Investing in property doesn’t always have to involve large deposits and deep pockets. By simply choosing the right strategy, you can create a property business with very little, all the while developing the skills that will allow you to build a portfolio later down the line if you choose to.
So grab a coffee, pull up a seat and discover how to get started in property on a shoestring budget and start a property business that cash flows from day one.
In today’s video, we look at just one of the Cashflow Strategies that can help you achieve this, by selling/trading Property Leads. Including
> The pitfalls and upsides of the selling property leads strategy
> Where you can make the money
> Is this strategy right for you, your personality and your situation
> & real-life case studies on how selling property leads works in the real world
[0:14] The basics & introduction on sourcing property leads
[1.16] Where the money is in this cashflow property strategy
[2.34] The different lead categories & how they work (Raw, Contacted, Qualified, Aged leads)
[3.56] Quick Lead generation tips
[5.12] Who this quick cashflow strategy is best for?
[7.26] Assets that will help you be a success with selling property leads
[8.42] The timeframe – how long should it take to get up and running
[10.24] Investor tips
[11.37] Lead selling example and figures
[14:00] A Real Life case study (How NOT to do it)
[16:50] Mistakes I realised I had made
[18:42] Key changes I made to make our newspaper lead sourcing a success
[20.05] The top 3 things I would do differently
[21:46] Real Life case study (When it Goes Right!)
[26.08] Key tips I learnt from doing Pay Per Click for sourcing property leads
Building a successful property portfolio, whether you have a lot of cash or none at all… all starts with being able to find the right properties and deals
In the early days you might be looking to build up your cash flow and decide to ‘trade’ these leads & deals, and this is exactly what this strategy covers.
It’s a simple process where you generate your own leads for motivated sellers.
You do your own marketing to get sellers contacting you directly, and you can even go as far as pre-qualifying them or semi-negotiating them if you wanted to add value to the lead. The more work you do the more you can sell a lead for.
Once generated you would sell these leads on to other investors, who have the cash to buy properties but not the time to source them themselves.
Leads & Deals are two separate things and two different strategies and Later on in the guide we will discuss property Deals, but this part is all about Trading Leads.
Where the Money Is
In volume, there is big money in selling on leads.
Just google ‘Sell my house quick’ or any other similar phrase and you will see the massive amount of competition, all competing to generate leads from ‘motivated sellers’ from across the UK.
But what you may not realise is that not all of these companies are looking to buy the properties themselves, there are a lot of professional ‘lead generation websites’ in this mix too.
These companies are great at marketing… they set up a website… generate leads and sell them to individual investors or the larger companies.
These leads are sold from anywhere from £5 to £50 per lead.
They will usually fall into one of these categories:
- Raw lead (just basic details like, name, address, telephone no, mortgage outstanding, reason for selling)
- Contacted lead (as above, but a phone call or email has been sent to the seller to confirm the details are correct and the seller has responded)
- Qualified lead (the seller has been called and semi-negotiated, they have been given example offers to see what they might accept)
- Aged lead (a lead that is old – possibly 6 months+, didn’t accept the original offer, but who’s situation may have now changed)
Aged leads are very hard to convert and due to their age are often not contactable so these are the lowest quality and sell for the least.
Qualified leads are hotter, more information has been gathered, and these sell for a premium.
I know investors that sell a couple of leads a week to friends at networking meetings AND I also know large companies that sell thousands of leads a week across different industries. The options are endless and you can fit nicely into the mix if this is a strategy you want to look at.
In addition, you can even think outside the box and sell leads on to local estate or lettings agents, for sellers you have spoken to that won’t accept low offers. These vendors still need a solution and you can provide it.
The market for this is big… and there’s a lot of money to be made if you can find the right leads and the right buyer.
Situation it’s Best For
Cash Poor & Time Rich
This is a great strategy, but it can be very time consuming generating the leads and trying out different marketing strategies, and ultimately it is a cashflow strategy as you’re not building up any long term wealth or assets (ie: your own property portfolio)
If your Time Poor then it may be a better use of your time to outsource finding the best property deals and hire a sourcer to find and negotiate the properties for you.
But if you are Cash Poor and Time Rich, this is a great starting point
Set up the right systems and you can be trading leads very quickly. If you start locally you can sell them quickly and build up investor contacts at the same time.
Your starting point should be thinking about approaching property investors who place adverts in local newspapers, go along to property networking events in your area, and use social media (linkedin, facebook, google+), to see who is active in your town and talking about property investments.
These are all great ways to find buyers for your motivated seller leads once you start generating them.
Assets That Will Help
- Marketing skills and experience (to generate leads online from a website or through more local methods like leafleting, newspapers, cards in windows..etc..)
- Telephone skills and the right personality to deal with vendors directly over the phone
- ‘Time’ to be a regular visitor to networking events and meet with other local investors to find buyers for your leads
- 2 weeks
One of the best things about this strategy is the speed at which you can get it up and running.
A pay per click online advertising campaign can be setup and running within minutes once you have your website and keyword research done.
Another key to the speed is the leads are traded as they are, you don’t have to wait for an actual property sale to complete, so as soon as you have generated the lead, you can sell it on for immediate payment if you have the right buyer.
Most companies provide 7 days credit to lead buyers and replacements or refunds for un-contactable leads.
So be genuine, provide quality leads and you can start to make a very healthy income by dominating your local area.
Now marketing for leads can be expensive, but if you learn your trade and know what your doing you can bring these costs down significantly.
Investor tip: One of the largest costs of marketing is time. Delivering leaflets and setting up and marketing a website, for example, are time intensive. If you do this yourself in the early days you can really stretch your budget and bring down your costs to generate each lead.
If you are planning to sell leads then you need to do this work yourself. Outsourcing this work will mean your cost per lead will increase and make it harder to make a profit on the leads.
I would only recommend outsourcing this time if your planning on using the leads for buying your own deals, or you are trading ‘Deals’ and not leads as the profits are much higher.
Let’s say you spend your own time and £100 on marketing. This could be spent on printing 10,000 leaflets, designing and building a small website or placing a small newspaper advert.
Let’s say this marketing generates 10 leads.
This costs you £10 per lead.
If you can sell them on average for £20 per lead (the current industry standard is between £20-30 for a contacted lead).
Then you have made a 100% profit and doubled your pot.
Don’t get me wrong… it’s time-consuming, especially if you’re working with smaller budgets.
Because you will be the one doing all the work of building and marketing your website, designing and delivering your leaflets or researching and creating a killer, small newspaper ad.
But once you have perfected it, you can easily systemise this part of your business, scale it and it can then simply run on autopilot.
Scale this up by covering wider areas and you can make a few thousand per month just on trading leads.
A Real Life Case Study & How NOT to do it
When I first started out, I wanted to generate my own leads.
I knew if I went direct to the vendor I would be able to negotiate better deals because there would be no third party involved to limit the negotiating.
But I didn’t have any background in marketing or know how to get leads, so I was starting with a small budget AND no real experience of marketing.
The last leaflet drop I had done before this was with my personal training business. I sent out 100,000 leaflets in a local paper, and got 1 phone call… Talk about a disaster (and bloody expensive)
So this time I knew I wanted to start small.
So I decided to try a newspaper advert. I took out the smallest space possible in the ‘property wanted’ section.
It cost me about £40 and I ran it for one week…
No phone calls
I thought it was because the advert was too small, so I decided to increase it. Double the space… double the cost
Ran it for another week
Still no phone calls
It was starting to be a frustrating trial. It hadn’t cost me a fortune but it was money I didn’t want to waste.
I didn’t want to blindly run the advert again, so I wanted to see where I might be going wrong.
I went out and brought the local newspapers from all my nearest towns and compared all of the adverts in each of the papers AND in my local free paper.
I noticed a couple of things:
- In the free paper, there were more advertisers (more competition can be a sign there is a more established market, so higher potential for more leads)
- All adverts in both the free & paid for papers were significantly larger than mine and they were worded very similarly to each other…
I did this for a couple of weeks and noticed the adverts rarely changed. Some would try different fonts or colours, but it was mainly the same companies advertising week in week out. Very few just placed an advert for one week.
My advert failed simply because I couldn’t compete. It was too small, my message was all wrong, it didn’t have a strong call to action (a reason for a seller to contact me).
I knew I couldn’t compete on price as I didn’t have the same budget of the other companies. So I did the only other thing I could. I made my advert stand out in a different way
All of the other companies were large ‘brands’ with 0800 numbers.
So I made mine the opposite, I changed my wording to be a local investor, put my mobile number on the advert and said they could text or call me. I then ran the advert for 8 weeks.
It was still small in size, but I started to slowly notice some leads coming through.
As the weeks went by, the leads increased as people were more familiar with the advert and more confident to call, as my advert didn’t come from nowhere one week and then gone the next.
It wasn’t an expensive mistake but cost me time to research, test and tweak, and it was all part of my learning curve.
Top 3 things I Would Do Differently
- Test small – but research your competition thoroughly first
- Be consistent – don’t just try one method and discount it after a week. Be regular with your marketing so people can see your ‘message’ a number of times
- Give a clear call to action – make it easy for people to contact you, and give them a reason to. Don’t just say ‘call today’…. tell them why…. “We will pay your selling fees if you contact us today!” as an example
A Real Life Case Study – When it goes right
One of my earliest ways of generating leads and finding sellers was through a website.
I spent a bit of time learning how PPC (pay per click) and SEO (search engine optimisation) advertising worked so I could generate leads online and I managed to get a steady flow of leads coming to my site.
The downside to this was I only wanted to buy local (or at least in the North West). But because the website was running all day every day and generating leads across the UK, I had many leads I couldn’t do anything with.
At first, I started to just ignore them, and only call the leads in my area, but I knew I was missing out… So I looked to find ways to make use of the leads outside of my patch.
After a bit of searching, I found a website that just sold property leads. You could upload your leads to the site, and they would sell them on your behalf to their list of investors.
At the time the leads were selling for around £50 per lead, and the commission was a 50/50 split with 50% going to the site.
So I was getting around £25 per lead.
I wasn’t ‘skilled’ at internet marketing, and I didn’t know then how to get lots of leads other than the regular trickle that was coming through.
But I was selling around one lead a day from the site out of my area. Not lots but it adds up when you’re working on a small budget believe me.
Investor Tip: If you decide to look into internet marketing to generate leads, then it is very important you learn about Pay Per Click and SEO before you lose your shirt on paid advertising on google or other sites.
To bring your marketing costs down it’s best to concentrate on something called ‘Long Tail Keywords’.
It was costing me around £10 per lead to generate when I took in to account my Pay per click costs.
So for not much work, I was making £100 per week…
Only small, but it was a sideline to me focusing on my own local area and I could put the budget back into my marketing. If I was committed to just ‘lead selling’ then the figures would have been much higher, and with this strategy alone you could run a good cash flow business if you scale it.
So if you have the skill set to generate leads, cost effectively…Then this is a great way to make money from property, with very little investment, large deposits or the need to deal with tenants.