How many touches does a seller need to convert into a deal?
I was going to go the whole “how many licks to get to the center of a tootsie” angle… But that got weird really quick.
Investors going direct to seller is small niche’.
While studies state that there are 28.1MM real estate investors in the US I would argue that the vast majority of them aren’t actively marketing directly to homeowners. Sometimes it sure feels like it though!
Listen up investors!
If you find yourself in the camp of those taking your portfolio by the horns you’re going to want to keep reading.
To kick September off right we started digging into our data.
We analyzed the past 60 off-market deals I’ve done looking at one data point.
How many touches would it take to get a seller to sell to us at a discount?
For the sake of the study:
A deal = A property purchased at 75% of ARV – repairs – holding costs (or 10k if it was a wholesale)
A touch = A phone call, a text message, or an appointment.
The data was super interesting.
My average deal took 10+ touches to sign on the dotted line.
We ran this entire study to be able to give our team actionable data on how important follow-up truly is. We then analyzed every seller lead that came into my office in July. We had right at 150 leads to add up touches on.
If I was a teacher they’d be getting a C+. Our staff had carried 60% of their leads (90) across the ten-touch threshold. They were at nine or fewer touches on 61 opportunities. I wholeheartedly believe that we could have EASILY eeked out 3 or 4 leads had they licked… (nope still doesn’t sound right) worked the leads just a tad harder.
We had a profitable month (which I’ll share the details on later) but one of our core values is excellence. We are always striving to be the best that we can be. Dropping the ball on 40% of our leads isn’t operating with excellence.
If you want to grow/progress you have to be willing to look at the real facts. The real fact is that we left opportunities on the table.
We are now also looking at the time-frame from the initial call to getting a signed contract. The results of this will be published in a future post.
Actionable Piece For Your Business
If you have staff (or are a solopreneur) take a look at your data and see what percentage of your leads are exceeding the ten-touch threshold. I’d put cold hard cash on the fact that you’ve got some room for improvement. This is a great thing to look at regularly and keep an eye on. It’s VERY easy to let pieces of your business (like follow-up) slip when new leads are pouring in! The moral of the story is to stop prejudging your leads, don’t take the first no as an answer, and focus on getting them all to ten touches or more!
TLDR… (Too Long Didn’t Read)
Looked at historical performance data. Average lead needs 10 touches to become a deal. Work your leads like a man or cry like a baby when looking at your results.