In this video Tyson Smith argues that traditional outbound tactics—list pulling, cold calling, and text blasting—are only suitable for landing a few initial wholesale real‑estate deals but cannot sustain a scalable, predictable business. He cites an audit of three large wholesaling companies showing outbound leads close at 1 in 70 with a 14‑day average time to contract, whereas inbound leads close at 1 in 20 with under 7 days. Although inbound leads cost more per acquisition ($70‑$1,100 versus a few hundred dollars for outbound), the higher conversion and speed make them far more profitable. Smith then details his three core inbound lead sources: 1. Meta (Facebook/Instagram) ads – 1 in 9 conversion, cheap to launch, but often in sub‑prime markets; he uses LeadsConnect.io. 2. Google Pay‑Per‑Click ads – 1 in 10 conversion, highly targetable, leverages Google’s AI, but expensive and requires account grooming. 3. YouTube ads – 1 in 16 conversion, captures high‑intent sellers searching “how to sell my inherited house,” but has high production costs; he partners with LeadZolo.com. He emphasizes a quality‑over‑quantity mindset, preferring to pay $1,000 for a lead that yields $25,000 profit rather than cheap leads that rarely close. The recommended growth path is to start with low‑cost outbound leads, close a few deals, then reinvest profits into the inbound channels. Finally, he invites viewers to DM him on Instagram (@tyson_smith) or Twitter (@tysonsmithrei) for personalized marketing help and asks for likes and comments.
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You need to stop relying on pulling lists, text blasting, and cold calling homeowners to generate leads for wholesaling real estate. Those methods are great for finding your first couple of deals, but when it comes to building a scalable and predictable business, you need to focus on other marketing channels. Pulling lists and texting or cold calling is an example of outbound marketing. You are panning for gold in the sense that you have to sift through a lot of BS in order to find the people who will end up being your customers. Now, this is great for finding your first couple of deals because the startup costs are relatively cheap. However, I always recommend that once you close a few deals, you should reinvest the profits into different forms of inbound marketing. Inbound marketing is where the potential customers reach directly out to you about selling their home, and this shifts the entire dynamic of the situation and gives you so much more control. These leads are also much hotter than outbound leads, and I can prove that they are hotter by using data found in an audit of 3 very large wholesaling companies. This audit found that on average, wholesale companies would close 1 in 70 leads generated from cold calling or texting. Also, the average amount of time from when that lead entered their system to when the lead was actually locked up on a contract took an average of 14 days, meaning you or your salespeople are needing to follow up with them for 2 whole weeks before that deal gets closed. Now let's compare that to what the audit found for inbound leads. Through combined sources of inbound leads, companies were closing on average 1 in 20 inbound leads. And not only that, but the average amount of time it took from when the lead entered the system to when it was locked up is less than 7 days. Meaning that with inbound leads, you need to generate less than one-third the amount of leads and spend less than half the amount of time getting them locked up. The only catch here is that inbound leads are usually much more expensive on the front end than outbound leads are. To start generating outbound leads, you really only need a couple hundred bucks to skip trace a list and then maybe another hundred or so to pay for a multi-line dialer or texting service, whereas inbound leads are gonna cost you $70 to $80 per lead on the low end, and even as high as $1,000 or $1,100 per lead on the high end. There are some markets such as San Diego where I'm happy to pay $1,100 a lead because we end up making $40,000 or $50,000 assignment fees on those. Paying for these higher quality leads may be a tough pill to swallow at first, but once you start seeing how many more deals you'll end up closing, you'll be lining up to start dumping tens of thousands of dollars at these marketing channels every single month. All of my leads come from 3 lead sources: Meta ads, which are both Facebook and Instagram ads, Google pay-per-click ads, and YouTube ads. Meta ads are one of my top lead sources, and my company is currently converting 1 in every 9 leads. The pros are that these are very hot leads. The vast majority of leads we get from Meta are from very motivated homeowners who want to sell, and they are quick to sign contracts. The other pro is that out of the 3 lead sources, Meta ads are going to be one of the cheapest and the easiest to get going. The cons are that the leads that are coming from this lead source are oftentimes in very subprime markets. With wholesaling real estate, it's always much easier to do it in bigger markets where there are a lot of fix and flippers. Dispoing a deal in markets like Dallas, Phoenix, Las Vegas, or Tampa is much easier than dispoing a deal in Okeechobee, Timbuktu, or Yuma. Now, this problem can easily be solved by knowing how to use novation contracts. When it comes to dispoing deals in small markets, it's hard because there aren't many cash buyers. And that's why in small markets like this, we use novation contracts so we can sell our deals on the MLS to retail buyers. Now, if you are currently doing deals and you're interested in implementing meta ads into your business, go to www.leadsconnect.io. This is exactly who my company uses to get our Meta ads that we are closing 1 in 9 of. Now, I will say, if you aren't already doing deals, this company will not work with you. So if you're still working on getting your first couple deals, I wouldn't recommend wasting your time. Now, my second lead source is going to be Google PPC ads, which we are currently closing 1 in 10. Google PPC, or Google pay-per-click, is an advertising service Google offers where you can pay to have your website rank highly for specified search terms. So for instance, when you Google "sell my house fast," The first 4 or 5 results are all going to be Google PPC ads, and those companies are charged every time somebody clicks the link, whether they become a customer or not. The result of this is that they can be very expensive. Now, the price per click depends on the competitiveness of the search term and the area you're running the ad in. So, "sell my house fast" is a very competitive search term, so it's going to be expensive. But if you were only wanting to rank highly when people search "sell my house fast" in some subprime market, it won't be as expensive as it is in a prime market. Now, the pros of this is that Google is one of the smartest AIs out there. It has millions of data points on every person who uses it, and Google knows more about you than you probably know about you. So I can assure you, Google knows when you are starting to think about selling your house, and over time, you can train your Google account to recognize this, and it will start providing you with the most top-notch leads. The pros of PPC is that you get to dictate exactly what markets you want leads in, and you get to leverage how smart Google is. The cons are that it's very expensive, and it takes a while to get your account trained to provide you with the leads you're looking for. You can't just make a PPC account and start throwing thousands of dollars and expect it to give you high-quality leads. You have to groom the account over time to get it generating the results you want by adding specific keywords and search terms, getting rid of negative keywords, and patting it on the back when it sends you leads you like. Now my third lead source is going to be from YouTube ads, which we are closing 1 in 16. YouTube is great because that is exactly where people go when they are seriously looking to learn how to do almost anything. So someone that searches something like "how to sell my inherited house" on YouTube, 9 times out of 10 is going to be a seriously motivated seller. So the pros are that you're getting very high quality leads, and now I predict that YouTube leads will probably become one of our top lead sources in the near future. The cons are that it's very expensive and the barrier to entry is really high. It takes a lot to know how to script, direct, and produce a YouTube ad, which is why we leave it to the professionals over at LeadZolo.com. Now, I personally know the owners of this company, and I can assure you, these guys are some of the best marketers I've ever met. If you are interested in getting YouTube ads for your wholesaling business, go check them out. When it comes to marketing for your wholesale companies, I believe in paying for quality over quantity. I don't care if I have to pay $1,000 for a lead if it's gonna make me $25,000. And I would rather pay $5,000 for 50 leads knowing I'm gonna close 5 of them than pay $5,000 for 500 leads knowing I'm only gonna get to close 5 of them. If you had a slot machine that you knew every single time you put $5,000 into, it was gonna bring you back $30,000, you'd be pulling that thing all day long. It's a classic case of working smarter, not harder. Now, in the beginning, you have to work your way out out the mud. So keep digging through your cold call and SMS leads, get yourself a couple of deals, and then reinvest the money properly so it makes getting more deals a lot easier. Now, if you need some help determining how to reinvest your money into marketing properly so you can scale up your business, send me a direct message on Instagram @tyson_smith or on Twitter @tysonsmithrei, and I'll tell you how I can help. Now, if you enjoyed this video or you found it helpful, I would seriously appreciate it if you give me a up, and if you have any questions, make sure to leave it in the comments. But as always, guys, thank you for watching, and we'll see you on the next one.
