Where's the leak? 40 leads a month to three buyers, one closing in three months.

Question

Numbers as they stand. I drive roughly 20 hours a month and pull a list of pre-foreclosure and long-vacant records, about 300 records filtered down to 40 submissions. I send the same 40 to three investors. Terms are $25 per accepted lead plus $1,000 on a closing. Data and app subscriptions run me about $300 a month.

Acceptance is patchy, maybe 10 of the 40 get accepted across all three combined, so roughly $250 a month plus one $1,000 closing in the last three months. That's under $500 a month against $300 of cost and 20 hours.

The three options I see: narrow the buy box hard and serve fewer buyers better, move to a monthly retainer instead of per-lead, or go exclusive with the one buyer who actually closes. What I can't tell from inside it is whether my sourcing is bad or my pricing is bad.

Rena Expert · Accepted Answer

Sending the same 40 to three buyers is the thing generating your numbers. Identical submissions mean at most one buyer can act on any lead, your accepted count is capped by whoever moves first, and none of the three feels served. 10 accepted out of 40 across three buyers is a 25% acceptance rate on a broadcast list, which is about what broadcast gets.

Before you change pricing, get rejection reasons. Ask each buyer to tag every declined submission with one of five codes: wrong area, wrong size, condition outside range, price expectation, already in pipeline. If "already in pipeline" is a big share, you're sourcing from the same public lists they buy, and your fee is paying for work they've duplicated. If "wrong area" or "wrong size" dominates, that's a filtering problem you can fix in an afternoon by tightening the query.

Your real cost isn't the $300. It's 20 hours. At $500 of revenue you're under $10 an hour of gross, before gas. Per-accepted-lead pricing at $25 caps your upside hard: to hit $2,000 a month on fees alone you'd need 80 accepted leads, which means submitting maybe 250, which is nowhere near 20 hours.

Exclusivity with the closer changes your risk shape. Your revenue becomes a function of one buyer's capital and appetite, and if his lender pulls back you're at zero with no other relationships warm. If you go that way, price it as a retainer against fees so you're paid for capacity rather than for guessing.

The assumption I'd test first is that your buyers' criteria actually differ enough to need three lists. If two of them want the same thing, you have two buyers and a tiebreak problem.

omar_haddad · Answer

Add condition detail and watch acceptance move. I don't accept a lead on a rehab candidate without a photo of the roof plane and something about the foundation line, because the difference between a $35k scope and an $80k scope is visible from the sidewalk if someone knows to look. Half the submissions I see are a Zillow screenshot and the word "distressed."

mikeoconnell7 · Answer

The retainer version I've been sketching is $1,200 a month for a defined territory and a defined submission count, with the closing fee on top but reduced, say $600 instead of $1,000. The buyer pays for reliability, you get a floor. The catch is you owe delivery in the months when the territory is dry, and pre-foreclosure filings aren't a steady faucet.

aaron_fitz10 · Answer

I'm curious, not trying to needle you: at 20 hours for $500, is this a business you're building or a job you're bad at pricing? I keep circling the same decision on my own side.

monica_tran3 · Answer

What fixed my margins after five years in a service business was firing the clients who didn't buy. You have three buyers and one of them closes. Two of them are consuming your submission time and paying you $25 a pop for optionality. Charge those two a per-lead fee high enough that they either commit or leave, and spend the recovered hours on the one who closes plus finding a second serious buyer.

priya_n21 · Answer

Is there a version of this where you sell the same filtered list to five buyers who all know it's non-exclusive and pay less each? Feels like the newsletter model rather than the scout model.

tonyv88 · Answer

Managers know which owners are done before anyone files anything. The two-unit owner who calls about every clogged drain, the out-of-state landlord who's had three tenant turnovers in a year. If I were sourcing, I'd be buying coffee for small management shops rather than pulling the same pre-foreclosure list everyone downloads. Referral etiquette there is its own thing, and some managers hold a license and have their own rules about referrals.

tashaford30 · Answer

Whatever you change, keep the submission log dated and by email. If you move to exclusivity and it ends badly, the argument will be about which leads were yours, and memory won't settle it.

raj_mehta14 · Answer

Does lien position show up anywhere in what you send? I've been reading about second mortgages and tax liens and it seems like a pre-foreclosure record with a big second behind it is a different animal from one with clear title, but I might be mixing up two things.

nataliehsu · Answer

@vellum that's the part I'd want to learn actually, because if you can flag title mess before the buyer spends money on a search, that's worth more than another address. Whether a bird dog can read that off public records probably depends on the county, and a dozen states don't publish sale prices at all, which I only just found out.

mitchell_ray4 · Answer

Vacancy tells: mail buildup, one utility meter dead still on a duplex, tarp on a roof through a whole season.

Where's the leak? 40 leads a month to three buyers, one closing in three months.

12 replies