Some of the best real estate investment deals crop up when you get the chance to buy vacant, distressed, or otherwise rundown properties. While these properties have several advantages, they also come with one big downside: their owners can be all but impossible to find. Fortunately, there is a way to find owners of distressed or vacant properties, even if they have skipped town or traditional outreach methods aren’t effective. It’s called skip tracing, and we’ll break down what skip tracing is and how real estate investors can use it in detail.
What is Skip Tracing in Real Estate?
As its name suggests, skip tracing involves finding a property owner that has “skipped” town. As a real estate investor, you can use skip tracing both to close a deal on a property you’ve already discovered and to find new potential investment opportunities. Skip tracing isn’t only used for real estate investment, of course. It can also be used for tracking down those subpoenaed by a court, fugitives, and more. But all of these requirements have the same core difficulty. Many people who skip town don’t leave many clues behind, so finding them can be tough. To find people who have skipped town, real estate investors and organizations can hire skip tracers. These professional and private investigators can use specific search techniques to locate individuals even if they have left town by searching through computer databases, gathering clues, and more.
[ Thinking about investing in real estate? Register to attend a FREE online real estate class and learn how to get started investing in real estate. ]
The Value of Skip Tracing for Investors
Skip tracing can provide a lot of value to real estate investors. For example, many distressed properties are abandoned by owners or are otherwise ignored while the owners leave town. Real estate investors can sometimes locate these motivated sellers and get a great deal for their investment. However, a real estate deal can be next to impossible if a property’s owner has skipped town. After all, most deals will need their signature to proceed. So skip tracing can help investors close deals on distressed properties depending on those deals’ circumstances and requirements. More proactive real estate investors can use skip tracing to find new distressed properties and seek out new deals. It all depends on the type of skip tracing service or professional you use.
For instance, certain skip trace services will provide only a basic spread of data on individuals, like their home addresses and known phone numbers. Other skip trace services provide even more in-depth information on property owners and the properties themselves, including mortgage details, last sale dates, criminal records for the owners, vehicles owned by the owners, and so on.
Bottom line: real estate investors can use skip tracing to secure deals for distressed real estate or locate owners who may have real estate they’re looking to offload. In either case, the odds of purchasing the property for a great price are higher than average.
Real Estate Skip Tracing Services
Although skip tracing as an industry is relatively limited, there are multiple services that real estate investors can and should check out. Note that in all cases, you’ll want to hire a reputable skip tracing service; avoid overly cheap services or those with bad reviews, as they may resell outdated and useless information. Some of the best skip tracing services include:
Melissa Data is less of a skip tracing service and more of a data provisional service that lets you research owners and property yourself. This service gives you tons of useful data on individuals or properties, including mortgage information and how many properties a person owns. You can then purchase credits to acquire even more in-depth information. All charges are on a per-record basis, so it can be quite cheap if you only need information on one person or property.
Skip Genie, a skip tracing service created for real estate investors in particular. As a result, all the data they provide is very relevant for investment goals. This service provides information for individuals and properties alike, including email addresses, owner names, mailing addresses, and so on. You’re charged at a monthly rate based on how many searches you think you’ll require, or you can be charged on a per-record basis if you use Skip Genie’s “bulk record” search feature.
Data Zapp, a standard contact information service that also includes a database for vacant properties, individuals who own multiple properties, and properties with out-of-state owners. Enterprising real estate investors can use Data Zapp to find great deals ahead of time. Pricing is on a per-record basis, or you can pay ahead of time for multiple orders and get a slight discount.
Reonomy, a property data provider designed for multifamily and commercial real estate properties. Using this service, real estate investors can acquire owner names, tenant details, and more information. Even better, you can browse Reonomy’s extensive database and look for properties you want to target during your next investment cycle. This service charges a monthly fee, but you get unlimited property data for the cost.
PropertyShark, is an excellent skip tracing service because it offers information on owners for LLCs comprised of residential properties. Note, however, that this service is only available for certain markets. Should it work for your needs, you’ll get detailed information on every property in your target LLCs, including building permits, owner contact information, recorded documents, and more. You’re charged a monthly fee to get access to one county’s data; if you want to check out the data from multiple counties, you have to pay a monthly fee for each.
Picking the Right Skip Tracing Service
While it can be wise to spend money hiring an excellent skip tracer or securing the data from a quality skip tracing service, you must take care to choose the right skip tracing service for your needs. You should specifically pay attention to a few major variables and factors and ensure any skip tracing service you hire includes them. These factors are:
-
A good amount of data
-
Recent data – nothing is worth less than outdated data
-
Good experience level from the skip tracer(s)
-
A reasonable price for each trace or document pull
-
Reasonable access to private information you couldn’t just get from a Google search
Summary
In the end, skip tracing is just one more tool that real estate investors can use to make the most of investment opportunities that involve abandoned, distressed, or otherwise subpar properties. Finding the owners of such properties can be difficult, but skip tracing gives you the tools and data you need to get them on the phone and convince them to put their signature on the dotted line.
Ready to start taking advantage of the current opportunities in the real estate market?
Click the banner below to take a 90-minute online training class and get started learning how to invest in today’s real estate market!
