The Top 3 Lead Generation Sources for Real Estate Investors
To be a successful real estate investor, you need to have a steady stream of reliable leads. However, creating a sustainable pipeline isn’t as straightforward as one might think.
There are two general types of real estate leads: buyer leads and seller leads. If you’re a fix-and-flip investor, you’ll need both. However, most investors agree finding buyers is more straightforward. The seller leads are where the real challenge comes in.
If investors can locate motivated sellers before they list a home, then the chances of getting a good deal increase. Plus, the odds of having to compete with other investors or buyers decreases.
However, it’s a competitive market, and finding home sellers with valuable homes who are willing to sell at fair or below market prices can be a challenge.
Most of the conventional advice says to network with your community and real estate agents. While this advice is valid, it isn’t going to be enough to set you above the competition, because most savvy investors are already networking.
These top three lead generation sources are proven strategies to help you find sellers and keep your lead bucket full and your business thriving:
1. Google Search Ads
Google Ads is a powerful online advertising tool that can be invaluable to real estate investors. It’s options, features, and settings can be overwhelming at first, but the power of Google search ads shouldn’t be ignored.
Too many real estate investors get overwhelmed by learning how to use Google’s PPC platform and decide it isn’t worth trying. If you commit to learning a few simple tricks, you can quickly build a steady stream of leads.
With Google search ads, you’re buying digital ad space that will show up, or trigger, in search results when people type in specific search terms (aka keywords).
For instance, you could choose to show ads anytime someone searched “how do I sell my home?” You can (and should) get more specific by choosing search terms that are more specific to your area, ideal seller type, and offerings.
(Many people know about search ads, but you can also use Google’s display ads and have your Google Ads show up in Google Maps, on Google search partner websites, and other places around the web. These ads aren’t based on search terms but on defined audience targets, like people who’ve visited your website before or people who fit certain demographics, opening up a whole other world of lead generation possibilities.)
Essentially, using Google search ads, you can set up “I Buy Houses” billboards that pop-up only when people are already actively searching for what you’re offering. It’s a potent tool for lead generation.
The most important thing is setting up your budget and goals correctly and monitoring and adjusting as you go. It’s also good to get very familiar with geotargeting, using negative keywords, and ad extensions because they’re beneficial features for real estate investors.
Real estate investors who’ve mastered Google search ads swear by its efficiency. With the right goals, it’s an easy way to make sure leads keep pouring in with minimal ongoing work from you after the initial set-up.
2. Direct Mail
Believe it or not, direct mail is still a terrific and cost-effective way to build up a steady stream of interested sellers. There are several strategies for direct mail campaigns, but in general, it involves mailing letters to a group of targeted homeowners to ask them if they’re willing to sell.
You might have to send the targeted group several letters to warm them up to the idea of selling before they give you a call back. Still, it can be an incredibly effective way to reach sellers before they list or before they have even thought about selling.
One of the essential components of direct mail pieces is choosing the correct list of targeted homeowners. You don’t want to just mail letters to every homeowner in a one-hundred-mile radius. That’s a waste of postage and won’t lead to very effective returns.
Instead, you want to zero-in on specific homeowners and properties, including:
- Homes that appear vacant or in disrepair
- Homeowners in tax default
- Landlords who live out of state
- Homeowners on probate
- Homeowners in pre-foreclosure
- Homes in up-and-coming or desired neighborhoods
You can gather a lot of this data through public records or by visiting a local county website. You can also drive around and make a list of homes to direct mail. You can also purchase targeted homeowner and property data for less than a penny per record from several vendors online.
Once you’ve aggregated your mailing list, it’s about writing letters that pitch your offer and benefits to potential sellers. Keep in mind that polished direct mail campaigns can garner an average 2-9% response rate.
If you mail 100 people, you can expect between two and nine of them to respond to your campaign. Then, it’s on you to close the deal. While that might seem like a low response rate or a lot of work for a low reward, it’s a low-cost, high ROI option for many real estate investors.
For optimum results, send out a mail piece at least once a month to your targeted list, and continue targeting this same group for three to five months. Test out different mail formats (like handwritten letters, postcards, and flyers) and different copy to see which converts best. At the end of the three-to-five-month period, it’s time to get a new list of potential sellers.
How effective is direct mail? One real estate investor said an average campaign cost her around $1,500 (purchasing data and sending three letters to 822 people). She ended up closing two deals, resulting in a $20,000 profit. The conversion rates look low, but the profit margins are evident. It’s clear to see why direct mail is a top lead generation source for real estate investors.
3. Expired Listings
Sometimes the most obvious source is the best one. Expired listings are exactly what they sound like they are. They’re listings that real estate agents had listed on MLS that didn’t sell. These homeowners are perfect real estate investor leads because they’re already frustrated.
Often, they’ve had their home listed for months, and despite working with an agent, their homes didn’t sell. These people are highly motivated to sell. They don’t need to be convinced. They just need to be presented with the right offer.
Often, these expired listings lead to immediate appointments. There are several methods to get these expired listings, including:
- Use the MLS Dashboard
- Mine Public Records
- Network with Real Estate Agents
- Purchase Expired Listing Leads
If you decide to scrape MLS data and public records, you will likely need to have a method for filling in the homeowner’s contact information. For instance, you might find a house that’s about to expire on MLS, but you don’t have access to the homeowner’s name, phone number, email, or other contact details.
Of course, you can send them mail, but you probably want to get in touch with these hot prospects quicker. You can get extra contact information from the listing agent, public records, or from data aggregation sources online. It’s important to know that mining and scraping MLS and public records can be time-consuming, which is why many people purchase the expired listings instead.
However, whether you mine it yourself or purchase the listings, expired listings are among the best lead generation sources for real estate investors.
Optimize Your Approach for More Qualified Leads
These three lead generation sources are some of the top options for real estate investors. To be successful, you’ll likely need several healthy lead streams, and these ideas are a few proven starting places.
It’s crucial to optimize your approach to enhance your success. Whether you’re doing search ads, direct mail, using expired listings, or utilizing some other method, you will need to optimize your techniques. Be sure to home in on your target demographic, ideal locations, and learn best practices for all your lead generation tactics.
Always test and improve your techniques. Try different copy or images. Use other public record sources. Draw from outside networks. Always try and test different approaches until you find ones that result in the best conversion rates for you.
If you aren’t afraid to learn new lead generation strategies and try unique sources, you’ll be ahead of all the other investors who idly surf online listing sites hoping to find a dream property.
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