[Case Study] How Edisson made $17K from a free lead: Part 2 of 3
As promised, today's blog post is the sequel to yesterday's post about Edisson's $17K case study! In today's blog post, I break down the three steps you need to turn addresses into five-figure profits!
In yesterday's blog post, I walked you through the benefit of growing a team of Property Locators. I have to tell you, there's nothing quite like having a team of people deployed in a local area, hunting down the best real estate deals, and presenting them on a silver platter. When implementing this team prospecting strategy, you can find deals before most investors know about them and, as a result, have the advantage of getting to the seller first. In today's blog post, we will cover what my team did, from marketing, to contracting the property, so you can implement the same strategy to get deals in your local market.
Enter...The Fire House
The image above was one of the images submitted by our Property Locator. As you can see, this property was severely damaged by fire and in the first blog post of this series I covered how to analyze these types of properties. If you haven't read part one yet, then go read it now. Here's another picture of the back of the house:
Once a property like this is sent to you, it's critical to move on it quickly, because it's a glaring sign of a motivated seller; if you don't get to it first, someone else will. Once we received this property the first thing we had to do was skip-trace the property owner. When one of our Property Locators refers us an opportunity, it usually comes with an address and pictures. So we can have the most success, we ask them to provide a picture of the front of the house and usually a pic of the street, left and right. The reason we ask for street pics as well, is so we can identify the type of area the house is located in; ideally what we are looking for is the worst house in the best area. What we liked about this house, is that it was surrounded by nice starter homes in an up and coming area, which foreshadowed the potential of what this house could be. Once we received the property our next step was to skip-trace the property owner. Like I mentioned in the last post, I love helping property owners of fire damaged properties, because there is almost zero emotion tied to the sale. The property owner cannot live in the house, as a result they don't want the house anymore and most of the time, they have already been paid out by insurance so they don't "need the money". Here's what I mean by that, anything the owner sells the property for after cashing out through insurance is typically just a bonus to them, which makes negotiations much easier than the typical seller. Now, let's dive into how we skip-traced the owner.
What Is Skip-tracing and Why You Need It
Without skip-tracing, I am confident to say that it would have taken a much longer time to reach this seller than it actually did. A Skip-tracing service is a data company as a service that provides contact information like phone numbers, mailing addresses and emails of property owners. There are many skip-tracing providers in the market right now, but not all are created equal, but more on that in a minute. The reason you need a reliable skip-tracing provider is so you can turn property addresses, like the one I shared today and turn them into opportunities to solve a sellers problem. After all, you can't solve a problem if you can't reach the seller! I'm not going to go too deep on skip-tracing here, because I already covered this topic in depth in this post. The service we used to skip-trace this property owner not only gave us the phone number, but it also gave us the current mailing address (confirmed by USPS) and all of the emails the seller has ever had to their name. Pretty cool right?
How To Choose a Skip-tracing Provider
I'll just say this: most people think that skip-tracing service quality does not matter, but it couldn't be further from the truth. Please listen to me closely when I say, cheaper is not better when information is involved. Think about it, the cheaper the data, that means the easier it was to get; if information is easy to get that means not much research was involved and the information is more than likely out dated or scraped from some random website on the internet you could access for free anyways. Remember this, the lower the price, the lower potential quality of that information. So, let me ask you a question, if you were going to want to have the best shot of reaching a home owner, then wouldn't it make sense to try and get the most accurate information possible? The more accurate the information, the less work you have to do when reaching out to the seller. For this reason, I want to pay as much as i can to get the most accurate information I can, to reach the seller as fast as I can, and so should you.
Here are a list of questions to ask a potential skip-tracing service to identify quality before you take out your wallet:
- What is the average hit rate? Hit rate is industry lingo for accuracy. If a company gives you a 50% hit rate that means that you have a 50% shot of the phone numbers provided being the right number to reach your seller.
- What is the average append rate? Append rate is defined as the ratio of phone numbers to records provided. In other words, what percentage of the records skip-traced have phone numbers.
- What contact information do you provide? Most skip-tracing providers only provide phone numbers. The best services typically provide current mailing address and emails, in addition to phone numbers as well.
Lastly, here are some quick skip-tracing benchmarks, so you can identify the best possible service to work with:
- Hit Rate: above 60%
- Append Rate: above 90%
- Points of contact: at least 2+; this can be phones and emails or phones and addresses. Ideally, you will want to have a combination of all three.
Most skip-tracing services have a hit rate 50% or less and with that low quality of data, trust me when I say it will take you forever to reach a seller. So what service did we use to skip-trace the property owner so fast? We used InstantSKIP, because it's built into the FlipTEAM platform and is one of the most accurate services on the market today! The cool thing is InstantSKIP not only gave us the phone number super fast (less than 5 minutes), but it also gave us the current mailing address, (confirmed by USPS) and all of the emails the seller has ever had to their name. Pretty cool right? Here are the stats from instantSKIP:
- 65%+ Hit Rate
- 3 Points of contact: mailing address, phone and email.
So, back to how we used skip-tracing to contact the owner of the property. Once the property came through my Lead Manager clicked a button and skip-traced the property owner. Because we had quality data with InstantSKIP, we were able to secure an accurate number for the seller and start our marketing.
Marketing Deep Dive: How We Contacted The Seller
The cool thing about FlipTEAM is that it really makes reaching out to sellers fairly simple. We solve one of the biggest issues that most busy real estate investors face, which is consistency. The reason why most people have such a hard time doing deals consistently is a lack of consistency in their marketing and FlipTEAM solves that. Once a property is skip-traced, FlipTEAM automatically starts reaching out to sellers on our behalf through a combination of phone calls, emails, text messages, oh and by the way, direct mail is coming soon too!
For this seller, once the outreach process was started, my Lead Manager used FlipTEAM to contact the seller through a combination of a handful of text messages and emails. Once contact was made, she then submitted the lead to Edisson to qualify further and see if our company would be a good fit to solve the sellers problem. When my Lead Manager reaches out, the overall goal is solely to find if the property owner is open to the idea of an offer; above and beyond that, we try to get answers to 4 main questions in an effort to tee the lead up for Acquisitions.
Here is a list of the questions my Lead Manager:
- How long have you been thinking about selling?
- How much are you hoping to get for your house?
- If we agree on a price would you consider selling within the next 90 days?
- Have you done any remodeling to the kitchen and bathrooms in the last 5 years?
Once we have the answers to these 4 questions, the lead is then ready to be sent to Acquisitions. We do not qualify much beyond that, because anything above that is sales, and Virtual Assistants, in most cases, are not sales people. You can check out our SMS process in an article posted last week here. Once my Lead Manager gathered all of the information above, the lead was now ready for Edisson (Acquisitions).
Summary: How We Converted The Lead
Before I get into which method we used to reach the seller and get the lead, I would first like to say this: the big reason we got this lead was consistency. You do not need a full team like I have to get deals with FlipTEAM; the cool thing is you can get leads and deals like this with FlipTEAM, even if you are a one man show! There is no magic here, just a commitment to following a simple process day in, day out until we saw results. The best real estate investors that you see in your local market, on podcasts and blog articles like this one are not special, they simply just have a relentless commitment and desire to see a goal through to the end. Model that focus and drive and you can accomplish anything you desire in this life.
Ok, so how did we end up reaching this seller? The reason we got this lead was instantSKIP, the awesome skip-tracing service inside FlipTEAM that provided the sellers email. My Lead Manager ended up connecting with the Seller over email, transitioned the email to a call, asked the seller the questions above and BOOM! The lead was secured. In tomorrow's post, the 3rd and final blog post in the series, I am going to dive in to how Edisson qualified the seller even further, put the deal under contract and how we sold it in less than 30 days to profit an exciting $17K!
P.S. Would you like the exact email template that we used to get the sellers attention? Download my Rapid Responder Email Sequence now. Simply copy and paste this simple email into your favorite email service, send and instantly start reaching more sellers!
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