Before I was in real estate, I was a sales and marketing rep for a local radio station in Tampa Bay. I freaking loved my manager. I looked at the guy like a second father. I learned a lot from him, too, soaking up knowledge and wisdom from him whenever I could.
One thing he always told me was, “If you want to consistently make money, make sure your funnel is always full with prospects.” Sales, in any industry, is a numbers game. And, wholesaling is no different. Because, what are wholesalers? Investors? Nah… we’re marketers. Rehabbers and landlords pay us to find them deals. And, in order to find deals, we need to entice people to pick up the phone and call us.
Wholesalers – We make the phone ring.
How To Quantify Your Wholesaling REI Business?
So, now that we know this, all we need to know is how many leads we need in order to meet our goal. I can tell you from personal experience that in order to flip one house, on average, you are going to have to look at about fifty leads. I’m not talking about just contracting to flip. I’m talking converted contracts… closed deals.
Fifty leads = one closed deal
Now, if fifty leads equals one deal, does it make sense that one hundred leads will get you two closed deals? It does to me. So, take what’s working and beef it up. If you’re putting out a hundred bandit signs, put out two hundred next time and track the results. If you are buying leads from the internet, add a neighboring county and increase your numbers.
There is the law of diminishing returns, which states that continuing efforts toward a goal will eventually plateau and decline. But, my guess is that will take a ton of money to even approach that point; more than most wholesalers have or are willing to put into their business. So, don’t worry about it.
Quantify your business and then create a plan to achieve those numbers. That’s how smart people do it. Successful ones, too. If you want consistency in your business, you’ll begin doing this, yourself. Nothing sucks more than flipping a house for $20,000… and then failing to flip another for six months. It’s better to make five thousand a month, than to make one big haul… and then go dry for an extended period. Instead, do what the Pro’s do: quantify your business by starting at the end and working your way backwards.
And, then be consistently prosperous.