, and Craigslist (this last one could improve some more)
  • Joined a dozen or so wholesaler lists

I've ran 100+ properties through my criteria and, so far, only one has made sense by the numbers. I'm considering yellow letters/mailing campaigns as an avenue but it seems like everyone is doing this, too. What else can I be doing to find more deals? Thanks!

 @Kim Tucker What are your thoughts on generating leads? I know you've sent me information on mailing campaigns - how do you measure success on these?

It's incredibly dependent on the market you're playing in and the resources you can dedicate to it. Unless you're running a very large-scale operation (all calls answered live, 25k pieces per month, CRM lead tracking & follow up), direct mail in larger markets will likely not generate revenue in excess of the cost. Happy to share my experiences here if anyone is interested.

Regardless of the tactic, it all boils down to a cost per lead generated (and the subsequent revenue generated). Some channels will be easier to track than others, but I always recommend having systems built out to track all your marketing efforts and ways to attribute revenue back to them. There will be varying levels of precision, but it will help you understand where to focus both your time and your capital.

@Michael Quarles you make a great point about building in the cost of a realtor v cost of marketing; if you can handle the paperwork. What bare minimum commitment would you recommend to an investor with a 9-5? Letters, localized phone number, answering service; what else?
Originally posted by @Aaron Winters :
@Michael Quarles you make a great point about building in the cost of a realtor v cost of marketing; if you can handle the paperwork.

What bare minimum commitment would you recommend to an investor with a 9-5? Letters, localized phone number, answering service; what else?

 Good to meet you.

Bare minimums are.

6 Pieces of mail over 6 months average cost is .52 cents per piece, list included. target 2000 people = 6240.00

10 Phone Lines, CRM, Text Marketing, Email and Webforms all at 99 a month. = 594.00

5 Polo Shirts that read I Buy Houses at 45 each = 225.00 ( I already own pants)

2 boxes of 1000 business cards = 100.00

10 tanks of gas at 80 bucks a tank = 800.00 (eliminate this if buying virtually)

Someone to show you how to buy houses for profit = 1397.00

Total = 9356.00

Median house sold in my city 238,000.00 x 6% =14,280.00 cost on each house

However in six Month will buy a lot more than just one and each one I ill buy at 65% of As Is value.. Or buy an equity position of 83,300.00. So for me it isn't hard to conclude that buying without a Realtor is a better play... With that said I will always use a Realtor to sell as it is the highest and best use of my resource. 

If I put my Broker hat on I still couldn't justify using a Broker to purchase real estate. 

Originally posted by @Aaron Winters :
@Derek L. I’d love to hear your experiences, from starting out to recommended products or best practices to what to do with excess leads.

Happy to help, shoot me a DM and we can connect.

@Aaron Winters

Tell them what you want and get them to go find it. It helps if you really narrow down exactly what you want, better yet, you have a list. I really like Tom Cafarella's marketing system and if I was going to get serious about marketing I would think about implementing his system. He's got a bunch of free content where he explains it and he has a podcast. That guy knows how to leverage other people's time! When I first experimented with RE marketing I was worried about what to do with all my leads. Then I realized how much time and money it really takes to generate those leads and realized that I shouldn't be doing it. 

@Derek L.

This is sort of what I was getting at, unless you go big in the marketing space, it's tough to be competitive and if you don't spend enough time and money then you're really just wasting both. I also invest in a market that is 1600 miles away, so I don't have folks to go on motivated seller appointments that I generate and I can't do it. Hence, I have taken the approach of getting others to bring me the deals, and compensating them with commissions. Certain people have certain things they are good at. Some are great at finding motivated sellers, getting properties under contract, and passing the contracts off. Some are great at marketing, some are great at project management. I'm good at forming partnerships, underwriting deals, having a vision for a project that goes along with my numbers. Could I be good at the marketing piece? Perhaps. Could I be good at talking to the motivated sellers and getting them to sell? I don't actually think so. My approach is just to focus on my strengths for now, since I have a full-time job unrelated to RE. 

Originally posted by @Michael Quarles :
Originally posted by @Aaron Winters:
@Michael Quarles you make a great point about building in the cost of a realtor v cost of marketing; if you can handle the paperwork.

What bare minimum commitment would you recommend to an investor with a 9-5? Letters, localized phone number, answering service; what else?

 Good to meet you.

Bare minimums are.

6 Pieces of mail over 6 months average cost is .52 cents per piece, list included. target 2000 people = 6240.00

10 Phone Lines, CRM, Text Marketing, Email and Webforms all at 99 a month. = 594.00

5 Polo Shirts that read I Buy Houses at 45 each = 225.00 ( I already own pants)

2 boxes of 1000 business cards = 100.00

10 tanks of gas at 80 bucks a tank = 800.00 (eliminate this if buying virtually)

Someone to show you how to buy houses for profit = 1397.00

Total = 9356.00

Median house sold in my city 238,000.00 x 6% =14,280.00 cost on each house

However in six Month will buy a lot more than just one and each one I ill buy at 65% of As Is value.. Or buy an equity position of 83,300.00. So for me it isn't hard to conclude that buying without a Realtor is a better play... With that said I will always use a Realtor to sell as it is the highest and best use of my resource. 

If I put my Broker hat on I still couldn't justify using a Broker to purchase real estate. 

Are these all services your company offers? Do the text and phone lines come with a support team (someone to answer and get prelim info) or is this just foot-in-the door costs?

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