The DealMachine Real Estate Investing Podcast

167: Has Skip Tracing Gotten More or Less Accurate?

Duration:: 16m
Broadcast on:: 24 Jun 2024
Audio Format:: mp3

Key Talking Points of the Episode

00:00 Introduction

01:03 Who is the Deal Machine app for?

02:17 What is skip tracing like for real estate investors?

03:35 How does Deal Machine help make skip tracing easier for its users?

05:18 Why do most data providers fail to generate accurate information?

07:08 How does Unlimited Contact Info on Deal Machine close the gap in skip tracing?

08:04 How does the Unlimited Contact Info feature on Deal Machine work?

10:53 How can you access the Unlimited Contact Info feature on the Deal Machine app?

12:56 How has Unlimited Contact Info helped us with an on-market deal?

15:23 What would it cost to access Unlimited Contact Info on the Deal Machine app?

Links

Event: Deal Machine Unveiled

https://www.dealmachine.com/unveiled

David's Social: @dlecko

https://www.dealmachine.com/pod

Ryan's Social: @heritage_home_investments

https://www.heritagehomeinvestments.com/

This one's for anyone who's looking for their first real estate deal and is using phone number contact information as your primary way of getting in touch with property owners. I've actually included a talk that I gave to the nation's largest house flippers. You have to be doing over 100 flips per year to be in this group. I recorded the lives so that you could see how we help them increase the conversations they're having by 50% which can help you get your first deal even faster. This is the podcast for 10x in your income replacing your W2 through wholesaling real estate a strategy where you make a finders fee for finding a rundown house and then reselling it to your network of buyers and you make a finders fee while they close on it with cash giving you building your skills finding great deals and building up your cash reserves so that you can then go on and do other things like build a rental portfolio. My name's David Leko I'm the co-host of the podcast I found a deal machine eight years ago which is a marketing tool for house flippers that's helped people close over 10,000 deals in all 50 states. Thanks Leon and everybody this one's for anyone who's using skip tracing as part of their acquisition strategy for cold calling or text messaging. It's also for anybody who's using direct mail getting returned mail and wanting to find those people who are hard to find. We're with a company called deal machine that's been around for eight years we're a marketing tool for house flippers. We started off as a driving for dollars tool and have evolved into a full data provider that combines property data and person data in a unique way to give you guys more of those insights and ability to have more connections with sellers than any of your competitors can or what you may be doing currently now. So my name's David Leko I'm the co-founder of deal machine and CEO. So by quick show of hands we're going to talk about the private investigator tool. How many of you guys actually skip trace as part of your business and acquisition strategy? Alright leave your hand up if you skip trace more than 10,000 leads per month. How about 30,000 leads? Anybody doing up to a hundred thousand leads per month? I see a couple in the back here that's awesome. So how many of you guys would prefer that your skip tracing was more accurate? All of the hands that it went up initially also went up now. Yeah so that's exactly what I expected. Sometimes you feel like a private investigator trying to find even the right person. If you've been skip tracing like probably 70% of you in the room have as part of your business you're definitely not going to be surprised to know that 33% of skip trace eta is not matching to the right person who owns the home or has no match at all. And that's actually pretty generous I would say there's even more than that that doesn't get matched with a lot of skip tracing techniques out there is what I noticed right. So we have been a traditional skip tracing provider I would say as you know for eight years the last eight years right where we take a data provider that sells us hits on a property for five cents right and then you could get that through our platform for seven cents. I mean that's pretty much standard throughout the whole industry how it works. This past November we thought we have there's got to be a better way because it's just so bad and everyone just deals with the accuracy that's out there. And so we have been able to put together a list of everyone in the entire country their phone number how old they are their current address where they're registered utilities their previous address and it's all inside of our database so we no longer have to pay transactionally to show you data. So that is like a very significant change because well then we're not going to show you data if it's not a hundred percent sure that that's the actual person. We can pair it with properties etc. And one thing that I noticed though was if my own properties they didn't actually show up and we'll get into why properties that are corporate are also a problem right. So even though we kind of made that leap in November and is a huge reason why we've been able to grow 44% year to date so far the corporate owners like they still weren't solved. People would typically have to go to a third website like open corporates is a great one your secretary of state could be another one to find who are the officers of those counties but still not ideal when you've got to pull up three different tools so that was something we noticed. So my own properties I've done about 19 Burr strategy deals where you go off market you kind of recycle your money I bought those over the last eight years as well as an investor. I've moved five times in the last year. So as I was buying the properties the tax address is where I lived but then I looked back I live in Austin Texas now. None of my properties have the current address where my utilities are registered. So those weren't showing up with our new scheme of matching that person and property data. So that was like a little indicator of I think we can maybe close the gap we could make this even better. And obviously I mean I was like well why is skip tracing so bad. I kind of got into that's what started what we developed last November with having every person's name in our database so that we could do that matching for you. And then again people don't move and they don't update their addresses so that's one reason why the data is inaccurate. In many of you you may know Ryan Heywood is a CG select member he's not in the premier group yet but he's been somebody who's utilized zero machine since 2019. And just from doing 400 deals since then like we become good friends his properties is 33 rentals in St. Joseph Missouri same issue right he had moved one time. And all of his mailing addresses were not updated because when you own a rental property you don't need to update the mailing address because your taxes are paid by your mortgage company automatically or you've got that on auto pay. There's no real reason to go update all those properties. So you know the data providers and us too previously were incentivized to sell you whatever they think is the closest match. And even if it's not right they they still want to give you that info which is good. But they were incentivized to sell you just close enough type data and that's why a lot of it's not accurate. And that's just the business model that they followed. Yeah so in November last November we had that new strategy we call it unlimited contact info and we realized 33 percent of the properties didn't match. They weren't showing a skip trace result. And again huge reason for that was we were matching it on the utility address and the county mailing address if those matched we knew for sure that was the owner. We weren't incentivized to show you data that we weren't 100% sure about so we would just show nothing and people really liked that our data was accurate. So now we're talking about closing that 33 percent gap where those properties weren't showing any matches. We have the whole list of everybody in the United States. So we thought if we could show you everyone with that owner's name in the United States and you could see that all on one screen with all of their phone numbers I mean that would close the gap. There's actually Leon was asking me it's like who wouldn't this work for? Well it wouldn't work in the rare case where the owner had misspelled their name on the deed of the house. Like that could happen. It has happened but that's a rare instance where this wouldn't look. Otherwise you're looking at a comprehensive list of everyone in the United States. And so if we can close that 33 percent gap which I believe we have that means we're 50 percent more accurate than any other option you have out there for finding skip trace data. So can I show you guys how it works? All right so you could see every person in the US with the same name as the property owner. So for me there's two David Leccos in the country and so both of them showed up. One lived in Austin, Texas the other one lived in San Jose, California. So it's not really clear which one is the owner of these Indianapolis properties until you open my contact card. I have a St. Louis phone number that's kind of closer to Indianapolis but then you could see my previous address was in Indianapolis. The other one just lived in California his whole life no other Midwest history. So you could easily select that I'm and link me to that property owner. But if you weren't sure you can just call both. Deal machine listeners. I'm wearing my turtleneck not because it's Steve Jobs birthday. Not because Apple just announced they're integrating AI into their phones. Nope none of that. It's because we're coming up on Deal machine unveiled which is our special live presentation where we're unveiling the latest innovation in real estate technology. Last November we had an unveiled event and we broke down the house with unlimited skip tracing which also improved with our private investigator tool. The accuracy of your skip tracing results by 50% meaning if you don't get data you can actually see every person with that homeowner's name all in one spot in one place. There's no other place you can get that. So come July 1st reserve your spot get notified be among the first to see what's coming next for the real estate industry. The URL by the way is deal machine dot com slash unveiled. You'll have a leg up on your competition because like I said most of the skip trace in our history of skip tracing before we even did all this we would always run a test. We would always on a yearly basis just want to benchmark ourselves against what else was available on the market. So the way we'd run the test is we'd pull a hundred properties from us mattering around the country. We'd skip trace the same properties with us and the top other four or five providers you could think of and then I would have the same team member call all of the results and we would calculate the right party contact. So that would be either a voicemail that indicated yeah they were the same person that owned the property that we were trying to call or an actual answer that confirmed that they were the person that they would actually call. So I know that a lot of the skip tracing results out there they're missing out on at least 33% of the properties that you're actually paying for to get data. So by closing that 33% gap 50% more accuracy 50% more conversations which should result in how many more deals more 50 it should be at the same close rate. So that's why these leads are gold right so you have access to data that others in your market don't. So you open a property there's a little magnifying glass in a person on the mobile app or the computer and that shows you every Denise Parker in the country. Now they are ordered by the most likely one so this property was in Belt in Texas. This top Denise Parker is 59 years old has a Belt in Texas address that's why she's listed top. But in case that's not the right one there's another one in New Bromfels, Corpus Christi, San Antonio right so it's showing you in the order that we think it's the most likely pretty much every Denise has two phone numbers you can just call through if you weren't sure and you need to verify. Let's look at corporate owner so we're able to pull in actually the open corporates data to find out a corporate owned property to see that the associated officers of this property is Michael or Mitchell Newby. So now we're going to show you every Mitchell Newby in the country. So again top one is 24 years old next one's 41 years old but the top one is in Texas this property I pulled was in Texas that's very common definitely probably going to be the top one right but you could call through the list of all the Mitchell Newbies in order that we think they would be. And then back to Denise Parker let's say she's deceased right that is like a big indicator that Uncle Carl when we're talking with him is important when he's looking through data are they dead or not so you know if they you look at the family or not and so although we don't have a deceased indicator on here yet Carl Carl has requested it very smartly. I did want to show that you can see Denise Parker's three related contacts which are family members or code inhabitants of that house and so that's going to be down there that you can see there's three dots you could scroll through three of them and then you could even open up Brittany Parker's contact car to get her address her previous address how old she is how much money she makes and what her phone numbers and emails are too so that's how the family member side of it works which is especially helpful in the case of somebody's passed away. I wanted to share it this was a very unexpected use as we were getting into making the skip tracing data better and pairing it with property owner data this was an on-market deal that I had you'd never think you'd need this in an on-market transaction but this past year I wanted to try something new for my own investing I sent out 500 offers in Indianapolis to properties that were 100 days old listed on the market just hadn't sold yet I sent 70% offers to all of those property owners through my real estate agent this one ended up contacting us back I did seven deals actually from that effort by the way in case you're curious I use a totally different software but a zoom offers which is a number I think Corey is a member of CG that's where I heard about it so anyway great software this deal was falling apart because I was closing a deal I should have used Renovo but at first I was using some other company and they were like hey the air conditioner is missing so on closing day they didn't let me close and the agents had like a bit of like a cat fight like a she said she said type scenario and they stopped talking to each other so the closing day came and passed I was supposed to get the AC installed by closing day so Leonard could close but they wouldn't close because it wasn't livable without an AC and that's why I actually couldn't close on this deal but I couldn't figure out how to solve it either because the agents weren't responding to each other so my agent said listen I can't give you the contact info of this owner because that would be a violation of our representation agreement but you said you're a smart guy why don't you look up this guy's number and contact him yourself seeing and smooth it out so there ended up being a few willies with I forget the last name on this property 13th Street in Indianapolis called the first one it was him he knew about the deal he was frustrated he said well your agent said you guys could close without the AC I was like I think that might be a miscommunication let's put that all aside can I just close cash on this but can you give me a credit for the AC then I can get the AC installed and refinance with Renovo very smooth by the way I really liked working with Renovo as I've tried a few other lenders and I will say very very easy to use so anyway we got the deal done and I never would have expected that I mean I had this in my disposal thankfully just to look up every willy whatever his last name was in the country to find this guy's contact info but really happy that we got that deal it ended up being a 1% rule it's worth 160,000 and rents for 1600 a month so I was really happy with that in Indianapolis so anyway so I wanted to share this unexpected way I was able to utilize but also in the grand scheme of things how this can help you guys close the gap yeah and just to alleviate any concerns about what this is powerful does it cost a lot you can use that private investigator tool unlimited times for $99 I think $99 a month and there's a seven-day trial so it's like not a big deal for anyone in this room it's like lunch so anyway just wanted to share that with you guys and provide you a really powerful tool for just kind of like a no-brainer option to help you guys out thanks for listening to the deal machine real estate investing podcast please leave us a review and follow along wherever you're listening to your podcast