For Newer Investors Driving for Dollars Or Investors Skip Tracing Vacant Properties

[Larry Higgins]

When I got started in real estate in 2014 and I was struggling with marketing I fairly quickly got really good at driving for dollars and researching properties and ultimately getting in touch with property owners and heirs.    It didn't happen over night, but I focused on it and got really proficient at it.   I'm in the Houston area so there was not and still isn't any shortage of vacant properties to pursue.    

As a solo operator I soon ran into the problem of having too many properties to pursue at a time.....like 100's of them and I figured out that I needed to prioritize my efforts in some way. So after I started getting legitimate leads and closing deals I looked to find out what things the leads/deals I was getting had in common.   The short answer is distress, but specifically it was what I call the trifecta:

1.  Vacancy

2.  Delinquent Taxes or Loan in Default

3. Deceased or Likely Deceased owners

If you can get good at finding deals with this criteria you will absolutely close deals and you will learn that your ratio of leads to deals is really tight even if you aren't all that great at sales or negotiating.   Not only will you get deals, these types of leads tend to produce your home run type deals.   I tell our customers all of the time, when you're steadily pursuing highly distressed leads with this criteria it's not a question of if, but how often you will contact the heir to a property who either didn't realized they owned, or they though the property had already been auctioned off by the bank or county.  It seems crazy to there are people that don't know they have ownership in a property and can sell it, but it's not that uncommon at all.    Another circumstance is that they may realize they have ownership, but for some reason or another they don't believe they can sell it, which with rare exceptions generally isn't the case......they can almost always sell.

These are absolutely great leads for newer investors because you don't have to have a huge marketing budget to pursue them, they are much easier to negotiate and contract, and much easier to access and show to investors because generally the heirs to the property will tell you to help yourself to viewing the property and inspecting whenever you want without them being present.   I always loved this last part because I hated having to bring a buyer, or several buyers at once, through an occupied property to look at it.

The two common challenges with these types of deals are:

1.  SOME CURATIVE TITLE WORK NEEDED.   Usually there is a minimum of an Affidavit of Heirship or Probate court action that has to take place so that the heirs can sell.    Very fixable and doable, just something you have to know and understand going into this.   You'll have to research your respective state to see if you can go through the Affidavit of Heirship process or if Probate/Surrogate court is the only option.   Affidavits of Heirship are convenient in the states that allow them because they are much cheaper and faster to do.    You'll find other things like liens and such that will have to be dealt with to clear title, but generally it's not too difficult and the title company or your title attorney will help you get title cleared.  Don't be intimidated by this.   

2.  CONTACTING HEIRS.  Probably the biggest mistake guys make pursuing highly distressed vacant properties is they are using the junk skip trace data.  By junk skip trace data I mean poor data quality or an incomplete data set.    I started out trying the cheapest data I could find like white pages etc.... and was running in circles trying to find and contact heirs.   Once I got great quality data it was an absolute game changer for me.  Not only were the phone numbers, addresses, and email addresses better, I was getting a much more complete data set showing me DECEASED indicators and ages as well as the names and associates of relatives I could contact.    For example, if I'm pursuing a highly distressed vacant property and I have a data set that shows me the owner is deceased or 97 years old I know immediately the owner is either deceased or likely deceased and the databases just aren't showing it yet (by law, they have to wait a certain amount of time to post death record) and that I need to zero in on the relatives and associates.    So many people are using poor data and are trying to call or text someone they don't know is deceased.  FYI, even with the best skip trace databases, you will at times have to really research outside of them to identify a relative to skip trace.  At times I've even had to bring in a genealogist, BUT it was absolutely worth it because these were home deals.

If you're a new investor struggling to get that first deal or to get any traction, don't get overwhelmed, get TARGETED.   Once you get some deals closed you can invest in different marketing channels and spending more on your marketing.   

If you want more info about this you can always google Larry Higgins Skip Tracing or Larry Higgins Vacant Houses and you can find podcasts I've done discussing this topic in depth over the years.

Best of luck.......