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SHOW NOTES FOR EPISODE 251: USING SKIP TRACING TO MARKET DIRECT TO SELLERS
In today’s seller market, it has become increasingly necessary for many investors to implement DIRECT TO SELLER marketing strategies – like direct mail and cold calling. It is especially challenging in the multifamily space where brokers used to supply investors with off-market leads but now pass those leads to institutional and international buyers who are paying above-market prices for properties. In this episode, Larry Higgins, CEO of Skip Genie, shares how skip tracing is being used as an effective marketing strategy that can bypass brokers and bring you face-to-face with property owners.
What You Will Learn
- What is the most effective direct-to-seller marketing approach and why?
- What is the “old letter lottery” and why does it hurt direst-to-seller marketing efforts?
- How to shift from passive marketing to true “direct marketing”
- What is the most effective distressed owner type and where you can find them?
- What is an “upper tier data” provider and why are they better?
- Why Larry does not do direct mail anymore
- The top four U.S. markets where skip tracing works best
- How to do skip tracing cold calling without ever picking up a phone
About Our Guest
Larry Higgins
Larry Higgins is a real estate investor primarily focusing on wholesaling in the larger Texas markets. He specializes in skip tracing and cold calling for deals. He’s also the co-founder of Skip Genie, a skip tracing service that specializes in helping investors of all types all experience levels find new ways to find deals. Larry began his career with Camden, a multifamily housing company, where he spent three years overseeing construction. After jumping into real estate full time in 2013, he quickly learned that returned mail was a problem. He graduated from Texas A&M University in 2003, where he was a member of the Corps of Cadets. Larry lives in Houston, Texas
More About Larry
- Larry graduated from Texas A&M in 2003
- Went to work for Camden and was involved in multifamily construction around Texas
- Left Camden and worked overseas for a few years
- Came back. Got another job. Loved the people but hated the job.
- Knew he needed to do something else but didn’t know what
- He liked the idea of real estate but more as a back-up “retirement plan”
- Wanted to pick-up some rental houses but he never took the steps to do so
- He would see the flipping shows on TV, hear radio ads for real estate seminars
- He thought there are a lot of people doing it, it can’t be that difficult
- He quit his job, jumped in and started to get self-educated on real estate investing through flipping
- He wanted more control over his life
- At first, he was most interested in owner financing but flipping seemed like an easier way to get started
First Deal
- A light rehab
- Didn’t have to market to find the deal
- Got it through a friend of a friend
- Owner financed
- Went well
- and did a few more deals like that
Marketing to Get More Deals
- Started doing direct mail to get more deals
- Did “driving for dollars,” driving through neighborhoods looking for vacant houses
- Posted “bandit signs” like the ones you see that say “We Buy Ugly Houses”
- With direct mail, he found out real fast that you get a lot of returned mail back after your mailing
- Other people would casually mention to just “Skip trace the letters to get directly in touch with the owner,” but no one really explained how to do so
Trying to Get in Touch With Owners
- He tried unsuccessfully, at first, to get a hold of the owners from the lists and returned mail he had
- He tried to get information but wasn’t doing very well – return mail is stacking up
- Found out many were distressed properties
- Owner deceased
- Delinquent taxes
- Vacant and abandoned properties
- People needed to sell the property but he didn’t know how to get in touch with the people to make an offer
- He also continued “driving for dollars” to locate vacant and distressed properties. As he tried to track down vacant house owners, he found they were oftimes very difficult to track down
- He was determined to find a way to locate owners and get good at it
Getting Help
- Found a guy who was recommended by other investors, who knew how to “skip trace”
- The problem was that he charged $50 per property for the owner contact information
- Larry had 200-300 properties he needed contact information on but couldn’t afford to pay the skip tracer for the information
- He was still determined so he researched more and found cheaper services like White Pages Online, Been Verified, Spokeo, and TLO. Some info was cheap and some free.
- The problem was “you get what you pay for” and the info ended up not being very reliable
- If you had to reach an owner who was stable, living in his house for a long time and had good credit, you could probably get their info from these services fairly quickly but, the problem is, that profile is not the profile for the typical prospect for most of the leads he had to track down
- Most of his leads were people who had multiple bankruptcies, tax liens and owned a distressed property
Moving to “Upper Tier” Data Providers
- He found more thorough, deeper owner research through a higher level of skip tracer that did what the others weren’t doing, like:
- Credentialing process
- Background checks
- For this service, he paid $500 per month for one year
- It was a big commitment for him but he was convinced he needed that data — and he was right
- The quality of data was far superior to what he had experienced before
- There still were contacts that were had to reach but he was getting in touch with people a lot faster, without having to “run around in circles” trying to get decent info because he had bad data
A Shift in Business Strategy – The Most Direct Way!
- While many real estate marketing educators were teaching to mail, mail, mail, he was finding that was not necessary
- He also saw that those focused primarily on direct mail were overwhelming owners and losing their effectiveness
- He calls it the “old letter lottery”
- For example, probate leads are real common
- When you do direct mail to probate lists, prospects get overwhelmed
- Larry had a friend whose dad past away. From the time they opened probate, within 2-3 weeks, his friend received 71 letters from investors and others who wanted to buy their property
- Very competitive
- For example, probate leads are real common
- Larry no longer does direct mail (hasn’t done it in 4 years)
- He started calling people not because he wanted to. He did so because it was the most direct way
- He started calling people directly out of necessity but ended up making “cold calls” his primary marketing methodology
- He liked the results
- It’s not passive like direct mail, where you just send it out and wait. It’s very effective
- When you cold call, you cut past all the letters because there are lots of people who have received the letters but don’t want to call people back – you cut to the chase!
- Many people don’t call back because they are just confused with the probate process and don’t feel they understand enough to discuss the issues with anyone
- Larry would present himself as a “problem solver” — someone who can help them cut through the process process, better understand their options and move forward to take action
- He found some people who didn’t even know they owned a property
- When you’re working in a mass scale approach, cold calling gets the best results
If You’re Having Trouble Reaching People Through Cold Calling
- They have tried various ways to deal with the problem of not reaching people or not getting calls back
- Larry found that a combination of these three approaches works best:
- Direct, persistent phone calls
- Follow-up texts
- Leaving “ringless voicemail” messages
His Target Marketing Audiences
- Today he is more broad-based in his leads
- In the past, he was more focused on the following leads
- Vacant Houses (#1 indicator regarding the possibility of a deal)
- Death/Estate/Probate
- Delinquent Taxes
- Loan defaults
- Other distressed areas:
- Foreclosures
- Bankruptcies
- Divorce
- Child support judgments
- Expired listings
- In Texas
- Delinquent taxes is top category for best leads
- Better still – people whose properties are about to go to a tax auction
- Next best: Estates (not probates)
- Why estates and not probates
- Probates will usually show up on estate lists but estates don’t always show up on probate lists
- Probates means someone died and papers have been filed
- Estates means someone died but there was not necessarily papers files
- It’s a better list because not many people are marketing to them because they think probates are estates
- People can die without a will and their family doesn’t have the means or the will to do anything about it
- The houses often fall into disrepair because they don’t have the means or desire to do anything about it
- There is no probate because there is no will and these are the best leads
- Why estates and not probates
- Foreclosures
- A lot of pressure and activity in this area
- He wants to develop a process/system before he actively pursues
- Tested it out in California and found that people filed multiple bankruptcies to offset the foreclosure process
- Other markets doing especially well with skip tracing
- Nashville
- Georgia
- Florida
- New Jersey
- Delinquent taxes is top category for best leads
- He seeks lists that have a combination of the above — that is a more targeted list
- Problem is, you can’t buy that list. You have to create your own
- It’s all about the property
- He’ll pull any list, let’s say an estate list and then looks for overlapping issues like delinquent taxes – and, with other key distressed issues. The more he can find, the more “distressed” and valuable the leads
- He can do “list stacking” to get these lists that have multiple distressed factors but it is more difficult to find – these are his best leads
- If you have a limited budget, this type of marketing can be most effective – getting the “most bang for your buck”
- As you scale up, and have the capacity to process more leads, you can start to broaden out
Multifamily Properties
- He hasn’t pursued this area yet but we wants to
- He would look for people who own a property in their own name – for “mom and pop” owners
- Other factors:
- Delinquent taxes
Getting Prepared for Finding Leads Through Skip Tracing
- Sometimes he’ll get someone who has 2,000 leads and they want to jump right in and call everyone on the list
- Before you start, you need to be prepared
- You need to ask yourself these questions:
- Have you ever made cold calls before?
- Have you ever used an auto dial?
- Larry works with clients
- Maybe start with 100 names first
- You need to have a script
- You need to test out first and evaluate your effectiveness and challenges
- For example, you may encounter something called “invisible states”
- You may be tracing a list of tax liens
- You find out that it looks like the owner is actually dead
- Or it says they are 110 years old, or some other clue which may suggest that they are actually dead
- Then you need to contact the relatives
How Skip Genie Works
- They focus on providing clients with “upper tier” data
- They first help to identify your needs
- Step One – Build a List
- Compile data from public and private records. Look for tax liens, mortgage defaults, and other signs of distressed ownership.
- If you’ve been sending direct mail and getting some back, that means a) a house is probably vacant, and b) your competitors aren’t reaching them either. You can skip trace the returned addresses
- Go out and look at properties (Driving for Dollars). Watch for certain, obvious signs of neglect. You can drastically pare down your list by visiting in person, and you might find opportunities that aren’t showing up elsewhere.
- Use list services:
- Step Two – Give Skip Genie your list
- You manually submit your list through their dashboard or submit some other way
- You can also do searches through their dashboard
- Your list may be one of or a combination of the following:
- Vacant Home
- Tax-distressed
- Mortgage default
- Probate
- Deceased owner
- Out-of-town owners
- Foreclosures
- Estates
- You need to submit owner’s name and address
- They will give the list back with:
- Contact phone number(s) for the owner
- Possible email addresses
- Address history
- Financial distress indicators
- Bankruptcies
- Liens
- Judgments
- Will show you a count of how many are showing up on their records
- Age of the owner
- Confirmation of owner being deceased or not
- List of relative names (without contact info)
- Every Wednesday night they have group calls to answer questions
- Their coaching sessions will teach you what to look for and how to proceed.
- Most effective calling techniques and strategies
- How to track and follow-up results
- Learn winning methods, best practices, and how to use the tools
- Cold calling
- You start making test calls
- evaluate progress
- refine your process
- identify challenges
- Connect in Wednesday coaching sessions to improve your cold calling technique and skills
- You start making test calls
- Benefit from Your Results
- By identifying promising properties and tracking down the owners with the help of the best tools, you can transcend the noise of the crowded investor market, and get directly to the opportunities. It takes a little legwork, but yields great results for a tiny fraction of the cost of traditional methods.
- Cost for their service (two plans)
- Perfectionist Plan
- $97 per month includes 25 searches
- Additional searches are $0.45 a search
- Unlimited skip tracer list submission per week (at $0.45 per record)
- Essentiality Plan
- $47 per month and includes 10 searches
- Additional searches at $1.50 per record
-
1 bulk skip tracer list submission per week (at $1.50 per record)
- There’s no charge if you run a search and get no record back
- Unlimited Search Credit Rollovers
- No Hidden Fees
- No Long term Contracts
- No Background Checks
- DISCOUNT ON DNC3 Scrub & Connection Check
- Perfectionist Plan
Advice for Old Dawgs Interested in Real Estate Investing
- Avoid “Shiny Object Syndrome”
- Zero in on what you want to do – wholesaling, flipping, single family rentals, multifamily
- Research and pick something and stick with it!
- Start with your end goal in mind
- Do you have limited capital? Start with wholesaling. Or look at lease-options and owner finance options
- If you’re thinking about using skip tracing and you’re concerned you don’t have the skill sets, job it out
- Not good at cold calling – hire skilled cold callers out of the Philippines (there’s a call center that specializes in real estate investors only in Texas)
- Use virtual assistants
- OutBounders.com (a team of 20,000 home-based telesales professionals)
- There’s someone out there who can take on the task for you
Rap-It-Up
- Favorite real estate book: My Life & 1,000 Houses by Mitch Stevens
- Favorite business book: How to Win Friends and Influence People by Andrew Carnegie
- Most valuable web site for success (other than your own): County Assessor websites or whatever local local government entity that holds your real property records
- Favorite app: Google Street View
- Favorite quote: “Never, never, never give up” – Winston Churchill
- If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Look for abandoned, vacant houses, prioritize them based on free public information going back to owner names, delinquent taxes, etc (distress factors). Narrow down to top 100 and then narrow down to best 20. Skip trace and start calling owners. Start wholesaling some deals to help build his cash back up.
How to Reach Larry
- Website: SkipGenie.com
- eMail: Larry@SkipGenie.com
This Episode Brought to You by Stessa
This episode of the “Old Dawg’s REI Podcast” is sponsored by Stessa, a modern software to track, manage, and communicate the performance of your residential real estate assets. Stessa lets real estate investors automate the busy work so you can focus more on the things you love — like growing your portfolios and spending more time with your family! To learn more and to get started with a free account, go to https://www.stessa.com/dawg
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