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. Of course, if you’re reading this piece, you’re either just starting a career in real estate investing or you’re not satisfied 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, which is what I intend to share with you here. So, whether you’re an old hat or a new one, if you’re looking for a potentially more rewarding real estate investor lead generation strategy, you’ve come to the right place.
The Best Lead Generation Methods for Real Estate Investors
There are a lot of different ways that you can try to find great investment property. Some are a little iffy, even unethical. Others may be more principled, but might only yield the occasional lead that converts to a sale. So, what I’m interested in specifically sharing is how you can ethically, and consistently, find discounted properties to renovate and sell for potentially good returns.
Here are the top seven real estate investing lead generation methods that I’ve used along with a few details for each about why they can work and, for some, the reasons why they often don’t.
1) Buy Lead Lists
The use of lead lists is a very common strategy 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, they 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, since lead lists are used so often, they’re probably not the best angle 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 You’ll find this is especially true if the information is outdated—which it usually is—and they’re no longer selling the property or have already sold it.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 real estate investing leads.
2) Check Legal Notices
A 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, a homeowner feeling intruded upon after getting contacted out-of-the-blue from a stranger about their mortgage 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) Attend Real Property Auctions
If you have cash in hand and are comfortable absorbing more risk, real property auctions sometimes yield great deals on distressed houses. Typically run by local city and county offices, most of the homes that end up at an auction are in the last stage of foreclosure. So, they’re frequently fixers that are priced cheaply in an effort to help lenders recoup some costs. But, private organizations, like the Cook County Judicial Sales Corporation in Chicago, hold real property auctions, too. Just checking ads in your town’s newspaper or running a simple online search should point you in the right direction for bidding on and, hopefully, buying a foreclosure auction home.
The risks associated with foreclosure auctions are real, however, and can make investing in property an expensive endeavor. Competition is strong from other investors and even from the lenders themselves. So, homes can get bid up to a price that doesn’t make sense to pay if your goal is to see potentially good returns after doing repairs. Also, full payment in cash is usually due within a few days, or hours, of winning the bid, giving you very little time to perform an inspection—if you’re even allowed to. That makes ending up with a money pit that eats into your ROI more likely to happen than scoring a real deal.
4) 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. For the right price, that property could become yours.
The biggest issue with this method, however, is the amount of pounding you’ll 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.
5) Utilize Social Media
Once considered an uncommon marketing idea for real estate investing, using social media to find leads has become more routine. Platforms like Facebook, Instagram, and Twitter provide you an opportunity to reach a high volume of people almost on demand. You can buy strategically-placed ads to create inbound sales, but posting informative content can generate followers. The combination of both lets people know you exist and, with enough time and the right hashtags, connecting with distressed homeowners is possible.
Utilizing social media won’t be enough to help you quickly build a business around investing in homes, though. It takes a lot of time and energy to create a strong presence, particularly on social media platforms which tend to be flooded with users. Even then, only a handful of distressed homeowners take to social media to discuss their inability to care for their houses. It’s an embarrassing topic that most people don’t want to make public. So, though you may occasionally connect with a homeowner willing to sell you their house, the effort you spent making contact may be more than it’s worth.
6) Pay for Advertising
The benefit of paid 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 folks you’re trying to reach. But, if you can back up your tactics with a reputation for good work, the money you spend on advertising could pay you back in spades.
Of course, paid-for advertising could also break the bank. The most effective forms of marketing are still television ads, radio spots, direct mail, and billboards—in addition to things like pop-up and banner ads that reach people surfing 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 extra cash to grow your business, paying to advertise everywhere may take all you’ve got.
7) Pool Resources With the Nation’s Largest Homebuyers
You might think that joining a real estate investing franchise, like HomeVestors®, is an unusual 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 take into account that they have bought over 100,000 houses nationwide, 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 for real estate investors that’s been in place for over three decades, and it’s the best method I’ve seen for ethically, and consistently, 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. After a while, however, 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 needed to gain access to better marketing tools and resources so that I could get more leads. Coming to HomeVestors helped me do both.
Don’t wait to reach more distressed homeowners with the number one real estate investing lead generation strategy available. Opportunities to own a franchise are limited, so contact HomeVestors today!
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