5 Cold Calling Tips for Real Estate Investors
Because we live in a digital world, it’s easy to assume that the best methods for growing your real estate business are also online. However, while digital marketing and outreach techniques are valuable, they probably aren’t getting the traction you want.
One of the most overlooked marketing strategies in real estate investing is cold calling. Most new investors don’t like the idea of cold calling, so they tend to avoid it. However, if you do it right, you could boost your bottom line substantially. This is a proven method used by many top 7 Figure investors today.
So, with that in mind, we want to take a closer look at how cold calling can help real estate investors, as well as discuss the best ways to make it work.
What is Cold Calling?
When it comes to telemarketing, there are cold calls and warm calls. Warm calling is when a prospect has already contacted your business, usually to find out more information. It could be a lead leaving a voicemail or subscribing to a newsletter. In these cases, the prospect is either expecting your call or isn’t surprised by it.
Cold calling, on the other hand, is making initial contact with new leads. Even if the person wants or needs what you have to offer, your call is unsolicited. Because of the nature of cold calling, many salespeople and investors avoid it as much as possible.
However, as we’ll get into later, what can make the most difference is the quality of your real estate leads. Having a list of names and numbers won’t mean much if they haven’t been qualified first.
Ideally, your list should be curated from a reliable source, meaning that the people on it are potentially interested in selling a property.
Is Cold Calling Dead?
Cold calling is a fundamental part of real estate marketing strategy, and it works remarkably well. However, few investors take the time to use this method because of the amount of labor, set up and execution to daily, weekly, and monthly.
In short, cold calling is NOT dead.
The primary issue is that so many real estate investors approach this tactic the wrong way, which leads to a lot of hangups and frustration.
The reality is that cold calling can be an excellent sales tool.
Why Cold Calling Works in Real Estate Investing?
Here are a few reasons why it should be integral to your real estate marketing.
Compared to other tactics, cold calling gets better results. That being said, this strategy doesn’t work for all businesses, but it can do wonders in real estate.
As you grow your sales team, you can cultivate new lists of prospects to call. There are always more sellers waiting for the right deal.
Cold calling is ultimately about the numbers. Let’s say you close five percent of your call list. That means you’ll get five follow-ups for every 100 names. Keep that up, and you’ll be making money in no time.
How to Make the Most of Cold Calling in Real Estate
One of the most significant pain points for salespeople with cold calling is that they don’t like the responses they get from prospects. Hangups and angry customers are par for the course, which can be a huge turn-off.
However, there are plenty of ways to mitigate these downsides so that you can have a good time making phone calls. Here’s what we suggest.
1. Build the Right List
As we mentioned, one of the best ways to maximize your potential with cold calling is to do your homework first. If you spend all day contacting people who don’t want to sell their home or property, then it will be a waste of time, money, and energy.
But how can you build the right list? Here are a few demographics to look for in your search.
Managing a property with tenants can be overwhelming and time-consuming. Yes, the residual income is great, but many absentee owners are not very invested in those properties. In a lot of cases, the responsibility can get to be too much, so the owners are looking to sell for a tidy profit to get the peace of mind.
When a person dies, any property that he or she owns will be passed on to relatives or other loved ones. In most cases, the recipients of these properties have no idea what to do with it. Either they don’t need it (i.e., they live elsewhere) or they don’t want the responsibility of managing and renting it out.
While it can seem a bit insensitive to contact family members of a recently deceased person, †the fact is that you’re likely doing them a favor by offering a good deal on the home. Typically, cold hard cash is much better than trying to deal with all of the stress of inherited property.
When someone has been living in a house for decades, he or she has built a lot of equity. At that point, the owner will usually want to capitalize on that equity by selling the home and using the money for something else. Perhaps the seller wants to downgrade to something smaller or use the capital as a nest egg for retirement.
Overall, the thread that connects these kinds of sellers is burnout. As an investor, you want to contact people who are tired of having to manage a property and don’t want the responsibility. Long-time owners may be sick of yard work and home maintenance. Absentee owners don’t want the stress of finding quality tenants. Leverage this burnout to your advantage.
If you can, find the commonality between the above lists and focus heavily on that list.
At RealEstateInvestor.com, we have perfected this process of cold calling their very best sellers and then working those leads and relationships teeing up countless hot qualified seller appointments.
2. Verify Your Phone Numbers
Another reason why so many salespeople hate cold calling is that the numbers may be incorrect or outdated. If that’s the case, you’re wasting more of your time and energy on leads that can’t go anywhere.
In many instances, investors try to use free verification services that don’t deliver quality results. As the saying goes, you get what you pay for, so what if you don’t pay anything? How can you get the best leads when you’re not willing to invest in them yourself?
At RealEstateInvestor.com, we like to use an automated tool that helps verify all of the numbers on our list. These numbers are cross-checked with public records and other organizations to ensure that they are accurate and up-to-date. This process is called skip tracing or data stacking.
3. Use an Autodialer
Do you or your salespeople really want to dial hundreds of numbers by hand every day? That sounds exhausting. Not only that, but the chances of making an error will only increase the longer the day wears on.
Instead, you want to invest in an autodialer. This way, you can input all of the numbers you’ve collected and verified. As we discussed earlier, cold calling is a numbers game. The more leads you contact, the more deals you’ll close – plain and simple. Realistically, you’ll need a list of 15,000 if you want to build your real estate business. There’s no way that you and your team can manage that manually.
An autodialer ensures that you can maintain a steady pace and that you don’t lose momentum along the way. That being said, make sure that your program is FCC-compliant. There are a lot of options that are technically illegal, so do your research first. You don’t want to get shut down because you picked the wrong service.
Overall, a person calling manually can do about 125 calls per day. With an autodialer, that number jumps to 250 or higher. You do the math.
4. Hire the Right Caller
If cold calling doesn’t sound appealing to you, then you need to find someone who will enjoy it better. All too often, real estate investors try to save a buck by outsourcing their lists to someone in another country who doesn’t understand either the industry or the sellers. As you can imagine, this tactic almost always fails.
Instead, make sure that you hire the best talent for this position. In many cases, all it takes is one high-quality salesperson to make the difference. You don’t need banks of phones and dozens of callers to get the results you want.
5. Use the Right Script
Finally, the script that your salespeople use is crucial for long-term success. Realistically, the script doesn’t have to be a verbatim list of sentences, but it can be a general guideline. Here is an example.
- Do you have a property to sell?
- How soon are you trying to sell it?
- What is the address of the property?
- What is the lowest amount you’d sell it for and still be satisfied?
Your script should be direct and easy to replicate. Not only will that streamline your operations, but it will filter out unqualified leads that much faster. With 15,000 calls to make, you don’t have time to waste.
The most significant challenge that real estate investors have with cold calling is developing the right list.
On average, cold calling requires about 40-45 warm motivated seller leads who’ve indicated they have a potential interest in selling their home. It typically takes 40-45 solid leads to close one deal.
Of course, this number can be dramatically improved with great sales skills and the ability to provide multiple offers vs a low ball cash offer (eg. our sales train and also our follow up system and team).
One dedicated full-time cold caller following our best practices should be able to drive enough leads to close 1-2 deals per month, a pretty awesome ROI.
Don’t be fooled by anyone who says you, “Shouldn’t cold call”, or that it, “Doesn’t work”. It works, you just need the right tools, approach, and methods.
Fortunately, we can help you cultivate qualified and verified leads. We even have cold callers who can screen leads for you. Contact us today to find out more about how we can improve your business’ bottom line.