Better Data, More Real Estate Investing Deals

Real Estate Investing and Wholesaling is a numbers game, but what would you rather do? Work a huge list to find one deal, or a much smaller one that finds the same deal?

You’d probably say “the smaller list, of course.” But how do you get there? It all starts with good data. Even if your marketing is excellent, and your selling skills are outstanding, if you have bad data, you will waste time and money going after leads that will never become deals. You won’t even be able to reach them.

Without data, any and all marketing efforts you make to reach your audiences go up the river unnoticed. So let’s talk about data.

What Do We Mean When We Say “Data?”

In Real Estate Investing, “data” means motivated homeowner lists, verified and run through lead scoring models to determine how likely and how soon owners will sell, based on various distress factors. What is a distress factor? It’s a reason that motivates the owner to need to sell, which is different than wanting to sell, as the latter will most likely just list it. Let’s dive into this deeper.

One List For All or A Winning List for One

One of the most common mistakes real estate investors make is relying only on lists every other investor can pull. PropStream, ListSource, PropertyRadar, and the like have “great lists”, but any investor who subscribes can pull the same names, so those lists lose their value.

Lists built from public sources that are not often accessed, such as arrest records, obituaries, code violations, and water shutoffs, reach owners other investors are not calling. If you try to do it yourself, including cross-referencing and cleaning the data, expect it to take weeks.

A lot of time, effort, and expertise goes into creating those lists, but once they’re done, they give you the competitive edge.

Lead Scoring To Identify The Leads That Matter

In a nutshell, lead scoring is a methodology to identify those leads who are most likely ready to sell and soon. There are dozens of different lists to target, and each list is a different motivation.

So how does a lead scoring model determine which leads are the priority? A good model evaluates, based on historical data, who has sold in the area and who sold to a wholesaler or investor, and why, and uses a point system to rank the types of sellers who are most likely to sell over others. For example, an inherited property is more likely to sell if it has a lien on it, or a rental is more likely to sell if its tenants filed for bankruptcy and were granted an automatic stay.

Lead scoring provides vital information to know who to target first and how to optimize marketing efforts. Leads who have a lower score today may get added points later, as more distress factors appear. For example, a pre-foreclosure that gets multiple utility shutoffs added to its record and that’s moving closer to its estimated foreclosure date will have more points for each added factor.

It’s All About Quality when Verifying Names, Numbers, and Addresses

When speaking of lists and data, we have to also mention skip tracing. How do you verify names, numbers, and addresses?

Here’s something worth knowing: matches or hits do NOT equal accuracy. A high match rate tells you how many records came back with a number, not how many of those numbers reach the owner.

In 2021, you could search for homeowner information providers and purchase matches for as little as half a penny. But are you going to test those numbers to assess accuracy? And what do you do if the numbers are wrong? You could spend a lot of time hunting down contacts and either come up empty or miss a sale.

This is when a cheap service becomes expensive, as you spend your time and marketing dollars trying to reach homeowners who you don’t even have the correct information for. And who knows? One of them could have been a deal waiting to happen, but you never got to talk with them.

Multi-tiered skip tracing helps: when the first source misses or returns a wrong number, the contact runs through a second and third source. Beyond matching numbers, aim for accuracy, using additional checks like USPS address verification and litigation scrubbers to verify information and make sure you can reach the homeowner.

Data Decides the Deal Count

Data is a vital element of your marketing strategy, and your real estate success depends on it. Bad data means wasted time, wasted dollars, and you lose leads and opportunities for closing deals.

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