Finding real estate deals is a difficult process but if you consider it as a funnel, you will be able to get hold of the concept and the complexities involved in it a bit more conveniently. We call it funneling because it starts with putting in a lot of raw leads, and the ones that get out from the bottom are quite lesser in number. But, those are the ones we can surely rely on.
So, what that funnel really is? Let’s find out.
The business persons, whose job is to get the deals closed, would probably have much better idea about getting the raw leads. There are a lot of ways we can get raw leads. Raw leads may include persons, along with their contact info, who wouldn’t have any intention to buy or sell the property. Still, that dispensable one is counted as lead as long as it stays in the list of raw leads.
To get the leads, there are software programs available that are programmed to search through specified domains quickly and create lists of leads.
Hot leads are the ones that respond to your marketing efforts. For instance, you have got 1000 raw leads. Now, you send your promotional email to all of them. Then, 50 from them respond to your email. Those 50 are the hot leads.
Here, you need remember that not every hot lead is your most likely business prospect. Some of them might not like to continue after getting further details. Some may not have good property location or value, making the leads non-workable for you.
Nevertheless, it is certain that many of those hot leads would take interest in investing in your business.
After you have the hot leads, now is the time to analyze them. Out of the 50 hot leads you have, you might be able to analyze only half of them. During the process of analysis, you try to calculate cash flow, cash on cash return, and total return.
After the analysis, you might find out that most of the properties you analyzed aren’t really offering you much in return. For instance, there may be some properties for which the sellers may demand $200,000. But when you would analyze that lead, you might find out that total worth of that property is just $50,000.
Hence, you might get only a few workable leads after the analysis.
Now when you have analyzed the deals and filtered the ones that are workable, it is the time to make an offer.
Getting the offer accepted
Now there is a little heads up. Not every offer that you make is going to get accepted. But, it is not a bad thing after all. If you are offering too much by inclining towards the seller or buyers in a way nobody does, you might get the offer accepted but you are basically making a compromise over your own business rule. So, rejection is necessary to get the future offers accepted.
Closing the deal
The reason for mentioning closing of deal as an end of the funnel is that even if you have got the offer accepted and the seller is ready to sell you the home, there may be some obstacles left that can end a deal without closing. For example, the seller have agreed to sell you the home but you found out at the last moment that there are several mortgage payments left, you are definitely not going to like to proceed with the process.