Real estate investing can be a lucrative way to generate profit or cash flow if you master the art of identifying and closing deals. However, the process is rarely as simple as spotting a “for sale” sign and making an offer. Finding profitable properties often requires some research.
Fortunately, this research doesn’t have to be time-consuming or complex. In this blog, we’ll explore how you can efficiently target off-market properties and leverage tools like skip tracing home owners to be the first to reach out to property owners.
How to create an off-market property list
The first step to a successful real estate investment is finding a promising opportunity. As mentioned, the best investment properties often don’t have “for sale” signs, so you’ll need effective methods to uncover off-market properties.
You have two main options for this:
Drive for Dollars: This involves exploring neighborhoods to identify distressed or neglected properties that can be purchased below market value. By physically driving through areas and looking for signs of damage or disrepair, you can spot potential investment opportunities.
Find Motivated Sellers: Motivated sellers are property owners facing financial difficulties that compel them to sell quickly. These situations can vary, but they all result in a pressing need to sell, often leading sellers to accept below-market offers for a quick cash sale.
To efficiently identify and locate these sellers and their properties, using a real estate lead generation platform is highly recommended. With the right platform, you can filter properties by distress factors and quickly generate a list of high-quality off-market opportunities. This tool allows you to efficiently uncover properties that align with your investment strategy.
How to skip trace a property list
Once you have your list of potential properties and have identified the most promising opportunities, the next step is to connect with the owners to make your offers. To begin outreach, you’ll need their phone numbers and email addresses. However, just like finding great investments, locating this contact information can be challenging and requires some effort.
Skip tracing is the process used to uncover this hidden information. It involves leveraging the data you already have to find the details you’re missing. Historically, skip tracing was a manual task used by debt collectors, bounty hunters, and private investigators to locate individuals who had “skipped town.”
Today, skip tracing involves using public records to find contact information for properties of interest. For example, you can check property deeds or liens for names that may lead you to new addresses. Online searches for criminal background checks or social media profiles can also provide valuable contact details. The goal is to uncover email addresses or phone numbers to reach out and make an offer on the property.
However, there are challenges with traditional skip tracing methods. Often, the contact information you seek isn’t publicly available, and even when it is, finding it can be time-consuming. Additionally, the information found is frequently outdated or inaccurate. In fact, only about 6% of contact information available online is reliable. Relying on this data can hinder your ability to secure deals.
Fortunately, with modern technology, skip tracing doesn’t have to be a manual or unreliable process. Quality real estate lead generation software often includes built-in skip tracing services. However, if the data provided by these services is inaccurate, it can negatively impact your revenue.
Why data quality matters
As highlighted, handling lead generation and skip tracing on your own isn’t the most efficient approach to real estate investing. Many investors try to cut costs by opting for low-to-mid-tier data providers, hoping to strike a balance between expense and effectiveness.
However, even mid-tier skip tracing tools often fall short. While they offer better accuracy than the 6% provided by lower-tier options, their accuracy rates typically peak around 40%.
As shown in the charts below, these low accuracy rates can significantly impact your profits. Saving money on skip tracing is not worth the cost of ineffective data. Missing out on opportunities due to inaccurate contact information will ultimately cost you more than you save. Additionally, dealing with wrong or disconnected numbers can lead to employee turnover, carrier flagging, and other issues.
On the other hand, a high-quality data provider ensures that the information you receive is thoroughly cleaned and enriched by an internal data science team. This means you get more accurate and comprehensive data, including number verification reports, Federal DNC scrubbing, and known litigator removal. Investing in high-quality data enhances your ability to connect with the right people and opens up opportunities that low-quality data cannot provide.
Key takeaways
As a real estate investor, seizing every opportunity is crucial, and skip tracing plays a key role in this process. By uncovering accurate contact information and reaching out to more property owners, you can unlock a wealth of potential investments.
To make the most of your efforts, you need high-quality data. Relying on public records or low-tier skip tracing services often results in wasted time and resources spent calling incorrect or disconnected numbers. By investing in reliable contact information, you gain a significant competitive advantage in the ever-evolving real estate market.
