When I started this post it was going about the executive summary of the business plan that I am developing for my wholesaling business. As it grew I discovered that what it really wanted was being a post about the touch points that a wholesaler can attempt to find leads. Guru’s are going to tell you that there is a magic bullet bulls-eye spot for your wholesaling. There might be one for them, but the real question is; what your sweet spot is going to be? A wholesaler must generate leads through multiple avenues so that they can find a diamond, or heck, even a garnet in the rough. There are a lot of generally accepted methods of building a lead network:
- Bandit signs
- Direct mailings
- Internet Traffic
- Driving for Dollars
- Real Estate Agents
- Classified Listings
Each of those seven methods has a large amount of subsections and ways to generate leads. Most beginning wholesalers take a shotgun approach to their marketing engine. They try too many things and get disappointed when the results are dismal and the costs are high. The accepted knowledge of how to really generate results and increase your conversion to more than 5% is to become a subject matter expert. Test, re-tool, test, re-tool. It’s about refining the way that you want to market. Focusing on one however is not going to generate the amount of leads you will need to make the transition from your day job to becoming a real estate jobber. How are you going to generate the 200 leads a month that you must have to make that transition? It really doesn’t matter which method you choose, and there is definitely no ‘right way’. And there is no ‘wrong’ way. If there was a wrong way it wouldn’t be a generally accepted method. Each method requires a certain amount of time and effort, some require larger cash outlays, but regardless of what any ‘guru’ tells you t
here is no instant way to lead generation that does not require time, effort and focus. Let’s take a look at some of the sub-marketing methods of finding those leads. You will be able find a lot of information around the web and a ton of eBooks on each these of subcategories.
Bandit Signs. Well, bandit signs are bandit signs. But what about bulletin boards, flyers, car magnet advertising? These are all different types of bandit signs that you can use. I am sure if you live or have lived on a major metropolitan area you have seen the “We Buy Ugly Houses” signs featuring the cave man. Those are a pretty impressive bandit signs. Other types include: door hanging, pizza box-toppers, etc. The problem that you might see with these are two things: $$$, and time/effort. It takes a lot of both to get out in front of a mass audience like that to get the phone to ring, or the website found on the internet.
Direct Marketing. Wow, there are so many ways to do direct marketing it is intimidating. You’ve got to develops what your touch points are going to be. Some of the most common sources are:
- Notice of Default
- Absentee Owners
- Divorce Proceedings
- Liens (Tax, Mechanical, Contractor, Bail Bonds)
- Specific Equity requirements
- Zip-Code Blasts
- New Movers (maybe they haven’t sold their old home yet?)
- Code violations
Direct marketing requires a higher acquisition cost but can get a very targeted demographic. It requires a lot of testing. One of the great things about direct marketing is that you can generally increase your percentage of responses by getting into the details of your list. There is a lot of information on the internet about direct marketing. Let me know what your favorite sources are!
Internet Leads. For every online resource to help you with direct marketing there are four online resources to teach you about online lead generation. Internet leads are all about driving traffic to your website so that you can capture more information about people on their schedule and not yours. Most of the advice you are going to find is focused on how to drive traffic to your site they include the following: SEO, social media outlets; Twitter, LinkedIn, Facebook, Pinterest, Instagram, G+, and so many more, PPC; pay-per-click advertising, Blogging (ahem!) to increase your expert status, offering freebie guides, and a host of other ideas. My thoughts on internet leads however are going to leave out some of the juiciest deals. Grandpa who has lived in his home for 30 years and has a ton of equity, is not going to be surfing the web to find out that you want to buy his home to cover his medical expenses.
Referrals. Often touted as the best route, or the place to find the best deals. Get out there and meet people. Take business cards and hand them out to everyone. Your dentist, your doctor, your barista, your bartender anyone who you might think people talk to other people all the time about. How about the hairdresser or barber? Network meetings; professional networking (chamber of commerce, business professional women) or service oriented clubs (Kiwanis, ToastMasters, etc.). Become known as the guy who can help sell real estate. Remember that with all other avenues, the only way to become known as that guy, you need to be out there and getting people to know you. It might take months before people in the club know what you do, but after you commit the time it becomes an engine! There is no telling how far you voice can carry when you are professional in these clubs and people come to know and trust you. Don’t forget the other set of referrals: Bird-dogs and other wholesalers.
Driving for Dollars. You need to first know your farm area assuming you believe in investing locally over not. And while you are doing that you might as well be the driving for dollars. Of all the other strategies this one has one of the lowest costs, but yields far fewer results. It’s still a great tool to have in your belt. When thinking about driving for dollars you should think about how you can automate this area. Get chummy with some pizza delivery guys and give them a $20 spot for letting you know about properties that fit your criteria. Talk to mail carriers and let them know that you are looking for properties where they are holding mail or are vacant. What about the FedEx guy? The garbage collector is going to know when a lot of furniture out or where there are houses that haven’t had garbage collection in a while. Think about the people who do the same route daily or weekly that would appreciate a little extra cash just to give you a heads up.
Classified Ads. You might be thinking that the newspaper is dead. But if that is the common thought process, then maybe you should zig when other people are zagging. Its been a cornerstone of real estate for so long, but we were so ready to give it up when print died. A lot of people however haven’t given up on print. Get those people! Other classified ads include the infamous Craigslist.org, but your mileage will vary on that site dependent on how savvy your farm area is. I consider all the other online mls-like websites; Zillow.com, Trulia.com, RedFin.com, LoopNet.com, et Al, to be classified sites. You can save properties that interest you and keep tabs on them. Usually you can get alerts about when it goes under contract, falls out of contract, price reduced, and a host of other things. What better way to watch as a seller becomes more distressed. And it’s automated!
Phew! That is a lot of information to swallow huh? Well the good news is that you aren’t supposed to swallow all of it. You need to find the ones that you want to work with and become an expert in a handful of those techniques.