Ever wonder how some real estate investors seem to have a magic touch for finding those elusive off-market deals? You know, the ones that aren’t plastered all over the MLS or waving “For Sale” signs in their front yards?
Well, buckle up, because we’re about to pull back the curtain on one of the most powerful tools in a savvy investor’s arsenal: skip tracing.
It’s not about skipping rope or tracing drawings. Nope, it’s about uncovering hidden gems in the real estate market. And let me tell you, when done right, it’s like having a secret map to buried treasure.
But here’s the kicker: most investors are doing it wrong. Or worse, they’re not doing it at all.
In this guide, we’ll unpack the mysteries of skip tracing, show you how to wield it like a pro, and combine it with killer marketing strategies to unearth those juicy off-market deals that everyone else is missing.
Ready to give yourself an unfair advantage in the real estate game? Let’s get started.
What Is Skip Tracing?
Skip tracing is the process of tracking down someone’s contact details when they’re not easy to find. In the real estate world, this often means finding property owners who have become hard to reach. These might be people who have inherited a property, are behind on payments, or have moved away without selling their home.
For example, imagine driving by an empty house that looks abandoned. You might wonder, “Who owns this property?” Skip tracing can help you find the owner’s current contact information, allowing you to reach out and see if they are interested in selling. This can lead to great deals on properties that other investors haven’t even considered.
How Investors Use Skip Tracing to Find Off-Market Properties
Skip tracing opens up a lot of opportunities for real estate investors. Here are some common ways it’s used:
Tracking Down Absentee Owners
Sometimes, properties are owned by people who don’t live there. These absentee owners might have moved away and neglected the home, letting it fall into disrepair. Investors use skip tracing to locate these owners, who might be willing to sell since they aren’t actively maintaining the property.
Uncovering Hidden Deals
Not all great property deals are listed for sale. Skip tracing helps investors find properties that aren’t on the market but may have owners who are motivated to sell. These could be homes facing foreclosure, properties with high equity, or those passed down through inheritance.
Creating Focused Mailing Lists
Instead of sending marketing materials to every home in a neighborhood, skip tracing lets investors create specific lists of property owners who are more likely to sell. By targeting the right people, investors can avoid wasting time and money on ineffective marketing.
Exploring New Markets
If you want to start investing in a new area, skip tracing can give you valuable insights. It helps you gather information on property owners even in places you’re not familiar with, allowing you to expand your investment opportunities.
Reconnecting with Old Leads
Sometimes, a potential seller you contacted in the past stops responding. With skip tracing, you can find updated contact information to reconnect with these leads and see if they’re still interested in selling.
Navigating Probate Properties
When someone passes away, their property might go into probate—a legal process that can make selling the property complicated. Skip tracing can help investors find the heirs or decision-makers responsible for selling the property, allowing you to potentially secure a deal.
Beating the Competition
In real estate, timing is key. Being able to contact property owners before their homes are listed on the market gives you an advantage over other investors. Skip tracing lets you reach out to these owners first, giving you a head start on closing a deal.
Verifying Ownership
Before investing in a property, it’s important to confirm who the actual owner is. Skip tracing helps you verify ownership, reducing the risk of title issues or other legal problems down the line.
How to Do Skip Tracing
If you want to start using skip tracing, you’ll need the right tools and information. Here’s a step-by-step guide to help you get started:
Choose a Skip Tracing Tool
There are several online platforms that offer skip tracing services. Some of the most popular tools include:
- LexisNexis
- TLO
- Intelius
- BeenVerified
- Deal Machine
- Propstream
These services gather information from public records and other sources to help you find property owners.
Gather Basic Information
To perform a skip trace, you’ll need some details about the property owner, including:
- Their full name (or the last known name)
- The last known address of the property
- Additional information, such as their age, possible relatives, or any other identifiers
Input the Information into Your Chosen Tool
After gathering the necessary details, log in to the skip tracing platform and input the information. These platforms will search through public records and databases to give you the contact information of the person you’re trying to find.
Review the Results
The tool will provide you with various details about the person, such as:
- Current address
- Phone numbers
- Email addresses
- Social media profiles
- Asset information (like other properties they own)
Once you have this information, you can reach out to the property owner to see if they’re interested in selling.
Is Skip Tracing Worth It?
Absolutely! Skip tracing is one of the most effective tools for real estate investors looking to find off-market properties. Here’s why it’s worth your time:
- Find Hidden Deals
Skip tracing allows you to discover properties that aren’t listed for sale, giving you access to deals that other investors don’t know about. - Save Time
Instead of searching for owners manually or spending hours trying to find their contact information, skip tracing tools do the work for you, giving you quick results. - Increase Your ROI (Return on Investment)
By targeting motivated sellers, you’re more likely to close deals, which increases your chances of making a profit. - Expand Your Reach
Skip tracing helps you explore new areas and markets with confidence. Whether you’re looking to invest in a nearby city or across the country, skip tracing can help you find property owners anywhere. - Gain a Competitive Advantage
While other investors are busy fighting over properties on the MLS, you’ll be working on deals that aren’t even on the market yet. This gives you an edge over the competition.
Is Skip Tracing Legal?
Yes, skip tracing is legal in the U.S., but it’s important to use the information responsibly. It’s commonly used in real estate, debt collection, and legal services. However, there are laws in place, like the Fair Debt Collection Practices Act (FDCPA), that protect people’s privacy. As long as you’re using skip tracing for legitimate business reasons and following the law, it’s perfectly fine.
The key is to avoid misusing the information. For example, don’t use it to harass or stalk someone. Always respect privacy laws, and when in doubt, consult a legal professional to ensure you’re on the right side of the law.
How Much Does Skip Tracing Cost?
Skip tracing costs can vary depending on the service you use and how many searches you’re doing. Here’s a quick overview:
- DIY (Do-It-Yourself) Method: This involves using free public records and online tools, and it can cost between $1 and $5 per search. It’s cheap, but it can be slow and often doesn’t provide complete information.
- Basic Online Services: Websites like Intelius or BeenVerified charge between $0.25 and $3 per search. This is great for occasional searches.
- Professional Skip Tracing Tools: Platforms like TLO or LexisNexis charge between $0.10 and $1 per search, and they offer discounts for bulk searches. These are the best options for investors doing a lot of skip tracing.
- Hiring a Professional: If you hire a professional skip tracer, it can cost anywhere from $5 to $200 per search, depending on how difficult the case is.
For most real estate investors, skip tracing costs between $0.25 and $3 per search. This is a small investment when you consider the potential profit from finding a great deal.
Combining Skip Tracing with Cold Calling and Direct Mail
Skip tracing works best when paired with other marketing techniques like cold calling and direct mail. Here’s how to use all three strategies together to find off-market properties:
- Start with Skip Tracing
Use skip tracing to find the contact details of absentee owners, properties with high equity, or homes facing foreclosure. - Cold Call the Owners
Once you have their contact information, pick up the phone and give them a call. Introduce yourself, explain that you’re interested in buying their property, and see if they’re open to selling. - Send Follow-Up Direct Mail
For those who don’t answer your call or aren’t ready to sell right away, send personalized mail. This could be a letter or a postcard offering to buy their home. The key is to keep the communication going. - Repeat the Process
Skip trace new properties regularly, make calls, and follow up with direct mail. Consistency is key in real estate marketing.
Final Thoughts
Skip tracing is an essential tool for real estate investors who want to find off-market deals. By using skip tracing to uncover hidden opportunities, you can get ahead of the competition and close deals that others don’t even know exist.
When combined with cold calling and direct mail, skip tracing becomes a powerful strategy that can help you grow your real estate business and increase your profits.
