If there’s one question that new investors constantly ask me it is: “what is the best way for me to find deals?”. I don’t blame them. Finding new leads is the lifeblood of a real estate investment business. If you can’t find new properties to buy, you won’t get very far in this game. That means knowing which lead generation strategies work best is incredibly important. But it’s not an easy question to answer. What works for one person may not work for another. That’s why in today’s article we aren’t going to provide a definitive answer. Rather, we’re going to look at the pros and cons of some of the most popular real estate investment lead generation strategies. We’ll leave it for you to decide which is the best choice for you
Ahh, direct mail. The classic real estate lead generation scheme. Anyone who has owned or rented a property has probably received a letter from an investor or a realtor at some point in their life. Many people receive one every week! It won’t surprise you to hear that, then, that direct mail is both a popular and relatively successful method of lead generation. But that’s not to say it isn’t without its downsides, too.
Direct mail can be incredibly cost effective. It’s not expensive to bulk print a load of flyers or to post them have or have someone drop them in letterboxes. It’s also very fast to do. It can take less than a day to find a list of people, design and print a flyer and send them off to be posted. Believe it or not, it also provides the opportunity to be personable with your audience and speak to them directly about a problem they may be having.
Naturally, because it is cheap and fast, conversion rates can be quite low. It is also a relatively competitive space. Every other investor in your area has probably tried direct mail at some point in their career. You also need to make sure that you have a highly targeted list to be effective. Failure to do so can make conversion rates even worse and can actually mean that campaigns become quite expensive. After all, you don’t want to be sending flyers to everyone, do you?
It seems like everyone is on social media nowadays. It’s not just millennials. Parents, grandparents and professionals are using Facebook, Twitter or some other social network site. Naturally, this can make it an effective lead generation tool for investors–if they know how to tame the social media beast.
Social media offers an incredibly high reach for a relatively small amount of money. Few other platforms of techniques can let you reach hundreds of thousands of people for a few dollars. Social media also offers you the chance to combine text and video to create truly captivating ads.
Not everyone is on social media and while you can target people to a high degree, it may be difficult to target all homeowners in your area. Social media is becoming increasingly pay-to-play as sites try to maximize ad revenue. This can mean higher advertising prices for investors.
Website and SEO
Who doesn’t have a website in this day and age. Okay, some old school investors may still prefer to fly under the radar, but most investors have a website, if only to give them an air of credibility and nothing else. But a website, if properly promoted to search engines using Search Engine Optimization (SEO), can generate a significant number of leads for free.
Ranking in Google can be hugely profitable, especially if your competitors aren’t. You’d be amazed at how many people search for how to sell their home quickly. So ranking first could mean a significant number of leads. Because it is online, it is also very easy to track. You can use Google Analytics to see who visits your website and what they do once you are on it. You can even use tools to track where you rank for certain search terms. We hired an SEO Consultant to boost our reach and it's been a huge catalyst for growth.
Although it doesn’t cost anything once you start ranking in Google, it can often cost a lot to get there in the first place. Hiring an SEO consultant to help you can easily cost $1000 per month. And it’s not quick, either. It can often take six months to rank on the first page of Google and you might not get there at all. At the same time, not everyone turns to Google for help.
We’ll end as we began, with another classic marketing technique. While old school door knocking has fallen out of popularity recently, it can still prove to be an effective lead generation strategy. Just be prepared for some rejection.
It is probably the most effective form of marketing for prospecting motivated sellers. If you knock on the door of someone wanting to sell their home, they are going to have a chat with you. It also gives you the opportunity to meet the seller and actually see the property. You’d be amazed at what human connection can do for your sales prospects. Best of all, it’s free. The only thing it costs is your time.
While it is free, it is incredibly time consuming. Many investors will feel their time could be better spent elsewhere. It can also be very disheartening to have the door slammed in your face one hundred times a day. While some people may love the human connection, people who are being forced to sell their home may not wish to meet the person taking it from them.
So there you have it; the pros and cons of four of the most popular lead generation strategies. Which is your favorite? What strategies are you going to start implementing in your business? Let us know!