Want to Find and Close More Deals? Get Better Data!
Being a successful real estate investor is based on hard numbers, getting the facts, and making sure you aren’t missing anything.
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All those little numbers and facts lead investors on long and merry chases through courthouses, county appraisal district websites, white pages, yellow pages, LLC filings, and more—trying any of a dozen different ways to track down phone numbers and email addresses for property owners.
Why Is Data Important to Real Estate Investors?
Real estate and data are inextricably linked. You HAVE TO become a data expert to be a successful investor.
The right data will help you determine which deals to go after, which don’t fit your investing criteria, and which properties have equity. Data will help you discover tons of information about property owners, too, such as what language they speak, their net worth (yes, you can find this out with a fairly high degree of accuracy), what kind of car they drive, where they work, and a million other things.
Personally, data has helped me weed out deals that would end up being a waste of time. It’s also enabled me to target my marketing more effectively on the deals I wanted to go after.
Types of Real Estate Data and Their Uses
There are four key areas of real estate data you need to market effectively. Some data is readily available on free websites; others take some digging to uncover.
Developing a way to track these details down will affect your long-term success and bottom line. As I became a better data hound, I became a better investor!
1. Physical stats about the property
Why is this necessary? Investors need to understand what they’re going after, whether it’s the bed and bath count in a single family home or the unit count in a big apartment complex.
Many wholesalers and investors start the conversation with sellers by asking about properties’ physical characteristics. I hate doing this!
As the person reaching out to the seller, I want to go into that first call with as much knowledge as possible. If I can demonstrate to them I’ve already taken the time to research and understand their property, I will build immediate rapport and credibility.
Where can you find this info? Basic details about the property can be found on county appraisal district websites.
Other bits of information can be acquired from title companies, insurance databases, the Realtors Property Resource (RPR) database, or other data aggregators that pull info from dozens of different sources.
2. Financial details about the property
Unless you’re good at negotiating short sales, this is very important when deciding if you’re going to spend valuable time and marketing dollars pursuing a property. To get a good deal, the property has to have equity.
Where can you find this info? The best place to access it is usually county deed records or directly from the lender.
In some instances, however, a list vendor will allow you to filter potential homes based on the amount of projected equity. Some data aggregators can also pull this information, which can be helpful to know when going into appointments and calls with sellers.
3. Details about the seller
Who is the seller, anyway? What do they do? Where do they work? How much money do they make?
Few investors take the time to dig into these types of details, but if you do, the benefits can be huge! The more you know, the better you’re able to tailor your marketing efforts specifically to what pushes your seller’s buttons.
For example, if they don’t speak English, contact them with a message in their native language. Or, if it looks like they are utilizing a lot of credit, emphasize that you can pay cash.
To understand the seller is to recognize their pain points. And if you can solve for their pain points, you will get deals. It’s really that simple.
Where can you find this info? This type of information is most often only available through demographic databases and data aggregators.
Look for a tool that pairs this info with the property you’re going after and the owner’s name. This isn’t something you want to try and track down yourself; it’ll take way too much time and effort. Instead, find a good data vendor and have them do the heavy lifting for you.
4. Contact information for the owner
This is usually comprised of phone numbers and email addresses.
Where can you find this? The process of finding this information is known as “skip tracing.”
There are numerous options today to help investors skip trace properties, but unfortunately, many do not provide very good data. I’ve found that it’s better to pay a little more up front for higher quality info than to have to go back and try again.
To reiterate, as a real estate investor in a competitive market, you need to get comfortable finding, reading, and working with data.
Identify the lists that are most helpful to you and develop a data process for your investing business. Stick to this process and stay organized.
Customer-relationship management software (aka a CRM system) can be very helpful, considering you’re trying to analyze thousands of properties and potentially millions of data points.
I’ve spent a hundreds of hours digging into the real estate data world, and I’m a massively better investor because of it.
I can also provide a huge amount of value and a service to partners, investors, realtors, and others I want to work with by helping them analyze data and find deals and properties they thought were un-closeable.
What’s even better, it’s a highly scalable skillset. If you understand a data process for your local market, you can deploy that in a majority of asset classes and other locations around the U.S.
Sure, working on skills like picking out tile and finishes, syndicating money, and lowering your tax burden is important. But remember that if you don’t have good data going in, you’ll never get to the closing table in the first place.
How do you use data? Where do you find it?