Occasionally, at the close of a seminar or a panel, someone will ask me the dreaded question: “How many real estate leads do I need to get started as an investor?”
It’s a difficult question. But I understand why they ask. Everyone wants to quantify how much “work” they need to do to get started—and I need to inform them that the quantity of leads is not what matters.
I tell them this: When I landed my first job right out of college, I had to submit three applications. Today, people tell me that number is closer to three hundred. But whether you go through three or three hundred applications, you only need one job.
How many real estate leads do you need to get started as an investor? Technically, you just need one. You need one lead that closes.
How Many Real Estate Leads Do I Need?
Sure, you can send 1,000 mailers to 1,000 leads and potentially land a great deal. But how much time (and money) did you spend? Think of real estate investing in terms of cost-benefit analysis. You want to obtain the best quality leads in the least amount of time.
Consider this: You get a call from a friend, and he has a fantastic lead for you. You call them back, make an offer, and it’s accepted—a verbal deal. A single lead turned into one sale in almost no time at all.
One well-qualified lead is better than hundreds of shaky ones. So, how many real estate leads do you need? Enough to get the deals you need to meet your investment goals. Having more leads isn’t always better. Sometimes, they can just waste your time.
What’s a Good Conversion Rate for a Real Estate Lead?
It depends: How many deals do you need? You’re an investor, not a real estate agent: Every deal you make has consequences for your business. Some real estate investors purchase three properties a year. Others purchase 30. If you’re trying to buy your first property, you don’t need 30 leads. You need one lead that pans out.
What Makes a Real Estate Lead a “Good” Lead?
You’ll frequently hear about “qualified” leads—maybe so often that it doesn’t mean anything to you anymore. But a “qualified” lead is a lead that meets specific criteria signaling the seller is highly motivated and ready to make a deal.
A qualified lead:
- Needs (or wants) to sell their property quickly. They may have inherited a property that needs work, be behind on their mortgage, or just need to move.
- Will accept a reasonable offer on their property. They aren’t looking for a top-of-market price; they’re looking to get out of the property fast.
- Has a property that requires the amount of work (and money) you can put in. Some investors are comfortable with structural repairs; other investors want to design. Know what type of investor you are.
A “good lead” absolutely depends on the type of investor you are. If you are a landlord, you might not mind paying a little more for a turn-key rental. If you flip properties, however, you may want properties that need considerable work. The more work you can do on the property, the more you can potentially sell it for later.
What Is the “Wrong” Type of Real Estate Lead?
In short, the wrong type of real estate lead is a lead that doesn’t lead anywhere. Your time is valuable. Many traditional methods of acquiring real estate leads, however, will ultimately waste your time—especially in a competitive market.
Real Estate Lead Sources
- Direct mail. It’s expensive but effective. Frequently, it doesn’t pay off for months at a time. A homeowner may look at your direct mail, shrug, and set it aside—until they need to sell their home.
- Lead lists. You can purchase lists of distressed properties or individuals who have expressed an interest in potentially selling their homes. Unfortunately, these lists are often outdated, and you don’t always know if the people you’re calling even want to sell their properties.
- Online advertising. Online advertising is extensive today, especially targeted advertising through social media. Target all the homeowners in a given zip code and ask them if they want to sell their house. While you can obtain leads this way, they may not be very motivated—just curious.
- Real estate marketplaces. Zillow, Redfin, and other online real estate marketplaces provide a venue for FSBO properties. Unfortunately, many people know about these marketplaces, and they can be just as competitive as the MLS. Properties that remain listed for a long time are usually overpriced.
- Billboards and traditional ads. Billboards, display ads, commercials, and podcast shoutouts are all effective forms of advertising, but they’re also expensive. It takes a lot of money to start building a brand.
There are a lot of investors out there. Just ask your friends and family members who own houses. How many texts, voicemails, and mailers are they getting weekly asking them to sell their home?
And have they ever sold a house to one of them?
It’s easier to get a job when you know someone. Likewise, it’s easier to find great real estate deals when they come to you. While I can’t establish you as an investment guru overnight, I can give you a trick that you can use to give your investing career a kickstart.
Get the Leads You Need with HomeVestors®
Everyone’s investment strategy—and real estate market—is unique. I can’t tell you how many leads you need to close this month or this year. But what I can tell you is how to make the process of getting leads much easier. Buy into a nationally-recognized marketing campaign.
HomeVestors® has already invested in best-in-class methods of lead generation: billboards, commercials, radio, direct mail, and online advertising. When you invest in a HomeVestors® franchise, leads come to you.
Skip all the waiting. There’s only one real lead you need, and that’s HomeVestors®. Franchises are selling fast in competitive markets, so request more information today.
Each franchise office is independently owned and operated.