Transcription
There was a guy locally who got known for somebody would cold call him about his property. He would take the call, act like he was interested in selling, get their information, file a lawsuit. I knew a guy who this happened to. Talked to his attorney. He's like, "Oh my god." He's like, "I make 65,000 a year as a side job." And he's like, "Just settled off, 1500 bucks. I'll go and that's his gig."
That was his gig. He had a full-time job and that was his side gig. Not a bad side gig. Punitive damages, no taxes.
I've got Matt Hecker today with smartskip.io. Matt is a data provider to folks who are trying to find folks and call folks. And in the real estate world, we need a whole heck of a lot of that, especially in our brand of real estate. So, we're going to talk to Matt today. Welcome, Matt.
Hey, Logan. How are you?
Good so far. Smart Skip IO, that's that's your game.
Yep.
Tell us a little bit about it real quick.
Yeah, so we're a skip tracing provider, high level data, and basically you can search multiple ways. is we have the the uh conventional bulk skip tracing. We also have manual skip tracing where you can dive into like different data fields. So if you're searching by person's first, last name in a city, you don't have an address per se, then um you can search that way, addresses only, see who's related to or affiliated with that address and so forth. So it's really like a deep dive tool and it just allows you to like dive real deep into records, especially like in the industry or the niche you're dealing with. uh air properties and so forth. We provide relative and associate data, relationship statuses and so forth.
I would say pro when we're looking for people somewhere around half the time we make first contact to them through someone else, relative, neighbor, something. So that stuff is that kind of connectivity is huge.
Yeah. Yeah. It's funny how it works because a lot of people don't pick up the phone, right? So stop there. Do you move on to close relative? We provide neighbors and so forth. So, if you got a good opportunity on your hand, you're not just going to stop there, right? You're going to you're going to continue to dive in. And that's where our data really kind of helps dig up those that that contact.
Sometimes when I talk to folks, because there's there's a lot of different platforms these days where you can find contact info. Sometimes you can Google it. Sometimes you got to get good good products that you pay for to help you. I've heard people say, "Oh my gosh, I have high connection rates. I have low connection rates. I made a hundred calls and only talked to 10 people. What do you think's happening there? Like, are they just calling people that are hard to get a hold of? Are there certain types of people that don't have great data anyway? Is it a software they're using? Like, what makes a good connection?"
It could be a combination of things, right? So, like, let's look at the method or or what you're using, the tool you're using to call them. So, for instance, a cell phone that's going to have your highest connectivity rate because it's an actual registered number with a service provider. It's not a VIP like call tools or some of these other platforms, right? Those are automatically recognized by service providers.
That could play into it. The other thing is a lot of people I've noticed, they don't track like their phone numbers accuracy.
So, or I guess where they're getting their phone numbers from. So, there are tools out there that have like phone tagging. a lot of CR like on a CRM, you can actually tag the phone number and say,
oh yeah,
this was a smart skip uh phone number or this was that phone, you know, basically the provider you got it from.
And then going back and comparing that accuracy as well. I think also a lot of people they look at it from a connectivity standpoint. That's not really accuracy, right? Accuracy is is this the correct number? Just because you if you didn't talk to somebody doesn't mean you don't have the correct number. It just means you didn't talk to somebody, right? So,
yeah, I was talking to somebody on the phone the other day and they said, "We've called a hundred people." And he's like, "How many we talk to?" He's like, "We probably get a 20% connection rate." And I was like, "If you talk to 20 people out of a hundred calls and you're calling deals like this where people are all over the place, they don't want to answer the phone. I actually think that's pretty good. If you can get through $100 in a day or if you can get through $50 in a day and have 10 conversations, dude, I'd be pleasantly surprised."
Yes.
We need better data. I'm like, dude, I don't know if you're going to get better data than that.
Yeah. I mean, that might just come down to them not understanding like industry standards because a bulk dialer, for instance, you're going to get a 3 to 5% answer rate.
Yeah. Answer and connectivity are different. Answer and accuracy are way
Yeah. Yeah. Exactly.
People call me all day. I'm at work. That doesn't mean it's a bad number. I'm busy. but they might call another phone number they got from a skip tracing provider and it's not your phone number and they get an answer on that and then they're somehow relating that to accuracy
right that makes sense so in that case it's probably important for people to consider what's my process like I called through let's say I decided to get 30 leads each one of them has five phone numbers it's 150 phone numbers because each
each person has multiples a lot of times
so they call through that 150 if you're really thinking about working through that. I would set a schedule because a dialer can get through 150 calls like fairly quickly.
Oh yeah. In minutes depending on how many lines you've got.
So I'm going to try to help people understand sometimes this business is bigger isn't better. More data isn't better. More correct
large volume in this business doesn't work because you miss so many things. You run a dialer and call thousand people. You will get a couple people to connect but you had to go through a lot to get thousand units of good properties, good data, good everything. I'd say get yourself a list of 50 properties. Get 150 phone numbers for those or maybe 250 because multiple owners in one property. Run that dialer like 11 o'clock today. You're done by two.
Yeah. Easy.
Have some good calls. Get some notes. Go take you a break. Have lunch. Go play with your kids. Whatever. Come back to the office tonight at 6 o'clock. Run that same set of numbers again. Run that sucker four, five, six times over the next three days.
I bet you find your connection rate is far different. It might not be the data. It might be the process.
Yeah. Exactly. or the tools you're using,
what would you guess accuracy? Like if you were to say, I can produce you 100 phone numbers, what percentage of them would actually be accurate if you had to guess?
So, we've actually tested this data from one of our other businesses where we we have cold calling as a marketing strategy, and we're we're right about 80% accuracy. Now,
how much better can you get? Yeah. I mean, it's tough because I think the average person switches their phone number every one to three years when you look statistically.
Are you serious?
I've had the same phone number since I was 16. I'm about to be 40, right? So,
but yeah. Um,
so when you factor in that and then the properties we're looking for, they're not in the best financial condition as far as the people go. They've got a lot going on. So, those people tend to switch phone numbers at a way higher rate.
Okay. So then you said the average person switches their phone every one to three years. Then how often you guys have to update your data? How's that look? It's got to be frequent, right?
Yeah. So all our data, the way we're gathering our data, it's always fresh pools. So you could you could skip trace through us today and then tomorrow skip trace again. And if numbers have changed, numbers, it will be it would be the same skip trace, the same person, the same address that you're running, but the data could be slightly different.
Wow. So then that means you're pulling from a ton of different places, corroborating data, and coming up with an end result to deliver to a customer, an end user.
Pretty much.
Yep.
How much of that can you share? Like what's that what's that look like when a user just hits this button and gets this big old list? What's going on?
Yeah. So I mean essentially it it comes from like how we used to skip trace before we had smart skip as our own product. And what we used to do through our cold calling strategy was you know every so many attempts like it's been a while since we've done this but I think it was on attempt three we would run through the second provider and attempt four we would run through the third provider and we would run it through four to five different providers. provider. What does it
like like a skip tracing provider like all the names you've heard smart skip
through propstream batch
skip all these different ones
and from there we created this concept where we were we knew how to layer each provider um so we don't use any of those providers but we're basically working with data aggregators and layering it the same way. So the interesting thing is when they get information from you guys, it might not be a sole source. It might have multiple sources and you guys are trying to figure out what's the best piece out of this to produce to the customer.
Correct.
Okay. So they're doing some work instead of an end user saying, "Well, I'm going to use these two products. If this doesn't work, then I'll do that one."
That's probably happened way before they get you gave them information.
Correct. And it saves the headache of what what we used to do and basically what you're saying of having to develop your own method and testing and so forth to like figure out okay I use this provider first then this guy second after this many attempts and a lot of people aren't analytical so it's not really I guess their cup of tea so but we we kind of take that pain away for them.
Huh. So let's say why would somebody use your product over like PropStream or Batch or whatever. Well, as a user ourselves and somebody who has a real estate investment company where we find offmarket deals, I mean, just pure accuracy for one, we're a little more expensive than a lot of these providers. Um, in some cases twice the price. But if you understand the value of a deal, and a lot of times, you know, it's 40 to 50,000 easily, unless wholesaling, let's say, is 15 to 25 on average, flipping, if you're finding your own deals, 40 to 60 on average. And then there are way bigger margins. the the cost of a deal um is huge. So if you're shooting for something, there are some of these providers that are half the cost of us. They're 30% accuracy. So how many deals are you losing out on? And if you lose out on one deal at the end of the day, it's costing you more to go with the cheaper guy. Not to mention all the other tools we have that kind of cater to niche sides of the the industry like uh the dirty deeds, you know, title curative title stuff that y'all do.
You know, something I think folks forget about is they look at what what what would you say a price per unit would be right now? Like a price per record said it was
on a skip trace 15 cents.
Okay. So, I've heard people say I can get it for six, I can get it for eight.
Yep. Well, back when we were wholesaling commercial real estate, and we would literally skip trace a list of 5,000 phone numbers,
well, that comes out to be a lot of money.
If you're doing distressed property, like extremely distressed property, if you got a couple hundred people in your list, it's a pretty nice list.
Yep.
And then when you step back and say, okay, the difference in me paying seven cent, seven half cents or 15 cents, it's double,
but why wouldn't you spend the extra money to get the better data? Because like you said, you're going to make 40 grand, 50 grand, 200 grand. What are you thinking, man?
Yeah, exactly.
Spend the money, get the better data. Spend the money, get the better lawyer. Spend the money, get the better private investigator. You're going to get on deals and profit so much faster.
Yeah.
Than folks that are trying to cut I'm going to call the lawyer. That's a good deal. Dude, that guy's not going to know what he's doing.
His answer's bad. You're not going to get your thing fixed or paid. Like,
come on, people.
Or even if you want to run a simple method like, yeah, use a cheap cheap company out there. There there are some providers that are as cheap as three cents. Use them first. see what you get. Maybe you get some lowhanging [clears throat] fruit and then very quickly run through somebody like us that's a high quality provider. You'll probably save some money there. You know, especially if you're running, you know, higher higher volume lists, you know, five or 10,000 properties, you might knock a,000 or 2,000 off, let's say, and then what they don't get you, then that's where we can come into play, too. So, there's you you don't just have to use the most expensive guy. Whereas, like with a lawyer, you don't want to swap from cheap guys to [laughter]
Yeah. it's not going to be a good situation. So,
so in y'all's product, are people pulling a list in your product? Are they bringing a list into your product? Does it store in your product? How's that work? Like in your user interface?
Yeah. So, it starts with you having some kind of information on bulk skip tracing. You're going to provide first, last name, uh mailing property address. We're always using the mailing address in case there's absentee owners. people might not have ever lived at that property. If it's if it's always been a rental or if you've cleaned an LLC, there's definitely going to be no affiliation between the personal name and the uh property. Or if you have any piece of an information like I had said earlier, let's say you've got a guy like you're searching for an heir for instance, and you know his name is John Smith and he lives in Charleston, West Virginia. You can run that search on us and we're going to give you every John Smith in Charleston, West Virginia. Um, and you might be able to find some links there through the relatives because you've already got the obituary in that case. And then you can start linking uh using the obituary to to create links for the right John Smith. Or you might have to call through a couple, you know, but at the end of the day, we're not actually we're providing you results for the data you're putting in. So you do have to have some something names, addresses, city, state, stuff like that.
Now, how does that connect? What would you call what do you all call it? a relationship or a relative or what do you call that connectivity to another person that's associated with your person?
Yeah. So in the software it's a relationship status. It'll say
status.
Yeah. We use general relationships. So like sibling versus brother, sister, parent, spouse, neighbor, we'll have co-orker, employer, stuff like that.
Wow, that's actually good information. I would always wonder like how does that become available? What do you mean as far as
like co-orker or employer? Like I'm I'm asking myself where does where are those records like aggregated? Like how does that actually
So yeah, again like where we're getting our data from. We're able to pull all that in.
So I've hunted down more people than I can count, you know, in the days.
And when you're in this place where like there's there's property involved, it's a house or a ranch or something. It's just there
and you're trying to figure out, okay, I want to find the person associated with this. First thing I would do is look immediately for that person. Then I would dump their information into Google, see if anything else came up. Yeah.
Then I would look at a relative, which would be a child, a sibling, or a parent. Sometimes they're easy to find, sometimes they're not. Um, then I would look to neighbors.
And then if I I would also go to social media and look through that, see if I could find them and find other people with similar names or whatever on their profile. But as some of the software started to get better, we realized that the relationship part of that was easier. It's far better to instead of having to go do all that research, rely on what's in front of you. So their dad is telling people, well, why are you gonna go through all this genealogy research if you can go to the the docket and an ad lightum has done some of this work for you? It's available right there. Just use that. And they say, well, the the data is not perfect. It doesn't matter. Get two or three on the phone and unravel it. Well, the same here. You can go do all this research on the internet or why not open up the file, open up the program, put the name, the address, and what other information you have. And if you don't get the person there, start looking at relationships inside the program.
Yep. It's so much faster trying to get people on the phone right now than it is digging all over the world on the internet.
Yeah. I mean, I data is never going to be 100% accurate. Even if you aggregated every data source that was open source available, it still wouldn't be 100% accurate because again people data takes time to be relevant to come about. Someone changes their number, it has to go through the data pipeline to become available and so forth. And even in the case like I this doesn't happen often but we actually had a deal we did created a little bit of issues with the real estate the closing company we were using but a person was listed in the obituary as a son when in fact they actually weren't right.
What'd you do?
Uh we used a different closing company. It [laughter] was will because we had two affidavits signed st and the guy was homeless and there was no way to find them. I mean I guess there was but we weren't going to hunt him down when we had two affidavits and another closing company said we can close this and get you insurance. No problem. Right. So, we just went to them. But again, there's inaccurate data created by the source of the data that knew the exact relationships the daughter, the true daughter had done the obituary, right? But still, so that all plays into I guess what I'm saying where data is not 100% accurate and kind of touching back on what you had said.
Yeah, that makes sense. How did you end up doing this as a business? Because guys don't wake up and be like, I'm going to produce data and sell it to people. Yeah, especially in the software space because we have no technical like we're not technical co-founders. Um, I have no computer science background. My my background is accounting, finance, and then construction and real estate. But, you know, just like every good business starts with seeing a problem that's relevant. A lot of people are having it. It was the problem for us that everybody was talking about was just aggregating this data properly and and formatting it so that it's kind of usable in a seamless fashion. And that's where we're like, okay, we can still go out there and get relative data and skip trace data and address history and all that, but how do you do it in a manner where I can actually like create add it to my process like a piece of the puzzle? Before we were using spreadsheets and word docs and we were color coding numbers and spreadsheets and it it was a nightmare. [laughter] So we actually for about a year and a half quit the whole like deep prospecting probate you know unless it was easy like all right there's a list of errors I know who to contact now but and then we just said man we should we should build something that kind of solves this problem and that's the path we went down. And
so when was that? That was uh 2023, December 2023, and we launched in August of 24.
How long did it take to make this thing work? Like to get a testable version.
Longer than it should have. Um [laughter] it was like 8 to nine months. So
So at this time, you guys are house flipping, doing real estate deals, and doing this?
Yep.
Okay. How many guys is it that run y'all's business? Is it you by yourself? You have a partner? What's that look like
on the real estate side?
No, on the business side, the Smart Script product.
Okay. So the smart skip side um my bro it's mainly me right now we have a CTO um we had a dev shop which is basically think of a general contractor and they have in-house engineers
front end backend people whatever we're weaning them out and we're building our own internal team right now and so we have one engineer um on staff we're going to be hiring another engineer probably in the next two to three months so that's basically a team of three my brother he's He's also a founder with me, but he's more on the real estate side till smart skip really starts getting rolling and then we'll figure out kind of how we maneuver from there.
And y'all mostly offer products to the real estate space or is it to other spaces too?
I mean, you could skip trace anybody. We've got people that are doing um what is it? Unclaimed funds, uh debt collection, some property managers that deal with evictions, um just any it's skip tracing, skip tracing.
I could see there. I mean, there's a huge demand for it. Like obviously they're massive companies like the Thompson Reuters, the TLO's, like Idi Cors. There's a there's a big well-developed market.
Yep.
You see private investigators, you see car repo companies, debt collectors, like you said, folks in the real estate world. Um, but they all just need to find somebody and find them fast and find them accurately, I guess.
Yeah, exactly.
So, tell me what the real estate business looks like because that's where this all started.
Yeah. Yeah. I mean, so it's funny. We're we're a mom and pop style business. It's me and my brother. We had two guys on the phones.
When was this when did you guys start?
Well, we started flipping in 2015 and then slowly but surely we figured out every step again, you know, you see a problem. We figured out there was a better way. So, like we bought a house or
we got our real estate licenses, right? And uh we were like, man, offering on the MLS as an agent. We're like, this isn't worth it. There's these cool guys called wholesalers. We'll start buying from them. Oh, yeah.
Then we then we saw a wholesaler make 55,000 which I'm cool with. We made our 40 or whatever 35 um back then. So I didn't have any issues with it, but I was like wholesalers can make more than 10 to 15 a deal because you always heard the 10 to 15 number from the educational guys and whatnot. So then we started that's when we kind of got into offmarket. We do a little bit of wholesaling but we basically flip or keep it as a rental. Yeah, we're mom and pop um style business. We're not massive. We don't want to be massive on that side of the business. We do uh two years ago we did it was like 27 deals. Um last year we we hit a little bit of a slow spot. Dialing and stuff kind of started getting heavily regulated as far as service carriers getting involved and blocking people. And that was a six-month debacle we had to unravel, but we got that straight. I think we only did like 14 or 15 deals last year.
How did you deal with that? switch dialers. And then my brother, honestly, you all talk a lot about how you all use your cell phones and he just sucked it up and said, "Man, on these deeper records,
call him.
Call him." So, now that that's proven working, we're actually going to do like Gab Wireless or something. Get him one of those uh $30 a month phones. So,
upstairs one of the offices, a pile of burners.
Yeah. But I mean, they're legit phones. They use a Verizon network, right? So, and they work.
Yeah. you just only have call and text. You don't have anything else. So, but yeah, so that's kind of how we navigated that. Now, we're back up and running. And uh I think we're at like six or seven deals so far this this year.
You guys prefer to do flips or do y'all prefer wholesaling? How about rentals? How's that mix look?
Uh I think if we had our way, we would be full-fledged software, but
Okay.
You can't you and then the rentals, of course, we're always going to be real estate. We own a mobile home park as well. So like whether it's commercial, bigger commercial, small commercial, one to whatever we do, we're always going to be like backed by real estate as far as wealth goes
in your business currently right now, you guys are flipping, wholesaling, and making rentals. What's kind of what's the uh what's the predominant business lineup?
Yeah, I mean the flipping I think it's just something we deal with. my bro
we we
it's one of those things like everything sucks at some period and you know for periods of time over the history of doing something like you're never most people don't wake up every day and love man I love flipping houses like there are days that just suck same with my brother on the acquisition side like there are days that just suck you're not getting any deals whatever right like you go through laws it's a eb and tide game it's a hamster wheel but we just deal with it. I mean, it it produces income. It produces rentals. Um, we built a decent portfolio. We found our mobile home park this way.
Sounds like rentals will always be like a backbone of it.
I mean, they've you've got to have some kind of cash flow, income based assets.
It's hard these days because if one of the challenges I ran into with single family rentals is you can pick up three, four, five, 10, 20 of them. But for us, it was like buy three, get one free. So, we buy three houses. Usually those are on the east side, poor condition. We're buying them with cash. So we're spending 20 to 40,000 each. So we'd spend 100 grand to get three. We'd sell off two of them and make 30 to 50,000 in profit because we're buying them for less than they're worth. So our third one was free.
So recapitalize. So we now have to go do three deals to add one in the portfolio. Three deals, add one in the portfolio. But every couple deals, we had to take that money because you got to like pay bills and live.
Yep.
And after a while, I was like, why don't we just use debt? Well, then I started running this model of like 30, 40, 50 houses at the price we were paying with debt, debt service, taxes, insurance, and then cash flow. And I was like, crud. Like, this is tough. Like, some of them would make $200 a month.
Yeah.
400 bucks a month. I'm like, God, we have to have a lot of houses and your cash flow won't really grow until you get those notes like knocked way down. That was something we ran into with the
cash flow on the single families.
Yeah. Yeah. And I mean that's all like all there there's so many variables that go into the rentals. Um, and it's a balancing act. So we have
What state are y'all's in?
Virginia. We're in the Norfolk Virginia Beach basically to
What's the rental look like there? What's it cost? What do you collect on it? Expenses, things like that.
So we we actually do Well, but we run the Burr method. So we're not buying anything close to rent ready. Most our rentals, all new electrical, brand new plumbing, brand new HVAC, brand new windows. Like these are the the bigger deal like flips that most people would do. So, it's a lot of front-end work, but the back end looks like no maintenance. I mean, our maintenance runs at like 10%. We self-manage because they attract great tenants, and it our life's just easy. We average um cash flow before maintenance is like 620 per door.
What's the house cost up there roughly
for us? No. Um more like what are they worth? Like more.
Yeah. So like do single families average 3 to 400 in like in the rental space that we're talking about, right? Three bedrooms, four bedrooms, C++, B minus kind of neighborhoods, maybe B's, but
Dang, that's that's that's good pricing for like that. I that's fairly strong pricing. you know, and then the category two to four unit market's extremely undervalued in my opinion, which is why we love to tackle duplexes.
Why is it undervalued? What makes you say that?
Because when you look at we're becoming a major metropolitan area. We're I think we're 2.2 million people. So, we're not New York City, but we're starting to become like a Richmond or I don't know how many people are in San Antonio, but we're growing to that level. So, the the multi-unit house hacking kind of thing, it's not really like it's not a a stat or it's not a um thing that people really do. Like, it's it's people do it, but you go to places like Long Island, for instance, and everybody's gobbling up duplexes so they can afford to actually live in Long Island and own a house.
Oh.
So,
do you think you might have good upside over the next 10 years? Values will really come upwards possibly.
Yeah. In the short of it, I I think as we continue to grow and become more of a major metro area, two to four units are going to become a huge opportunity for home buyers. I mean, it's going to become a necessity. If you make 80,000 a year and you're a single person and want to own, you might not be able to buy a single family house.
Gosh, I know it's scary. It's that happens all across the United States with a variation in income. And I read statistics the other day that said it was like 25% of the cost of a typical new construction home had to do with like permitting, taxation, like red tape, development stuff, basically 25%.
Geez. And then the timelines that go into permits are insane. Yeah.
Right. That means houses are getting more and more expensive.
And I think the jobs the value of a job trails like right behind that because at some point people can't buy houses, they stop buying them.
Yep. and jobs slowly start to catch up, then the houses will run again. It's like those two kind of
Yeah. I mean, the real estate market's probably one of the biggest indicators like economically
what's happening now. The weird thing is you got stuff like on the West Coast, for example, their homes are so expensive relative to what a person can afford. They have many homes have multiple generations in them. Yeah.
And then they've got 50-year mortgage.
So instead of being 30 like us, they finance it for 50. It's like it gets so far out of hand. I don't know how that happened.
Yeah. Let me go back to something you said a minute ago. So you you talked about um like the legal risk. Some of the outbound stuff was starting to get regulated and we're starting to have problems with it a while back. When it comes to data, are there legal constraints on the kind of data that can be offered? Um how you use the data.
Yeah. So I mean there's like regulated and unregulated data or unregulated data. Regulated debt is essentially going to be um anything that comes from um like financial documentation like mortgage information, stuff like that. So if you go buy a house and that data is sold, there is still
Oh my gosh, they sell that.
Go figure, right? Um
how do how do I not how do I opt out of that when I get a new credit card? Do I sign it and says you can't sell my data? Like
I think you can go to like individual companies and uh opt out. I see I don't the only thing I have is a mortgage. So
yeah,
I don't you know all my all my debts commercial debt. So my numbers nowhere to be found. Um so I've never had to deal with that, right? But
but yeah. Um going to providers asking them to uh opt out, they're going to have to comply.
Oh wow. So, let's say I didn't want to show up on any skip tracing because my phone melts with like we've hundreds of transactions a year for 12 years now. Like, I'm always getting a text message about some [ __ ] and I'm not even I don't even know what's happening because there are guys running those business lines.
So, if I were to want to opt out of all this to try to stop those calls,
I would have to go to all kinds of places, 50 places to opt out.
I mean, you can register with the DNC list, but that's not a year. not going to make it regulated D.
And I can't and even if a fly by night wholesaler does that and I send him a demand letter, you got to pay me. It doesn't matter.
Yeah.
It's funny though. There was a there was a guy locally who got known for as soon as he would accept a cold call or somebody would cold call him about his property, [clears throat] he would answer the phone, he would take the call, act like he was interested in selling, get their information, file a lawsuit. I knew a guy who this happened to. He talked to his attorney and he's like, "Oh my gosh, he got you." He's like, "This guy makes 65,000 a year as a side job." And he's like, "Just settle. Offer him 1,500 bucks. He'll go away."
And that's his gig.
That was his gig. He had a full-time job and that was his side gig. Not a bad side gig. Punitive damages, no taxes,
man.
Yeah. So, we don't provide any regulated data. That's going to be the stuff that comes from
regular be like mortgage.
Yeah. Exactly.
What would be some other examples of regular data? is that
it it's GDPR um is the regulation. So it's anything that comes from like uh applications on financial institutions, employment stuff that's considered like extremely personal information. This the data that we use is pretty much considered like open- source data. Even though like we may have a phone number that another person doesn't have or vice versa or whatever, it's still considered like open source data.
So then who is permitted to use regulated data? That's going to be your license. Like collection agencies, lawyers, and pri licensed private investigators.
Oh, because they had to sign on for probably a bond, an ethics vow, all that kind of stuff.
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Correct. And also it's going to come down to the people that provide that as well. They're going to want to see those credentials because it ensures that they're not that their data is not getting abused, right? Because there's recourse for somebody that has a license.
Got it. So, how much better would you say regulated data is versus non-regulated? Because if you got a a quality rate of maybe 80%, how much better is regulator? Because materially like order magnitude, you got 80%'s enough to make a business work,
right? Right.
Like how much better would it get if you go through all that extra hassle to to get a license or do that? What more do you get out of it? Do you get to 99% data? Is it that good?
So if you actually like went through and tested the data, like TLO is a [clears throat] well-known provider of regulated data and it's it's pretty hard to get like a license with them to use their product. We actually went through a bunch of data that uh they had and we had and did a comparison of the two and it's pretty much it's just hit or miss. They might have a number we don't have sometimes and sometimes we have the number they and they don't have it.
So it's not really it doesn't really come down to are they better. If you have access to something like TLLLO, I would say use both sources and when one doesn't work, use the other. And actually, you'll find like if you go to Reddit and there's a lot of private investigator forums, they'll be registered with everybody
and they'll talk about how they'll hit four or five different providers all at once. Now, they're not doing volume, right?
Oh, if they're trying to find one, let's say they have a client that whose child's missing and they're trying to phone number of a neighbor who used to live there because they think they might have some information they want to track them down, they'll run that in like five different providers.
Yeah. from from what I've seen in the forum. Okay.
I've never been a private investigator before.
And then they'll produce like a report in that forum basically saying this one is how I got it or they were all about the same or whatever. You're getting feedback.
Correct.
Because for them accuracy is key and and they're not high volume um right per se. Right. But the other thing is the regulated data providers, they're not doing bulk skip tracing. So if you have a file, let's say you've got a thousand properties and somehow you could get access to a regulated data system, you're not going to be able to bulk skip trace those thousand properties, [laughter]
you're going to have to go through one by one, produce reports, PDF, print, print the PDF the reports, save them, download them, whatever. So it's it can work, but not in mass or in volume. I would almost say even if you have the option to get regulated data, you might be better off going unregulated because you can pull that in volume and get through more and have a better workflow than if you literally have to trace one by one by one by one.
Yeah.
So like I would say, all right, maybe we run a report of like x amount of properties, say a bundle of 25, and you can run that report, burn through the list, and then go back and record who you talked to, who you didn't, the ones you didn't talk to. Then you would go and deep dive one by one on those.
Correct.
But mine out the ones that you can just call through with a dialer right off the bat. That would be very efficient.
Yeah. And it's funny, that's kind of how our process moves is bulk tile
and then move s on the investment side, right? The real estate side,
bulk dial and then move the niche ones out of there.
That after three or four attempts, the bulk dialer just kind of falls on its face. So you move those niche ones out that are worth going after, you know, one at a time. So, it's funny you say that, but like that's that's a good process because you're hitting the lowhanging fruit with the easiest, fastest method possible and then spend your time on what's really valuable.
If someone's got a limited budget, what do you think the best way to approach finding that vacant property at the end of their block and they're new and they want to get into this? How should they do
as far as a business goes? Right. You're not saying like they're just looking to get in touch with one person one time. Well, I would say someone who's like, let's say there are a lot of people listeners out there that haven't really gotten full-fledged in this space, but they've been researching, learning, and they really want to do it and they don't they're not willing to commit a massive budget to it. They're just trying to be thoughtful, but they want to nab a deal or two this summer. Where do you think they should spend that money? How do you think they should go about it?
I'd I'd probably if you don't have the budget, you've got to put the time into it because every everything takes time, money, or both, right? So, I would probably focus niche and I would focus on the right niche properties and I would also stay within my realm of knowledge cuz I know a lot of people want to go deceased right out of the gate. That's a whole another learning curve and you can overcome the learning curve, but there's also properties out there if you just want to get your first couple going where you could go like a live tax delinquent and vacant properties and maybe you saw it and it was distressed, overgrown, whatever. That's a property that I would deep dive that just right out of the gate. hit the owner, it's unsuccessful, and then like you were saying, you start calling ne neighbors, relatives, and so forth. And then I would let it cool, move on if I had no luck to the next property that's similar. So vacancy, tax delinquency, and deferred D is like the term for, you know, physical distress. Those are your three biggest like indicators. And then if you layer deceased in there, that's huge, too. So, how would you tell someone that's new to layer deceased in there again with a reasonable budget?
I mean, it's it's really the same thing. It's just how in my opinion, it's how much work do you want to do cuz you're dealing with multiple people, right? So, you might have four errors, six errors. My brother just worked on one. We we ended up letting it go. Had 21 errors and he hadn't even finished the file. So, we're like, "All right."
Was that up where y'all are at?
Yeah. Yeah.
What was the story? How'd you come across it? What happened? started digging in, found one heir.
Where'd you find But how did you find the lead?
So, tax delinquent,
deceased owner, pre-probate basically,
um, and vacant. And he he just started digging in and started unraveling it. Started building out what we thought we had as a family tree and it was like seven people, but then like six of the seven were dead that
Were heirs. And then you just started unraveling it, and it started passing to multiple.
"And he's doing this through research or through calls?"
"A combination of both."
"Okay."
"So, because once you start getting that deep and the family's detached, they start to lose like connection. So, they're like, 'Yeah, I think John had two kids, but I don't know what happened. I think their names were Andrew and Susan.' So, then you now you're now you're researching because they don't know anything past that. But yeah, so it got to 21s. Um, you got to know when to stop. I think someone in [laughter] your group, my brother went into the DPA group and said, 'Guys, this is the situation I've got.' And everybody was like, 'You better have a real big margin if you want to keep going on that,' and we just decided to let it go."
"You know."
"I'm glad you did. I'm going to take a little credibility for that people saying big margin because years ago before I really pushed that hard, all these people would tell me all these title problems and all this stuff and I'm like, 'I'd always lead with, but how much is the property worth?' '$97,000.' 'I'm like, how are you going to make a h 100,000 on a $97,000 property and there are taxes and people to pay and lawyers to pay?' Yeah. And I just remember walking around for like two years on every podcast, every time we do an event. 'Is the juice worth the squeeze? Is the juice worth the squeeze?' You say that a lot. And I started to hear people's now I think it's inherent. If you can't make enough money, why do the deal? But people get really trapped in this. 'I'm going to go fix this problem and solve it.' They get mesmerized. I'm like, 'Don't forget you're here to make you're here to earn a living.' So I'm glad that he got that good guidance."
"Yeah. Yeah. And you've you've been through it from beginning to end on not I'm sure not."
"The good ones and the terrible ones."
"Yeah. Exactly. So, you know, even if there is a $100,000 spread across 21 heirs, by the time you track them all down and then you deal with the hiccups and then this person all of a sudden you didn't know had has proof that they they paid property taxes and."
"Let me say it this way. 100 grand sounds like a lot. Okay, there's 20 owners. Let's do it this way. Now there's $5,000 equity each."
"Yeah."
"You have to be able to buy for $500 a piece to even make it worth a shot."
"Without a and."
"Yeah. And."
"Zero hiccups."
"Yeah. Exactly. So, what's the probability of getting 20 people to all agree to have unanimous consent who haven't already?"
"Yeah."
"It's like."
"It's a lot of work."
"You're trying to pin the tail on the donkey from a mile away with your eyes closed. Like, it doesn't work."
"Yep. So, that going back to like where where should people start though, like with the deceased owners, that's just something, you know, kind of the banter that we're we were just going over, whatever. That that's the kind of stuff you're going to deal with. So that's."
"Does your platform point out deceased in it?"
"Yeah, it does."
"Okay. So, tell me all the fact patterns. If I were to run Logan Fulmer in there right now, what all pieces of information would I be able to see about Logan Fulmer?"
"So, it's going to show you if if you're deceased or not, which you're clearly not. [laughter] Address, history, um, it's going to give a list of phone numbers. We can run the caller IDs on them. So, for like a caller ID, people always ask me, 'What's a caller ID?' It's the same thing as if somebody's not in your contact list on your phone and they call you and it says John Smith or maybe John Smith or however they all present it different ways like the service providers that's the caller ID because John that's John Smith's actual phone number and that's what the."
"Oh, account owner."
"Yeah, the account owner basically all the relatives associates their phone numbers their most recent addresses and then the relationship statuses."
"That's and then we do provide emails as well."
"That's what I was about to go. What about emails? We don't use email that much. There are times in the past we had. We don't."
"Yeah. I mean, we provide them, but email's such a hit or miss game. So, phone phone numbers are better as far as being able to manage quality. Put out a picture."
"No, we don't do that. No license. No, no driver's license information, none of that stuff."
"Oh, that'd be regulated."
"Yeah."
"Yeah. I think I think that's probably enough information right there to say, do I think I have the right person? Can I get on the get on the phone within a couple minutes and decide is that them or not and then decide what your next step is?"
"Yeah, for sure."
"Now, that record does it need to be printed or do you guys have a way where you can store those records so you can um go back to them simply?"
"Yeah, good question. So, the records we actually have a records page which is pretty much it's a search results page. Any manual search you do, no matter what it is, it's going to store that file and it's a dynamic interface um where you can actually like so for instance the guy with the budget."
"Who's just trying to dig at a couple properties here and there um we have phone statuses so he could actually manage a file."
"Um, it's not a CRM, but there's phone statuses there's a little notes section um, you can also print it to PDF if you want."
"Sweet. Yeah, just save it in boom save in your file."
"Yep. And the Other thing you can do too which a lot of people are doing is each record has its own individual URL. So you can copy and paste the actual like up in the website bar the URL into let's say you use Salesforce or Pipe Drive or something copy and paste it into your notes or message board it'll create a link and you can immediately just navigate back to that file. So it kind of works as like an integration without an actual integration."
"I like that. Where's skip trace where where has it changed in the last let's say three to five years? Is it basically the same way everyone's been doing or have stuff evolved?"
"I mean it's really just what the company's how they want to do it the science they want to put behind it and the value that like the accuracy they want to provide. I haven't seen data really change much. It's all still readily available. It's just how are you sourcing your data that's going to create the overall product that you provide to your customers. So we we pride ourselves on quality data, right? Like we could go cheaper so that we could charge cheaper to try to do more volume, but then I feel like we're doing customers a disservice because I know what the value of a deal is as a real estate investor."
"So, real estate investor would be your highest paying client, I would bet."
"Funny enough, actually, those solar panel companies, cuz we we've talked to a couple of them, we've had some use us. Um, they're making upwards of around $40 to $50,000."
"Per install."
"Per install. So, now I didn't get too into the details because that's not what the topic of conversation was, but I they're they're also up there."
"Gotcha. So, they'd be good."
"Yeah."
"I would bet private investigators technically that is B2B, but that's lower volume. They're not going to have as big of a budget. They're not going to be running as many files. When you're talking about."
"Solar who's [snorts] going to lead source to go sell a bunch of this stuff, they're trying to push a sales team. They need a lot of data."
"Yeah. So, they're going to be like real estate on the bulk dial kind of side. Are the home services getting into that stuff yet these days? Because people are really starting to get sophisticated and say, 'Let's go in these mom and pops home services business and brand them, ramp them up on sales, train them on administrative, and hire a bunch of crews to go service.' I'm seeing that a lot."
"You mean like a roof like roofing companies, stuff like that?"
"Yeah. HVAC, roofing, plumbing."
"Yeah. I mean, they're starting to cold calling's, funny enough, it's one of the most time-t tested methods, marketing strategies, but yeah, the services industry or the trades are starting to really get into that as far as like a BTOC method."
"Yeah."
"Window companies, roofing companies, tree companies, a lot of cold calling."
"Yeah, I think that I asked myself if I were in those services, how would I want to find customers? And ultimately, you can have someone on commission comb an entire neighborhood and there are many sales in that neighborhood."
"Yeah. And I mean, let's be honest, there's only a handful of marketing strategies, right? There's like bulk dialing, like B, there's dialing, bulk, and manual kind of one. Um, door knocking, direct mail, PPC, Facebook ads."
"Yep."
"And there might be one more that I'm not thinking."
"Radio, TV, and billboard. But those are I would imagine those are getting a lot of pressure right now from the other ones."
"Yeah. Radio TV billboard. Yep. So there you go. There's only eight marketing strategies in total."
"And a lot of them require you to go see that billboard and call. Now company can spend money and cause leads to come in, but for us, we're going to be proactive and go fine."
"Yeah. I mean, I I love outbound over inbound."
"You you have the element we feel a little bit more control over it. I don't know if it's psychological or if it just works better on for us or maybe [snorts] like maybe it works better for your team as well or it's what we do. But."
"Um, it definitely has that element."
"We've never found much outbound marketing [snorts] worked well. We mailed out contracts to people. We did mailers back in the day. We did PPC."
"Yeah. For us, when we're trying to find people that are in this situation, half of them don't even know about the situation or anything can be done about they're not actively sourcing per solution. So, we've got to call them and talk to them about it, find out if they're interested. But us doing PPC for this."
"Man, not a chance in the world. It wouldn't work. I spent $20,000."
"This is 2018 or 19, like 20,000 over several months. And this guy was like, 'It's going to work. It's going to work. It's going to work.' And finally by like four months I'm like, 'Dude, I'm done pumping money in this. These leads, they're not what I want.'"
"Yeah. We've we've done some inbound with Google ads. And we you find that like a lot of times those are the people you're the third call or the second call or you're the first call before they call three or four other people right after you."
"That's what I didn't like."
"Yeah. And it's just super competitive. We didn't do PPC back in the day. I'd imagine there was a time and place where it was great, but now too, you know, everybody's their own Google Ads experts. They get in and they fiddle with it. Well, they're just jacking up the auction pricing, so you're paying more per click [laughter] and they're just burning money. Yeah, we we wasted a bunch of money on PPC. We did a couple deals, we got it back, but it wasn't our cup of tea."
"It wasn't what we thought it was going to be."
"Yeah."
"Is there any is there any like legal risk? I realize like texting and cold calling is changing. If people are using this for a main outbound lead strategy or source, what kind of legal risk are coming stuff on the forefront? Should people be more aware today or should they just call?"
"I mean, I'm not going to advise anybody. Um."
"What are you seeing? Like what are you hearing?"
"There was just a uh there was just a case that um Wow. What state was it? Anyways, a a guy was actually he was being sued for calling somebody on the DNC list to see if they wanted to sell their house. And I think I'm I may be partially correct um or I may be 100% correct, but I think the judge ruled in his favor that he wasn't actually soliciting because he was reaching out. No different than if I."
"Yeah. So."
"Trying to sell somebody a product. Exactly. Harassment's still a thing though. [laughter]"
"You call me 40 times quick."
"Yeah. Yeah. So I think the biggest thing is just run a legit business, right? Like don't pound the same people over and over and over again. If they're not interested in selling, move on or or move on and let them rest for six to eight months. Come back to them. You know."
"I like that. I tell people all the time they I had somebody the other day who called me. I don't know how wind up on the phone when they got through and they said, 'I've called this person about 15 times. I went to their house four or five times. I knocked on their window. I talked to their neighbors.' And I was like, 'Uh, dude, you're stalking this person.' And they're like, 'But but they have to but how do I get to them?' I'm like, 'You got to them. They left a yellow notepad on their door. They wrote a note.'"
"They heard your message, dog. You got five voicemails. I don't want to drag someone out of a hole. I want to call somebody and see if they want to play ball. And if they do, let's play ball. But I'm not trying to drag somebody out of a hole. Like, there are times in our early days of our career where I've been to somebody's house 15 times. I get it."
"Yeah."
"But you're just young and naive and trying to get a deal to work. And at some point you realize I'd rather go to five houses three times or three houses five times than one house 15 times."
"Yeah. Exactly."
"Spread that time out. Find someone who answers the door and says, 'Yeah, man. I'm glad you're here. This is a mess and I'm down to figure it out with you. Let's do that.'"
"Exactly. And then those properties where you're not getting in touch with people like you were saying, run that at a pace like don't hit somebody 15 times in a week. [laughter] So now now you're just making them ignore your calls."
"I heard a wholesaler say they had like I can't remember what they called it. He's like for the first seven it was like seven days of hell or something is what he called it. He said when their information is in my CRM we call them like three times a day for seven days. He said by then we abandon the lead."
"They called him over 20 something times in the first seven days. That's their process. He said that's how we work. That's how that's just their thing. I'm like wow."
"Yeah. I mean, if you use what's the rule of thumb it's like seven to 10 times or is that what it is or okay you always hear some story too some guy I called him for the 25th time and I got the deal but like."
"Get a business like that though."
"Exactly. And that's one guy in a Facebook group of let's say 30,000 people who got that one deal. So I mean that can be."
"Wrong as well. Yeah."
"But that's not what everybody's doing."
"Yeah. It's not working in at scale because we would all be doing that then. Right. Cuz we're actually measuring data and we're figuring out what works. [snorts]"
"We don't have a way to measure on that side of it because we'll just use cell phones to call. But it would be interesting to see how many calls we've had to make to get to people, how many calls we've had to make to close a deal. You know, I've got guys that will give me rough numbers like, oh, every fifth call I get something inked. I see typically some of the guys that are most targeted about their data in our office will say one to five, basically within five calls, I'll get someone to agree to a deal and they're like data scientists. Yeah."
"Then some guys are like, you know what, it's usually about 30 convers not dials, conversations."
"Yeah."
"It's about 30 conversations to get someone and they're less sophisticated with their data targeting basically. I hear those, but I also would I wouldn't mind seeing data because as humans sometimes we're so far in the forest we can't see the trees."
"Yep."
"And we would be so wrong it's not even funny."
"So."
"Yeah, I mean, that's why the tracking the data is good because you can't anecdotally do everything."
"Right? So I think we were like 250 correct numbers is how I was measuring it. So actual conversations with homeowners to get a deal is how we were. But we're running things a little different. Y'all are going very deep in the weeds. We kind of go in the weeds a little bit and then we also hit more of like stacked kind of stuff. Less niche."
"So you are using a dialer in that way."
"Yep."
"Yeah. Because making that volume of calls to a cell phone would be pretty tough."
"Yeah. [laughter] And and you just got to bang through people at that point too. So right those are lower priority but your people also know too like."
"There's they they have systems in place where they don't want to work with more than x amount of errors because they they just understand the data stolen like that that becomes too hard of a system or a deal to try to put together like we were saying earlier."
"So that all plays into it you know."
"Yeah. Folks sometimes forget about what is ahead you know when you have two or three owners. Great. But it sounds really fascinating to say that you did a deal that had 10 owners or 15 owners. But they also, it's important to remember that I need to get this deal to cycle. I need to get it these sellers paid. I need to close my problems out. I need to resell it, make some money. And if I'm doing one or two deals at a time, I need one to close every 30 days. I got bills to pay. You know, things like that."
"And people miss it. And I hear them say, 'Well, I got this deal with 15 owners.' I'm like, 'Yeah, how long you been working on it?' 13 months. Man, I hope you're doing something else to keep your bills paid along the way."
"Yeah. No, exact. I mean, I don't Yeah. I don't think the number of errors or that plaque that you get or credibility you get pays the electric bill, right?"
"No one cares about that plaque except for you, dog. [laughter]"
"Well, Matt, this has been fun. What else anybody need to know about your product? Actually, where do they go find it?"
"Uh, smarts skip.io."
"That's the name. That's the web address. That's it."
"Yeah."
"Okay. What else they need to know before we sign off today?"
"Uh, I mean, I think that's about it. It's a pretty simple product. It's easy to use. If they do have any questions, there's an intercom chat widget, so you know, product questions or anything like that, they can always reach out through that."
"Someone from the team will take care of them."
"Nice. Love it. All right, buddy. Skip trace data. You want to figure out how to find people, you want how to get a hold of them, Matt's your guy. That's all we got today. My commitment to you is to deliver the most interesting, messy, and profitable real estate deals on earth. And in exchange for that, I only ask that you subscribe to this podcast and share it with a friend who can benefit. Let's dive in."