If you were selling chocolate chip cookies, and you wanted to mail ads to a group of people, the list you send them to makes all the difference. If you list names and addresses for diabetics or CrossFit enthusiasts, your response rate will probably plummet. But if you send out a list of members of the Cookie Lovers Association, you won’t be able to follow through on all orders!
For a marketer, the power is in the list. If you are hunting for off-market great real estate deals, you are a marketer! You may not be selling cookies, but you are selling yourself as a buyer of real estate. The better your list, the bigger your success. Let’s talk about how to build a great off-market listing.
What is a List Broker?
List brokers are companies that have hundreds of millions of data points about people—and you can buy lists of people based on certain criteria. sounds scary, huh?
Maybe it is, but it is big business in the world today and every day your information is being sold to other people who are doing marketing for you. So let’s talk about how to make some money doing it (ethically and legally, of course).
With so many companies out there to buy inventory from, you’ll want to make sure they focus on the type of real estate you want to do.
For example, if you are looking for single-family homes, ListSource, PropStream, Melissa Data, ReboGateway, AgentPro247, DataTree from First American Title, and RealQuest are some of the most popular listing brokers. You can also go directly to your county administration building.
For multifamily and other commercial deals, some of the ones I just mentioned work, but there are others like Reonomy, CoreLogic, CompStak, PropertyShark, Data Axle, and CoStar that can be great for larger commercial properties Are.
Who should you choose? play with them! Different companies have different data with different utility. Find something that works for you and learn how to use it properly and you’ll be building your list in no time.
As I was putting this information together, I stumbled upon my friend Seth Williams’ website where he does a really in-depth analysis of the pros and cons of these companies. So if you want more specific details on these I’m going to send you there (no, he didn’t pay me to say this. He doesn’t even know I’m yelling at him). You can view it here.
More on off-market properties from BiggerPockets
which list do i make
You’ve Identified Your List Broker, What Next?
It’s time to decide which list to make.
Having your Crystal Clear Criteria (CCC) is going to play an important role in the lists that you pull to ensure that you are not getting leads outside of your CCC and maximum purchase price. The Crystal Clear Criteria is a set of five criteria every investor must look for in order to identify what they are looking for.
- Property Type
- Place
- Situation
- price range
- profitability
There are a few other filter features that you’ll need to dial down for various reasons.
- What are your property characteristics? How many units are you interested in? nuclear family? Small multidimensional? 100+ units?
- What about the year made? If you’re just starting out, this might not be something you’ve considered yet, but there is a big difference between a 1916 building and a 1960 building. With age comes a lot of deferred maintenance and capital expenditure. If you don’t have the right team, it can drain your cash flow.
- How long has the property been owned by one owner? If the owner has bought the property more than 10 years ago, this person will be more likely to sell as compared to a property bought two years ago. An owner who has held a property for more than 10 years may have higher equity or more debt repaid over that 10-year period.
- When it comes to loans, there are usually filters for loan origination as well. Does the owner have equity in their property or are they over-leveraged? Are they late on their mortgage payments? Is their loan coming due soon (something very common with commercial properties)? For example, if you reach out to large multifamily owners who had 12 months to pay off their outstanding loan, they will likely be more motivated than someone who has five more years.
- Does the owner live in the property or do they own it but live elsewhere? If they own it and live elsewhere, this is called an absentee owner, and it may improve the chances that someone will want to sell.
real estate podcast
On the BiggerPockets Real Estate Podcast, co-hosts David Green and Rob Abasolo talk to real estate investors and entrepreneurs about the successes, failures, and hard-earned lessons. You’ll find analysis of real strategies that work – whatever your experience level. Tune in to the #1 Real Estate Investing Podcast every Tuesday, Thursday and Sunday.
don’t forget to start small
This is just a sample of all the filters available on most property data websites. You could spend days going down the different filter rabbit holes and pulling out dozens of lists.
Yes, the better your list is, the less people will be marketing the same list and the better your deal flow will be. But if you spend all your time trying to build the “perfect list that no one else is doing,” you’ll get nothing done.
Start small, start simple, and maybe start with only the unit count filter. You need to fill your funnel, so don’t limit your search results too much when starting out.
Research online what other people are doing for their lists. Through sites like the BiggerPockets forums, you’ll find hundreds of conversations where real real estate investors share what’s working for them and what’s not.
start reaching
What do you do once you have your list? reach upto!
Most likely this will be through direct mail marketing, but it could also be cold calling or door knocking or carrier pidgeoning. whatever. The point is to reach out, reach out often, and reach out consistently.
Contact your prospects until (a) they call you and ask you to take them off their list, (b) they threaten to go to your house and beat you up, (c) you buy property, or (d) the world should end. Reach out consistently until one of those events occurs. You never know when your marketing efforts are going to hit them at the right time.
Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
