So, you’ve decided that real estate investing is your next big pursuit, but the problem standing in your way is how to get your first leads. You know that there are distressed sellers all around New York City and you are just the person to help them—plus, potentially come out ahead of the market. But, lead generation services generally cater only to real estate agents as part of their brokerage’s Multiple Listing Service (MLS) or Customer Resource Management (CRM) system.
Of course, these agents don’t want to share their system with you—it would ruin their business! And, since agents are the bread and butter of major online public property search portals, they won’t sell you lead generation services either.
Don’t despair, though. This doesn’t mean that investing is out of the picture for you, because there are alternative options for real estate investor lead generation.
Comparing NYC Lead Generation Methods
A traditional method for attracting the attention of potential sellers is outbound marketing. These services compile data from multiple sources to create regionally-specific lists of homeowners and mortgagees. Investors may then purchase those lists and manage their own direct outreach. Or, the company will engage targeted individuals and groups through either direct mail, email drip campaigns, or e-newsletters on your behalf. This method of lead generation has a low barrier to entry; however, it also amounts to a numbers game. The response rate is quite low and the conversion rate even lower, but may rise slightly after a potential lead has seen your ad several times and develops a familiarity with your branding.
Putting your message in front of select audiences repeatedly is the same strategy that ad networks, like Google Adwords, employ. While ad networks enable you to target specific demographics according to criteria such as geographic location and online behavior (maybe even people searching for “how to sell a house” online!), there are costs involved. Pricing models can include cost-per-click, cost-per-view, or cost-per-acquisition and may vary according to market reach or advertisement format. Some ad networks are more reliable than others, but one major concern with utilizing any ad network is transparency. You need to be able to trust that the network will appropriately match your ad to relevant content and audiences. Otherwise, it’s just a waste of your time and money.
Some companies offer a valuation service widget that can be placed on your website to engage sellers who want to know what their home is worth. Potential home sellers provide their contact information in exchange for information on the valuation of their home. While the leading services are typically only available for real estate agent websites, some offer their product to others like you. Contact information associated with the online valuation query is delivered to you for conversion. However, the drawbacks are significant:
- Inbound marketing online is tough. In order for a valuation widget to provide leads, you need to drive lots of traffic to your website. Offering valuable SEO content is the best way to appeal to audiences, which will either be time-consuming or potentially costly for you to do effectively.
- Valuation data may be incorrect or inconsistent. The value of the service to home sellers rests squarely on data accuracy. Many valuation services either rely on outdated regional data aggregations or do not update their data set regularly enough to keep up with market fluctuations.
- Potential to undermine your business approach. As a result of their data compilation methods, these services may give an inflated valuation to a potential home seller because it cannot account for the deteriorated state of many distressed properties. This, of course, does not position you well for approaching the home seller with an offer to buy.
Like the other lead generation methods, placing a valuation widget to obtain a potential seller’s contact information delivers a low return on investment—and potentially worse.
So What Really Is the Best Option?
The best bet for lead generation is gaining access to key local market data and insider support. Many investors have successfully found and converted leads by leveraging the well-known “We Buy Ugly Houses®” marketing tools and proprietary ValueChek™ software from HomeVestors®. As an independently owned and operated franchisee, you would receive training on how to manage end-to-end investment transactions, from lead generation to approaching a potential seller and seeing the property renovation through to resell. In addition, HomeVestors® matches each new franchisee up with a seasoned mentor who can guide you when questions arise. If you are ready to take the next step and turn those leads into real opportunities, request more information today.
Each franchise office is independently owned and operated.
Photo Credit: Flickr CC user Lei Han.