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 a promise not to sell anything from those zips to anyone else, without defining what happens to an address logged last month, or to a property that straddles a zip boundary, or to a buyer who cancels in month three and keeps the list. Every one of those turns into an argument. For exclusivity, put a floor on volume that must be delivered, put an end date on the buyer's right to use delivered data, and state in writing that no representation is made about condition or ownership accuracy. A lawyer in the relevant state should draft it, and that matters because the licensing question raised elsewhere 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.

Plenty of investors build their own list and wouldn't buy raw addresses at any price, because driving the routes is the part that costs nothing but a Saturday and doubles as due diligence. What tends to have real value is a re-drive. A stack of properties logged since last spring with no idea which ones changed is a common situation. Sending someone past a set of them with a fresh photo and date is worth real money, because it's the follow-up step that rarely gets done.

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.

A $600 offer isn't a loss, it's an unknown. At 280 addresses it's $2.14 each. But that offer doesn't obligate delivering 280. Scope the four zips to 200 addresses a month and it's $3.00 each, above cost as stated, and above a tighter criteria's cost too if drivers end up logging fewer and better entries. Exclusivity priced per address is a category error. Exclusivity is priced on what the buyer is protecting, which is the ability to be the only letter in that mailbox. That's worth more than $2.14 a house to a buyer, and it's worth finding out how much more before countering.

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.

A buyer would reasonably pay for exclusivity and push back on flat monthly pricing. Flat monthly means the buyer carries all the risk of a slow month from the drivers. A lower base plus something at close is a structure most buyers would sign quickly. Performance-based deals with lead vendors get a bad reputation because collection can be a nightmare. Still, for a buyer choosing between offers, that's the structure that gets a 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.

@omar_haddad has it. Worth adding that a standard criteria sheet almost always 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 things out. Log quality goes up and logs per hour go down, which changes @hannah_west29's math but in the direction that helps.

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 plenty of operators already track this without calling it a business. Field techs and maintenance crews drive past hundreds of houses a week and can say which ones went dark. If the buyers are in a metro where the property managers are awake, some of them likely have a rough version of this product already, even if nobody has priced it.

For a buyer who wants no surprises, subscription tends to win. A bill that's the same every month and a number of addresses to plan around beats having to think about pricing every week.

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.

Nine logs per hour is a dense metro number. In a lower density market that pace can drop to nine in a morning, burning real fuel cost to get there, which keeps a model like this confined to dense city grids. That is the geographic ceiling on this kind of business, and it is the reason it rarely scales beyond one metro.

@laurenkim53's point is the one that matters if outside money ever comes into this. Selling hours with a small markup means hours do not compound. Every extra dollar of revenue needs another driver. That is a fine business to own and a hard one to raise on, so the decision now is whether to keep it a two person operation, 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 rather than addresses logged. Nine addresses an hour where four resolve to a current mailing address is a four-unit hour, and that is 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. Service businesses have lost an entire 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.