All Forum Posts by: Cornelius Garland

@Craig Brandt I've marketed to Boston before. It is one of the tougher markets. I haven't marketed to Jacksonville, FL, but I have closed up deals in Tampa and Broward County. I do a ton of cold calling, and I have done a lot of direct mail in the past as well. In any market, you're going to encounter issues with sellers hearing from other investors. That's not where your problem is. I think follow-up is a slept-on strategy that not a lot of investors are doing. Sellers do business with people they like. The more we speak with them, the easier it is to befriend them. I am constantly staying on top of my team to get in at least 50 follow-up calls per day. Since you asked about cold calling, I'll touch on some points with cold calling that may help you optimize your campaigns.

Firstly, how long have you been dialing your current list and how many numbers are on it? Typically, a list can last for about 3 months if you have 2 callers per 10,000 records. If you have like 20 callers dialing 10k records, then you'll fatigue your list quickly. I start noticing a decrease in my lead flow around month 2 of dialing my list, based on me dialing a list of 20k records with 5 cold callers dialing it. Once you start seeing your call intervals increase, meaning it's taking your callers longer to connect to another record, then it may be time to rest your list. I'm constantly rotating my lists to keep them fresh. I don't think investors realize the sheer volume of calling you need to do to generate one lead, let alone to generate enough leads to contract a property.

Both direct mail and cold calling are numbers games. I would definitely split test both to see if one beats out the other. For instance, I'd put the same budget to both for a month. Let's say you set a $1k budget for cold calling and direct mail. I'd then track how many leads you received from each marketing channel. Then I would track how many hot leads you received from each marketing channel. If one clearly outperforms the other then you may want to focus on going all-in on that marketing strategy and eliminate the other.

Based on my experience, you can close deals using any marketing channel. The point investors get hung up on is scaling. It's easy to pull a fresh list and market to it for a few months. However, there gets to a point where we reach a diminishing returns effect; the more money we put in yields stagnant or even inverse results. This is where you need to dive into your numbers and determine what you can optimize. Ultimately, I determine the health of a marketing campaign based on how many leads it's generating per day. Once those leads dip down, I know I need to determine the cause and make a swift change.

@Douglas Turner Most often, you can find a contact for the seller. If the sellers' numbers are wrong, typically I can find a relative. Family Tree Now is a free site that has surprisingly accurate data. The difficult part is just making sure you are looking at the correct individual's information especially if they have a common name. Close relatives are listed here so you can get the number of a sibling or spouse using this site.

If you're manually skip tracing on a consistent basis, it might be worth checking out Locate Plus. Investors can get access to this, but you can't access social security numbers unless you're doing tenant screening. They pull from the same database that TLO does, so the data is solid.

I hope this helps out.

@Account Closed Are you tracking your leads to contract for each lead generation source? Knowing this will allow you to gain insight into what has worked and if you can scale to $200k net per year. My issue with niche lists like code violations and tax delinquents is that they're finite lists. Once you pull all of the records in a city, you can't guarantee that you will get thousands more every month. You could hit the same lists over and over, but then this will lead to list fatigue; your response rates will drop after several months of hitting the same list.

If it's taking you around 50 leads or less to generate a contract from any of your marketing sources, then I would focus on these lead generation sources. If it's taking you more than this then you could encounter a situation where all of your lists dry up. This is why I tend to have niche lists sprinkled in with a broad marketing list that doesn't have equity filters and also includes absentee and owner-occupants. For instance, if I started marketing in a city today, I'd pull 10k records. 80% of my list will include broad, yet targeted criteria. The remaining 20% will be niche lists.

My suggestion is that you go with what is scalable. It's easy for you to become the bottleneck, and I would eliminate any lead gen sources that can't be outsourced to a virtual assistant. You, as the owner, shouldn't be obsessing over marketing every day. I have a "set it and forget it" approach, so I can focus on other things in my business. At one point, this is all I thought about and it stifled the growth of my business. I'd actually like more insight into your KPIs. Also, are you looking to reduce the number of cities you're in? I can then offer some more tactical advice based on your answers.

@Jerryll Noorden I disagree with your take on dissuading investors from cold calling. The companies you mentioned are already established brands. I'm sure when they started out, they had to do some outbound sales through cold calling, direct mail, etc. to other businesses in order to land B2B contracts or endorsements. Of course, they do not need to do outbound sales themselves to their customers now because of their authority, so their ad campaigns are centered around brand awareness.

I also doubt cold calling will become illegal anytime soon. This has been around long before SEO, PPC, or any online lead generation strategies. I do think that TCPA laws will be enforced more strictly going forward. However, as long as you're conducting your marketing in a way that is within the regulations, investors should not worry. If it was illegal or trending this way, I believe the government wouldn't even have regulations regarding cold calling; they would just outlaw it completely. It is becoming heavier regulated, which is a good thing. People doing cold calling in any industry need to be held to a standard. 

Regarding SEO, I do think it's a solid strategy, but it's a long-term play. Even if you did PPC, it could take months and thousands of dollars to dial in your prospect. It is also difficult for new investors to do this themselves when they're just starting out especially if they are not tech-savvy. At any time, Google or Facebook can throttle your ads and limit who sees them. If you spend more money on ads, this does not necessarily correlate to more leads. I'm not sure about you, but I don't like sitting back and hoping that leads come in when I spend my marketing funds. This is more like gambling and does not appear to be strategic. I think this is why a lot of new investors fail: They conduct marketing that is not fit for a beginner, and it takes them too long to see results.

I realize SEO works, but can you specifically say how long it will take for a beginner or intermediate investor to start receiving leads? It's hard to say. Depending on SEO as your primary lead generation strategy as a novice seems more like a wish than a guaranteed way to generate seller leads. 

@Robert Anthony Lewis Hey Robert, I'll share what your target KPIs should be when cold calling. Firstly, where you get your phone numbers from is very important. Unfortunately, a lot of investors believe all skip tracing companies are the same. Unlike direct mail where a majority of them deliver the same product, skip tracing companies can vary drastically depending on how they're sourcing their phone numbers. You can easily gauge how accurate your phone numbers are based on how your cold call campaign performs.

1. Your percentage of disconnect numbers should be around 2%-5%. Anything over 5% is an indication that your phone numbers may not be good or the company you used provided a lot of extra numbers to bolster the hit rate. Just because you get a 90% hit rate doesn't mean 90% of the numbers are good. I've seen some shady marketing from skip tracing companies that advertise high hit rates and the numbers are bad, so please keep this in mind when you're getting your list skip traced. I would always start with a small number of records to test out their phone numbers then skip trace the remainder of your list.

2. Your average connection rate should be 2%. This is why I highly recommend outsourcing cold calling. You can waste a lot of your time cold calling for hours and only reach a handful of sellers that may not be interested in selling. It's much better to outsource this to virtual assistants and have them pre-qualify your leads. Cold calling has its place and I get deals from it, but it is very time-consuming. You can be allocating your time to do other things in your business.

3. I call this KPI the "motivated seller response rate". This will be around .2-.4%. So if you make 1,000 calls, you can realistically expect around 2-4 qualified leads. You'll have a lot of people that just want an offer or are curious as to how you got their information. I don't consider these sellers as leads. I consider anybody a lead that has serious intent to sell their property at a discounted price.

4. The only other KPI I track is my cost per lead. You'll need to divide your total cold calling monthly budget by how many leads came in. For instance, if you spent $1,000 on cold calling and 20 leads came in, your cost per lead will be $50 per lead. There isn't a definitive answer regarding what your cost per lead should be, though. As a general rule of thumb, if you're spending more than $100 per lead, these need to be very high-quality leads (e.g., PPC), or you need to be in a more competitive market where the profit margins are higher (e.g., California or New York).

Hope this clears things up, and let me know if you have any questions.

@Darrick Richardson Absolutely! Let me know if you have any other questions. I am borderline obsessive when it comes to my marketing campaigns.

@Darrick Richardson Hey Darrick, I market to sellers using a combination of marketing channels. I am very strategic with my approach, though. I start off with what's the least expensive marketing channel that yields the highest response rate. Currently, this is text blasting for me. After I text blast my sellers, I'll remove the unmotivated sellers from my list and then hit them with ringless voicemail (RVM). The response rate is around 2% for RVM, but I can hit a lot of sellers without expending my budget. The next thing I'll do is send the records that didn't respond to texting or RVM to my cold call team. Once they've run through the list a few times, I'll scrub it and compile a list of who didn't respond. This is when I send the non-responsive sellers direct mail. I do direct mail last because this is the most expensive marketing channel. It makes much more sense to filter out any unmotivated leads using the least expensive marketing channels first and then having a targeted direct mail list. This has allowed me to decrease my cost per deal significantly as well as get more qualified leads. It's important to hit the sellers on multiple platforms in order to maximize your chances of getting in touch with your entire marketing list. Some sellers are more responsive to text messaging than direct mail. Conversely, others prefer receiving a cold call instead of a ringless voicemail.

@Gregory Carter Hey Greg, one thing to keep in mind is that marketing is a numbers game; the more volume you 're targeting, the better chance you have to get motivated sellers that want to sell. However, I think some investors take this to the extreme and target any property owner without narrowing down their list. Driving for dollars can definitely get you some deals, but it will take you a long time to get a deal by only getting 5 properties a day. On average, it's taking me 63 leads in order to get a deal. This doesn't mean out of every 63 people that contact me, I'm closing a deal; this means it's taking me 63 people that raise their hand and say "yes", I want to sell to close a deal. The number of people that agree to my cash offer is few and far between. When it comes to direct mail, your response rates will be around .5-1%. This means if you were to mail 1,000 pieces, you can expect 5-10 sellers to call you. However, only a fraction of those will be somewhat interested in selling. 

I'm not saying all of this to discourage you but to make the point that you're going to have to get your numbers up to see a decent ROI. I've seen investors that have only targeted 100 properties through driving for dollars close a deal, but their mail piece was very unique and the houses they were targeting clearly had distress. I would aim for 20 properties a day and write each seller a yellow letter and place it in a colorful envelope with stickers on it. You want to do whatever you can to make your mail piece stand out because other investors are going to be mailing your sellers, too, because the seller is most likely on their mailing lists. Granted, a lot of investors use the same direct mail companies so their mail pieces will look the same. You have the opportunity to stand out by tweaking your envelope and handwriting your letter. I suggest targeting properties that look like they're distressed. If you see cars in the driveway and someone is living there, this can likely be a tenant that isn't taking care of the property.

If you want to build out a mailing list then check out listsource.com. This will save you so much time instead of manually compiling a list from the tax assessor site. You can filter your list to only target absentee homeowners, property owners that bought their houses before 1980 and also filter by equity.

@Jared McNeel Hey Jared, I wouldn't necessarily say door knocking is better than direct mail because both have their pros and cons. I do, however, think you'll get higher-quality leads door knocking. You do need to keep in mind that you'll still need to get in touch with several homeowners. Only door knocking to a handful of homes isn't going to cut it. I wouldn't suggest mentioning the seller's situation to them, though. For instance, if you're targeting preforeclosures or houses on the auction list then I would approach the homeowners as if you're just randomly door knocking. You can mention that if they are going through some sort of distressing situation then you have an option for them. You don't want your realtor to go right out and say "Hey, I see your property is about to get foreclosed on. We have some options for you." As long as you're hitting at least 100 doors a day, I'm sure you'll have several qualified leads to work with. Not a lot of people are doing this, so you won't have any competition, and you'll come across as a legitimate company to the sellers.

@Shannon DeLaune Great explanation, and this makes sense. I'm targeting a list of fire-damaged properties exclusively and this information definitely helps. I'll ensure I have my leads check on their insurance policy before I agree to buy it. I don't want any surprises at closing. I had one situation where I was about to close on a fire-damaged property and the seller backed away an hour before closing. I'm sure it had something to do with the insurer advicing him not to move forward with the sell. Thanks for the information.