In this post, I’m going to tell you about the importance of having a system for keeping track of your leads and how doing so allowed me to buy a house that I had been trying to buy for over 8 years!
Do you have a stack of listings and other leads printed out and sitting on your desk?
Did you plan on eventually going through them and following up with sellers and agents to see if there has been a price change or if the sellers have become more motivated?
Do you ever get around to that or do you keep crossing it off your To Do list without actually doing it and moving it to a day one week or even one month from now?
Join the club! It’s horribly inefficient and we lose lots of deals because of it, but dang it, it seems like we are just wired to do it that way.
First, have you joined our private FlippingJunkie facebook group? Come network with us!
What most investors do with the leads they receive
Most investors will get a motivated seller lead and write it down in their handy dandy notebook. This is where the chicken scratch will be laid down as deal analysis is done and recorded…usually in such a way that it makes it nearly impossible to decipher what was written, even just one day later.
I’m sure you know what I’m talking about. We are usually in such a hurry just to figure out whether the lead has the potential to be a real deal that we don’t concern ourselves with how we are managing that information. We aren’t thinking about how we may need to keep that information more easily available and organized for follow up purposes.
There are full notebooks sitting in my office that span back to at least a couple years. I haven’t thrown them away because I can’t bring myself to, just in case a seller calls that I had spoken to before. It’s crazy.
Even if I do get a call from a seller that I had spoken to before, and if I use those notebooks to find the information I had written down before, it would take hours to find it!
Not only that, I’m not sure I’d even be able to decipher what I had written down, so it would all be a huge waste of time!
I’ve used notebooks to record lead details, but I also have a “system” that I use that makes it possible to quickly and easily find this information whenever and wherever I want to. More on that in a minute…
Why that is bad… really, really bad
If you’ve been marketing to motivated sellers for any length of time, you probably know that up to, and possibly more than, 50% of deals come with follow up instead of during the initial negotiations. This means that most investors are leaving deals on the table… lots of deals! Time has a way of motivating people to sell their house.
A seller that is not interested in your offer right now could decide that it is a great offer after time changes his/her mind. Nobody’s life is free of problems. Over time these problems can happen and accumulate and cause their position to change. They no longer have the ability or desire to “hold out” for a better offer.
They now just want that cash and to be done with their house problem!
But, what if they don’t remember who they talked to or did not keep your card or your offer?
This is very common.
There could be 6 months or even a couple years that go by before circumstances create the motivation to trade the house for your cash offer.
At that point, if you haven’t been following up with them, they will likely start their search over again and end up selling to one of your competitors. We don’t want that.
What can we do?
Some investors use spreadsheets to manage their leads. Click here to see one way to do this using spreadsheets that my friend, Shae Bynes, recommended on BiggerPockets.
Other investors spend countless hours trying to configure a CRM system like Zoho that is built to be general enough to allow it to work for every conceivable use… which makes it hard to make it work exactly right for your specific needs.
To me, spending my time focusing on the 20% of things that produce 80% of my results (Pareto’s Law) in my real estate investing is the smart thing to do. I’d rather be spending my time analyzing deals, viewing houses and making offers.
It’s a fact that most of us have trouble getting out of our comfort zone though and so we end up avoiding these massive results producing activities by spending days trying to configure a system we will never use because we aren’t doing the things necessary to generate real estate investor leads in the first place. We have to break through those limiting issues and focus on taking action.
Without action, you’re just stuck where you’ve always been!
What information should be kept better track of
Regardless of which system you use, spreadsheets, CRM system you configure, writing things on the back of your hand and down your leg, folders or notebooks, there are several things that are very important to keep track of to maximize your chances of getting the deal.
This list is in no way exhaustive, but it will definitely get you on the right track to benefiting more from each lead.
- Property details – The details of the house: property type, number of bedrooms and baths, one story or two story, garage, basement, heating and cooling, year built, square footage and lot size.
- Seller contact info – This one is kind of important…you need to be able to get in touch with the seller. Get as much contact information as you can: home phone, cell phone, email, etc.
- Repairs needed – You’ve got to know the repairs that are necessary to return the house to sellable condition so that you can properly analyze the deal.
- Reason for selling – After you’ve been in this business a while and you’ve talked with a lot of motivated sellers, you’ll realize that understanding what people really want, is not always just about the amount of money they can get. Keep track of why they want to sell. If you’re not asking this question, smack yourself and then make a note to start asking it. 🙂
- Their asking price – Keep track of how much they say they want. This number is almost always much more than they really expect to get.
- How much they still owe – Not asking how much they owe because you are afraid you are asking for too much info? Get over it and start asking this question so that you don’t waste their time…or yours. If they owe too much for you to be able to buy their house, why are you going to waste their time asking a million more questions and going to see their house? Riddle me that one.
- How fast they want to close – This is another motivation determining piece of information.
- Your max allowable offer – After your deal analysis, you want to keep track of the max you can offer for the house.
- Comparable sales – Keep track of the comps used to determine the after repair value of the house.
- Offers made – Keep track of the offers you make, the counter offers by the seller, with dates made. This will help you see the big picture of the ongoing negotiation.
- Notes – Record all of your notes for the lead so that you can catch yourself up on where you last were with the lead. This can be very helpful when a seller calls you years after your initial meeting.
- Follow up reminders – You should have a reminder message and date to follow up with the seller. This is how you stay in the seller’s mind and become the person they call when time motivates them to sell.
I just bought a house that I had been trying to buy for 8 years…
I kid you not. Yes, I finally bought a house I had been trying to buy for nearly a decade.
Years and years ago, I sent the owner of a run-down, large, two-story house in a historic district a letter explaining that I would like to buy it.
The seller explained that he was interested in selling but that his grown kids were against it. I had made an offer and followed up with him religiously every month for about 8 months. Then I waited about a year and contacted him again. Then I contacted him again after another year….
Honestly, I gave up after that.
Then, out of the blue, the seller called me a couple of months ago and said he was ready to sell!
We ended up buying the house for pretty close to our initial offer and were able to wholesale it for a profit of over $30,000!
We were going to fix it up but I just didn’t have the time to take on such a large project that would have likely taken at least 3-4 months (probably closer to 6 months). Wholesaling it made the most sense as our return on investment and return on time invested were astronomical.
Just goes to show you the power of following up with sellers until they either sell the house, or they start talking about a restraining order.
What I did before I flipped hundreds of houses
Bear with me…and don’t worry, I won’t bust out a slide show.
My full-time job before I became a real estate investor was as a software developer. I really enjoy the challenge of designing and creating software…but didn’t really enjoy doing it for someone else.
I wanted freedom.
I wanted the freedom to be my own boss, vacation when and for as long as I wanted, to control what I did every day and have control over how much time I was able to spend with my family.
Flipping houses gave me that freedom.
But, I never lost the urge to develop software. Since the beginning, I’ve been creating software to help me manage my leads. It’s been through many iterations and was always just built for myself to use.
Then, one day years ago, it dawned on me that maybe other investors would like to have just such a system. There were a couple of other systems out there but they were either million-dollar custom systems for large investment companies or systems that were priced way too high for most small investors to justify the cost. Why not allow them to use the software I’d been creating and improving for years?
Thus, FlipPilot was born. FlipPilot is more than a CRM. There’s not really a single word or phrase to describe what it does, because it really is the very first of its kind for real estate investors. It is everything in one place. We were evolving as investors, and we needed a software that was going to continue to evolve with us. All of the existing technology only allowed us to work IN our business, but it wasn’t giving us the freedom that we wanted. FlipPilot changes all of that. Click here to join the list to be notified when we go on sale to the general public.