Step 1: Generate Leads

TOOLS & RESOURCES

GENERATING LEADS

Leads are the lifeblood of any real estate business. Just as raw ingredients like sauce, cheese, toppings, and dough are to a pizza shop owner; seller, buyer, contractor, and private lender leads are to a real estate business.

This next part might seem counterintuitive, so pay close attention…

You are NOT a real estate investor.

You ARE in the business of marketing your real estate business.

It’s a simple, yet profound mindset shift that I believe every person has to make in order to be successful in this business. I wrote an article called, Drive Revenue, Not Nails. In it I go a little more in-depth on this very subject. 

The first type of lead that you want to generate in your business is seller leads. Generating seller leads can be a challenge for most real estate investors. In fact, when we polled hundreds of thousands of real estate investors on our list, every year they reply that generating seller leads is the number 1 challenge in their business. (You can read that report here.)

I think part of this has to do with them spending their efforts in marketing channels that just don’t give them a great ROI on their time and money. So let’s talk about three that do.

IDENTIFYING YOUR SWEET SPOT

Begin by focusing on those areas where people are moving into, and not out of, and areas with good schools and high real estate sales.

I put together a little exercise for you to complete to help you identify your own "Sweet Spot" within your market. You can download it above.  

Now that we've gotten that out of the way, let's talking about 3 powerful marketing channels. 

DIRECT MAIL

The first, and quite possibly most effective, lead generation technique that I want to share with you is Direct Mail. This is one of the most tried and true marketing techniques for building out seller lists.

In the same survey mentioned above, investors that have done 50+ deals rank Direct Mail as their number one source of seller leads.

Being successful in Direct Mail is part art, part science. Most investors get it wrong by assuming that the direct mail piece itself is the most important part when, actually, the list you are sending to is more important than anything.

That's why I've directed so much of Leadflow's time and resources over the past few years developing LeadPipes. It's a list engine built into Leadflow that uses the highest quality data in the industry to provide powerful lead lists and filtering options to build the best lists possible for your business. Currently we have access to over 148,000,000 property records across the United States. 

Here are some of the more popular list types out there that real estate investors often target: 

• Absentee Owners
• Active Listings
• Bankruptcies
• Bored Investors
• Cash Buyers
• Foreclosures
• Free & Clear
• High Equity
• Long-Term Owner
• Low Equity
• Potentially Inherited
• Pre-Foreclosures
• Vacancies
• Zombie Properties

I cover that, and more, in The Ultimate Guide To Real Estate Direct Mail report that I wrote. That report can be downloaded above.

Before you start sending direct mail campaigns, make sure you are ready to take the calls that result. Here is a copy of The Ultimate Seller Script that some of the top real estate investors developed for talking to sellers.

MULTIPLE LISTING SERVICE (MLS)

The second best lead generation strategy for real estate investors is farming the Multiple Listing Service, also called the MLS.

The MLS is where real estate agents list properties that are actively on the market.

I’d estimate that about 8-12% of on-market properties are great investment properties. That means you have to get good at whittling through the 5 million or so homes that are sold each year on the MLS to be successful.

The key to doing this is to go through the property descriptions that the real estate agents write for the property. There are several keywords that real estate agents use that often indicate if a property is in distress or if the seller is highly motivated.

I’ve put together a list of 57 keywords you can use to find potential investment properties on the MLS. It's called the Keyword Tracing Report and you can download it above. 

Once you have the list you can then search through MLS listing data on the MLS, if you have access, or through services like FlipComp.com to find them. FlipComp is a product of Leadflow that gives investors access to MLS listing data to find potential deals and then the tools to comp and analyze them. 

Once you find a potential investment deal on the MLS it’s critical to make offers fast on them to be competitive. We’ll talk more about that in Step 4: Make Offers.

REFERRALS

The third best strategy for generating seller leads is referrals. Referrals are exactly as they sound; getting someone to refer to you a property that might be a good deal.

There are a lot of different ways to do this, but it starts with building a brand around your business (remember our solid foundation concept from the first email) and then networking and letting as many people as possible know about what you do.

The trick is to always be prepared to answer this question, “so, what do you do?” Here's a good elevator pitch that you can tweak for your business...

“I own a residential redevelopment company called ________. We buy homes that are oftentimes inherited, in disrepair, are vacant, or are in pre-foreclosure. Then we fix them up, and sell them. Do you know anyone that might be interested in selling a home like that?"

As one investor I know always says, "always be asking."

Even if you are on the phone with a seller and it doesn’t sound like it’s working out, ask the question,

“I know you aren’t interested in selling, but do you know anyone else that might be looking to sell their home or is in need of any help when it comes to their home?”

It can be that simple. You’ll be surprised once you start sharing what you do with more and more people in your circle of influence, how many people will start referring properties to you. 

Now that you’ve got a solid understanding of how to generate seller leads, next week I’ll be talking about how to analyze them to protect you from making costly mistakes.

DISCLAIMER

These documents and information contained herein are designed to provide accurate and authoritative information with regard to the subject matter being covered. It is given with the understanding that the authors and distributors are not engaged in providing legal, accounting, real estate or other professional advice.

If legal advice or other expert or professional assistance is required, the services of a competent professional person licensed in your area should be sought.