When I first started investing in real estate, I was sure I knew the secret: leads. I hustled for leads everywhere I could, collecting as many as possible. I thought I was crushing it. I had more leads than I knew what to do with. But at one point, I realized that I wasn’t actually closing deals that led to me having investment properties.
I thought that I was getting “qualified” real estate leads, in other words “motivated seller” leads, but it turned out that the homeowners weren’t actually wanting to sell. Getting real estate leads from motivated sellers is a whole different story, though.
It starts by understanding what makes a seller motivated. From there, the path to closing on a house can be much simpler—if you have the right marketing plan in place. Let’s explore how this all comes together.
Why Your Real Estate Leads Are Not “Qualified”
If you talk to a real estate investment guru, they’ll probably tell you that any lead can be a “qualified” lead if you try hard enough (and buy their book). But that’s not true—they’ve set the bar too low in their understanding of the term.
You can’t just see a foreclosure listing on Zillow, start reaching out to the homeowner incessantly, and call that a “qualified” lead. You don’t know anything about whether or not the homeowner is actually motivated to sell to you so it’s a waste of time.
Let’s take a look at some of the pros and cons of other common ways real estate investors attempt to find “qualified” leads and why they don’t pan out either.
The sheriff’s auction is where the local municipality auctions off houses that were foreclosed upon. These are some of the most popular ways to find leads. There will certainly be houses to bid on whether you’re in New York or rural Oregon.
Pro: The information is offered freely by the owner (the owner, in this case, being the repossessing agent, which isn’t as personal, but still counts).
Con: The bank could care less who it sells the house to and, sometimes, even whether it sells at all. Simply put, there’s no motivation behind the deal.
Door-to-Door Cold Calling
This is a very traditional way of finding real estate leads but they can’t be considered “qualified” either. You canvas neighborhoods that are either in bad shape or are rebounding, and look for houses that seem in disrepair. Then, you try to initiate some communication to get a deal.
Pro: You might get lucky enough to talk to the owner, if they don’t slam the door in your face. Or, you might be knocking on the door of disgruntled tenants. The gamble is up to you.
Con: Obviously, the homeowner didn’t reach out to you. Initiating communication, much less trust can be an uphill battle if there is no motivation on the other end.
Scrolling Through Advertisements
Whether online or in print, lots of people who are selling their houses put up ads. So it’s pretty easy to reach out to people who might be selling their home. Anyone who puts up a “for sale” sign is making a decision to open themselves up to buyers. These are easy to find and plentiful but of course, that can also be a problem.
Pro: They are giving their information freely, which seems promising.
Con: They are not exclusively giving you their information. A public ad or listing attracts competition. And, who knows if they are actually motivated to sell, just testing the market, or scamming.
Accessing Real Estate Leads With Better Investment Potential
So how do you tell whether a homeowner is motivated enough to make a deal with you? For me, there are three defining characteristics of a real estate lead that is worth pursuing:
The Homeowner Reached Out to You
This is a business about meeting mutual needs. If a homeowner reaches out to you, it’s because they need to sell. They might be buried under bills or recently inherited a property that is too much work for them. Regardless of the reasoning, they’re ready to sell and they need a buyer.
And because they reached out to you, there is a baseline of trust. You aren’t a stranger knocking on the door or just another person in line at the auction. You are a person to whom they turned for a solution.
Information Was Freely Provided
For some people, the real estate investment business has a bad reputation. It is true that there are a lot of less-than-ethical actors in it. There are high-pressure salespeople, there are detective types who track down records in order to start buttering up a desperate person, and there are those who just try to lowball. If you are doing any of that for a real estate lead, it isn’t “qualified” in any sense of the word. Instead, it’s a lead that you have to work to get the information required to start a relationship and build trust.
If someone provides their information records to you freely, it’s because they trust you and they want to do business with you. They are motivated.
Nobody Else Has Access to the Lead
A lot of us in real estate investing are super competitive, but the truth is that competition is bad for the buyer. It drives up prices. It crowds out smaller players. It hurts the mom-and-pop, single-owner business.
Too much competition also makes it less likely for you to get the property, especially if you don’t want to spend so much that you trim down your potential profit margin. And if you don’t get a property you’ve worked on, analyzed, and bid on, you’ve wasted time. In this industry, time is money. Too much competition can have you wasting both. Having exclusive access to a lead is the holy grail of real estate investing.
These three characteristics have provided me with plenty of real estate leads from qualified and motivated sellers over the years but I can’t say that it’s always been easy.
A Strategy for Leads From Qualified and Motivated Home Sellers
Inbound marketing, which is defined as having the prospect come to you, is almost certainly the best way to get real estate leads. The idea is that you put out ads and people reach out to you. This can be anywhere from a series of billboards to small ads in the paper. When someone is ready to sell, they will reach out to an investor they know who buys houses. Ideally, that person is you.
But it can be expensive to be both top-of-mind and at the top of search results. For inbound marketing to really work, you have to intersect with their mind at the moment they are ready to sell. You’re not going to do that by putting a three-line blurb in the classifieds of the local coupon clipper. And you likely can’t afford to be running radio ads every hour.
Inbound marketing is the best way to get qualified leads but you don’t have to do it alone.
When I started out, I struggled with getting what I thought might be “qualified” leads from inbound marketing. I was spending a lot of money and not seeing any returns. When I joined the HomeVestors® network of independently owned and operated franchises, my lack of results was no longer an issue. With HomeVestors, motivated seller leads were coming my way because the We Buy Ugly Houses® marketing campaign is nationally known and trusted.
If someone is ready to sell, they call HomeVestors and I get the lead. They’ve reached out to me, provided their information freely, and the lead comes directly to me. They’re ready to sell and all I need to do is close the deal.
Are you ready to join a nationwide network of experienced real estate investors and get more qualified real estate leads? Contact us today to find out how to become a HomeVestors® franchisee.
Each franchise office is independently owned and operated.