This week, we’re going back to basics and answering some fundamental questions about getting started in real estate.
Today, we’re going to talk about generating leads. A real estate investor has two important activities:
- finding deals
- finding money
Those are the only two things that you should really spend a considerable amount of time on. In many ways, finding leads is the more important activity of the two because having money is no good to you if you can’t find deals.
As a new investor with not a lot of contacts or experience, there are a lot of things you can do. Let’s talk about a few ways in which you can generate leads:
- Drive for dollars: This means driving around your target market (usually something close to your home with lower to medium level houses) and writing down the addresses of all the houses that look like they’re in disrepair or abandon. Then, you go to the city website and find the names of the people who own these houses. You can call those owners and see if they’re interesting in selling.
- Find a good realtor: Find a realtor who has access to the MLS, tell them what your criteria are (what neighborhoods your interested in, how much you’re willing to spend, etc), and tell them how you evaluate a deal. Use the formula we talked about yesterday. They’ll scour the MLS and find you possible leads. That’s how I found all my deals for the first several years I was in this business.
- Befriend other investors: Go to your local RIA and start building relationships with other investors in your area. Sometimes they’ll refer deals to you.
- Find a good wholesaler: Find someone in your area who is dealing directly with sellers and looking for investors. Tell them what you’re looking for and get them to start sending you leads.
- Market yourself directly: Create a postcard or yellow letter, find a list (List Source is a good resource), and send it to the people on your list using something like Yellow Letters or Click2Mail. You’ll start getting calls from motivated sellers. This costs money, but it’s another way of finding leads.
- Finding leads online: Set up your own lead generating website. I didn’t understand how to do this for years, but it can be incredibly powerful. Lead Propeller is a fantastic way to get started, and don’t forget that you can get a month free as a listener of this show using the code “JUSTSTART.”
Finding leads is the lifeblood of a real estate investor, and they have to be good leads. You have to be able to sift and sort using the formula we went over yesterday. There are good deals out there, but you have to work to find them.
Once you get a deal under contract, you can then either buy it and flip it, buy it and rent it out, or wholesale it to another investor.
I hope you found this week of going over the basics useful!
If you have any further questions, don’t hesitate to email me and I will help you as much as I possibly can.