Updated 4 months ago on . Most recent reply
Sourcing Sellers Funneling
Hello everyone,
I'm looking for insight into your experience with a few funnels. A partner and I are focusing on realtors, a probate list (cold emailing) updated once a month, D4D, and Craigslist. The Craigslist effort will mostly be just for this month to test the numbers, as I am moving into this full time from my current job in tech and do not have the time necessary for D4D.
If you have done these, do you have experience you can share with how you made it work? If you've done something different, why did you choose to focus on that different funnel? From my first few weeks getting up to speed, it's definitely become daunting trying to source solid deals in Denver.
Any perspective you are willing to share would be appreciated!
Most Popular Reply
I worked a full time job my first year in real estate, and I drove for dollars for the first 6 months but didn't get any results. It takes significant volume to get a deal under contract regardless of the marketing strategy. If you have more time than money then you can spend your days D4D and manually doing lead generation. However, when working a full-time job, you'll get better results by putting together a marketing campaign. Specifically, pulling a list of motivated sellers, and then reaching out to it via cold calling or text.
There's a tendency to take a targeted and sniper approach when you first start and have limited time. For cold marketing, we need to take a broader approach since we're stacking the funnel of quality leads. Even though a list may appear highly motivated, like probates, you still need to touch a high number of sellers to generate enough leads to get a property under contract. Additionally, others are targeting the same lists, so finding an exclusive, highly motivated list is difficult. This is why I create my own criteria to ensure nobody else has the same combination of 10k+ sellers on their list.
Cold email is not a great strategy as the emails do not have a high response rate. Yes, your messages will hit their inbox if you're using cold email software, which I'm assuming you're doing since you're in IT. However, you're going to need to send hundreds of thousands of emails to get a deal. Most people in the industry experimented with this already, but aren't having success because email addresses are not highly accurate when you skip trace the lists - especially if you're using a cheaper datasource.
Atop of this, you're in Denver, which is an affluent market. The median sales prices are $550k, which is $100k over the national average. The higher the median sales price is over the national average, the more affluent an area is; ultimately, resulting in the majority of the sellers not fitting our ideal "motivated seller" demographic.
So let's break this down and point out the flaws in your strategy: You're in an affluent market where your ideal seller is not located while using cold email and manual marketing strategies, which yield a low number of sellers being touched daily. This is a recipe for your business to never get off the ground. It's sad to see so many investors get excited about starting their journey but then lose steam because they get stuck in the marketing phase - never giving themselves an opportunity to actually get a seller on the phone and do the fun part of investing - locking up contracts! This will not happen to you if you make tactical adjustments that I'll state below.
Here's what I suggest: Focus on one scalable strategy. If you want to do more hands-on marketing, bandit signs are a good alternative to D4D as you can put your signs up over the weekend and get a lot of eyeballs on them instead of manually driving an area and taking a sniper approach. I tend to adopt the same marketing philosophies of Fortune 500 companies: Does McDonalds or Lowe's have reps going door-to-door to market their products? No, even in the early stages they did not. They focused on getting in front of the most targeted demographic using their available budget at the time.
Here's what I'm doing that's working: I'm cold texting to get all my deals this year. I used to have a lot of cold callers on staff, and this year I have slowly transitioned to texting after primarily cold calling to get deals between 2019 - 2024. Since the texting 10 DLC / A2P regulations went into effect in October 2023, it reset the marketing channel and now very few investors are texting in bulk due to all the hurdles you need to jump through to get your account approved for texting.
For me, keeping my cost per deal low is very important. It was worth it figuring out how to get texting up and running because my cold calling leads kept taking longer and longer to convert into deals (over 120 days even for hot ones). And I can only get 1 - 3 leads, on average, a day with cold calling, so it made sense to change. I can get 20 - 50 leads a day cold texting by using one virtual assistant verses needing 30 cold callers on staff to generate the same volume. It became very unsustainable, and I wasn't getting the same ROI with cold calling.
A lot of the information you hear on social media is either dated or too ambiguous. Most influencers in this industry are extroverted and great at sales; however, they have blind spots in the technical areas and many live in echo chambers. So you'll hear them parrot the same talking points even if the information is not the most accurate and current. There are very few original thought leaders and true pioneers in the marketing side of real estate. Marketing is just an afterthought to most gurus, yet it's the primary reason why most investors never get their companies off the ground. Feel free to ask me any other questions so we can get you rolling in the right direction.