Fast Cash Real Estate Investing: How to Generate Profitable Foreclosure Leads

Whether you’re new to real estate investing or an experienced investor, I think you’ll agree you can’t make money unless you have a list of qualified prospects (i.e. people who are ready, willing and motivated to sell their homes.)

If you market your services to people in foreclosure, or to any targeted list of ready-to-sell homeowners, you’re going to get qualified leads.

But truth be known, prospects aren’t deals quite yet.

Some may turn out to be ultra-lucrative winners that put thousands of dollars in your pocket, but if you want to make the big money, you need to focus on only the best leads.

Everything else you can let someone else deal with.

New investors get excited when their marketing starts working, and understandably so. It’s tempting at this stage to want to contact everyone who responds to your marketing. But soon, it becomes obvious, even to a newbie, that not all leads are created equal.

This is true even when investing in foreclosures. Even though owners are highly motivated to sell, you still need to learn how to flush out the best deals.

When I started investing, I learned that I’d never have enough time to contact every prospect. I quickly learned to screen my leads to find the best possible opportunities.

For instance, over the years, I’ve used a 24-hour recorded message, direct mail, and a live answering service. But I’ve found that one tool works better than any other: the Internet.

Our marketing to people in foreclosure drives the prospect to one of our foreclosure websites. There are two basic reasons:

1. People in foreclosure are usually is a state of panic. As a result, they’re more likely to visit a website, where they can remain anonymous at first. Late, if they ARE interested, they WILL call you directly.

2. Our website encourages prospects to qualify themselves.

Our websites have lots of audio and video testimonials from previous sellers who we have helped. You’ll find these audio and video files very motivating. These are all real people who sold their homes to us when they were in foreclosure or needed a quick sale.

What if you are new to real estate and don’t have testimonials?

The easy answer is you can partner with an investor who does have a track record and use his testimonials (while you also benefit from his experience). Or you can include general testimonials from people who know you and know you’re trustworthy. Have them say things like "Jack always comes through with his promises"… or "Alice does what she says she’s going to do when she says she’s going to do it." Then make sure you live up to those words.

I invite my website visitors to submit an electronic form with all the information I need. I promise them a response within 48 hours, but at no time do I tell them I will make an offer on their home. The prospective seller must answer all the questions on the form before the website will allow them to submit the form to my office. The questions are designed not only to get qualifying information, but also - and just as important - to find facts that could disqualify them. That’s because I don’t want to waste a lot of time following up on unqualified leads.

Some of the questions are the sort of thing any investor would ask: how much the seller owes, to whom, and so on. But I also ask questions that "test the waters" to gauge how motivated they are (such as how many payments they’re behind).

Finally, I ask the seller to tell me why they want to sell now. In many cases, this question makes or breaks the deal. Here’s why:

If they write a long story on that last question (I often get as much as two and a half pages), I learn something important about them. And if all the numbers work, I put them on the top of the pile.

Why?

Because people in distress appreciate it when you let them pour their hearts out. I’m a good listener, so I’m sympathetic when they tell me about the tragic circumstances and bad luck that have brought them to their present position. And because I listen, the seller is frequently on my side when it comes time for me to present my offer. That makes negotiations much easier.

But if they write something like "I’m not taking one penny less than the full value of my house. My bother-in-law says it’s worth $250,000 and that’s what I expect"… I won’t waste another 10 seconds on that lead. I won’t even waste the time it takes to put his address on a pre-printed, pre-stamped rejection postcard.

In short, my website does almost all the work of qualifying my leads. I waste no time on any leads where there is no deal to be made.

I recommend that you establish a method of pre-screening and pre-qualifying your leads, preferably with a system--like a website--where the prospects screen themselves. This method has made us a better, more focused real estate company and it can make you wealthier in your own business in a much shorter period of time.

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