Not long ago, skip tracing and direct mail were the two main methods real estate professionals used to find motivated sellers and cash buyers. While skip tracing emerged as a more efficient and faster method, many real estate investors initially struggled to get the results they hoped for and returned to direct mail.
Why did this happen? How did skip tracing fall short?
The truth is, while skip tracing can be incredibly effective, it needs to be done correctly. Like direct mail, if not executed properly, it won’t yield the desired results.
So, how can you make skip tracing work for you? What’s the secret to using skip tracing to supplement or even replace your direct mail efforts?
That’s what we’ll discuss. But first, let’s address why you should consider using batch file skip tracing for real estate in the first place, given your understandable skepticism.
Why Use Batch File Skip Tracing for Real Estate?
If you’re not familiar with skip tracing, it’s a technique used to find someone based on limited information. Debt collectors, repossession agencies, and private investigators frequently use skip tracing to locate individuals who are avoiding contact.
In real estate, skip tracing is used differently. You only need basic contact information, such as a phone number or email address. You’re not serving legal papers, so people typically aren’t hiding from you.
This means you can conduct skip traces for real estate in bulk, generating many leads quickly.
Now, is skip tracing better than direct mail? In many ways, yes.
Direct mail has been a reliable method for real estate wholesalers and likely always will be. However, skip tracing can be more efficient and effective if done right. It’s not a matter of choosing one over the other; using a combination of both is a viable strategy.
Here’s why skip tracing for real estate is so efficient and effective.
Cost
People often compare skip tracing and direct mail on a one-to-one basis. If a skip trace costs a dollar and a direct mail piece costs a dollar, it might seem the costs are the same, right?
Not quite. Direct mail often requires multiple touches to get a response. Some experts say it takes seven touches to get a lead from direct mail. Even if you get a response in four touches, that’s four dollars per lead from direct mail.
With skip tracing, you pay for the information once. Then you can call or email as many times as needed at no additional cost. This makes batch file skip tracing less expensive when considering the total cost of generating warm leads.
Speed to Contact
How long does it take for direct mail to arrive? At least a day or two, sometimes up to five days. Then, how long does it take for a potential seller to call you back? If they’re really motivated, it could be the same day they receive your mailer, or they may wait until your second, third, or fourth mailer arrives.
With skip tracing, you can contact people the same day you get your list of potential sellers. Often, a bulk skip trace will get you phone numbers in minutes, allowing you to start cold calling almost immediately. This reduces the chances of losing a deal to another wholesaler.
Follow Up
The easy sales are snapped up first, which is why the money is in the follow-up.
With direct mail, the only way to follow up if someone doesn’t call you back is to send another mailer. However, with skip tracing, once you have a phone number or email, you can set up an email drip campaign or follow up with another phone call. You can pursue tougher leads until they convert.
ROI
The goal of direct mail is to get people to call you, so the more people you get on the phone, the more deals you’ll make. If people don’t call you, you won’t close any deals.
Skip tracing gets people on the phone, leading to a better return on investment (ROI). There’s no way around it.
How to Use Batch File Skip Tracing for Real Estate Wholesaling
You can use skip tracing to find both buyers and sellers, automating much of the process.
Here’s a step-by-step guide to using batch file skip tracing:
Prepare Your List
Start with a list of names and addresses from a vacancy list, code violations list, or a purchased list (e.g., from Listsource.com). If you have a list of addresses without names, you can still use skip tracing to find the names.
Ensure your list is in the right format. Most batch file skip tracing services require the list to be in one of these formats:
- .csv
- .txt
- Microsoft Excel
Use a spreadsheet editor to put each piece of information into its own column. For real estate, this typically includes:
- Name
- Physical address
- City
- State
- Zip code
- County (if available)
Run Your Skip Trace
- Upload your list to a batch file skip trace service like Searchbug.
- Select the information you want to find. If you have just addresses, do a batch file skip trace to get names first, then run the names and addresses to find phone numbers and email addresses.
- Get your results. Most providers will email you when your results are ready.
Fill in Missing Information
Some entries may still be missing phone numbers or email addresses. Here’s how to complete your list:
- Use your spreadsheet editor to pull out entries missing information and create a separate list.
- Run this list through a more thorough batch file skip trace. If your provider offers an enhanced service, use it to get the most phone numbers and email addresses possible.
Now, you have a list of phone numbers and email addresses ready for cold calling or emailing. This process works for finding both buyers and sellers.
Tips for Effective Batch File Skip Tracing
Here’s how to ensure skip tracing works for you:
Don’t Go Cheap
The saying “you get what you pay for” applies to skip tracing services. Free or very cheap skip tracing services usually provide low-quality data. You might get outdated or disconnected phone numbers and email addresses, or they may not find any information at all.
Reliable data typically costs about 15 cents per hit. While it might be more expensive, the value of having a usable list is worth it.
Never Call Numbers on the DNC List
The “DO NOT CALL” (DNC) list is for numbers whose owners have requested not to receive unsolicited calls. Run your lists through a phone validator to identify and remove DNC-listed numbers. This step will protect you from legal issues.
Use an Autodialer
Skip tracing can generate hundreds of phone numbers, so an autodialer is essential for making the cold calling process efficient. Even if you hire a team to make calls, an autodialer saves time.
Hire a Virtual Assistant
Skip tracing involves several steps: running the skip trace, cleansing the list, and adding it to your cold calling system. While each step is simple, it’s time-consuming. A virtual assistant can handle these tasks, allowing you to focus on converting leads and closing deals.
Use Skip Tracing to Find Buyers
Efficiently finding buyers is crucial, especially if you quickly end up with more sellers than buyers. Here’s how to use skip tracing to find buyers:
- Get a contract for a property to wholesale.
- Identify zip codes where potential buyers live, typically areas surrounding the property for sale.
- Buy a list of potential buyers from a list provider like Listsource. Look for buyers who purchased with “NO LIENS” or “100 PERCENT EQUITY” in the last 6 to 12 months.
- Run a batch file skip trace on the list to get phone numbers or email addresses.
- Verify the email addresses to reduce bounce rates and improve email performance metrics.
When you contact potential buyers, find out when they plan to invest in another property. If they’re not ready to buy soon, ask if they’d like to be added to your list for future investment opportunities.
This way, you either find a buyer ready to buy now or grow your list of potential buyers.
By following these steps and tips, you can skip tracing a powerful tool in your real estate wholesaling business.
