Skip Tracing | How to Pass Your Competition with Skip Tracing
Larry Higgins is a real estate investor based out of Houston, TX. After graduating from Texas A&M University in 2003 he began his career in construction project management which he thoroughly enjoyed until 2013 when for the first time in his life, he found himself in a job from which he got no sense of satisfaction and decided he needed to make a change. That’s when he decided it was time to quit and jump into real estate full time although he had zero experience in it and had never even done a deal.
Fortunately, during this transition, Larry stumbled across Mitch Stephen, whose mentorship helped him hit the ground running.
Like so many other investors have experienced before he knew it, Larry had a huge stack of returned mail from his mail campaigns and he knew he needed to do something with it. After getting in touch with several skip trace services he realized how expensive it can be to skip trace so he decided to learn how to become his own skip tracer. Two deals later and he fully realized how crucial it is to be able to skip trace returned mail.
But it wasn’t just the returned mail that got Larry’s attention. As he worked his business he couldn’t help but notice that some letters weren’t returned for weeks, months, or even years (yes years) after they were initially mailed.
He also witnessed first-hand how in most cases where his mail was received and he happened to get an appointment, it had a lot to do with luck in what he calls the yellow letter lottery. This is where the seller has received a stack of mail from other investors and the seller decides to pick just two or three people to call and get offers. No matter how great you think your mailing list is, if you’re in a larger market, the odds are there’s at least a dozen if not dozens of other investors mailing the same people.
So with a keen understanding that he was losing valuable time and leaving too much to chance with mailing, he knew he needed to create a system that allowed him to skip trace high volumes of people or lists and then call or text them. In another stroke of luck, Larry had just started partnering with Will Denker, an established and successful investor in Houston. With their combined knowledge and experience, and the great team Will already had assembled, they were able to create the system they envisioned.
Now that they have created this system they no longer do mail campaigns and they rely strictly on skip tracing lists of potentially motivated sellers and contacting them via phone calls or text messages and it’s transformed their business. The ability to skip trace high volumes of people in a cost-effective manner has not only given them the ability to find and call or text the potential sellers, but it allows them to scan the lists and identify great deals that are flying under every other investor’s radar. The bottom line result is that they are more successful at getting deals and the deals are much more profitable. After first implementing their system their average assignment fee grew from $10,000 to $22,000 and then after becoming much more targeted they doubled it again to their current average assignment fee of $44,000.
Because they now have their strategy defined and much more targeted, Larry and Will recently decided to create their skip tracing service, skipgenie.com to begin sharing their high-volume skip trace system with other investors in various markets around the country, and helping them develop and tailor a system around their specific goals.
What you’ll learn about in this episode:
- How skip tracing compares to mail
- How your cost-per-buy is dramatically lower with skip tracing
- Why you should not be using lower-tiered skip tracing services
- One issue with skip tracing that a lot of people complain about
- Why you shouldn’t hesitate to contact relatives if you if you have good leads, especially with vacant properties
- Why every deal you do should involve skip tracing
- Why you should focus on being more targeted whether you’re mailing or calling
- How to get a tighter ratio of leads to deals
- The best way to get your footing when you’re just starting out
Mitch Stephen: This is Mitch and welcome to the Real Estate Investor Summit Podcast. I’m going to be talking with Larry Higgins today and he’s going to talk to us how to do bulk skip tracing and how to save a fortune in other marketing ideas and just go straight to what matters! We’re going to get to that and how his system is helping investors across the country achieve the goal of finding motivated sellers. Alright, I’m here with Larry Higgins. How are you doing today, Larry?
Larry Higgins: Hey, Mitch. I’m good, I’m good. I’m glad to be back, I really appreciate you having me back on here.
Mitch Stephen: You know, well, I’d like to tell the listeners we met, you came to me when you were at your job trying to jump from your job, if I remember correctly. It was quite a while ago. And you needed some help or wanted a coach or a mentor and we got together and we’ve been talking ever since on-and-off, for, I don’t know, quite a few years. How long has it been? Two years? Three years? Four years?
Larry Higgins: Pushing four years, somewhere there about, yeah. It’s been a little while, but it’s gone by and it’s been a blur, though.
Mitch Stephen: Time flies when you’re having fun huh, Larry?
Larry Higgins: Exactly, exactly.
Mitch Stephen: You know, Larry is a full-time real estate investor now, and has always been one of those quick learners, quick study, and he worked quickly and discovered some things about skip tracing that we’re going to learn about today. But, before we jump into that, give us a little bit about your background, Larry, so the listeners know who you are and where you’re from.
Larry Higgins: Yeah, so, for all the “Aggies” out there, I’m a graduate of Texas A&M, and I went into construction after that, building multi-family apartments and commercial stuff, worked overseas for a little while. One thing led to another, I was in a job I didn’t like for the first time in my life and I said, “I want to try this real estate thing out”. Didn’t know anything about it, that’s kind of how we linked up eventually. I said, “Hey, this guy sounds like I can trust him, and he definitely sounds like he knows what he’s doing” and I just jumped in deep into it. From there, started off with a couple hundred finance deals, and like you call it, “the crack of real estate”, got into wholesaling after that. [Laughing] You know the story, it’s not a neat concept, “I’m just going to go get some cash, get a wholesale and get some cash reserves”.
When I went down that path, doing the marketing, the mill, doing some Drive for Dollars, that put me down the path where I am today. I learned about the value and versatility of skip tracing. And, I never could have foreseen at that point, that “Hey, I’m just going to stop milling all together and everything I do is going to revolve around skip tracing, and hey I’m even going to help other investors 2 or 3 years down the road with this.” Never saw that, it’s just kind of what it turned in to.
Mitch Stephen: Yeah, so it’s always an evolution, right? We used to use bandit signs and they were great, and they worked like a charm and for a dollar a sign, or 50 cents a sign, at the time, you could put up a crap-load of signs around the city, and you could buy houses and it works. But, that ran its course, and it doesn’t work as well. Maybe it’s because there’s a whole lot more competition out there, and so many more signs, and maybe the result of people calling those signs has not been favorable or fun. So, those signs have stigma or for whatever the reason, I don’t know the reason, but those signs don’t work anymore.
Then we were doing the letters, and then everyone started doing the letters and there’s so many letters out that they’re becoming tougher. So, the idea was to snag the return mail, and then follow up on those leads. So, we were actually doing mailings to get the return mail. Because, if our mail didn’t make it, our postcard or yellow letter didn’t make it to the potential seller, then neither did anyone else’s. So, then we had this pristine lead and we could get skip tracing started. Start jumping right to the source or trying to found that untapped resource there.
Then, I think you kind of started the trend here, lately, Larry. That, why even mail at all? Why don’t we just get the list and why don’t we just start skip tracing them all and doing some research online and finding out what the most reliable prospect is? Let’s just pick up the phone and call them or drive over to their house. Let’s just get right to it, and eliminate that step of doing a mailing. Which, by the way, mailings cost a certain amount of money, too. They’re not cheap, so, let’s skip that step and put it all into finding the right guy and calling him directly. I think you started that trend, Larry.
Larry Higgins: Well, not to pat myself on the back, but, three years ago, just seeing the level of activity, I didn’t like mail when I was doing it, 3 or 3 and a half years ago. I just didn’t like it. You know, I’m not saying I didn’t get deals, I just saw where it was heading and, like I said, 3 years later it’s just more and more saturated.
What it really breaks down to…skip tracing is not passive. Mail, the best thing it had going for it, it’s passive. All you do, you send your mail campaign and you wait for that phone to ring. But there’s a cost to that. And especially for bringing in new people it can be very, very…it can be expensive education. By that, I mean, if your cost for buy is five or six thousand dollars, off a mill campaign, well, if you’re brand new, there’s certain things you don’t know. You’re going to blow deals, period. I laugh at some of the stuff I…I blew some deals, I know. You don’t know how to negotiate, maybe you don’t know your A-R-B’s, you don’t know how to find your buyers, whatever the case is, you’re gonna blow some deal that with a year of experience you’ll make those deals happen, but when you’re really green, you’re going to blow deals.
That’s an expensive mistake to make. Versus…with skip tracing it’s not passive, it is work. Now, there’s ways to streamline it, and make it pretty easy, but your cost-for-buy is dramatically lowered. So, it’s one thing that over the past few months as we’ve grown and started talking to a lot of people, it’s one thing I’ve stressed with the newer people. I’m not saying mail doesn’t work, but before you go drop 5 to 10 thousand dollars in mail, oh by the way, you need to be doing that every month. Waiting for that first deal to come in, why don’t you go get a couple deals with skip tracing? Go Drive for Dollars, you know, or find some really quality leads. Skip trace some and call them. You’ve got much less money at risk, and your odds of getting a deal are much better. The odds of getting a better deal, are better.
That’s one of the things I’ve really given a lot of thought to lately, is passive versus skip tracing. Not quite as passive, but you get way better odds, and much less money.
Mitch Stephen: Okay, so, that’s the first step. People are going to say, “Well, Mitch, you told me to mail letters!” And I said “Yeah, at the time that’s what was working and that’s what worked.” And then I also said, “You’re really mailing the letters, not to sit back and wait for the phone call, you’re waiting for the return postcards so you can start getting active, you know? That’s when, as a professional real estate investor, that’s when my day started, is when the return mail postcards got delivered to my house. That’s when the work started.
But then, things evolve. You know, I learn a ton from my students all the time and I try to bring it back and put it in this cauldron, so that all the people that are involved here and around me, and the people that are hiring me for mentoring other students. We’ve got this cauldron to sip out of and I’m bringing everything back to it.
And so, now, the next step is, why do the mailing? Or, let’s do the mailing after just to the people that we’ve touched. As an extra touch, we’ll do a mailing. Which is a small, fewer people, a lot smaller people. But you’re saying, just go right to them. Why mail them and then go to them? Why don’t we just find out who they are? So, instead of mailing to them let’s just call them or go to them, like, right now and skip that step.
Now, your statements from [inaudible 00:11:16] mailings, but skip tracing isn’t free either. There’s two ways to go about it. So one way is you go get your own skip tracing software and capability and you start doing it like that. The other way is to hire out someone to do some skip tracing for you. Am I on the right track here, or do you suggest that people do their own skip tracing, or do you do bulk skip tracing for people?
Larry Higgins: So, I suggest they do it on their own and that’s really what we cater to. Because when you pay someone else to do it, it’s just costing you more. And it’s not that hard. So, that’s one of the reasons why we’re doing this is yes, we did a bulk skip tracing, but we’ve also created systems…when we initially started this we thought it was strictly going to be geared towards higher volume guys, doing hundreds or thousands of leads a month and we still have those customers, but there was a lot of demand for people to lower volume. Twenty a month or a hundred, couple hundred.
Mitch Stephen: Well, the point I was getting at, Larry, was some people have a job or they have a full-time job and they’re trying to get into this, they may not have the time. So, you do offer, am I right or wrong, you do offer to skip trace for people, right?
Larry Higgins: Yeah, we’ll run the reports for them, that’s not a problem at all.
Mitch Stephen: Okay, but what you really think is the most effective for most of the people out there is that you teach them how to use your systems to find the people yourself, do their own skip tracing, right?
Larry Higgins: Yeah, and this goes back to a lot of people do try and do it on their own. There’s a lot of mistakes made. They start just like I did, they go down the path of using the really cheap, lower tiered services. Well, ultimately those are going to cost you money because the data is incomplete, it’s dated, and you’re just going to find yourself running in circles.
There’s a strong correlation between truly distressed properties and how hard it is to reach those owners, or in a lot of cases, the heirs of the deceased owner. I’ve seen it just recently, we had somebody call, they were trying to reach…they were using a lower tier service, and I think it’s like 20 bucks a month or something…and he’s like, “Hey, I can’t get a good phone number for this lady.” I said, “Okay, no problem, let’ just…” He’s a prospective customer, I said “I’m on my computer let’s just pull it right now, I’ll pull it in my system, I’ll give you a free report.” I ran the report and I started laughing as soon as it came up. The service he was using showed the lady was 72 but he couldn’t get a good phone number for her. My report, right off the bat, the first thing that jumped out at me was that she died two years ago.
I started laughing and I said, “Well, unless you can talk to dead people, you’re not going to get her on the phone.”
Mitch Stephen: [Laughing]
Larry Higgins: So, that is a fine example of why the data matters, and I don’t care, use upper tier data. Our is upper tier, it doesn’t necessarily have to be us, use upper tier data.
Mitch Stephen: If you’re gonna do it, let’s do it right, right? [inaudible 00:14:21]
Larry Higgins: Exactly, [inaudible 00:14:24] a wise man, and you might recognize this saying, “Don’t trip on the pennies on the way to the dollar”.
Mitch Stephen: [Laughing] I don’t think I invented that, I just say it a lot. Someone else invented that. I didn’t invent anything. I just try and get it all in one place so you can mull it over.
Larry Higgins: With the lower tier stuff, I’m not saying you can never get a good phone number or never get good information, but in general it’s not reliable. And I know from ym own personal pain it will have you running in circles and ultimately it’s going to cost you deals. So, maybe you save 30 bucks a month or a 100 bucks a month, but it costs you a 20, 50, 100 thousand dollar deal. That’s a very realistic scenario.
Mitch Stephen: Yeah.
Larry Higgins: I would not put that at risk.
Mitch Stephen: So, give us an interesting case study recently, just one of your case studies, either your own personal experience or one of your customers, give us a case study.
Larry Higgins: Okay, I’ll give you a couple. And this is one of the ways we differentiate, is we’re more than just a data provider in that we teach people some of the techniques and strategies. I wanted to do a deal in Austin. I’d never done one, and I said, “Okay, I’m going to see if I can reach into Austin and grab a deal.” As tough as that market is, everyone knows it’s crazy, a lot of investors, it’s covered up. So I kind of did some research found some potential properties, I skip traced them all.
I was specifically looking for what I call, “Invisible estates”. So, I’m paying for all these properties where either the owners were alive, most of them were owned or occupied, some of them weren’t. And sure enough, I skip traced all of them, and I see one where the owner had died several years ago. On paper, per the appraisal district, that house was owned or occupied. Had a substantial past delinquency, and I thought it was vacant. So, I’m checking three boxes there. The owner’s deceased, because it’s not even listed as an estate I’m fairly confident there’s no will, which increases the odds of a deal, that the family’s going to need help doing something there. Substantial tax issue, that really got my…if they weren’t in distress, why aren’t they paying their taxes? Why would they let their taxes get that high in delinquent taxes? And vacancy.
So, I skip traced, found all the errors, there was three of them, and one issue with skip tracing, a lot of people complain, is you get a lot of bad numbers, wrong numbers, or what I call, “Questionable numbers” there’s no way around it. I don’t care what service you get, that’s just a reality you have to accept. And I’m okay with that, I accepted it a long time ago. It’s just “Okay, keep going.”.
So, I called every single number. I had some bad numbers, wrong numbers, but for each of the three errors, I had several numbers that were questionable. By that, I mean, you get a message that the voicemail is full, voicemail not set-up, or generic voicemail message, where you’re trying to reach Billy, but the voicemail just says, “Hey, leave a number.” You don’t know who you’re leaving a message with.
Another scenario, maybe the phone just rings and rings and rings, nobody ever picks up. So, they’re working numbers, you just don’t know to who. That is, at that point, where I was on that lead, most people probably would have kept calling, left messages and just given up. Well, I gave them a couple days, I called several times, gave them a couple days, nobody would call me back. So, I texted every single one of those questionable numbers, within two minutes, I get a text message back from one of the daughters of the deceased owner and she was interested in selling, I couldn’t get her one the phone, it was all through text message. She asked me for an offer and this is something I preach about to our customers, is, take everything into consideration.
So, when she asked me for an offer, I can’t get her on the phone, I’m looking at what’s going on with this property. Owner is deceased, no will, house appears to be vacant (I found out later it wasn’t but it just looked like it was which, in essence is almost the same thing), and substantial tax delinquency. I could see the house on Google Street View, that’s how I saw it.
I just gave her a ballpark number. I had all of those factors working in to my favor, and that ballpark basically put me in a position to get a good deal. I just figured, “Hey, if I can’t get her on the phone, might as well swing for the fences.” And she was receptive.
Long story short, taking the time to send that text message lead to an 80 thousand dollar deal.
Mitch Stephen: 80 thousand dollar profit?
Larry Higgins: Yes. It started with skip tracing, but even then, had I given up, which most people would not take the time to send a text message. If they can’t get them on the phone, they’ll kind of piss and moan, “I can’t get a good number” or they get overwhelmed. They’re not thorough or methodical working through their leads like that.
Mitch Stephen: I’m with you! Everything in my arsenal: If I can’t get them this way, I get them that way. If I can’t do this, I’ll send a text. I mean, why would you stop short? That’s the difference between the real investors and the…I don’t know what do you want to call them? Novices? Amateurs? Or just lazy? Or all of the above? We’re in this as professionals, man. We’re in this as professionals, we don’t stop. And as a matter of fact, the harder someone is to reach, the more engaged I get, because I know once I get there, I’m going to be the only one there.
Larry Higgins: I’m with you 100% on that. Last time I was on I mentioned, we will bring in a genealogist occasionally. I just emailed the genealogist we used yesterday. Found a house, it’s vacant, pretty good tax issue with it, owner died five years ago, and I can’t find anything. I found an obituary that didn’t list any…it was more of a death notice. And you know, born on this date, died on this date, her service is at this church on this date, would this reverend you know, taking care of the service?
So, I emailed the church. Couldn’t get a phone number for them, but they had an email account. They replied back, said they were going to talk to the members and see if anyone knew her. I hit a dead end, okay? At this point, I’ve done everything I can. I’m going to see if the genealogist will tell me who the heirs are, then I’ll go start working on mill.
I know if I reach them, nobody else has. I like my odds. The reason I did that, I would do that for every single lead, but again, I’m taking into account what’s going on with this property. She died five years ago, it’s vacant, nobody’s paid the taxes in five years, and with my skills, I haven’t been able to find or even get a whiff of a relative. It’s in decent shape, there’s a huge equity spread there, I like my odds of at least getting a 30 or 40 thousand dollar deal out of that. Maybe it turns out it’s 10, you know, I’m not going to turn that down, but I like my odds of 30 or 40 thousand. That’s why I’m willing to put that effort in.
Mitch Stephen: Okay, so, how hard is it for people to learn how to skip trace? Tell us about that.
Larry Higgins: It’s not that hard. First and foremost, a lot of people, probably 80-85% of people, you can either reach them directly or reach one of their relatives pretty easily. That’s not hard. You just run skip trace reports, you get the phone numbers, and you dial.
Then from there, you have some, where, you just can’t get good phone numbers for people. Especially with the really, really distressed properties. If there’s a lot of financial instability, things like that. By that, multiple bankruptcies, lean [inaudible 00:22:32]. They’re pretty skittish and they may not even have a working number. I don’t hesitate to call relatives. It’s easy to get their information, especially with us, we provide likely relatives and you can pull their reports no problem. And that’s another thing I always preach is, “If you have good leads, especially with vacant properties, taking the time to call a relative, spending an extra 2, 3, 5, 6 bucks pulling reports on relatives, that alone will make the difference in whether, or not, you get some deals.”
That’s a made probably a 200 thousand dollar difference for me. Just reaching out to relatives when I couldn’t reach the owner. You never know what’s going on with them. I’ve had them living and working in Saudi Arabia, nursing homes, prison, mentally incompetent. I learned a long time ago, don’t play that game, “Why can’t I reach the person?”. Just call the relatives. A lot of times they’re pretty open, they’ll tell you what’s going on, or help you get into contact with them.
Mitch Stephen: Is it hard to get people to open up to you when you’re dealing with the relatives?
Larry Higgins: Not really. With our scripts, I’ve done a lot of cold-calling and again, it goes back to truly distressed properties. I’m very targeted right now in what I go after. That example in Austin, that’s a prime example. That wasn’t by accident. When they’re truly distressed, by that, maybe you’re going after foreclosures, or I love vacant properties. To me, vacancies is the number one indicator of the likelihood of a deal, period. Anything you can stack on top of that makes it even better.
But when it’s truly distressed, a lot of times as long as you’re approachable and you don’t screw it up on the cold-call, as far as how you talk to them, a lot of times you’ll be surprised what they tell you. I mean, they’ll just completely open up.
I think I mentioned it before, it’s not uncommon that they’ll either…they either don’t realize that they own it anymore or that they can sell it, and then they’ll just give me the whole history.
Mitch Stephen: Yeah, I imagine a lot of these people give up when there iss other heirs, or there’s title issues, or something. They don’t know what to do about it. So, you have to convey that you’re an expert at solving these issues and if they’ll help you, that you might be able to help them, right?
Larry Higgins: Yeah, it’s funny. Some investors and even some of our customers can’t get their head around how somebody can own a property and either not realize it, or not think it’s worth fooling with. I’ll give you another quick case study if we have time?
Mitch Stephen: Sure, sure, we want to hear.
Larry Higgins: So, one of guys, he’s in Tennessee, all I know about it, is how hot it is. Nashville, Memphis, all that, just how hot those markets are. Well, he was Driving for Dollars, he had a list of vacants, and I helped him to kind of prioritize. You know I love vacants, but if you have a limited budget and limited time to work these leads, he has a full-time job, I said, “We really need to focus on prioritizing getting your top 10”. So I helped him do that, and then, same scenario as the one I talked about in Austin. He had a vacant house, when we skip traced it, found out the owner died like 7 years ago, and oh shocker, the tax delinquency started seven years ago. The family stopped paying the taxes. No will. The house hadn’t been touched. Looked like a jungle. I saw it, we looked it up on Street View just from my indication.
And I told him, just because I’ve seen enough of this, I said, “Look, there’s no guarantee, I’m not telling you this will happen, but there’s a reasonable chance you’re going to contact the heirs and they’re going to say, ‘Hey, talk to the county, or we can’t sell it’, something along those lines. Don’t count on it, but there’s a reasonable chance that’s going to be your response.”
Well, sure enough, he calls a son of the deceased owner, so he’s one of the heirs, and he actually recorded this call for me and I couldn’t have asked for a better call. I was fist pumping as I’m listening to the recording when he sent it to me. The first words out of the son’s mouth, this guy calls him, the son’s like, “Well, you need to talk to the county. We told them we’re not paying the taxes, I sent them a letter told them to take the property back because we’re not paying the taxes.”
The heir had thought he had conveyed title to the county. He saw it as a liability, he’s like, “I don’t want it, I’m not paying for it.” And our customer stepped in and said, “Actually, you still own it, I can take care of this as far as the probate issues,” and things like that, and when it’s all said and done, I think they agreed to like, four thousand for each heir. That’s what the heirs…they were kind of wanting to make it worth their while.
Long story short, because he took the time to do that, he made I think 16 or 18 thousand dollars off of that deal. And that was a scenario where they didn’t even realize they could do anything. They thought they had given it away. They didn’t want to do anything. That happens. It’s not a matter of “if”, it’s a matter of “when”, if you’re calling these properties like that.
Mitch Stephen: Yeah, we meet people all the time who don’t know they own a property. Don’t know they have an interest in a property. We’ve met, over the years, people who don’t want anything to do with that property. I don’t know what happened on that property that scarred them that way, but there’s something happened. A lot of times I figure it was a sexual abuse or something. They’re never going back to that property, they don’t even want to talk about it.
I’ve even had people not talk about it. Just completely shut down. I’m like, I cannot get them to open up. They don’t want to take any money from it because they feel like it’s “ill-gotten money” for some reason.
There’s a plethora of reasons that will blow your mind. When it’s really just money there for the taking for someone if they’ll just help you figure it out and exercise their rights. I’m sure you run into…what’s the weirdest thing you ever ran into?
Larry Higgins: Well, it’s funny, everything you just brought up about, sometimes there’s trauma, or just something that may keep them from wanting to do anything. I’m actually working on a lead right now, came across this one, and from what I can tell, it’s vacant, and there is some tax delinquency. I skip traced the owner, and it just didn’t look right. Everything told me he should be living in that house. It showed he was alive, but from what I could tell, nobody lived there. It got my attention, I said, “I’ll just Google him and see what comes up,” maybe he died and there’s just no record of it.
Well, I found a bunch of news articles, and this was like 2 or 3 years ago, this guy was shot and killed by the police in his own house. He had illegal…his blood alcohol was like twice the legal driving, I think it was almost .2. And he pulled a gun on the cops and they shot him.
So, I already know, everything you just said. I’m having trouble getting in touch with, who I think is his son, and possibly his wife or ex-wife. I know that, that could be an obstacle that I have to overcome, is the trauma to that. They may not want to have anything to do with it. Or maybe they just don’t realize they can do something. I’ve just gotta get them on the phone, I just started working with that recently.
Mitch Stephen: Yeah, maybe they were in the house when it happened. So, you know, you can understand some of these things, you know? Like a really bad experience that they don’t even want to talk about it.
Larry Higgins: I don’t necessarily have that deal yet, it’s just a lead I’m working that, that’s probably the strangest thing I’ve come across.
Mitch Stephen: Yeah, so look guys, I want you to go to 1000houses.com/skip. S-K-I-P, all lowercase. Want you to go there and I want you to get, Larry is offering to give you 5 FREE skip traces so you can see how it works and he’ll kind of enlighten you on how it works.
I also want you to get in touch with Larry and learn about “Invisible estates” and why or when he turns to a genealogist. Man, there’s so much to learn in even the smallest niche. This is a very profitable niche. Learning how to find people that are difficult to find is a money-maker, I guarantee it, if you don’t quit. You can’t quit on this stuff. The best deals I’ve ever made, when I say that I mean, the most money, was from people that were very difficult to find because I had no competition. No one else had called them. They had no other person whispering in their ear about what the property was worth or countering my offer, any of that.
They were just there, and usually a lot of times, so disgusted that they would take anything just to get it over with. “Just tell me what I gotta do to get it over with, I’m not going to do very much but what is it I have to do as long as it’s not very much?” I says well, “All you have to do is sign this paper I’m sending over to your house. Can you do that? Can you sign a piece of paper? Can you write your signature once and then you’ll be forever done with this?”
A lot of times they just say, “Yeah!”, because of a lot of the emotional issues that can go with properties. You know, we live in this business and it’s not that complicated to us, but some people really freak out about owning a property that, they don’t want. And it’s a major, major problem in their mind. People that get hard to find, seem to have a tendency to fall in that groove, don’t you find that to be true, Larry?
Larry Higgins: Absolutely. Every deal I do, unless we get a referral from somebody, every deal I do involves skip tracing, and it’s that way for a reason. It’s just much better deals, way less overhead, less marketing costs. Yeah, I don’t have to spend 50 thousand dollars to go make a hundred. I don’t have near the spend as the guy who’s dropping…you know, some of the high-volume guys around the country. A lot of these guys will spend 20, 30, 50, 60 thousand dollars a month. We have guys here, locally in Houston and they’re saying their goal is to spend 100 thousand dollars a month in marketing. They’re high-volume.
I don’t want that overhead. I think there’s a lot of people out there that are trying to lean their operations, they’re not looking to have a full-blown team of 10 acquisition agents, and all. Hey, there’s no right or wrong way, if that’s what you want, more power to you! That’s not necessarily what I want. I’d rather be lean, spend less, and go chase these bigger deals. And they’re out there.
It comes down to numbers. When you’re putting in that work to do it, chances are nobody, very few if nobody else, has talking to those owners. So, just by that fact alone your odds have improved dramatically.
Mitch Stephen: Yeah, it’s not unusual sometimes they say, “How did you know I own that house? No one knows that. No one’s ever called me about that.” You know? “How did you figure this out?” So, yeah, I’ll say, “Well, it wasn’t easy my friend. But I’m here to solve your problems.” [Laughing]. [inaudible 00:34:02] Go ahead.
Larry Higgins: Yeah, sometimes I’ll laugh when I get that response, occasionally. You know, I’ll laugh and say, “It wasn’t easy, but you know, I didn’t know what was going on but the more I dug, the more my curiosity peaked and I just kept going. It became like a puzzle.”
Mitch Stephen: Yeah, that’s my crossword puzzle. You’re a word that I just had to figure out. So, look guys, go to 1000houses.com/skip. All lowercase. And go have a conversation with Larry and his team. See what’s in store for you.
Skip tracing is a very, very, very lucrative skill. And I don’t think really these days, as a professional real estate investor you can do without it. You have to have it on some level, no matter what. But if you take it to the optimal levels, you may not need anything else to find deals. Again, 1000houses.com/skip. S-K-I-P.
What am I missing here? I may not know enough about your business to even ask the right questions. Where’s the next logical topic?
Larry Higgins: Well, just to kind of highlight exactly what we do. So, obviously we provide skip trace data. Our information is good, but we’re truly one-of-a-kind company in the real estate arena right now, in that, like I said, you can get data anywhere. There’s no shortage of data providers. But, what was missing was somebody to teach you, it’s not hard. Somebody can teach you how to use it whether it’s to create an overall strategy, or the nuts and bolts of tracking down individual people. It’s just what I call the “Escalation process”. If you can’t get them on the phone and they won’t answer? Text. No response? Go to the relatives. Nothing there? Et cetera, et cetera.
So to combine that, the data with the education, how to use that data most effectively. That’s going to be a game changer. We’re the only ones that are doing that. Now, I’m adamant that we’re providing way more value in return for what we’re getting. And that’s my goal, is to make this a one-sided transaction. We’re going to give you way more value than what we get in return. I’m okay with that, because that’s just our model.
Whether you’re Driving for Dollars, or you’re an established investor with thousands of pieces of returned mail, we can add a lot of value. If you do one deal for 20 thousand dollars, it will take us…I’ll be old and gray by the time I make 20 thousand dollars off of you.
Mitch Stephen: [Laughing]. Well, I like your philosophy, man. Just make sure that people get an overwhelming value. I believe in that philosophy myself, and all my finances seem to take care of themselves when I just take care of the people.
Larry Higgins: That’s it. Chalk it up to karma or whatever. One thing I’ve learned as we’ve started this, and it’s shifted from just high-volume guys to a lot of newer people in the market that are struggling for deals, or even more experienced people that they’re just not getting the same results from mail. They’ve been doing what they’ve always done, but they’re seeing declining results.
Just to add this layer to what they’re doing and to make them more profitable. I’ve gotten a lot of…I’ve just thoroughly enjoyed that.
So, some of the stuff we do, yeah, we have scripts for calling, different scenarios. The house is vacant, the deceased owner, you’re talking to a relative, we have some basic scripts. Tried and true, it’s my personal scripts that I use.
One thing I modeled after, so obviously, I’m one of Mitch’s students, I still get on his calls as much as I can. We have a weekly Q&A call that’s every Wednesday, 7 o’clock Central. And my commitment is to stay on that call as long as people have questions. Maybe it’s, you’re at a dead end with a lead, or have to increase your calling capacity using an auto-dialer, hiring a caller, or whatever issue you have, I’m there to answer and help you as much as I can.
It doesn’t necessarily have to be about just skip tracing. I’m not selling a 20 thousand dollar course. I’ll give you my advice, I have been around, I do know some different things about different subjects in the real estate realm. If I don’t know something I’ll tell you. But I can at least help you and point you in the right direction.
Not too long ago, I was pointing somebody towards you, Mitch. We were talking exit strategy on a deal, it was a skip trace deal and she was going to end up having some extra lots. I was like, “What are you going to do with the lots? If I were you I would just owner finance.” I said, “I know about owner financing but if you really want to learn a lot more about it…” Because she really jumped at that concept, I was like, “Here, Mitch Stephen.”.
Mitch Stephen: Well, I appreciate it. That’s one of the reasons we connect is we have the same philosophy. We just want to…whether it’s me or someone else or Larry, whatever, we want to help you find your way there. And we know if we help people do that, then everything will take care of itself.
I like the philosophy and I like what you do, and thank you for the recommendation, of course and the kudos that you give me. But, that’s why we’re still talking after four years. We’re kind of peas-in-a-pod as far as our theories on how life is supposed to run. I just appreciate, I don’t know, having people and being able to interview people like you because I get smarter by interviewing people like you. I don’t do all this interviewing stuff just because strictly bottom-line monetary reasons or ego or anything. I really, learn a lot from my students. It’s a wonderful way to keep myself on top of the game. It’s because I’m constantly talking to people who are evolving.I have no doubt, that Larry’s the one that’s going to make, it’s already starting, starting to make people question the idea of mass mailings at least upfront.
Sometimes, it may make more sense to go direct to the person. And then don’t do mass mailings, do minuscule mailings to the ones that matter. A minuscule mailing.
Larry Higgins: Yeah, very, very targeted. Whether you’re mailing or calling, I’m always about being more targeted. Not just doing a single…some of these people drop thousands of dollars and they have to because they’re quite seriously so loose. I’m all about having a really, what I call, “Layered list” or “Multiple indicators”.
I’m on somebody’s Facebook group and you see guys say, “Hey, I’m about to do my first mailing, should I do absentee owners over the age of 65, or tax delinquents, or estates?” I’m like, “Do all three! Combine all three of those into one list and you’re golden!”
That seems to be lost on a lot of people, especially the newer people. It’s the five year criteria. The more distressed, the tighter your ratios going to be as far as leads to deals. Obviously, if you loosen your criteria your ratio is going to expand. So, if you’re fairly new, you need the smallest ratio possible so that you don’t spend all your money and end up with nothing.
Mitch Stephen: Well, there’s an advantage to that. There’s an advantage to being new and being tight. Because your list can be very filtered. I mean, it can be really, really, really targeted, you know? You don’t have the money to mail or search out a lot, so let’s just search out the highest level of prospects possible, you know? Filter, after filter, after filter. Hey, only these 40 fell through, but they’re probably a real, rich 40, you know what I mean?
Larry Higgins: Yeah, exactly. That mentality with all the different services and the access to that we have now, there’s no reason not to. And VAs not to mention. Maybe every state or every county is a little different, some require a little more effort to get certain types of information or leads or lists, but you can send that off to a VA to have them do the more manual stuff. It’s very cost effective.
And you just brought up something, I don’t want to turn this into a case study seminar, but one of our customers, he wasn’t even our customer yet, he was using our free trial. He had his five free searches and I think he actually heard the first podcast we did. He called us up and I said, “Look, I want to give you a trial account and just test it out and see how you like it” and he had tried some other skip trace services but the data wasn’t there.
He had a vacant house, he has a full-time job, so limited budget and limited capacity to work leads, which I understand. That’s a common scenario for people getting into this. He had a vacant house he had seen, he skip traced the owner, “Oh, owner died, okay” Well, he’s always heard me talk about going to the heirs. He skip traces the deceased owner’s daughter, well she died, he finds her husband, he contacts the husband, so within his five free searches, he uses three, establishes contact with the son-in-law of the deceased owner, who is now the heir of this property. That lead to his first deal out of the gate, which, there’s good and bad about this, but it’s a 40 thousand dollar deal for him.
Again, full disclosure, this result is not typical. But, that was skip tracing at it’s finest. It was a quality lead and he prioritized. It was vacant, deceased owner, deceased heir, and 40 thousand dollars. And it had a tax issue and it lead to a 40 thousand dollar deal. That has a huge impact when you’re first starting out. That’s kind of what I call, “Getting your footing.” Get your first couple of deals or your first big deal, and maybe that allowed him to transition from full-time to part-time. He’s still got a job, but he’s reduced his hours. He’s able to put more time and effort into investing.
That’s how I talked about how I’m enjoying this, I love being a part of that process and helping these people get further down the road like that.
Mitch Stephen: Yeah, there is an emotional reward for sure, helping people get where they’re going and I appreciate you for being a part of that plan.
Larry, I’d like to thank you for taking the time to come on, I really appreciate you taking the time. I think you have a very valuable service.
Larry Higgins: I appreciate you having me back on here, and I appreciate your friendship over the years. You’re the first one that really introduced me to skip tracing so, ultimately, I have you to thank for this, so I appreciate that.
Mitch Stephen: Hey, it’s just a big, old just sharing knowledge with people that are thinking about the same things and they’re trying to get to the same destinations and it’s amazing the results of what comes from a think-tank of like-minded people. That’s exactly what happened and I get as much from you that hopefully you get from me and that’s why it’s such a nice place to be. Whether, you’re on the Q&A calls or you’re signed up for mentorship, or whatever, get with someone who’s already doing or already where you want to be. Or at the next level to where you want to be.
There’s always another level. I’m trying to find levels now and the think-tanks and the groups, they want 15 thousand, 25 thousand, 30 thousand, 20 thousand, but the people in the room, they know how to do what I want to do, or the next step for me.
The question is, how valuable is that next step? Most of the time, almost always, the price to get in that room pales in comparison to what the next step will do for you financially and emotionally, or freedom-wise. And so, it’s always a choice between those things.
I want you to go 1000houses.com/skip. Take advantage of your free trial of skip traces, get into the system and see how it is and you know, get a chance to talk to Larry and his team and find out just what skip tracing can do for you.
This is Mitch Stephen, it’s time to wrap it up. I’d like to thank everyone out there for stopping by to get you some Larry Higgins and learn about skip tracing.
I hope you have a great day, hope you have a great week, hope you have a terrific month, and that you achieve all the goals that you’ve planned for yourself this year. Thank you again, we’re out of here!
Speaker 1: You’ve been listening to the Owner-Financing master, Mitch “Be The Bank” Stephen on the Real Estate Investor Summit Podcast. Let us now blatantly, without apology, ride you towards financial freedom by offering you a whole, bunch of free stuff. Go to 1000houses.com and get you some! And ya’ll come back now, you hear?