All Forum Posts by: Sean OToole

Hi Jordan,

I think your goals are great, but it's a pretty tough market in CA right now to count on deals coming quickly enough to pay rent. Even when markets weren't as tight, like when I started, it was 6 months until my first pay day, and about a year before I had enough deal flow to have reliable income.

I'm surprised you are having a hard time finding IT work in CA right now. I suspect you are letting yourself get sidetracked with investing and aren't looking that hard. I'd follow your father's advice and focus on that until you have something steady, that pays the rent, locked down. Having that base will make pursuing your goals in real estate way easier.

You can certainly use Uber to fill the gap while you are looking for the IT job and as a great way to continue driving for dollars (between rides), and getting to know the market. That said, I think you'll find lenders are going to far prefer the IT job as your base, especially with your goal to buy a triplex or quad and live in one of the units.

Patience will take you far.

Best,
Sean

@Jonathan Tang, yes, I'm the founder and CEO of PropertyRadar, happy to answer any questions. As for % of equity, it depends a bit on your business model. When I was investing I was highly vertically integrated and was oriented towards doing volume so I could work with a pretty small equity %. Netting 5% on a deal that I turned in 60-90 days gave me annualized returns on capital of >20%, which fit my business model. If I was doing a few deals a year and was relying on outside vendors, I'd look for MUCH higher returns. That said the typical advice is to look for at least 30% equity.

Also keep in mind that all vendors equity numbers are based on computer models, meaning they are estimates. As such they work amazing for narrowing down a list to properties that are LIKELY to have equity, but you will still get calls from people who don't actually have equity. Also, that criteria will miss some people that actually do have equity - the most common case being people having unused home equity credit lines (HELOC), as the computer model has no idea what the current balance is, and many are zero, but the computer models assume the worst case that the credit line is maxed.

Hope that helps.

If budget is an issue start with "driving for dollars" to build your own list of motivated sellers. Once you have an address of a property that appears to be in distress, you can go to the county assessor to find the owner (even online in some counties) for free (if you don't value your time), or you can use a paid service that will give you all the details right on your phone while you are standing out front, owner or non-owner occupied, value, comps, equity, vacant, even their phone number.

Filters I'd recommend:

• Equity, no reason to waste your time on properties folks can't sell at a reasonable price
• Property Type, most folks stick to residential, and often just single family homes
• Estimated Value, stick to a price range you can afford, and/or for which there is demand if you plan to flip or rent
• Location, this is best way to control size of your list. Lots of ways to select location, which one is best depends on your particular area.

Beyond those, I also recommend using additional filters to better differentiate your message from competitors sending to all absentee owners as if they were the same.

• Equity, like above, except separate free & clear from those who have a loan, and use different messages for each group, as their issues and motivations are often different.
• Age, someone managing rentals in their 70's or 80's is going to have different motivations then someone in their 40's or 50's.
• Owner location (based on mailing address), a owner that lives far from the property has different issues then someone next door or down the street.

LOTS of possibilities, but hopefully that gives you some ideas. The more unique your list and message, the more likely you are to improve your response rate. 

@Dori Arazi - the suggestion above from @Allan Smith regarding appraised value vs estimated value won't work in CA because of Prop 13. The rest is solid.

More important than the list, in my opinion, is the message. Lots of people mail to absentee owners who have equity, and most of them do it with the same messages you see posted all over bigger pockets. Should be no surprise that they typically get a terrible response rate. You can get far better results with a unique message. For example if you targeted that same absentee, high equity, list, but narrowed it to folks who purchased from 2008-2012, your message could focus on how they can now cash in on their amazing market timing, and how you can help them do that quickly and easily without having to evict tenants, clean the property, hire an agent, etc. This is but one of unlimited possibilities.

Bottom line, start with the a message that offers a clear differentiator, and then build your list to best deliver that message to the right people.

Hi @giangelo - A few thoughts for you:

1. We will tag a property as Bank Owned if it was sold "back to the bank" at a trustee sale. We will leave it tagged as that until we see a market value transfer to someone else. For the most part that works really well. That said, you'll want to look at each one carefully, as there are some instances where they will not be bank owned - a rescission, a non-market transfer, etc.

2. It is surprising how many properties there are that have been bank owned for a long time. Sometimes the bank decided to rent the property, possibly back to the prior owner. Sometimes they've fallen of the radar and are in a state of disrepair. Not completely sure why, but I recommend driving by the property before going to too much trouble to see what condition it is in and if anyone is living in it. Occasionally you'll find a notice posted on the property with contact info.

3. Banks aren't really setup for you to buy property directly from them. It's not impossible, but it is also not easy. If you want to pursue it, the first task is to get a hold of someone at the bank. For that task I recommend the Lane Guide. It will still take some work, but it will help you at least get to the right department and headed in the right direction towards making a real contact.

Hope that helps. Our support team is always available if you additional questions too.

@Bryan Pham - I don't consider our product a "skip trace" tool. You can do a quick search for properties that people (or companies) own based on their name, phone or email. You also quick search for properties, and their owners, by address, APN, or by just clicking on the property on a map. From there we provide property address, mailing address, phone numbers, etc. Depending on what you need it might be enough.

A true skip trace tool like Accurint or TLO will pull data from credit reports, tell you where they work, show criminal and driving records, show possible relationships to other people, past addresses, aliases, and other tools that law enforcement, collection agencies, PI's, etc need to try to find folks who are missing or hiding. Access to much of the data is often limited to people in certain professions, and doing certain activities - though I've certainly heard of investors lying to get access, I wouldn't recommend that.

Both are good products, but there are definitely differences. For example Listsource has almost 20 demographics fields vs. AgentPro247 only having 7. Listsource is a Corelogic product, which is a company that spun out of First American Title, whereas AgentPro247 is a BlackKnight product, which is a company that spun out of Fidelity Title. For many years the data products out of the FirstAm lineage were superior in terms of coverage, timeliness and quality. That gap has narrowed over the last 5 years, but will still vary by location. I always recommend testing in your specific area, as sometimes one is better in a particular county then the other. On price, keep in mind many people get better rates after talking to a sales rep at Listsource, and Listsource also has resellers that get better pricing, and they are sometimes willing to pass that along.

The bigger issue is that buying lists in this way is less than ideal:

* No way to preview your list before you buy to make sure it is really what you want.
* The list becomes stale the minute you buy it - changes continue to happen, and the only way to keep your list current is to purchase it over and over again.
* Even after you buy you don't get to see all the details behind the list, unless you buy a lot of expensive add-on options (title history, estimated values, equity, etc).

Hi @Nick Parks - Great way to focus on a specific niche. Too many people just do non-owner occupied, or maybe non-owner occupied high equity. By narrowing down to specific age group, and with a specific message like you are, you should stand out.

To that end, you might even take your target and break it up some more, even better targeting your messaging. Perhaps tweaking the message by age group, by home value range. Also, consider combining with non-owner occupied. An older person with rentals may want to keep the monthly income, while not having to deal with tenants. You could also check to see if any properties that fit your criteria are also vacant. Lot's of possibilities.

Like @Account Closed - While you are right that us list providers can't say to the penny how much equity someone has, our equity models are typically very good. We can typically model which loans are open and outstanding, and their balances. There are certainly exceptions - for example we can't know the current balance of a HELOC, so we assume they've used the whole balance, even though they may not be using any. Still, for most properties, equity is going to work very well as a criteria. And with 150M properties, you might as well focus on those that are most likely to have equity. :-)

In Texas, Listsource is currently the best for most real estate related lists imho. You could also look at AgentPro247. Hopefully there will be at least one more good alternative soon. ;-)