When investing in real estate, one of the most important rules that you should follow is that not all leads are deals. New investors may get excited when they start generating real estate leads as they’re starting out, but a seasoned investor knows that they will never have time to contact everyone, so a screening system has to be used. Some leads have the potential to make you a great deal of money, while others may turn out to be a waste of time, so this is another great reason to pre-screen your leads.
Time is money, so spending too much of it on leads that may turn out to not be good investment opportunities will limit your opportunity to earn big profits from investing in real estate. Even if your marketing is top-notch, and you get a significant amount of leads, it won’t be beneficial if you can’t distinguish leads that you should follow from leads that you shouldn’t.
How to Pre-Screen Your Leads
When you have your first talks with a potential seller, asking the right questions will help you determine if the deal is worth investing in or not, which will, in turn, save you a lot of headaches and money in the future. Here is a list of the info that you should try to acquire when pre-screening leads:
- Find out why they’re selling. This bit of information won’t directly allow you to decide how profitable a deal is, but it can help you determine how ready the homeowner is to sell his property. Usually, homeowners who really want to sell their home will tell you the reason, while those who won’t, probably aren’t ready to sell.
- Find out the asking price. Knowing how much a homeowner is expecting to make by selling their home can help you come up with an initial offer much more easily.
- Find out how much the repairs will cost. You shouldn’t base your decision solely on what the seller tells you in regards to what repairs need to be done, but you can get a general idea. Of course, before buying a home, you should have a professional home inspector look at it to determine if it has any problems that will be expensive to repair.
- Find out if there are any outstanding debts. Knowing if there are any unpaid loans in the property will help you better determine how much you should pay for the home and how good of a deal it is.
Pre-screening your leads will allow you to avoid making some big mistakes that will cost you money and time, or may even put you out of business. Real estate investing is one industry where you have to be really careful before spending money. Simple mistakes can turn into costly problems overnight, so always make sure that you closely verify all the leads before investing, no matter how appealing they may seem.