Real Estate Lead Pipelines
Your real estate lead pipeline is the most essential part of your real estate business. From agents to wholesalers to county auction buyers, every type of real estate investor needs to keep the deals coming and closing. The biggest mistake you can make is to pause lead generation and let the lead pipeline run dry.
There are several ways real estate lead pipelines are fed and kept flowing with leads and deals. These methods are very different and depend on which part of the real estate business you are in.
Wholesalers Are Especially Vulnerable to Dry Lead Pipelines
For many, wholesaling is the entryway to real estate, and it can be a bumpy journey full of harsh lessons. The harshest lesson a wholesaler will quickly learn is “Always keep marketing!”
When I was a wholesaler mentor, an acronym I made up was “MEAT,” which stands for “Market Everything ALL the Time.” I often told my students,
“Don’t forget that MEAT is important to every growing real estate business. If you stop MEAT, you will end up with no food on your dinner table.”
At one point in my wholesale business, I realized that many of the deals I was closing on came from a marketing campaign created nine months earlier. Countless deals over the years have resulted from people who said, “I got your postcard and put in my file cabinet for later” or “I found this in my mother’s papers when I was cleaning out her house after she passed.”
Although my activities at PropertyOnion.com keep me busy full time, I recently closed a deal from a postcard magnet I sent out seven years ago.
The seller said, “I kept that magnet on the side of my fridge, and when I needed to sell my rental in a hurry, I called you.”
I consistently sent postcards, called my phone lists for one hour a day, and marketed my website to collect leads. There is a reason I never stopped marketing.
After my first three deals, I got lazy. Instead of hiring someone to take over, I stopped marketing for a few months. About three months later the deals dried up, the phone nearly stopped ringing, and I realized how big of a mistake I made. It took another three months to fill my pipeline with deals, and I went hungry in the meantime.
Patience and Persistence Are Non-Negotiable
According to most wholesalers in competitive markets, it takes about six “touches” to get the lead into your system. That means you need to send six different pieces of mail, make six phone calls, or send six text messages to the customer to get them to respond.
Once they are in your system as a lead, it can take months or even years to close the deal. These are the truths you won’t read about on most “get rich quick with wholesaling” courses. You absolutely need to be marketing everything all the time.
It takes an enormous amount of persistence to get a seller to contact you, sign a contract, and eventually close. In the vast majority of the 100+ wholesale deals I was part of, it felt like I had to drag all parties involved over the finish line kicking and screaming. Each deal involved dozens of marketing pieces, 1,000 emails, and 10,000 phone calls to get my check at the end of it.
When I stopped marketing for the shortest periods, I had a dry lead pipeline a few months later. Wholesalers often experience an exceptionally long time between marketing and deal creation in the real estate business.
County Foreclosure and Tax Deed Deal Pipelines
County foreclosure and tax deed bidders also have a deal pipeline that needs to be worked consistently. This deal pipeline is different than a wholesaler’s pipeline, although the deals need to be nurtured with the same persistence.
As a county foreclosure bidder, you want to be alerted as soon as a property is added to the sale calendar. How experienced you are in the auctions game usually determines how early your pipeline is filled. Beginners’ pipelines might begin at three to four weeks — experienced bidders’ pipelines about five days to one week. Expert auction bidders like Joe Perez often start researching the day before or even the morning of the auction.
For 95% of the investors who bid at tax deed and foreclosure auctions, the pipeline begins at about three weeks.
As it gets closer to auction day, you need to begin the due diligence process. Check which party is foreclosing (if it’s a foreclosure auction) and do a preliminary check on other liens and encumbrances. The week before the auction, make sure your bidder account with the county has enough cash to cover your deposits.
Within 72 hours of the auction date, schedule a drive-by and a professional title check to give you a clear picture of the property’s title.
You should have all sorts of information about the property collected by now. The day before the auction, have an exact maximum bid ready to go.
Failing to Watch the Auction Calendar Will Cost You
If you let your pipeline run dry, properties that you want might go whizzing by you as they did me early in my investing career. I was looking to purchase a townhouse, which was half of a split duplex, from a motivated seller a while back. Owning half a duplex is historically problematic when dealing with rehabbing since there’s a shared wall, landscaping, front paint, and roof. I checked the owner of record on the other half of the duplex and quickly saw that the property was up for auction in two days.
I didn’t have time to get the cash together for the auction. It just wasn’t possible. I ended up buying half of that duplex and selling it to the auction winner three weeks later for a modest profit, but I missed out by slacking off and not watching the auctions for a couple of months. I could have had a home run.
For county auctions, staying ahead on the calendar is what filling your lead pipeline is all about. If you fall behind the county calendar, you will start missing deals. If you’re late and try to play catch up, that’s when mistakes — costly mistakes — happen. You can’t rush proper due diligence when it comes to county foreclosures.
Real Estate Agent Lead Pipelines Need Consistent Work
In today’s world of instant gratification, real estate agents need to be on top of their leads, maintaining what amounts to a warehouse full of spinning plates. If you are the type of agent who takes a day or longer to call or text back a prospective lead, then you are almost guaranteed to have lost it to the next agent on the page.
The top agents in any market are the ones who regularly manage their lead pipeline daily. They have systems in place to qualify their leads and filter them into the appropriate entry point and stage in their lead funnel. They employ multiple lead generation tactics like a website, social media groups, emails, text campaigns, postal mailers, signs, and open houses.
A good customer relationship management (CRM) software is essential for a modern agent. The CRM can keep your lead pipeline flowing and predict problem areas. It can even operate as an automated marketing channel that sends emails, texts, and postcards to your prospects.
Some leads are lukewarm but will convert down the road to a hot lead. Keep your info and headshot at their fingertips through some gentle weekly emails and a few postcard mailers. Other leads are better converted with follow-up phone calls and daily or weekly text messages. Individuals entering any of these sales channels are on a journey of their own. Savvy agents can identify which point they are at in their real estate journey and market to them accordingly.
A neglected real estate agent lead pipeline will have a significant impact on the agent’s bottom line and make it impossible to hit sale goals in the future. When the pipeline is neglected, agents are left scrambling to fill it again. Those with empty pipelines can quickly starve and often resort to more expensive short-term marketing methods to get the leads flowing again.
Persistence Is the Key to Leads
The beauty of a smoothly operating pipeline is that you can predict your sales, closings, and income at any given time. However, only consistent monitoring and nurturing will provide a consistent and hopefully growing income. Auction buyers, real estate agents, and wholesalers all need to keep the leads flowing and avoid any gaps to succeed in real estate.