What is a typical close rate for a good wholesaler?

Question

I'm trying to back up into my goals as a potential wholesaler and I was hoping to get an understanding of my KPIS. What is a typical lead to opportunity ratio?

John Thedford · Answer

Close rate?  You mean signing contracts or assigning them? You won't get an honest answer on assigning them because unlicensed brokers will never admit to how many sellers they victimize by scamming out of the contract. If you mean getting properties under contract that depends on how many sellers are easy to scam into signing.

John Thedford · Answer

States are cracking down do to the number of victims complaining to regulators. These operators truly are predators victimizing the public.

Greg Dickerson · Answer

@Joseph Cameron I work with some of the top wholesalers and flippers in the country. Some are doing 200-300 deals a year. The answer really depends on the marketing channel, the area, price point and skill level of the investor

Inbound marketing like internet, tv, radio, print and direct mail have the highest conversions meaning leads to closed sales. I only measure closed transactions as lots of deals fall apart due to title issues etc.

Inbound generally produces about 8-10% average with some people hitting around 20% on the high end.

Cold calling off a list has the lowest for most people at around 5% but I do have one client that kills it with cold calling and converts about 25% off of one list.

Driving for dollars is pretty effective as well.

Believe it or not MLS is still pretty effective in several markets as most investor are ignoring it. There is a specific system you can use there to increase results. Do you want to target vacant properties that I’ve been on the market for a month or two longer than average days on market and have her price reductions when you go in and make an offer where it works for you. I get about 20-30% of these. Expired can work as well.

One stat that’s really interesting is my clients with huge day at bases are getting 30% conversions on following up on leads from 6-12 months old and older.

The key is to find what works best for you in your market and double down on that strategy.

Greg Dickerson · Answer

I monitor the expired properties daily and go direct to seller.

Dustin P. · Answer

Great information Greg!

I wanted to ask what your process is for expired listings? Do you have searches set up to kick you an e-mail once a listing is 6 months expired and it meets a certain criteria? Are you calling the old listing agent or skip tracking direct to seller?

Joseph Cameron · Answer

@Greg Dickerson extremely valuable Greg, this is what I was looking for. I was thinking that it would be lead source dependent. It's good to know that the top dogs are hitting such good numbers. I'm specifically intrigued by this method as it's so close to conventional sales and seems like a great way to learn. I'm sure I'll pick up a few flips or buy & holds along the way.

Joseph Cameron · Answer

@DJ M. Appreciate your response and good luck to you as well.

Joseph Cameron · Answer

@John Thedford thanks for your effort here. I'm referring to how many leads you need before you get a house under contract. Let's say via the two of the top lead sources i.e. DM and d4d.

DJ M. · Answer

To add on to what @John Thedford has already said. Typically the more dishonest with sellers your are, the more sellers you will get to sign your fraudulent contracts. Also, the more trouble you will find yourself in.

Theres a reason states are starting to crack down on those unlicensed brokers skirting licensing laws.

Good Luck

What is a typical close rate for a good wholesaler?

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