Exclusive zips or per-address pricing on a paid-driver lead service?

Your unit cost is understated. Labor at $20/hour against 9 qualifying logs per hour gives $2.22, but that assumes every paid hour is a driving hour. Add drive time to and from the route, breaks, days where the grid is thin, and any time the driver spends cleaning up entries, and effective logs per paid hour is usually meaningfully lower than field logs per hour. Track paid hours against logs delivered for a month and you may find your real cost is $3.50 or worse.

The more important number is missing. You're pricing per address while your buyer prices per closed deal. If a buyer needs 400 raw addresses to get one contract, your $2.50 address costs him $1,000 per contract, which is cheap. If he needs 2,000, it's $5,000 per contract and he's comparing that to mail and cold calling. You cannot set price sensibly until you know your buyers' address-to-contract ratio, and right now nobody in that conversation knows it. So the answer depends on that ratio, and the only way to get it is to run one buyer and count.

On the product question, driving for dollars produces a sighting. The sighting has value because physical distress shows up in the street before it shows up in any record. A sighting with a resolved owner and a current mailing address is a different product with a different cost base, and it's the one that gets used. Addresses without owner resolution tend to sit in a spreadsheet.

Whether taking a fee for connecting an owner with a buyer triggers a real estate licensing requirement depends on your state's statute and on what you actually do in the conversation, so get that answered by a licensed attorney in your state before you sign either deal.

I bought driving leads twice. Both times I stopped inside six weeks, and both times it was the same problem. The list was addresses. Turning 300 addresses into 300 owners with current phone numbers is the actual work, and I was paying someone to do the easy half.

Charge me more and hand me owners. I'd have paid $12 an address for resolved owner plus photo plus a date I could trust, and I'd have bought 100 a month instead of 400. @rena-expert is right that the ratio decides it, but even without the ratio I can tell you which half of the job I don't want.

Basic question since I'm nowhere near this. What's on the criteria sheet? I've been driving my own neighborhood on weekends and I honestly can't tell an overgrown yard from a yard that's overgrown because it rained for two weeks.

The date stamp is the part I'd pay for. Anyone can tell me a house looks rough. Telling me it looked rough in January and still looks rough in April is a different sentence.

Read the exclusivity offer again as a document, not as a price. Four zips exclusive for $600 a month means you've promised not to sell anything from those zips to anyone else, and you haven't defined what happens to an address your driver logged last month, or to a property that straddles a zip boundary, or to the buyer who cancels in month three and keeps the list. Every one of those turns into an argument.

If you do exclusivity, put a floor on volume you're obligated to deliver, put an end date on the buyer's right to use delivered data, and say in writing that you make no representation about condition or ownership accuracy. A lawyer in your state should draft it, and I say that because the licensing question you raised sits in the same document.

Can your drivers knock? Or do you keep them strictly to photographing from the street? I ask because if they knock you're paying for a very different kind of hour and I assume the risk changes too.

What's a skip trace? I gather it's how you find the owner but I don't know what's actually happening for seven cents.

I build my own list and I wouldn't buy raw addresses from you at any price, because driving is the part I enjoy and the part that costs me nothing but Saturdays.

What I would pay for is a re-drive. I have 340 properties logged since last spring and I have no idea which ones changed. Send someone past 100 of them with a photo and a date and I'd pay real money for that, because it's the thing I never get around to doing.

Different angle. What does the driver job actually feel like after week three? I've been trying to work out where I fit and "get paid to look at houses" sounds better than most entry doors I've found, but I suspect it gets grinding fast.

Your $600 offer isn't a loss, it's an unknown. At 280 addresses it's $2.14 each. But that offer doesn't obligate you to deliver 280. If you scope the four zips to 200 addresses a month, it's $3.00 each and you're above cost as you've stated it, and above @rena-expert's corrected cost too if you tighten the criteria so drivers log fewer and better.

Exclusivity priced per address is a category error. Exclusivity is priced on what the buyer is protecting, which is his ability to be the only letter in that mailbox. That's worth more than $2.14 a house to him and you should find out how much more before you counter.

Tell your drivers to shoot the roof line and the ground where the downspouts land, not just a front elevation from the car. A front elevation tells me the grass is tall. A roof line tells me whether I'm looking at $9k or $34k, and that changes whether the address is worth my stamp at all. Photos that let me pre-scope are worth several dollars each to me. Photos of grass are worth about forty cents.

I'd pay for exclusivity and I'd fight you on the structure. Flat monthly means I carry all the risk of your drivers having a bad month. Give me a lower base plus something at close and I'll sign today.

I know everyone hates performance based deals with lead vendors because collection is a nightmare. Fine. But you asked what's on my desk and that's what would get my signature.

Working @rena-expert's ratio question from my side, since I've been counting my own. Out of 100 addresses I mail three times, I've been getting somewhere around 4 conversations and less than one offer worth making. So 400 addresses to a contract feels about right to me at my skill level, and probably better for someone who can talk.

Which means at $2.50 an address a buyer is spending $1,000 in leads per contract and then all the mail cost on top. Your price is not the thing that will kill this. Their conversion will be.

Churn is the whole business and you're treating it as a footnote. Every lead vendor I've dealt with lost me in month two because I hadn't closed anything and I decided it was the leads. That's not fair to them and I'd do it again.

@harrow has it. I'd add that your criteria sheet almost certainly misses the things a trades person sees, and that's fixable in one afternoon of training. Two boards sistered onto a porch post, a chimney out of plumb, a new-looking roof section over an old one. Those tell you a house has been patched by someone out of money, which is a stronger signal than a tall yard.

Spend a day riding with each driver and pointing. Your log quality goes up and your logs per hour goes down, which changes @ledger's math but in the direction you want.

Do you need the app at all to start? Everything in this thread sounds like a phone camera and a notebook plus somebody willing to type.

Two things I'd want before I put money anywhere near this. First, route logs. If I'm buying four zips exclusive I want to see which streets were covered and when, otherwise I'm paying for coverage I can't verify. Second, whether your drivers are contractors or employees, because that determination doesn't turn on what your paperwork says, and how it comes out varies by state. That one needs a professional, not a forum.

Neither of those is pricing. Both of them decide whether the pricing survives.

On the management side I already track this for free without calling it a business. My techs drive past hundreds of houses a week and they tell me which ones went dark. If you're selling into a metro where the property managers are awake, some of your buyers have a version of your product already.

As the buyer type who wants no surprises, subscription. I want a bill that's the same every month and a number of addresses I can plan around. Per address means I have to think about it every week and I won't.

None of this transfers to what I buy. A neglected lot looks exactly like a well held lot, and the distress on land lives in the tax record rather than the street. Saying so mostly to mark the edge of your market, because if a buyer ever asks you for land leads you should say no.

Your 9 logs per hour is a dense-metro number. Out where I look you'd get 9 in a morning and burn $40 of gas doing it, so the whole model stays inside city grids. That's the geographic ceiling on this business and it's the reason I don't think it ever gets big.

@hollow's point is the one that matters if you ever want outside money in this. You're selling hours with a small markup, and hours don't compound. Every extra dollar of revenue needs another driver. That's a fine business to own and a hard one to raise on, so decide now whether you want it to stay a two person operation you keep, because pricing for scale and pricing for a good small margin are different decisions.

Change the metric you report before you change the price. Count resolved owners delivered, not addresses logged. Nine addresses an hour where four resolve to a current mailing address is a four-unit hour, and that's the number your buyer's outcome actually depends on. You'll price it better and you'll manage your drivers better.

Where do the drivers come from? Students, retirees, someone already driving all day for other reasons? I'd guess the last group is the cheapest hour you'll ever buy and the hardest to hold to a criteria sheet.

Whatever you sign with the buyers, sign something with the drivers first. Who owns the log, what happens to the photos if a driver quits, and whether a driver can take the same route for himself next month. I've watched a service business lose its whole list because the person holding the phone was the one it belonged to on paper. Have counsel in your state look at both agreements together rather than one at a time.

On the licensing piece, don't take a forum answer. I'm working through my own state's requirements right now and the definitions of what counts as brokering for compensation are written broadly enough that where you land depends on the specific wording and on what you say to the owner. It differs state to state. Get it in writing from an attorney licensed where you operate before either of these contracts starts, because unwinding it after you've been paid is worse.