The Science of Flipping - Episode 174: The Power Of Good Skip Tracing Data

Episode Date: November 20, 2020

Skiptracing is something that pretty every investor that does direct to seller marketing uses. One thing that most people overlook is the quality of the data that they're using. This has a massive impact on the leads that come in, because if you're using bad quality of skiptracing data, that means you'll get bad quality leads which affects your bottom line. Let's chat more about it now!

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Justin Colby. Alright guys, welcome back to another great episode of the Science of Flipping. I am your host. And if you are listening this on iTunes, welcome host. And if you are listening this on iTunes, welcome back. And if you are watching this on YouTube, welcome back. So you can actually catch these podcasts both on iTunes and YouTube. Not every podcast will be on YouTube, but this one actually is. So I suggest you head over to iTunes if you are interested in catching every episode daily on iTunes of the Science of Flipping podcast.

This is all about how to implement the systems, the strategies, the tools, the techniques, or service products, which I'm going to talk to you guys about today, which is skip tracing. As you guys all know, I'm a massive advocate of cold calling. I always have been. I got my start into this business using cold calling. And so I will forever use cold calling as a strategy to find my deals, regardless of what market I'm in. It will be a priority to be cold calling. Now, the key to cold calling, which a lot of people don't talk about, is the data component. And the reason why I bring that up and why I highlight this is so important is because literally if you have bad data because you want to save money, then you're not going to reach the people you're intending on reaching. So what does that

mean? Well, if I call somebody and I say, hey, is this Fred? And he says, no, I don't know who Fred is. Fred is not here and hangs up on me or maybe doesn't even hang up on me. Well, then I'm already starting way behind the eight ball. I'm already trying to climb this mountain with cold calling and reaching out to someone I don't know. But now I've made the assumption that this person owns this home and Fred is his name and it's incorrect. Well, now I just seem awfully suspicious. The engagement is totally broken and I have to really, oh, I'm sorry about that. You know, I was looking for that. I was looking for Fred. I was looking for the owner of 123 Main Street, etc.

And having accurate data really can change that whole thing. You're already outbound calling, meaning they're not expecting your call. So you're already catching them on their heels. Well, why not at least have the right person you're trying to call so when you have the conversation with them that they at least know that you have the right data and that they're talking to the right person. Well, so with that said, I will say having accurate data is paramount to everything. There are companies out there that try to sell you two, three, four, five, six cents data. It's inaccurate.

You're gonna have to call a lot of people to connect to the right person. Like I mentioned, if you're calling the wrong person, you might as well just forget about the call because they're not gonna really trust you. You started off on the wrong foot, right? And so the key here will really be to have good data. Now, what does good data mean

and what should be your proper expectations for good data? Well, here's what good data will provide you. You're roughly gonna be paying anywhere from, call it 14 to 20 cents per deal, right? Or not per deal, per skip trace number. For found skip trace number, per hit is what they call it, which means as long as you give them a list and it comes up with a phone number, you'll pay for it. If it doesn't, it won't. So you're going to pay anywhere from 14 cents to 20 cents for good data. That is completely normal. You usually are going to pay higher for LLCs and trusts, which I actually have access to a company that does that

as well, but that'll be a little bit higher of a cost. So let's start talking about the expectation of contact ratio, lead ratio, et cetera. Well, for skip tracing, you really want good contact ratio. So you're shooting for about 10% contact ratio. Well, what does that mean? Well, that simply is saying for every 1000 calls, let's say you have 10% contacts, which is simply when you call the person and say, Hey, is this Fred? Fred says, yes, this is Fred. Okay, so you want 10%. So that would be 100 out of 1000, you're actually speaking to the right person. That means your data is good. That is good data. If you're at 9%, you're still good data. If you're 11%, obviously even better better when you start getting around five or six or seven percent contact ratio you know your data isn't very good okay you would

likely want to change data providers or potentially lists so sometimes it's not always just the data that's incorrect it maybe you are skip tracing a more difficult list to find the actual correct data and those type of lists are out there such as vacant list. A lot of times they're vacant because the homeowners don't want to be found. I would tell you most often is data, but sometimes it's going to be your list. So 10% contact ratio. Now that doesn't mean they're looking to sell. I'm not saying that. That is just saying you have good contact ratio. It's a great measurement of your data. Now the next thing will be your lead ratio from that. Now that is speaking more about your lists. You would look to have seven percent of the ten percent

that you contacted be an actual seller lead that's really what you're looking for there so you have a hundred people that said yes this is fred and then seven percent of that which would be seven will actually be a seller lead i define a seller lead by someone looking to sell in the next 12 months. Again, doesn't mean they're going to sell at your price. They may want retail, they may want more money than it's worth, etc. But it does mean they're looking to sell in the next 12 months. So it is really important for you to have accurate data because accurate data can get you to these leads faster. If I break that down even further, in cold calling, it takes roughly between 100 and 200 leads to get a deal. And that starts to shrink and you will be able to get deals in a shorter lead volume as you create a pipeline.

So I walked that all the way through with you, but really the focus of this podcast episode is getting fundamentally good skip tracing and not just accepting cheaper skip tracing because it's cheaper. You get what you pay for in this industry. Now, I can respect some of you maybe just starting or you don't have much of a marketing budget.

So do whatever it takes. Absolutely, I get it. You know, something is better than nothing. However, if you do have some level of a marketing budget, I really encourage you to use the service I use, which is DataSkip. And if you just use the promo code TSOF, they will actually give you a three cent discount

on all your Skip Trace leads. I worked that out for you guys as my loyal listeners. They'll give you a three cent discount. Again, promo code TSOF will give you that three cent discount. And I will actually, for those of you watching this on YouTube I will link that link down below you can go to TSOF skip calm TSOF skip calm that'll lead you directly to the right place and then you use promo code TSOF. So again, TSOFskip.com, TSOFskip.com, and then TSOF is the promo code. You'll get three cents off. Now, as I mentioned, this provider and why I like this provider, not only does it have incredible contact ratio, but also they do LLCs as well as trusts. Now, as I mentioned, they are more expensive

because it takes a little bit more ingenuity and some backend work to find those phone numbers, but they will actually do that. The cost of those does go up, but I did help you guys out to make sure you are getting the three cents off if you do upload a list of LLCs or trusts, which if you are using a service like PropStream, which I highly encourage you to use PropStream. Again, you can go to tsofdata.com for PropStream, seven-day free trial, tsofdata.com for a seven-day free trial. And you're pulling a list of properties. Maybe it's a cash buyer list. Maybe it's a list of properties that you are looking to call. And you come up with LLCs and trusts.

Well, you want to accumulate those and skip trace them. That's a list that not many people are actually skip tracing because quite honestly, it's hard to find. So this company, why I love this company and I advocate for them is because they actually have that service. Now, just strictly speaking, the contact ratio still can be a little tricky because depending upon the data that they get from the LLC or the trust may or may not still be accurate. But at least if you're pulling a list and let's just say you have a hundred rental properties that are owned by an LLC that have high equity,

but they have liens on them or whatever the filters you're using, well, why just throw those hundred properties away? Why not skip trace that LLC and call to see if the owner of that LLC has any interest at all in selling his rental properties? So again, many of the lists that you might be skip tracing come up with LLC homeowners and that's natural or maybe trust homeowners, family trust homeowners. And so the challenge is most investors don't actually try to go after those. So that is where some of the gold will be is for you to be able to skip trace those and actually go try to get a hold of those individuals as well.

So again, skip tracing is really important. Do not use cheap companies. Cheap companies, you're gonna get what you pay for in that space. I highly encourage you to get really good data. Obviously, you get what you pay for there. So it will be a little bit more expensive, but I have brokered a deal.

If you go to tsofskip.com and use promo code TSOF, you'll get a three cent discount on incredible skip tracing, including LLCs and trusts. But again, skip tracing is so important because you can use it for your text messaging, cold calling, RVMs, and voicemail broadcasts. Get good skip tracing. Use it on all platforms and you will be able to get more and more deals. So hopefully this helps you guys. Again, if you're listening to this on iTunes, make sure you are also checking out my YouTube channel. Go to youtube.com forward slash Justin Colby.

I drop YouTube videos every single day about real estate investing, business, and entrepreneurship. And if you are watching this on YouTube, I'd tell you to go the other way. Go head over to iTunes. I am dropping a podcast a day about real estate investing. So go over to iTunes and check out The Science of Flipping. Hopefully this helps you guys.

And I'll see you guys again tomorrow on another video and another podcast. Peace.