Today, Rob Caldwell elaborates on the life of a lead, especially pertaining to after your initial appointment.
Mike: Welcome to the We Buy Ugly Houses show, where real investors share real investing stories and lessons from the trenches, where our team buys thousands of investment properties each year. Now, let’s meet today’s host.
Rob: Hey, everyone. My name is Rob Caldwell and welcome to the We Buy Ugly Houses real estate investing show. Today, I want to talk with you about when does the life of a lead begin? As real estate investors, we do a lot of things to attract sellers to call us so we can go on an appointment and make an offer to buy the house. I don’t know if you’re using direct mail. Maybe you’re using billboards or radio, or TV. Those are some of the things that we do. But whatever you’re doing to make that phone ring, I’m going to suggest to you a new way of thinking about that lead.
Let’s talk about the current system and how it works. Generally, when the phone rings, we’re going to try to make an appointment as soon as possible. We want to get out there and get in front of the seller. We’re going to do all of our due diligence. We’re going to do our comparables. We’re going to look at the repairs and then we’re going to have a discussion with the seller, and then we’re going to present our offer to the seller. Generally, most times, we’re walking out the door without a contract. We’ve left our offer with the seller, they’re going to think about it, whatever it is that they need to do, and now we’re off to the next lead.
But what I’m going to suggest to you is a new way of thinking about leads. I’m going to suggest that we think about the life of a lead after the appointment. You’ve made your offer, the doors close behind you, and now we’re going to set up a process for managing that lead, some sort of a system for follow-up because that’s when we buy the most houses. We know, we have the data that supports that we buy more houses on the follow-up than any other time. To kind of put this into perspective, I’m going to talk with you for a second about what we call conversion ratios.
Conversion ratios are actually when the lead comes in, we’re actually taking the total number of leads that we receive and converting that into a purchase. So how ever many leads in your business is an average. In our world, it’s about 20 leads equal one purchase. So in the beginning, as a new real estate investor and the people that I work with, I tell them, “You’re not going to buy a house the first 90 days you’re in business.” Don’t even think about it. Your conversion ratios are going to be really, really low.
But a guy who’s been in business for a year or year and a half, or two years, he’s probably going to buy more houses and his conversion ratio is going to be higher. Why? Because now he’s actually purchasing houses on appointments or from leads that he’s received many, many months ago. I had a guy call me not too long ago that told me he’d bought a house and he’s been in business for a year and a half. But he bought a house from somebody that was his first appointment he attended a year and a half ago. So that improves his conversion ratio and that also confirms and backs up why it’s important to think about the life of a lead after you’ve gone on that initial appointment.
So don’t discount that lead after you’ve made your offer and the seller said no and you’re going down the road. Think of the lead’s life just now beginning after you’ve made your offer to the seller. So I hope that helps with understanding leads and maybe putting a new perspective on how to consider and think about your leads. Again, my name is Rob Caldwell and I want to thank you for watching the We Buy Ugly Houses real estate investing show.
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