Wholesaling Conversion Ratios
Beverly Hills · Member since 2018 · 3 posts · 0 votes
I’m interested to know what your wholesaling conversion ratios are and what ratios are prototypical.
This topic has been covered in other forums, but I feel that the actual ratios were hardly even talked about. I few people posted their ratios, but the forum very quickly turned into a debate about whether or not to place any value on this kind of data. In my eyes, data and information is crucial to efficient scaling.
That said, to all the wholesalers that have ever closed a deal, I would be very interested and appreciative to know your firm’s breakdown and the prototypical breakdown of these simple ratios:
1. Cost per lead
2. Leads -> appointment
3. Appointment -> Close
4. Any other ratio or metric you’d like to share and feel is important
I'll go. This does NOT include my salary or the salary of my AM. Strictly direct mail marketing costs. I also shifted my strategy to flipping/wholetaling medium value assets (125-250k ARV) which means my max allowable offer might be a little higher than a typical wholesaler. Not sure.
1. $2,109 cost per acquisition
2. I go on appointments on 50% of my leads that call in. If they have equity, I go on the appointment.
3. 13.5% of my offers are accepted. I offer on almost everything.
4. I track leads per deal primarily rather than appointments to deal. On average for every 23 leads that call in, I'll get a deal.
Timothy, this is certainly a pretty huge question.
My first reaction would be: it depends on marketing method. If you have ONE method, of course these numbers are easy. If you have several, it changes based on each method, of course.
I'll go through one of mine, the big hairy elephant in the room: direct mail
1. $4400
2. 10
3. 5.7
Of course, once you know your KPIs, you can always work on streamlining each one to effect the others. There are easily another 10 KPIs you could track based on these, and a few other ways to spin the non-closed appointments into other revenue methods (like listings, etc). Follow up spins off its own KPIs as well.
I'll go. This does NOT include my salary or the salary of my AM. Strictly direct mail marketing costs. I also shifted my strategy to flipping/wholetaling medium value assets (125-250k ARV) which means my max allowable offer might be a little higher than a typical wholesaler. Not sure.
1. $2,109 cost per acquisition
2. I go on appointments on 50% of my leads that call in. If they have equity, I go on the appointment.
3. 13.5% of my offers are accepted. I offer on almost everything.
4. I track leads per deal primarily rather than appointments to deal. On average for every 23 leads that call in, I'll get a deal.
Timothy wins today for the most complicated question on the platform! lol good question
First... The majority of Real Estate Professionals today do the following, and miss 97% of their segmented target market.
Only 3% of any given target market is ready to buy (or sell in this case) immediately. They've already done their research and ready to… CALL THAT REALTOR. SELL THEIR PROPERTY. SIGN INTO AMAZON TO BUY SOMETHING. BUY THAT NEW IPHONE. UPGRADE THEIR BIGGERPOCKETS ACCOUNT. WALK INTO THAT FOOD STORE. ENTER THAT RESTAURANT... and part with their hard-earned money! Three Percent!T
The other 97% is left out there to decide for themselves and they skipped right over our "WE CAN DO THIS" advertisement or mailers or outdated cold calling methods and moved on to research their need and who can solve it. Sucks, right?
Here are the Stats: Out of 100% of prospective clients (sellers in this case), only 3% are in BUYER mode (ready to sell or must sell)! They’ve done their research and know what they want. This 3% is where EVERY company is THROWING their big marketer bucks! That’s a lot of competition! 17% are in INFORMATION GATHERING mode. 20% are in PROBLEM AWARE mode. And 60% are in NOT AWARE of problem mode.
To use Anson Youngs numbers as my example: Mailers are good but should be done as an extra in my opinion and here is why...
1. $4400 investment for roughly 8-8500 mailers at $.54 a pop
2. 10 appointments
3. 5.7 sales = $771.93 per lead final cost.
Now, if your turning 10K per lead you're getting over $10 back for every $1 invested. Not bad. But if these were flips and he grossing 45 K per deal well then, now we're talking.
Deciding factors:
What do you need to make on a deal, ideally?
How many deals to get to your ideal sales number every month on average?
After answering those to questions, what % or how much money are you willing to invest in your cold calling, marketing etc?
You can't decide what your marketing budget is until you know your minimum profit your willing to take from any deal. Once decided... base your numbers off of that.
Our ratios are:
10k leads contacted per month @ $3440 expense = 60-80 motivated seller leads on average or $43-57 per lead.
Now, let's say you can only close:
1 of them. We'll that lead cost you $3,440 but if it profited you 20K it returned $7 for every 1 you invested.
2 of them. We'll that lead cost you $3,440 but if it profited you 20K it returned $14 for every 1 you invested.
2 of them. We'll that lead cost you $3,440 but if it profited you 20K it returned $21 for every 1 you invested.
Etc.
Hope this helps and let me know if you have any other questions.
Timothy, this is certainly a pretty huge question.
My first reaction would be: it depends on marketing method. If you have ONE method, of course these numbers are easy. If you have several, it changes based on each method, of course.
I'll go through one of mine, the big hairy elephant in the room: direct mail
1. $4400
2. 10
3. 5.7
Of course, once you know your KPIs, you can always work on streamlining each one to effect the others. There are easily another 10 KPIs you could track based on these, and a few other ways to spin the non-closed appointments into other revenue methods (like listings, etc). Follow up spins off its own KPIs as well.
Timothy, this is certainly a pretty huge question.
My first reaction would be: it depends on marketing method. If you have ONE method, of course these numbers are easy. If you have several, it changes based on each method, of course.
I'll go through one of mine, the big hairy elephant in the room: direct mail
1. $4400
2. 10
3. 5.7
Of course, once you know your KPIs, you can always work on streamlining each one to effect the others. There are easily another 10 KPIs you could track based on these, and a few other ways to spin the non-closed appointments into other revenue methods (like listings, etc). Follow up spins off its own KPIs as well.
Yes, But I make a million off each deal... j/k
The metrics were:
1. Cost per lead (I actually posted my cost per deal... oops I see the problem now lol)
2. Leads -> appointment
3. Appointment -> Close