The only time I had issues generating real estate leads was my first few months as a Realtor. I ended up selling 48 houses in my first year. Once I started a team, it was clear that lead gen didn’t come easy for everyone… This post is for those of you who are struggling and want to learn how to generate real estate leads.
Although I consider myself an expert in the real estate agency world, Alex Hormozi owns businesses that generate 20,000+ leads per day and over $250,000,000 per year in revenue. Coincidentally, Alex Hormozi’s book $100M Leads was just released.
According to Hormozi, there are only 8 ways to generate leads… I’m going to translate that to how you can generate leads in real estate, and share some personal experiences I had while spending $250k+ to generate leads.
The first four, or the ‘Core Four’, are every single way you can generate real estate leads.
The second four, or the ‘Lead Getters’, are how to get real estate leads from other people or businesses.
Let’s start with how you can generate leads, the Core Four.
Table of Contents:
- Warm Outreach
- Cold Outreach for Realtors
- Posting Free Content
- Running Paid Ads for Real Estate Leads
- Part 2: Lead Getters (Others Tell People About Your Real Estate Business)
- Lead Getters #1 – Customer Referrals
- Lead Getters #2 – Employees
- Lead Getters #3 – Agencies
- Lead Getters #4 – Affiliates
- Concluding How to Get Real Estate Leads
When I first got my real estate license, I was told to call everyone on my phone and tell them I got my real estate license… At the time, I don’t think I even knew what a referral was… Little did I know, I was supposed to generate referral leads.
So, while I was telling everyone I was officially a real estate agent, one of the other Army officers in my unit said he and his wife were looking to buy a house. It worked! Less than a couple months later, we closed and I earned my first commission check. But if I hadn’t said anything, he would have found a different real estate agent.
If you struggle generating real estate leads and someone in your circle doesn’t know you are an agent… You’re doing it wrong.
To keep lead generation in its simplest form, warm outreach is 1 on 1 contact between 2 people who know each other.
Warm Outreach Lead Generation Strategies
If you work remotely or hate shaking hands and kissin’ babies, here are some examples for warm outreach to generate real estate leads:
Social Media direct messages
Sending letters or postcards
Cold Outreach for Realtors
I remember when I first got my real estate license. People told me about cold calling so I thought I would try it. After about 100 calls and two hours, I swore I would never do it again. Once I interviewed James Patrick, who built his business cold calling, I could see there is a right way to cold call.
I also didn’t understand that I was calling people at completely different stages of the sales funnel.
Just like warm outreach, calling isn’t the only way to do outreach. DUH
Actually, my first transaction from cold outreach was from Facebook. One day, I was scouring the internet trying to find business… I saw someone post that they were moving to Fayetteville, NC so I cold DMed them.
It worked! I got a client out of it!
Lead generation doesn’t have to be a ‘nails on chalkboard’ cold call… You can find people lower in the sales funnel (more ready to buy or sell) by finding questions they ask on different websites and social media platforms.
Here’s what Hormozi says the steps are to doing outreach, and I agree because their the same steps I did when doing mass SMS campaigns.
Step 1. Build a List
Most real estate property records are public information. You can pull up a county GIS or tax records through your local MLS service to find the property owners’ names. There are also a ton of third-party apps that collect homeowner data and allow you to pull certain lists like:
AI assisted seller leads lists that estimates people who might sell
I used Propstream for a ton of my data. Keep in mind that companies like Propstream are third-party national data companies and not the most accurate. I don’t know where they source their data from, but I think a lot of it is done via software and scraping.
For example… I used to go to the Mecklenburg county courthouse every day to look at foreclosures. In the binders at the courthouse, there were almost always 50+ foreclosures… But Propstream only had 5-10 and some of what they had was incorrect.
There was no consolidated location for all foreclosure data except at the courthouse. If you go and do it yourself, you will have the freshest, most accurate data.
Of course this isn’t scalable unless that data source is profitable enough for you to hire someone to scrape it for you… Which, if it’s not, I wouldn’t reccomend doing it to begin with.
There’s a few different ways to get your lists. Here are the 3 ways according to Hormozi:
Scrape ’em (Software)
Buy ’em (Brokers)
Look for ’em (Manual Search)
Once you get the list of cold leads, the next step is the most difficult because some people get angry and say mean things. Take it with a big grain of salt because you are interrupting these people’s day… Don’t snap back disrespectfully if they have some attitude.
Step 2. Personalize, Then Give Big Fast Value
I am moving to Lexington KY in a couple of weeks and decided to throw my house up on Zillow as FSBO. All of the agents who cold-called me did a fairly good job of personalizing the phone call to start it off.
You can imagine how many calls I have been getting from Realtors who claim they have a buyer. I thought that would be great! It is super valuable… Except all of them are lying.
So, instead of calling and wasting my time trying to get a listing, why didn’t a single agent try to give out an awesome lead magnet that shows how they sell houses for top dollar?
Give away the information, sell the implementation.
Step 3. Contact them until they’re willing and able to listen
Do more outreach… More times. More Ways. Don’t stop following up unless they ask you to stop contacting them.
PS – Follow up within reason – Multiple times per day is excessive for cold outreach
Methods to Generate Real Estate Leads via Cold Outreach
Just like warm outreach, here are some examples of cold outreach.
- Cold calling (Be sure to scrub your list for DNC phone numbers)
- Texting (If you are a real estate agent, cold SMS is ILLEGAL. But, in most states it is legal for people offering to purchase a property)
- Social Media DMs
- Direct Mail Campaigns
- Cold Emailing
Posting Free Content
Outreach definitely works, but if you are looking to dominate your market, I firmly believe posting free content is required. Here’s why:
With outreach, the more you do, the better you get. Your conversion rates will improve with practice. The downfall is you will only ever be able to communicate with one person at a time.
By posting free content, you not only market to multiple people at once, you are also building your audience. The more you do it, the faster you can grow your audience, and the more you can convert that audience into revenue.
In $100M Leads, Alex talks about how your audience is the compounding asset when posting free content. Which is true for social media, but I think he left out a significant piece of the puzzle…
When posting content to a website for a search engine optimization (SEO) campaign, the asset is the content. Why?
The purpose of search engines is to satisfy a searcher’s query. They want to recommend the highest quality content so that user continues to use their search engine… Normally it’s YouTube or Google… But recent studies show 51% of Gen-Z women prefer Tik-tok as a search engine…
So, in cases where the content is what people are searching for, the content is the asset. In cases where people are scrolling social media like Instagram, the audience is the asset.
Hormozi knows WAY more than me about social media, but maybe not SEO.
So, how does Alex say to create free content to grow your warm audience?
Three Components of a Piece of Content
I can’t say it any better myself, so I’m going to insert an excerpt from $100M Leads:
“All audience-growing content does one thing – it rewards the people consuming it. And a person can only get rewarded by the content if they:
1) Have a reason to consume it and
2) Pay attention long enough to
3) Get that reason satisfied
Thankfully we can reverse those three outcomes into the three things we have to do to make audience-growing content. This means we have to:
a) Hook attention: get them to notice your content.
b) Retain attention: get them to consume it.
c) Reward attention: satisfy the reason they consumed it to begin with.”
Lead Generation Strategies for Free Content
- Pinterest… You name it
Search Engine Content
Yeah, I said Youtube twice… It’s a hybrid. Between posting free content and doing outreach, this is as close as you’ll get to free real estate leads.
Don’t have time but do have money? Consider this next option…
Running Paid Ads for Real Estate Leads
As someone new to the business world, I was TERRIFIED of running ads. I thought it was a scammy system that was programmed to take all my money and only the best could manipulate it’s sophisticated levers and buttons…
Keywords, Negative keywords, Bidding settings… I was confused so I hired an agency to run Facebook Ads for me.
Alex Hormozi built a huge business by running paid advertising. He didn’t do it for real estate agents, but the same concepts apply.
The 4 problems to solve with paid advertising is:
Knowing where to advertise
Getting the right audience to see it
Making the best ad for them to see
Getting permission to contact them
Step 1. How to Choose a Platform to Run Paid Advertising on
Hormozi did a great job of breaking this down into 4 more simple requirements. Here is a quote for what he looks for in a platform to advertise on: “
I’ve used it and gotten value from it as a consumer. So I have some idea how it works.
I can target people on the platform interested in my stuff
I know how to format ads specific to the platform (which I’ll dive into in step 3)
I have the minimum amount of money to spend to place an ad”
If you don’t have a platform where you meet this requirement… Hormozi says to start off placing ads where your competitors are.
Once you choose a platform… Spend some time studying ads on that platform.
Step 2. How to Target Your Audience
Since real estate is a local, service business, it’s hard to target the right people… I live in Charlotte and we have like 2.6 million people in our metro. If you think about it, that’s less than 1% of the United States population…
Since local businesses already have such a small pool of people to target, you can target everyone within your service area… Easy enough, right?
PS – Later on, you can tell the algorithm to who turned out to be great clients and it’ll target more people like that to get you better results.
Step 3. “What Should My Ad Say?”
Similar to Alex’s ‘Hook-Retain-Reward’ Framework, a paid ad has 3 main parts
Call Out – AKA Hook
Get Them Interested
CTA – Tell them what to do
We could deep dive into each of these, but I’d reccomend buying both of Alex’s books if you’re interested in running paid ads… They’re only $0.99 unless you want a physical copy.
$100M Leads – Available for free on Hormozi’s podcast – The Game
Here’s an example of a paid ad I was running for a Realtor in Connecticut… I recorded this myself since I thought it was too negative for his branding:
“If you’re thinking about selling your house in Connecticut, do NOT make these 5 mistakes.”
– Call out
“If you make any of these mistakes, your house WILL sit on the market costing you extra mortgage, insurance, interest, utilities… it could cost you tens of THOUSANDS of dollars when you sell your house.”
– Get them interested
“To get this list of mistakes and how to prevent them with my max value selling guide, go to the link below. It’s totally free and automatically emails it to you when you fill out your information.”
– Call to Action
This ad produced leads just under $40 a pop… But we didn’t have a lead magnet ready to send them so it was kind of a waste of $1,000… Excellent learning experience though!
Step 4. Get Permission to Contact Them
The easiest way to get permission to contact your real estate lead, is by a simple landing page… Yes, I know, this is another HUGE thing you do not know how to do and makes the wall of ‘unknown’ that much taller. I promise, it’s not as difficult as it may seem. Here are some examples Hormozi uses in his book:
If landing pages give you anxiety just thinking about it… I have good news!
Platforms like Facebook and IG have forms within their ads so you don’t even have to make landing pages. But be careful… They have auto-fill settings for those forms and most people don’t update their info. If you can, turn that setting off OR ensure the lead has to verify their contact info.
Now you have all the info you should need to go make your first ad! Let’s talk about the money stuff behind paid advertising…
Money Behind Paid Advertising
Because I hired an agency to run Facebook Ads for motivated sellers, I knew VERY little about the behind-the-scenes. Hormozi does a great job of explaining how to measure your success with paid advertising.
Here are Hormozi’s 3 stages of scaling paid ads:
Phase 1: Track Money (Make sure you can track what ads are spending and converting)
Phase 2: Lose Money (Test a whole bunch of variations of ads… Find a winner)
Phase 3: Print Money (Scale the winner for success)
The next question to answer is “How do I know how well I’m doing?”
This is something I’ve been struggling with… and Hormozi summed it up pretty simple. Let’s define a couple terms:
Lifetime Gross Profit (LTGP) = For real estate agents, lifetime gross profit is the average income a client will bring you minus whatever it costs you to serve that client.
My average listing is a $6,500 commission. I pay $400 for photos and a drone video. I also pay to have the property measured – $100. What’s my Gross Profit?
2. Cost to Acquire a Customer (CAC) =
Hormozi says all of his businesses struggled to scale until their LTGP/CAC > 3.
This means their LTGP tends to perform better when it’s 3x bigger than the CAC. Once it’s more than 3, it was way easier to scale.
Here’s the difficult part about paid advertising for generating real estate leads…
On average, it takes at least 60 days for these leads to convert… Since this post is Hormozi’s $100M Leads book – real estate agents’ summary edition, I’m going to share a HUGE problem within the real estate industry.
One of the ways Hormozi scaled his businesses so fast was with ‘client financed acquisition’. Client financed acquisition is when the customer pays you enough profit within the first 30 days to compensate for your cost to acquire them…
I don’t know how to do it for a real estate business, especially since kick-backs are illegal. If you think of something to achieve client financed acquisition… let me know.
Examples of Running Paid Ads
- Instagram ads
- Facebook ads
- TikTok ads
- Youtube Ads
- Google ads
- TV Commercials
I might be missing a few but you get the idea… Each of those platforms has at least 3 placements available… You can’t figure them all out so choose 1 platform and go deep!
We have officially covered all they ways YOU can generate real estate leads…
You’re probably thinking ‘Nu-uh! You missed a bunch!‘… If I did, please let me know! Now, let’s move into how to exponentially grow your real estate lead generation… Having other people generate leads for you! Or as Hormozi puts it:
Getting Lead Getters
Part 2: Lead Getters (Others Tell People About Your Real Estate Business)
The ‘Core Four’ was all about what YOU can do to get more leads… But that’s not the only way to get leads… ‘Lead Getters’ are other people who are out there getting leads for you! There are 4 main categories within the ‘Lead Getters’ portion.
Customers – they buy your stuff then tell other people about it to get you leads
Employees – people in your business that get you leads
Agencies – businesses with services that get you leads
Affiliates – businesses who tell their audiences about your stuff to get you leads
All four lead getters mean other people are getting leads. This means they provide much more leverage than you generating leads on your own.
Let’s talk about my favorite lead getter…
Lead Getters #1 – Customer Referrals
Referrals are how I built my business and sold 48 houses in my first year. Even better than a plain referral… I had a few ‘core advocates‘. Think of them like referral machines.
How do you get referrals? That’s a hard question to answer… Instead, ask “How would I definitely not get any referrals?” Hormozi has 2 reasons in the book…
Your service isn’t good enough
You don’t ask for them
In $100M Leads, Alex talks about some ways to get more referrals… Here are his six ways of giving more value:
Call outs -> Sell better customers
Dream Outcome -> Set Better Expectations
Increase Perceived Likelihood of Achievement -> Get more people better results
Decrease time delay -> Get Faster Results
Decrease effort and sacrifice -> Keep making your stuff better
Call to action -> Tell them what to buy next
These are all very true but I think he left out the most important one…
Alex runs a B2B business called acquisition.com. They partner with other businesses to help increase profits and revenue and build a more valuable company. Why is this important?
He is B2B, while a real estate agent is usually B2C or business-to-consumer. So, which referral method did he leave out?
My business thrived on referrals because I am good at making friends and being likable… As a real estate agent, the most important thing you can do is make your clients love you… Consumers usually don’t know what an easy or ideal real estate transaction is. They care about how you make them feel. Plus…
We all know the best leads in real estate are referrals. The referrer already vouched for you and told them how great you are. So, referrals are great because they are free right? Kinda…
Let’s look at it like this…
Every time you get a client, that client sends you 3 more clients. That’s AMAZING but, they’re not free because nothing is free.
In theory, if this worked, you’d only need 1 client to start your business. The downfall? It might take 1-3 years before you get those 3 referrals.
So, instead of looking at it as an exponentially growing business, let’s look at it in relation to your cost to acquire a customer.
Jason Boice is an agent in CT who buys Zillow leads. On average, his CAC with Zillow leads is $1,000.
But, if 50% of his clients refer someone else, his CAC decreases. For example:
If Jason closes 10 clients in 2023 from Zillow leads, and 1/2 of those clients refer someone else, Jason now has 15 clients. He spent $10,000 to acquire 15 customers so his CAC is now $666.66! That’s a 33% decrease… And if he makes $6k commission on each of those people:
10 clients = $60k GCI on $10k spent = 500% ROI
15 clients = $90k GCI on $10k spent = 800% ROI
That’s a HUGE difference and goes to show how valuable referrals are.
Lead Getters #2 – Employees
Employees are essential for every real estate business. The funny thing is, most real estate agents don’t have employees to generate leads, they have employees to do administrative work. Which isn’t wrong… But judging by the core four above, imagine if you had someone generating real estate leads for you.
All you had to worry about was converting those leads because your administrative assistant or a 1099 transaction coordinator takes it from contract to close…
Slowly building a REAL real estate business.
For example, this week at our weekly training a good friend of mine spoke about cold calling. Greg Mcdaniel is a cold-calling wizard and machine. He tracks all of his hours and income from cold calling, and he discovered that he makes roughly $3,472 per hour when he cold calls to generate leads.
Now, is he a pro that does it better than 99% of people? Yes.
Is he capable of training someone to become better than 95% of cold callers? Absolutely.
If that cold caller was just as good as him, he could pay that person $500 per hour and make WAY more money than if he was calling those people. So, what’s the first step to hiring?
How to Get Employees
Employee lead generation is very similar to real estate lead generation. Everything you do to generate real estate leads, you can use the same methods to generate employee leads. Here is how Hormozi displays it in $100M Leads:
So, now that you have a pipeline full of employee leads… Here’s how to train them to get you leads.
How to Get Employees to Get you Leads
Real estate lead generation is not a difficult process. It’s a grind. Hormozi has 3 basic steps to training your employee lead getters:
Document – Make a checklist, record videos, whatever is necessary to hand it to someone so know what steps to take.
Demonstrate – Do it in front of them. If they slow you down or ask questions, go back to step 1 to update the checklist
Duplicate – They do it in front of you. Now it’s their turn. They follow the same checklist you did. Get them to follow the checklist until it’s right
Alex gives a short tip in the book and I can’t agree more:
“Most entry level advertising jobs aren’t complex. It takes grit more than skill. If you trained someone properly and they’re still below expectations three weeks in, cut them.”
For example: I hired someone to pull data from public data sources like the newspaper and code enforcement site. She was a virtual assistant from the Philippines. I constantly had to tell her to do certain things that were on a checklist and I made video tutorials on how to execute.
It wasn’t that she didn’t know how to do it, she didn’t care.
I waited WAY too long to fire her… Get rid of those people after the second strike.
Lead Getters #3 – Agencies
I have used a few agencies throughout my time. Only 1 of them was to generate leads. I’ll share my personal experiences with you…
Unfortunately, I didn’t know ANYTHING technical about digital marketing when I started. I hired an agency and paid them $1,700 every 2 weeks. I can’t tell you what they did, how many leads they generated, or how much revenue they produced… which is one of my biggest mistakes.
In my defense, we had 10+ agents and I was just trying to manage the chaos. I paid them for around 18 months… You can do the math but just know this was a $50,000+ lesson I learned. So…
If an agency can’t explain to you what they are doing, and what results they’re getting you… FIRE THEM!!
Another agency I still pay today is a social media agency. They handle a few of my social media pages such as Pints & Properties and Five Pillars Nation. Although it isn’t perfect, it’s better than nothing.
I think lead generation agencies work, but they are expensive. In the book, Alex talks about how he uses an agency to train himself and his team to eventually bring that lead generation strategy in-house.
For the majority of us, this isn’t going to be an option. As real estate professionals, we are generally local businesses that would struggle to bring in $100,000 per month from one lead source… Therefore it would be hard to justify hiring a full time employee to pay at a minimum $5,000/month to train and operate that lead source.
After training that employee with thousands or tens of thousands of dollars worth of education from the agency, that employee is likely going to be worth well over $10,000/month.
If they’re responsible for paid advertising, it’s likely you are going to need to spend at least $20,000/mo in ad spend to see a solid ROI. $10,000/mo salary + $20,000/mo ad spend… according to Alex, this lead generation method needs to bring in $120k/mo in order to help your business. It’s not impossible if you live in a big market… But it is difficult.
What should you do?
Improve what is already working before hiring an agency to generate leads.
Lead Getters #4 – Affiliates
Hormozi describes an affiliate as ‘an independent business that tells their audience to buy your stuff.’
There are a ton of different affiliates in the real estate world, but my favorite is agent referrals. For example… I have an agent in DC that I have referred 3-4 people to and they have closed every single deal. Not only does he close, but the people I send him tell me how amazing he is.
Big bonus? He keeps me updated on their transaction along the way… I will keep sending him quality leads as long as he produces.
Also, since I did the rounds on some popular podcasts early in my career, I developed Realtor relationships across the nation. Those relationships have generated hundreds of leads for my business.
You don’t have to run any advertising. They run the behind-the-scenes and send you leads to close. You can decide what category they below in, but at the end of the day, they’re putting in the work, not you.
In the book, Alex goes into a step by step process of how to get affiliates. I thought of something that you can do to find high quality ‘affiliate’ referrals from other real estate agents.
Go to Redfin data for whatever city you’re in… I’m in Charlotte so we will use that as an example
Find the top 5-10 cities most people are relocating from.
Find 10-20 agents in that market and consistently send them mail or texts reminding them you’re an agent in Charlotte
When they send you leads – keep them updated on a weekly basis of how those leads are doing
Boom – affiliate lead generation… and they’re likely more qualified leads
Concluding How to Get Real Estate Leads
If you read this but want a more in depth tutorial on how to generate real estate leads, I will be writing more in-depth articles specific to each channel. We have briefly covered all lead generation strategies available in the world of business.
If you don’t have money, I really like the idea of starting a local Youtube channel and building an asset that will grow over time. You can also do this on different social media platforms.
If you’re not sure what to choose, you can learn more about marketing for real estate agents.