Best Real Estate Investing Advice Ever Show Podcast

JF1065: How to Track Down Vacant Property Owners With Larry Higgins

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If you’re a wholesaler, I’ll bet returned mail is near the top of your list of problems. Larry and his company can help get that returned mail back into a lead! Hear about the houses everyone else is missing, and how to track down contact information for vacant properties. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

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Larry Higgins Real Estate Background:
-Owner and chief operator of Emprise REI LLC and its series, HomeFront Real Estate Investments
-Began career with Camden, a multifamily housing company, spent three years overseeing construction
-After jumping into real estate full time in 2013, he quickly learned that returned mail was a problem
-Graduated from Texas A&M University in 2003, where he was a member of the Corps of Cadets
-Based in Houston, Texas
-Say hi to him at larryATskipgenie.com or at skipgenie.com/
-Best Ever Book: Winston Churchill: A Life

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Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluff. With us today, Larry Higgins. How are you doing, my friend?

Larry Higgins: I’m doing great, Joe. How are you doing?

Joe Fairless: I’m doing great as well. Nice to have you on the show. A little bit about Larry – he is the owner and chief operator at Emprise REI – is that right?

Larry Higgins: Yes, that’s the overall LLC that I’m established under; that’s Emprise, and then we’ve just recently started SkipGenie.com.

Joe Fairless: SkipGenie.com… I think that’s gonna be the focus of our conversations, SkipGenie.com. A little bit more about Larry – he began his career in Camden, a multifamily housing company and spent three years overseeing construction. He’s based in Houston, Texas; we’re gonna talk about skip tracing and exactly what that is, and how he’s using it as a strategy and how others are, as well. With that being said, Larry, before we get into that, do you wanna give the Best Ever listeners a little bit more about your background and your focus?

Larry Higgins: I have a construction management background after the college, I did that for a while, I worked overseas, doing that for a while as well. Then I came home and got myself in a job I really didn’t care for too much. It just bored me; it wasn’t the company or anything like that, it was just very boring. Then I jumped into real estate. I didn’t know anything about it, but I learned really fast. At his point I’m just wholesaling; we do do some deals here and there, we’ll buy enlisted — but as far as my strategy in going after deals, as a new investor I started like a lot of other guys – you do a little bit of bandit signs, a little bit of mail, and things like that… And I learned what a valuable, versatile tool skiptracing was, and I also learned I really liked vacant properties.

Over time I just developed my own process and I got really proficient and really good at filtering lists and taking certain information, and maybe skiptracing entire lists and reaching out — instead of mailing, just directly contacting these people. So that’s kind of my strategy, and I use that just to wholesale deals.

Joe Fairless: Okay. So let’s talk about skiptracing. First, how about you define it for anyone who’s not familiar… I need a refresher on it, because other people have talked about this, but I haven’t talked about it in detail. So what is it and how do you implement it?

Larry Higgins: That’s a great question, because it can mean different things to different people. Most of the time it just means go somewhere and try and find the phone number for somebody or a new address. So if you wanted to do this on a massive scale, you can just pull a bunch of reports; people are fairly easy to find, and you’ve got phone numbers, e-mail addresses and current addresses, things like that, ways to reach out and contact them.

In another context, what I consider when you have to go in-depth is when maybe somebody passed away, or they just fell off the face of the earth, and maybe on the face value it’s a really hot deal. That’s when you have to dive down a little deeper, maybe find relatives, talk to the neighbors… You’re almost like a detective at that point, and you’re putting the pieces of the puzzle together. The ability to do one or both of those is just tremendous, because so many people won’t do it. So many people just do, say, return mail. We’re talking to a lot of people now, even the more experienced guys… A lot of people have heard “You should work your return mail”, or “Skiptrace your return mail”, the reason being nobody else is. There’s a correlation between direct mail and vacant properties.

Say you’re brand new and you’re driving for dollars – there’s a correlation there that if that mail gets returned or that property is vacant, generally those people might be a little bit harder to find. You’re not gonna be able to just dial one phone number and reach them. But there’s also another correlation — everybody loves vacant properties for a reason: a higher probability of getting the deal, a higher probability it’s gonna be a better deal.

Joe Fairless: Yeah.

Larry Higgins: So that’s skiptracing in general. As I said, it could be real broad – you just wanna grab phone numbers; maybe you’ve got a mailing list of 1,000 people and you just wanna start calling them all – no problem, you’re just taking what you get. Or you can do both – take that entire list, you’ve got the numbers… Maybe you wanna dive a little bit deeper in the data. Maybe you see the owner lives in another state now and they’re 90 years old, or maybe they’re even deceased but they don’t show up as an estate or a probate. People die all the time all over the place, and great numbers live out of will; those people don’t show up on probate lists.

So there’s a lot of little pieces that you can look at, little indicators I call them. My bread and butter – if you can get a vacant property, that’s a great indicator overall. If you can get a tax delinquent property, a lot of people love those… That’s a pretty good indicator. Then if you get an owner that has passed away, that’s obviously a lot of people like the probate.

Whatever you can do to filter business data and try and get as many of those boxes checked as you can on one property, that’s a way to prioritize and know when to dig deeper, that kind of thing. I went into too much detail…

Joe Fairless: No, I love it. The more details, the better. Thank you, this is great. So you have a mailing list of 1,000 people; how do you get the phone numbers?

Larry Higgins: One of the things unique to our services is — a lot of people have access to what they consider skiptrace services, but they’re doing a lot of manual searching. You have to go in and search each property, each name…. And you’ll get a report and it shows the phone numbers. I’ve teamed up with a guy a year and a half, two years ago; it was on a specific project – it was vacant properties and calling the owners, rather than mailing. Over time, there was an evolution that we were doing so much we couldn’t keep up doing it manually, so we put the resources into it to develop our own system, to where we can now process an entire list at once. Instead of doing 100 manual searches, we plug in a spreadsheet and we get it spit back out to us. It’s all automated at that point. So now  you can even plug it into the more popular autodialers, your voicemail drops… It’s a different way to reach out to a potential owner, because maybe you don’t wanna call him.

You could literally take a mail list of 10,000, skip trace it; we can provide it in a format the next day, you plug it into your system, and you’ve gone out and done — I think it’s a different name, but I call it a voicemail drop. Some people call it ringless voicemail. But within 24-48 hours you’ve left voicemails with 10,000 people.

Joe Fairless: And what service do you use for that? Is that your service too, or do you partner with someone?

Larry Higgins: Yeah, it’s ours. It’s our internal capability that we developed in the last year or so. We knew there was demand for it, and we thought it would be geared more towards just the higher volume guys, doing 1,000 or more a month, but there’s so much frustration with direct mail right now… It’s amazing. I call it “the yellow letter lottery.” There’s so many people sending mail to the same list… It’s not uncommon to go to an appointment, and there’s two, three, five, six other investors, and you are lucky to even get that, because they might have 50 pieces of mail. All these weekend seminars, all these classes, all these people jumping into wholesaling, and that’s the number one thing you’re told to do probably – drop mail. And everybody’s mailing the same list.

I can’t think of anybody I’ve heard in the last year to say that their response rates from direct mail have gotten better. Everybody’s talking about how the results are actually kind of going down.

It’s an intriguing concept for some people, and they’re looking for alternative ways to try and set themselves apart from everybody else, rather than just being another postcard or yellow letter in the mail type thing.

Joe Fairless: I have a list of 1,000 property addresses; in this case, let’s say I work with your company. So I have a spreadsheet, I give it to you… Do you just put the phone numbers in the cell right next to the address, so now I have the addresses plus the phone number that corresponds to each address?

Larry Higgins: Yes, it’s all in a usable format. It makes sense once you see it. We tell you if that person shows up as deceased, and if the property is not in an estate, that’s something to key in on, because it’s a de facto estate at that point. By that, I mean it’s flying under everybody else’s radar. People are tracing probates, people are tracing estates… Well, say you have a property – John Doe lives on Main Street; the mailing address is line up, and it looks like an owner-occupied house. Let’s say maybe you even know it’s vacant for sure. You run the report, and it shows up John Doe died two years ago. To me, the priority goes way up on that property. He died, it’s vacant, it’s getting run down, so that’s a key indicator to look at.

Joe Fairless: So what do you do when — yeah, sorry, go ahead; I interrupted you, I didn’t mean to. Go ahead.

Larry Higgins: That’s alright, I like talking about skiptracing, so I’ll go on and on and on, and you’ll have to cut me off. [laughter] So if you go down the way our spreadsheet is formatted, that’s one thing you can filter – see who’s deceased. Sometimes the age… Whether you use it in the cheap, low-end stuff [unintelligible [00:11:33].18] or the upper-tier providers (which we are, at this point), we all get our get our death records from the social security death index. But if that death is never reported, nobody has visibility on that death record, so it’s not uncommon to see somebody that’s 100, 110 years old that looks like they’re alive. But I tell people… Based off your list, say it’s tax delinquent or non-owner occupied, something along those lines; if you see anybody who’s 90 or older, go ahead and just do a quick obituary check. It’s worth that extra step.

You need to maximize your list. Don’t overlook these little things. You could turn that over to a VA and just teach him the process; it’s really simple. So there’s the death status, the age, then we give you address history, all the phone numbers associated with that person, and we can also show you the likely and possible relatives, so if that person does show up as deceased, “Hey, here’s some possible people that you’re gonna want to skiptrace to get their phone numbers”, if there are probable errors in that scenario.

Joe Fairless: Yeah, it’s certainly a competitive advantage that you’ve uncovered, because you’ve taken something from the surface of “Hey, you just match up phone numbers with addresses”, and you’ve taken it three levels further than that and thought through the process from an investor standpoint.

Larry Higgins: Our unofficial motto is “Built by, for and used by investors.” So we kind of know what people are looking for… And some people don’t know what they should be looking for.

But that’s not the end of the useful data; the other thing we provide are any possible e-mail addresses. I’ve just learned this from one of our clients last week. He’s using those to go and try and target the people on Facebook, as well… That kind of blew my mind; I was like, “Wow, that’s even more utility out of it.” The versatility in something like this is amazing if you make the effort, and it’s not hard.

Like I said, you could be completely automated, and just — whatever’s easy to get, you get, or you take the time and pay attention to those smaller indicators and know when you might need to put a little more work into certain things.

My general rule is the harder somebody is to find, or their heirs, the more likely it’s gonna be a better deal or a home run type deal. There might be cases where you have to get a genealogist involved. I say that because we’ve done that. I consider that a great opportunity, if I have to reach out to our genealogist and give her some information because we can’t find the heirs.

Joe Fairless: Please tell us more about that particular deal.

Larry Higgins: Okay. So that’s the house, we had a lead… I looked it up, and the owner died; they owed like $30,000 in taxes (this is in Houston). The owner died, I see her son; I look him up, and he had died, too. He didn’t have any siblings, no wives, no children. Her husband had died like 30 years prior. I just couldn’t find anything on the guy. I’m really good at going into our local county clerk, stuff like that, looking for probate records, and there was just a dearth of information on them. So I’m not a genealogist… I can do some basic stuff on ancestry, but that’s definitely not my specialty. I just knew there was a major issue at this house, and there was no close heirs, I could tell that.

So we got a genealogist involved, and I’ll never forget… It was nine in the morning, I called, I left a voicemail with the lady; I didn’t realize where she was. Well, she was in Alaska; she called me right back and she told me “It’s like six in the morning here’, but she was already up and she was really pleasant. She said, “Yeah, the person you mentioned, that’s my cousin. I haven’t seen him in 30 years.” This was a little awkward, but I had to inform her that her cousin died a few years ago, and under our heirship laws in Texas, as a cousin, she was one of the heirs.

Now, the genealogist was the one that gave me her name, and that’s how I knew how to find her… So she’s 1,500-2,000 miles away in Alaska, owns a legal interest in her deceased cousin’s property in Texas, doesn’t have the first clue about how to take care of the heirship and the title issues and things like that… And we’d found out that the house had squatters living in it. So this is getting better and better and better, but that deal alone – it took some work, and we ended up actually paying for the squatters to move, just incentivize them.

Joe Fairless: What did you pay them?

Larry Higgins: I think we ended up spending about $1,500. We wanted a clean deal, we wanted them out by the time we were closing, and not to say it’s right, it’s just the easier thing to do [unintelligible [00:16:22].15] But on that deal we paid each of the heirs $3,000; it was like free money falling out of the sky, and we double-closed on it. We didn’t necessarily want our buyer to see what we were making off of it, but it was a $150,000 deal. We were right under $50,000 all in, and we sold it for 200k.

I’m not saying you can do that once a month or every few weeks or anything like that, but my point is if you’re not looking for that, you’re rarely gonna find it. Or if you had just given up… All the signs were there – huge tax problem, and there’s no close relatives… Okay, spend a few minutes and dig a little deeper. It’s risk/reward. At some point you make a decision, “Should I get a genealogist involved? Well, there’s huge potential payoff, so yeah, let’s spend a couple hundred bucks if I have to.”

Joe Fairless: That was one of my questions – how does a genealogist charge you? What’s the structure?

Larry Higgins: We’ve only used one, and I think she’s in Canada. She’s very good, she’s always gotten results back. Our average bill — we’ve only done it a few times… I think our average bill was maybe $100-$150, and that was with us — we’re impatient, like “This is urgent, we’ll pay the rush charge.” She has a little rush charge, so we’re always like “Hey, we’ll pay the rush charge, whatever it is. As soon as you can get this…” So it’s very, very affordable, and you’re not gonna be doing it all the time. It’s something that depends on how many leads you’re working through. It’s not a common scenario, but if you come across something like that, it’s well worth your time and the risk of $100.

Like I said, in that situation, the heirs… You should be looking forward to the day that you’re notifying somebody that they are the legal owner of a property they didn’t know anything about.

Joe Fairless: We just got the phone numbers back from you; I’m pretending I paid for your services, I got my phone numbers… Now I’ve got the spreadsheet in front of me on my laptop, I’ve got my phone next to my, got my earphones in, ready to make my first call… Walk me through a phone call scenario when you call someone – or, in this hypothetical scenario, when I call someone. What should I say and what should I expect as a response?

Larry Higgins: Some of that is gonna be based off of your criteria, the nature of that list – is it a probate, or an inherited property and you’re suspecting you’re talking to relatives? Is it a free foreclosure home? That’s two different ways of talking to them.

Joe Fairless: Go with both scenarios, if you could do each scenario quickly.

Larry Higgins: Okay. Say it’s an inherited property…

“Hey, can I speak to Jill, please?”

“Yeah, this is Jill.”

“Hey, Jill. This is kind of out of the blue, but my name is Larry Higgins, and I’m not even sure if you can help, but I saw this property over at Main Street, and it looked like it might be vacant, I’m not sure. When I looked up the owner, I saw that he had passed, so now I’m just trying to reach his family or whoever owns or controls the property to see if they have any interest in selling it, because I’d like to buy it”, and then I just shut up. You’d be surprised how open some people are.

Now, that script – that’s not totally ad-hoc. That’s come through a lot of trial and error. The goal when you do this — and we actually worked with a sales trainer at one point, he helped us fine-tune it. He actually uses it with his calling center now, for people that are doing this. He has a full-blown call center.

But the goal is, when you call somebody out of the blue like that — if I just said, “Hey, is Jill there?”, she doesn’t know you; the defenses go up. It’s like “Who is this guy? Why is he calling?”, so the goal is to be as personable and just genuinely an easygoing person to talk to, and answer their questions before they have to ask who you are and why you’re calling. Then I’m just straightforward to the message.

Joe Fairless: What about the other scenario?

Larry Higgins: The other — and again, I’m not saying this is THE way, the right way; it’s the way I like. On the foreclosure:

“Hey, can I speak to Jill, please?”

“Yeah, this is Jill.”

“Hey, Jill. I don’t know if there’s a mistake and I’m really not sure, but I just saw this on a county website…” First of all, let me clarify – I don’t mention foreclosure if I’m not positive that I’m talking to the right person.

Joe Fairless: Okay.

Larry Higgins: That’s a good way to kill a deal. So once I know it’s Jill, I say:

“Hey, maybe it’s a mistake, I’m not sure. If it is, I wanted to make sure you knew that the county shows that this house – it looks like you own it – is scheduled for the auction next month (or two months, or whenever).” Sometimes I’ll just shut up right there, to see how they’re gonna tell you what they’re going through. If you’re really lucky, they think it’s already been [unintelligible [00:21:10].00]. That happens.

You’ll call them and they’ll say “Well, I would sell it, but the bank already owns it.” You’d be surprised if that happens. They don’t realize they’re still the legal owners, especially with inherited properties. The good thing there is, mentally, their mindset is they’re getting [unintelligible [00:21:27].05]; there’s no worth, no value to that property. That’s where they are mentally. If they can get anything in their pocket at that point, they’re probably gonna be happy. Probably, but you never know.

These are great questions you’re asking. We’re just a skiptrace service, but it’s hard to explain to people we’re more than just data. We give you these scripts. We will help you go over your strategy. If you’re a brand new guy, you’ve gotta make every dollar count, you can’t go pull 1,000 skiptraces on properties, we’re gonna help you to prioritize. Our goal is to get you a deal as quickly as possible and as cheaply as possible. We know that’s the only way you’re gonna stay with us – you’ve gotta see those results. One of the ways we’re doing that is the next week or two we’re gonna start weekly calls, just Q&A; what issues you’re having, whatever it is.

I like the interaction. I’m on a call like that with a guy here in Texas for something different, and you never know what little nuggets you’re get out of there that help you in whatever you’re doing.

Joe Fairless: Larry, what is your best real estate investing advice ever?

Larry Higgins: Not to beat a dead horse, but even if it’s not skiptracing, to me it pretty much involves skiptracing — but to be more targeted. I saw a guy post in a Facebook group the other day he spent $15,000 in mail since the beginning of this year, and he’s got one deal for $5,000. Obviously, I have issues with mail to begin with, but he probably wasn’t being targeted enough. There’s too much data out there from multiple sources and there’s no reason not to have a pretty tight target in your marketing. He should have got more than one deal, but those were his results.

Joe Fairless: Are you ready for the Best Ever Lightning Round?

Larry Higgins: Yes.

Joe Fairless: Okay, let’s do it. First, a quick word from our Best Ever partners.

Break: [[00:23:21].00] to [[00:24:21].04]

Joe Fairless: Best ever book you’ve read?

Larry Higgins: Not real estate related, but it’s “Churchill: A Life” by Martin Gilbert.

Joe Fairless: Churchill Life?

Larry Higgins: “Churchill: A Life.” I’ve read multiple biographies on him. He had a fascinating life; he had his highs, he had his lows, but the quote “Never, never, never give up” – that kind of sums him up. He’s just a fascinating historical figure.

Joe Fairless: Best ever deal you’ve done?

Larry Higgins: The house we spoke about earlier, where we had the genealogist involved. That was $150,000 on a wholesale deal — well, we double-closed, but that was it.

Joe Fairless: Over 1,000 episodes, and this is the first episode where we have mentioned bringing in a genealogist to close on a deal, so bravo to you for that!

Larry Higgins: That’s awesome, I get to bring something new to the Best Ever Show listeners; I like that.

Joe Fairless: Yes, you do. What’s a mistake you’ve made on a transaction?

Larry Higgins: It was really a wholesale deal, and it wasn’t that I lost money, it was that I went ahead and did the deal. It took so much time and energy out of me when it was all said and done… It just wasn’t worth it. I look at opportunity cost. Everything, all the time and energy that I’ve put into this thing… It was crazy – having to move people, and the family was an issue to deal with. I realized “This cost me money.” I made $2,000, but I was so distracted and I put so much energy into that, it literally probably cost me a much more profitable deal somewhere else.

Joe Fairless: Best ever way you like to give back?

Larry Higgins: Talking to newer investors that need even basic question, just the back and forth… I’m not that far removed from where they are. Just “Hey, how do you go find who the owner is in a tax record?” It’s something so simple, so easy to give, but they’re at a roadblock… So just whatever I can do to talk to them, whether it’s Facebook groups, on the phone or networking events. It’s a small thing, but it’s just a little way to help a lot of different people.

Joe Fairless: How can the Best Ever listeners get in touch with you?

Larry Higgins: They can e-mail me any time at larry@skipgenie.com.

Joe Fairless: And what’s your company’s website?

Larry Higgins: It is SkipGenie.com. And just a little bit of a disclosure – we just started this up recently as far as putting it out there, and we’ve done very little… But it has accelerated; we way underestimated the demand. The website is functional. It looks decent, but it is definitely a work in progress. We’re rapidly expanding our capabilities there. We have a startup mindset at this point, it’s a lot of fun. We’d love to talk to anybody if you have questions about anything. We can even give you a free search, just so you can get an idea for the quality of our content, the format of it and how we operate.

Joe Fairless: Outstanding. Well, Larry, I’ve really enjoyed our conversation, learning about skiptracing, learning about how you as an entrepreneur have developed the company and thought through the different scenarios after the number is received, and what value can you and your company add to investors to help close more deals. As you mentioned, the harder the deals are to uncover or to find, usually the better the deal, and you used the genealogist example where you made $150,000 on one deal, where you bought it for 50k and sold it for 200k. Again, not typical, but it happened; it’s real.

You do this long enough, enough times, you hit some singles, maybe strike out once or twice, but then you hit a grand slam like that, and overall your batting average is around 300-400, and that’s pretty darn good.

Thanks for being on the show, Larry. I hope you have a best ever day. I truly enjoyed this. We’ll talk to you soon!

Larry Higgins: Thanks, Joe. I really appreciate you having me on, it was good talking to you.

 

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