What is the going rate for purchasing wholesaling leads?

Question

I see a lot of people here have websites named stuff like "SellYourHouseFast-YourCity.com"  which I assume most of you just work in a specific area. I have a lot of experience internet marketing and was thinking of building a national site (opposed to one that just focused on one city)  that could collect leads from all of the big cities. My plan would be to find 1 person for every big city (other than mine) that would be interested in buying the leads from me.

My Question are:
1. Would you be interested in buying leads?
2. Would you prefer to buy "pay per lead" where you pay for the information no matter the outcome.
3. Would you prefer to do a % deal where you would pay a small % of the profit you made, only on the leads that turned into successful deals. For the leads that didn't get used you would pay nothing for those. 
4. How much pay per lead or % would you be willing to do?

Thanks in advance, i'm just trying to get a general feel for what everyone's thoughts are and what the going rates are.

Jason Grote · Answer

It is a great idea... You don't have to know anything about wholesaling... you just need to know how to produce a website that ranks on top of the search engines nationally and do well at building relationships with the best investor in each city.  You catch em and the investor cleans em (bad analogy)

Will Sifert · Answer

Exclusive with 1 person per market (big city area) is the only way I would want to do it as well. I definitely wouldn't charge anyone a monthly fee. Building good business relationships with people is a very important principle to me. I don't want to make someone pay for information that will get resold several times and I wouldn't want them to pay for something that doesn't help them either. If it works out for both parties then everyone is happy.

What I would be offering would just be the lead, their information. If I can generate lots of leads it would take too much time to do the wholesaling side for each of them, which honestly I am still learning and not sure how I would do that in other cities across the country. I would use the local leads for myself and sell the other leads. I would prefer being paid by a % only if the lead I sent turned into a deal. Obviously there would be some trust involved and since I do have the person's information as well, It would be easy for me to follow up with the people so I don't think anyone would try to screw me over. Especially people who post here and have good reputations.

Will Sifert · Answer

Hi Nick, if I can ask, how much do you think an exclusive lead (not shared with 3-4 other people) would be worth on a pay per lead basis? I am not familiar with any other services are what people are willing to pay.  I would have a per user cost based on my advertising, but should have a decent margin as proficient with marketing online, just never used it to acquire real-estate leads.

I agree that ppl would be the safest for me and easiest for me to calculate my costs. But at the same  time, I don't like to charge people for something unless it benefits them. I would hate to send someone a lot of leads they paid for that didn't produce anything for them. I would also rather building strategic partnerships which I feel that would happen better with a % deal, but if everyone would want to go the ppl route that would be fine with me as well.

I will contact you if I do end up building a site. Thanks for the feedback.

Jason Grote · Answer

Will Sifert Sorry I forgot to mention the dollar amount for leads....

If I receive all of the leads and have to qualify them and work with them, I would treat it more like a bird dog instead of a wholesale deal.  A wholesale deal is just that, it's a deal handed to you with the numbers already worked out.  I would look to pay about $2k-$5k for a deal that closes depending on the profit margin.  7-10% of profit would seem reasonable to me.

Jason Grote · Answer

Will Sifert I personally would only sign up with a "national lead generator" if I was their exclusive investor in my city (Austin).  I initially approached a company that does this and they wanted money every month regardless.  I never did it because it is so uncertain.  Now that I have a "local lead generator" website, I see how many junk leads that I get and I would not be happy if I was paying for every single one.

I would prefer the % or the wholesale fee for a lead that closes.  Obviously, some sort of accountability would need to be in place, but if you are supplying viable leads and working exclusively with a good investor in each city, then the benefits of working with you are great.

Hope this helps!

Nick J. · Answer

If you expect to make any money at that idea, you have to charge up front regardless of the outcome.

there is a company I've used with very little success. They charge a monthly fee, collect all kinds of leads and everyone who's paid into the monthly fee gets access to those leads.

Once those leads are viewed by 4 people, they get taken off of viewing for everyone else. So, you just have to make sure you're one of the 4 each and every time.

If you plan on moving into my market(Phoenix), send me a message or email in my signature. I might have a few ideas for you that probably won't work in other markets.