When I crafted my first real estate investment business plan, I’d already been trying to make a career out of buying and renovating houses to resell or rent out on a full-time basis. After two years of failing to scale at the level I needed, I finally wisened up and set more strategic goals. The benefit of getting clear about what you want to accomplish is that the path for getting there becomes more obvious as well. For me, this meant significantly increasing the number of motivated home sellers I had access to. But, to do that, I had to rethink my strategy for generating qualified leads that are more likely to convert.

My friend and colleague, Kevin Guz, went through something similar when he made the decision to shift his part-time dabbling into a full-time real estate investing career. And, like me, the realization that he needed a high volume of higher-quality real estate investor leads drove him to become an independently owned and operated HomeVestors® franchisee. Now, he owns and operates a variety of industry-related companies in the Dallas Fort-Worth area that focus on everything from managing rental properties to wholesaling. As busy as Kevin is, however, he still makes time to talk. And, the last time we did, we marveled at just how far our careers had come and how having access to the right leads helped to get us here.

The Importance of Having the Right Real Estate Investor Leads

Like a lot of folks who start investing in real estate, Kevin first stuck his toe in the water before committing to leaving his corporate job behind. In fact, the demands placed upon him at work only allowed him just enough room to visit potential investment opportunities during his daily lunch hour. But, his persistence paid off. During his first six years as an investor, he acquired six properties—about one per year—that he held as rentals. Since his dedication to his corporate responsibilities never wavered during this time, his success as a real estate investor, he says, surprised even him. It also opened him up to the idea that buying residential investment property could, quite possibly, be scaled into a full-time business.

With this realization came the motivation to rework his real estate investing business plan so that it reflected both his new goal of buying property full-time and how he intended to do it. Experience had already taught him, he says, that “unlocking the volume, scale, and full potential of real estate investing,” would hinge on his ability to “generate more distressed homeowner leads.” So, if Kevin wanted to take the full-time investing leap, he’d have to find a robust lead generation strategy to catch him.

Challenges of Using the MLS for Real Estate Investment Leads

Getting those leads, however, was harder than Kevin thought. Relying on the MLS as a primary resource for motivated seller leads, as Kevin did, is a typical rookie mistake. The popularity of the MLS reduces the number of investment opportunities you may be able to get. But, competition isn’t the only downfall of using the MLS, either. Kevin notes that the sellers whose homes are on the MLS are usually not as motivated as the individuals who haven’t listed their homes. And, there are good reasons why:

Distressed homeowners don’t have the time, luxury, ability, or the proper property to market formally on the MLS. They generally don’t have time to wait for a traditional 45 or 60-day close, the resources to spruce up their property and make it ready to sell, or even a lifestyle that allows for showings with 15-minute warnings. Or, they may simply have a property that no one will list for them due to its state of disrepair.

Another issue with an online retail platform like the MLS is that it erects a barrier between you and the homeowner. So, the opportunity to treat someone with compassion, to empathize with their situation, to engage in honest communication, and to demonstrate that you can solve their “ugly situation” is lost. But, it’s by approaching distressed homeowners directly that some of your best deals are made. Very often, someone who’s been able to unload their home quickly because of impending medical bills, a death in the family, or burdensome property taxes will feel the same. Per Kevin:

After investing for a while, you realize it’s rarely about the house; it’s almost always about the seller—what their problems, challenges, or obstacles are. Purchasing their home is just a component of solving their problem or meeting their objectives. When you’re able to understand that and also show that you can provide a solution, a distressed seller will start to see you as the best option available—and, you are.

It wasn’t long before Kevin realized that the MLS was not feasible for the long term as a source of distressed home seller leads—he would need something else to build a full-time investing business, But, he didn’t have the knowledge, access, skills, or experience to tap into the other methods of generating leads. Kevin explained: “It was beyond my scope of understanding that there are different mediums that can—and must—be used to gain access to distressed sellers.”

Accessing Qualified Leads From Distressed Sellers

Kevin had to figure out how he could reach these homeowners and gain access to off-market real estate deals. Or, more to the point, how he could afford to. Developing a marketing strategy that utilizes direct mail, billboards, radio, television, and the Internet takes more money and time than most real estate investors have—no matter your level of experience. For example, if you think about what goes into creating a direct mailer campaign, then organizing that campaign so that it repeatedly targets homeowners who fit a specific profile, the sheer investment of time and effort that’s needed, says Kevin, is simply more than what most real estate investors can give. He illustrates:

As a small business owner at any level, but especially when you’re just starting out, you’re usually running the organization by yourself. You’ve got so many things you have to do and that you’re responsible for and that you can’t always delegate or rely on someone else to do. You’re the I.T. guy, the sales guy, the H.R. guy, the operations guy, and the accountant and finance guy. You have to do it all. But, the reality is, most people can’t.

Even when you come to the table with over 20 years of work as an executive in corporate America behind you, as Kevin did, managing all of these tasks on your own is still exceedingly difficult. And, at some point after starting your real estate investing company, you’ll have to leave more room in the day than just your lunch hour for buying property. Or, as Kevin likes to put it, you’ll “need to have feet on the street.”

Keeping Your Feet on the Street With Motivated Seller Leads

So, how do you let go of the cost, time, and energy that’s needed for generating qualified leads so that you can get—and convert—more real estate investor leads?

For Kevin, the answer was to join the HomeVestors® team:

I realized that learning how to efficiently get more leads, and at a rate that would allow me to fuel, run, and scale my business, was probably going to be one of my significant challenges. But, when I discovered HomeVestors®, I also realized that’s exactly what I could do. They have a proven brand and methodologies for generating high-quality leads at a high volume on a consistent, ongoing basis. In short, HomeVestors® provided the missing piece to my business plan.

By leveraging the trust generated by the HomeVestors® brand, maximizing his access to the “We Buy Ugly Houses®” national ad campaign, and making full use of the lead management software system, the scope of Kevin’s business has changed dramatically. He now generally buys one house every 10 days—or, 36 houses a year.

But, during our talk, he was quick to remind me that it’s not just about the numbers; there’s another aspect of the HomeVestors® franchise that attracted him:

The beauty of using the HomeVestors® system is that, from day one, it eliminates months, even years, of building a professional real estate investing business from the ground up. But, it’s the emphasis on developing the interpersonal skills of empathy, compassion, and understanding that go hand in hand with successfully dealing with distressed sellers that sold me. And, when you’re sitting across from a homeowner who needs to sell their house, it’s clear that having these skills sells them, too.

Apparently, the attraction is mutual. Kevin’s passion for the importance of connecting with homeowners and the role it plays in lead conversion earned him an invitation to speak as a panel member at HomeVestors®’ Annual Convention. There, he not only talked about how critical it is to build rapport with potential home sellers but how every effort must be made to regularly follow up to maintain that rapport in whatever way is most effective—for the seller. If you ignore your part in creating the kind of connection that helps a homeowner see you as the solution for their “ugly” situation, and someone else will.

Maximizing Your Investment Potential

Not everyone who becomes an independently owned and operated HomeVestors® franchisee arrives with the same innate understanding that the seller’s experience is as important to the deal as the house you want to buy. I certainly didn’t. But, you learn it during your initial week-long training. And, you hear as much from more experienced franchisees during panel discussions like the one Kevin participated in. It is when you get your feet on the street, however, that you start to see that the opportunity to convert real estate investing leads and maximize your potential as a real estate investor begins when you are ready and able to provide answers to a distressed homeowner’s call for help.

Kevin, it turns out, takes that responsibility quite literally. “I personally answer my phone every time a lead calls.” With as many qualified leads on motivated home sellers as HomeVestors® franchisees like us get, I’m surprised he had time to talk to me.

If you want to increase the number of distressed homeowner leads who call you and improve your ability to convert them to sales, call HomeVestors®. Someday you’ll be able to marvel at how far along your professional real estate investing career has come, too.

Each franchise office is independently owned and operated.