I’ve been asked What is the secret to consistency in scaling. This podcast is all about systems, tools, strategies, tips, tricks, operational processes, to run a successful real estate business. And so the question I was posed this weekend actually was, how do I get consistent deal flow that will lead to scaling my business. And so I’m going to simplify this for you because I think people put the cart before the horse. Everything boils down to how many leads are you bringing into your business?
𝐉𝐨𝐢𝐧 𝐎𝐮𝐫 𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐅𝐚𝐜𝐞𝐛𝐨𝐨𝐤 𝐆𝐫𝐨𝐮𝐩
And what type of marketing strategy are you using? And then what type of converting ratio do you have? Now, that’s not always easy to answer, but what I will challenge you is to find that out, a direct mail lead is different than a PPC lead, which is different than a cold calling lead, which is different than a text message lead, which is different than a voicemail drop or a RVM lead. Now there are some baseline rules that you need to understand and go by to figure out whether you are actually in par or in line with a consistent deal flow. And that’s just consistent marketing and lead bringing in so if you are cold calling, and you have not built up a you know, several 100 if not 1000 person pipeline of leads already, then the proper expectation for you to have is you should be converting one lead forever, either 100 to 200 leads that come in. That’s right, you convert one out of every 100 to 200. Okay, now, if you have a pipeline, your goal will be to bring that down into converting one out of every 50 cold calling leads. So how many calls Do you need to make? How many cold callers Do you need to hire? How many VA Do you need to hire? How big does your team to be need to be to make the amount of calls to bring in the amount of leads that you need, so that you can convert the deals into a consistent deal flow where you’re getting 234 510 deals a month, consistently. Now direct mail is slightly different direct mail is one out of every 20 leads, you should be converting and simply said, direct mail, if you put out 10,000 mail pieces, you will likely get point 004 return, which is roughly 40% of 1%.
Right, so you’re going to get 40 total calls of the 40 total calls, half of those are going to be f us, which brings you down to 20 actual real leads. So roughly one deal, that’s if you’re doing direct mail, you should be targeting roughly 10,000 mail pieces to go out so that you can actually get 20 leads. So you can convert one deal text messaging, we’re seeing roughly 9000 to 10,000 outbound text messages convert to one deal, that’s roughly the ratio. Now some markets aren’t as tough as Phoenix. So you might have a better ratio, you might have like three to 4000 outbound text messages to one deal, I do appreciate that I’m actually in Phoenix. And so that market, our market is is very difficult. So I don’t get the luxury of three to 4000. I’m more like nine to 10,000 for one deal. And roughly you’re going to be dropping, give or take 3000 voicemail drops before you can get to viable leads. And then you should be able to convert roughly one out of every 20 viable leads for voicemail drops. So it’s just a matter of putting out enough voicemail drops to actually make it worthwhile for you to convert the lead. So again, to boil this down and I just did this off the top of my head because I’ve been doing this business for so long to boil this down. Simply said you You need to have a consistency in lead generating more than anything. So I would argue, most people who have the question, how do you get consistent deal flow, they also don’t have a consistent lead flow, meaning they’re not marketing consistently, they do some marketing, they get scared, because they’re, they’re spending some money. So they need to, they stop doing the marketing, and then they, you know, try to go get a deal and scramble. And then they spend a little bit more money, but it doesn’t really drive many leads. If you’re out there, and you’re either watching or listening to this, and you’re like shaking your head or laughing yourself. This is the main reason people can’t find a way to create consistent deal flow. And especially the individual that asked me this question, they wanted to get a consistent 10 deals a month. And you just heard how much marketing has to go into your business? How many leads have to start flowing through your business? And do you even have the right person now, converting the leads? Now this goes into the the next topic, which will be how do you actually scale the personnel? Well, I would tell you this, every real estate investor, who’s running their own business should not be trying to scale personnel, until they are doing five deals a month and or 250 grand a year, call it 25 grand a month coming into their pocket, because otherwise you’re taking the money out of your own pocket to try to scale in operation. Now, yes, the benefit of that is, you will be able to have more time to yourself. But that is a slightly misguided truth. The reality is, the more time you have to yourself really then has to go into guiding people being a leader training, managing to the KPI so that they’re actually performing at the level you want them to, excuse me perform at. And so it doesn’t mean you get to go on vacation. This is, in large part a misguided truth or at least in my opinion, it kind of it sets the tone incorrectly. A lot of people want to scale so that you can have a time freedom lifestyle, I love that I appreciate I myself have a very nice lifestyle.
But it’s after 13 years of building this business. I have managers in both of my main horses, my real estate business, in my education business, they run the entire operational component of both businesses, and I can be the lead horse in that. And then I have, you know, obviously other personnel like acquisition people, etc. But I’ve built that over a lot of time, and that has afforded me to have a certain lifestyle. With that said, If you can’t put 25 grand a month in your pocket every month consistently, then I would really urge you not to jump out and go hire people. Could you leverage some virtual assistants for text messaging or cold calling? Absolutely. But would you want to go out and hire an acquisition person or a disposition person? Absolutely not, not until you’ve reached that point or you’re doing four to five deals consistently every month, and you’re trying to level up to get to 10. At that point, you might want to look at bringing in maybe a personal assistant first and then starting to go you know beyond that personal assistant can take over a lot of responsibility that you might have as the business owner, so i a lot of times will suggest a personal assistant. If you are watching this on YouTube, make sure you’re smashing the like button that gives the YouTube Gods a little favorability to my videos if you’re on iTunes, listening to this. also realize I do daily videos on my YouTube. Just go to YouTube look up Justin Colby, or go to youtube.com forward slash Justin Colby. start watching my videos I do all things business real estate investing in entrepreneurship. Hopefully this finds you guys well if you need anything else go over to the science of flipping calm, happy to help. I will see you guys on the next YouTube video as well as the next podcast episode which drops daily peace