If you’re an old hat at investing in real estate, like I am, you probably have your own method for getting distressed homeowner leads. Then again, if you’re reading this piece, you’re either just starting a career in real estate investing or you’re none-too-happy with the strategies you’ve tried so far. I’ve been there—both as a new investor and as a more experienced one tired of dealing with leads that didn’t convert. Eventually, I dug in, did the research, and found a way to get more deals. So, whether you’re an older hat or a new one, if you’re looking for a successful real estate investor lead generation strategy, you’ve come to the right place.
Top Lead Generation Methods for Real Estate Investors
There are a lot of different ways that investors try to find great investment property. Some are a little iffy, even unethical. Others, like the use of social media, fall into the bucket of uncommon real estate investing marketing ideas, but that’s not to say they don’t provide some value. What I’m more interested in, however, is helping you consistently find discounted properties that you can renovate and realize optimal returns.
Without further ado, here are the top five lead generation methods that I’ve used:
1) Buy Lead Lists
The use of lead lists is a very common lead generation system that real estate investors employ to find distressed homeowners. Part of the reason they’re so popular is that they can be customized to filter for specific circumstances, like expired listings and foreclosure starts, but can also be expanded to include everything from abandoned properties to homes with unpaid taxes and other liens. There are a variety of reasons a homeowner may be motivated to sell and by purchasing one or more of these lists, you can have your pick of the litter.
Unfortunately, it’s because lead lists are so often used that they’re not always the best strategy to take. The homeowners on these lists tend to get inundated with investor interest, which isn’t going to endear them to your sales pitch when you call. You’ll find this is especially true if the information is outdated—which it usually is—and they’re no longer selling the property or have already sold it. So, it might be in your best interest to go against the grain and find a more effective, and less popular, way to source leads.
2) Check Legal Notices
Another, more accurate way to get a list of homeowners who are struggling to make their mortgage payments is to check online for legal notices. Many local government offices, as well as national agencies like the U.S. Department of Housing and Urban Development (HUD), are required to post these public notices when a home enters pre-foreclosure. So, the lists will include homeowners who’ve been served a Notice of Default or Lis Pendens, but they’ll also contain information on individuals and families who have simply fallen behind on their loans. If it sounds a little invasive, that’s because it is. Still, it’s not a bad way to find motivated sellers who don’t want to lose their home, or the equity they’ve put in it, to a lender.
But, the feeling of intrusion a homeowner might get from you contacting them seemingly out-of-the-blue about their late payments isn’t the only problem you’ll run into. In fact, you’re likely to get frustrated yourself. Hunting down these legal notices in the first place can be a chore, and not every office lists them in the same place or with the same detail. Once you find the notices, you’ll have to check back regularly for updates on the foreclosure proceedings to make sure any given property is still available. Sometimes, homeowners get current on the loan or are granted an automatic stay to buy some time. So, when all is said and done, you could also end up feeling like you’ve wasted yours.
3) Pound the Pavement
It’s a little old school, to be sure, but pounding the proverbial pavement in the areas where you’d like to buy and sell investment property is still pretty common. By staying on the lookout for older, smaller, or rundown houses in otherwise nice or up-and-coming neighborhoods, you might happen upon a property whose owner is in financial distress or who simply can’t, because of health or other obligations, make the time to care for the home. For the right price, that property could become yours.
The biggest issue with this method, however, is the amount of pounding you’ll potentially have to do. On the off chance you find the ideal house, you’ll still have to locate the owner if the property is vacant, abandoned, or tenant-occupied. Even then, you’ll have to convince them to sell. This may prove more difficult than you think if the house has ended up on a lead list. You’ll also have to repeat these steps many times over if you want to make buying and renovating properties to resell a worthwhile living. I don’t know about you, but that sounds pretty exhausting to me.
4) Pay for Advertising
The benefit of advertising is that, rather than having to find ways to approach distressed homeowners directly, you increase the chance that they’ll want to come to you first. Yes, it takes time to build brand awareness in the marketplace and to instill trust in the very folks you’re trying to reach. But, if you can back up your marketing efforts with a reputation for good work, the money you spend on advertising could pay you back in spades. Of course, it could also break the bank. The most effective forms of advertising are still television ads, radio spots, direct mail, and billboards—in addition to the myriad online marketing tactics you may want to implement online. To reach the biggest audience, you’re going to want to use them all. Even if you’ve been investing for a while and have some extra cash to grow your business, it may take all that you’ve got.
5) Pool Resources With the Nation’s Largest Homebuyers
You might think joining a real estate investing franchise, like HomeVestors®, is a fairly uncommon method for generating leads on distressed homeowners. Considering the number of real estate investors out there who aren’t independently owned and operated HomeVestors® franchisees, I’d say you’re right. But, when you also consider that they have bought over 100,000 houses nationwide since 1996, it starts to look like HomeVestors® franchisees have the leads—and indeed they do. HomeVestors’ nationally-recognized “We Buy Ugly Houses®” ad campaign reaches homeowners in distress across the country through television, radio, print, and the web. It’s a lead generation strategy that’s been in place for over two decades, and it’s the best method I’ve seen for getting a leg up on the competition.
The Number One Strategy for Reaching Distressed Homeowners
Long before I was an independently owned and operated HomeVestors® franchisee, I was a struggling real estate investor just like you. And, I tried every lead generation method available to buy properties—with inconsistent results. In the beginning, I chalked up my frustration to being a novice. But, after a while, it was clear that if I wanted to turn my passion into a real career, I was going to have to close more deals. To do that, I’d needed to get more qualified leads. Coming to HomeVestors helped me do both.
Reach more distressed homeowners with one of the top lead generation strategies available. Contact HomeVestors today!
Each franchise office is independently owned and operated.
HomeVestors of America® is the nation’s only real estate investing franchise, providing wonderful business opportunities to real estate and investment professionals across the nation.