If you were selling chocolate chip cookies, and you wanted to mail advertisements to a bunch of people, the list you send to makes all the difference. If you build a list of names and addresses for diabetics or Crossfit enthusiasts, your response rate will probably suck. But if you send to a list of members of the Cookie Lovers Association, you won’t be able to keep up with all the orders!
For a marketer, the power is in the list. If you’re hunting for great real estate deals off-market, you are a marketer! You might 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 list.
What is a list broker?
List brokers are companies that have millions and millions of data points about people—and you can buy lists of people based on certain criteria. Sounds creepy, huh?
Maybe it is, but it’s a big business in the world today and every day your info is being sold to other people who are marketing to you. So let’s talk about how to make some money by doing it (ethically and legally, of course).
With so many companies out there to purchase lists from, you will want to ensure they focus on the type of real estate you want to do.
For example, if you’re looking for single-family houses, some of the most popular list brokers are ListSource, Propstream, Melissa Data, ReboGateway, AgentPro247, DataTree from First American Title, and RealQuest. You could even go right to your county administration building itself.
For multifamily and other commercial deals, some of those I just mentioned work as well, but there are a few others like Reonomy, CoreLogic, CompStak, PropertyShark, Data Axle, and CoStar that can be great for larger commercial properties.
Which should you choose? Play around with them! Different companies have different data with different usability. Find something that works for you and learn how to use it right and you’ll be building your list in no time.
As I was putting together this info, I stumbled on my buddy Seth Williams’s website where he gives a really great in-depth analysis of the pros and cons of a lot of these companies. So I’m just going to send you there if you want more specifics on these (no, he didn’t pay me to say this. He doesn’t even know I’m shouting him out). You can check that out here.
More on off-market properties from BiggerPockets
What list should I build
You have your list broker identified, what next?
It’s time to decide what list to build.
Having your crystal clear criteria (CCC) is going to play a vital role in the lists you pull to ensure you are not getting leads outside of your CCC and maximum purchase price. The crystal clear criteria is a set of five criteria points every investor should identify about what they want.
- Property type
- Price range
There are a few other the filter features you will need to dial in, for various reasons.
- What are your property characteristics? How many units are you interested in? Single family? Small multifamily? 100+ units?
- What about the year built? If you’re just getting started, this may not be something you have considered yet, but there is a huge difference between a 1916 building and a 1960 building. With age comes a lot more deferred maintenance and capital expenditures. If you don’t have the right team in place, this can kill your cash flow.
- How long has the property had the same owner? If the owner purchased the property over 10 years, this person will likely have a higher likelihood of selling than someone that purchased two years ago. An owner that has held a property for over 10 years may also have higher equity or more of the loan paid down over that 10-year period.
- Speaking of loans, there are also typically filters for loan origination. Does the owner have equity in their property or are they over-leveraged? Are they late on their mortgage payment? Is their loan coming up soon (something very common with commercial properties)? For example, if you reach out to large multifamily owners who had a loan balloon payment due in 12 months, they will likely be much more motivated than someone who has five more years.
- Does the owner live in the property or do they own it but live somewhere else? If they own it and live somewhere else, this is called an absentee owner, and it can improve the chance that someone wants to sell.
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Don’t forget to start small
This is just a sample of all the filters that are available on most property data websites. You could spend days going down different filter rabbit holes and pulling dozens of lists.
Yes, the better your list is, the fewer people marketing to that same list and the better your deal flow will be. But if you spend all your time trying to craft the “absolutely perfect list that no one else is doing,” you’ll end up doing nothing.
Start small, start simple, and maybe start with just the unit count filter. You need to fill your funnel, so don’t get too narrow with your search results 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 actual real estate investors share what’s working and what’s not working for them.
Start reaching out
Once you have your list, what do you do? Reach out!
Most likely that’s going to be through direct mail marketing, but it could also be cold calling or door knocking or carrier pigeoning. Whatever. The point is to reach out, reach out often, and reach out consistently.
Contact your prospects until (a) they call and tell you to take them off your list, (b) they threaten to drive to your house and beat you up, (c) you buy the property, or (d) the world ends. Unless one of those events occurs, reach out consistently. You never know when your marketing efforts are going to land in their lap at just the right moment.