Lead generation is an eternal problem for real estate investors. We spend so much of our time seeking that next prospect and hoping to catch the attention of the seller. Lead lists are a popular way for investors to try to reach out to supposedly “low hanging fruit.” But, let’s be honest. How many of us have spun our tires making those dreadful cold calls or organizing email drip campaigns without any real results? Let’s take a look at why those lead lists are not effective—and what you could be doing with your time instead.
The Truth About Lead Lists for Finding Prospective Sellers
To put it bluntly, lead lists are generally not very good quality. You can’t guarantee the authenticity of the information you gain—even if you buy or rent it from a reputable source. Data on lead lists can become outdated very quickly. Perhaps a homeowner was in distress but they worked their way out of the problem. Or maybe the homeowner has already sold the house.
Even if the homeowner actually needs to sell, you risk provoking the people whose trust you want to earn. Since you bought the list, you can imagine that many others did, too. The homeowners may feel deluged with cold calls from investors and react negatively to you.
The biggest consequence of using lead lists, however, is that it can negatively impact your business reputation. Contacting homeowners without their buy-in first can draw anger, and people in the neighborhoods you are targeting may talk. Even with email drip campaigns, you risk being identified as a spammer. You have no way of knowing how many times the email addresses on the list have been targeted by other investors like you or even whether they have been scrubbed for hard bounces.
Alternatives to Lead Lists
While lead lists are popular among real estate investors, they tend to have a low conversion rate while putting your business at risk of a negative reputation. Don’t despair, however. There are other ways to reach homeowners in need of a buyer. Here are the top five methods that can work:
1. Pound the pavement.
It’s an old-fashioned strategy, but often it makes a difference when you approach a distressed homeowner in person. People facing foreclosure are wading through a lot of emotions, from frustration to despair, and a face-to-face meeting provides you the opportunity to show them a compassionate way out of their financial troubles.
2. Social media advertising.
Facebook is probably the biggest source of inbound investor leads from social media. There are multitudes of ways to leverage Facebook, from joining community groups to posting informative blogs and even targeted, paid advertising.
3. Strategic networking.
Step out of your comfort zone and make it a point to get to know as many real-estate affiliated professionals in your area as possible. Mortgage lenders, attorneys, landscape designers, and movers are all well-positioned to come across someone who wants to sell their home. This could be a good source of referrals.
4. Zillow Instant Offers.
Zillow recently launched a pilot program in Las Vegas and Orlando that enables home sellers to request instant offers on their property from investors or other buyers. It’s early in the game, so only 15 hand-selected private investors are currently participating in the program. However, Instant Offers has piqued industry-wide interest and the program is sure to go nationwide soon. It might get fiercely competitive, however, as investors hop on the bandwagon to present low-ball offers.
5. HomeVestors® marketing tools.
With the nationally-known and trusted “We Buy Ugly HousesⓇ” brand on billboards, commercials, and radio spots, people already know who to call when they are ready to sell their house quickly. This marketing campaign for real estate investors brings in fresh leads to franchisees every day.
Turn Your Business Prospects Around
It took me some time to realize that I was going nowhere fast by using lead lists. But I regrouped, Joined HomeVestors, and put together a solid real estate investing franchise business plan that included tried-and-true strategies, and started getting prospects calling me. Of course, there’s still a lot of work to do to manage my investments but I have already successfully bought and sold close to 30 properties. That makes me well on my way to achieving my investment goals. Are you ready to leave that day job behind and be your own boss, too?
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