Numbers That Will Improve Your Chances for Success
We’ve talked before about the importance of setting goals so you know where you are headed in your investing career, and what it is going to take to get there. Having the best chance of success is really just a numbers game. If you use tried-and-true statistics, and then fudge on the side of being even more conservative if you are a newbie, then you should be able to predict your level of success within a plus or minus small allowance for error.
The first statistic to bank on is one that many agents swear by: it takes 34 contacts to make one sale. It will take 34 showings of a house to sell it. It will take 34 contacts with prospective sellers to land one deal that is carried all the way to the closing table. It takes 34 personal contacts with private lenders to get one to come on board as an investor. If you are new you may want to use a higher figure-say 44 or 50 as your target contact number in order to close a deal.
So, when planning your marketing, let’s say you want to have 2 short sale closings per month. That means that, at least to start, you are likely to have to contact between 68 and 100 agents, 68 and 100 distressed homeowners, and show the couple houses you have under contract 68 to 100 times in order to get to the double closing on those two houses.
Of course, using social media and having a team of agents working with you on finding and selling properties will help spread that workload out. But some of it you will have to orchestrate personally in order to make sure the process does not stagnate.
Don’t skimp. You may think that contacting 25 instead of 34 agents or homeowners will suffice, but that is actually a 27% reduction and will probably yield a 27% reduction in your closings also. Likewise, if you increase your marketing to owners, agents and others to 50 each per month, you are increasing the chances of it leading to a closing by 47%. Little improvements in your outreach can make a big difference in your bottom line!
Delegation is critical to your success. However, there is one job that should not be delegated and that is lead generation. People want to do business with the people they know, like and trust. It takes personal contact to build a level of trust that will encourage people to do business with you.