Building an accurate and robust absentee owner list is a powerful tool for any successful real estate investor to have in his or her toolbox.
With the 2020 housing market continuing to show nationwide inventory shortages, record-high prices, and a robust sellers’ market, real estate investors must get creative and think outside the box to find motivated sellers and potential investment or off-market properties.
An accurate absentee owner list can become a powerful source of future leads for an investor to continuously pull from and leverage to find great deals.
In this article, we’ll break down the mechanics of creating and nurturing an absentee owner list, including:
Ready to learn more about Absentee Owners Lists? Read on!
An absentee owner is a property owner who does not occupy the subject property. The subject property is no longer the absentee owner’s current home. Often, absentee owners live out of the area and utilize the subject property as a rental.
Additionally, absentee homeowners tend to not be involved in the day-to-day management of the property. If the property is being rented, they may have hired a property management company to run daily operations and prefer to remain hands-off.
Absentee owners often find themselves in a variety of different situations: they may be former landlords who no longer want to be in the rental business. They may have inherited the property and are feeling overwhelmed with how and what to do with the property.
They may have occupied the property at one point, have moved on due to life circumstances, and are now letting the property sit vacant.
The property may be in pre-foreclosure due to not paying the mortgage or property taxes. Absentee owners may also be facing financial distress and are unsure how to proceed.
There are many ways to locate and target absentee homeowners. Real estate investors can search for absentee owners of both residential and commercial real estate properties.
First, a real estate investor can be tipped off that a subject property is owned by an absentee owner by a few telltale signs.
For example, a vacant property may show the following wear and tear over time: lights are always off, an overgrown lawn, an overstuffed mailbox, a driveway or porch that remains unshoveled (if in a snowy climate), or other obvious signs of neglected home maintenance such as:
Investors can pull property records from a trusted title company. Title companies can furnish Owner and Encumbrance Reports (O&E) which also identify property owners and any potential liens or encumbrances on the property.
Depending on specific city or state guidelines, investors can request and pull county records showing properties with delinquent utility bills. Investors can also search by local tax assessor websites.
For example, a clear tipoff that a property is vacant could be records showing that the water was turned off months before. Shuttered utilities can be a sign of vacant homes and potential financial distress.
Investors can also work with a real estate broker with access to the Multiple Listing Service (MLS). The MLS will identify the owners of the subject property the investor is interested in. Depending on the state, the real estate agent may also have access to off-market or pocket listings that meet the investor’s requirements.
Off-market listings are houses that the owners have requested not to be placed on the public MLS. Well-connected real estate agents will utilize their networks and private market strategies to work these types of deals.
Investors can also browse rental listings to see if any properties have been unrented for a long period of time. This may signal that the owner/landlord has had prolonged vacancies, is unable to get the rental properties rented, and may be interested in selling.
Investors can search for stale rental listings using Zillow’s rental search function.
Investors can also use the property search feature in county records to find identifying information on the owners. These property records often list the mailing or forwarding address of the property owner. If the mailing/forwarding address is different from the subject property address, this usually signals an absentee owner.
Finally, investors can drive for dollars or hire bird dogs to conduct their field research and find absentee owners. Driving for dollars requires very little money to get started but is more time-intensive. Hiring bird dogs to pound pavement will cost the investor more upfront but save him/her more time in the long run. Both strategies are highly utilized!
Locating absentee homeowners is only half the battle. Once you have located them, then you have to contact and persuade them to work with you!
Many absentee owners may be bombarded with agents and real estate investors reaching out. Therefore, it is important that you be concise, polite, and quickly demonstrate your unique value proposition to the homeowner. You must stand out from the crowd in order to win the deal!
Many real estate investors will utilize cold calling or direct mail to reach out to an absentee owner after skip tracing their contact information.
It’s important to understand that locating absentee owners can take time, patience, creativity, and a bit of “detective” work. It may take more time than you planned in order to track down absentee owners’ updated contact information.
To build a solid absentee owners list, you’ll need a laptop or computer, spreadsheet software, or CRM to manage contacts, several list sources (free or paid), and patience!
You will need to pick an efficient strategy for finding these absentee owners. You can utilize title companies’ property lists, utility companies, tax assessor websites, or local property records websites.
Also, you need to decide the following: Will you be searching for absentee owners first OR will you be searching for subject properties first and then researching to determine if it is owned by an absentee owner?
This step is important as you will want to build a system that cuts down on your research time.
Don’t forget to run your analysis on each potential property to ensure your numbers work and that you have an accurate market value. It’s important to understand your local market and know how to find great real estate comps to support your analysis.
It’s important to stay organized and continuously update your spreadsheets and notes. Take note of all contacts and attempts to reach the absentee owner. Take notes of how you sourced the property.
Will you send direct mail? Doorknock on the mailing address, if local? Cold call or email? Send personalized, handwritten yellow letters?
If you decide to cold call, check out Wholesaling Cold Calling Script: The (ULTIMATE) Guide.
It’s important to test a few contact methods and ultimately select the strategy that generates the most responses.
Make sure to run your own numbers and understand the after repair value (ARV) and maximum allowable offer for a property.
Be courteous, firm, and always approach an absentee owner with an attitude of teamwork and creating a great solution for all parties.
Many absentee owners may not take your calls or respond to your mail requests for several months, even years. Stay patient, place the lead on a drip campaign, and create a long-term plan to follow up.
ListSource provides a few different pricing options depending on the investor’s needs. For a subscription model, ListSource will customize pricing based on quarterly or annual subscription commitments and based on the number of provided leads. These absentee owner leads will be fed to the investor based on customized search criteria.
Pricing operates on a “per-lead” basis and bulk discounting applies. The more leads generated and given, the cheaper the “per-lead” cost becomes.
Recurring subscriptions can range from $150/month for over 1,100 leads to $500/month for over 4,500 leads. These plans are available on a quarterly or annual basis. Additional customized subscription plans can be arranged by contacting ListSource directly.
If an investor would rather build out a single “quicklist”, the “Build and Buy” option allows a one-time charge. The service will quickly generate a list of absentee owners based only on the criteria put in by the investor.
This gives investors more flexibility around using and testing the ListSource product. These “per-lead” quick lists can be purchased individually.
For example, in 2020, a list of 4,137 leads costs $600, making the approximate “per lead” cost $0.15. A list of 13,800 leads would cost $1,725.
Pricing varies significantly based on the selected search criteria and whether the investor is planning to do a subscription or “per lead” plan.
The best way to find a free absentee homeowner list is to create one! Investors can pay for these types of lists with generated real estate leads (covered in more detail below).
Professional services advertising these types of lists will require payment. Many real estate investors find they can build their own list and save money.
An investor can utilize traditional real estate marketing methods to gather leads for a free absentee owner list including hiring bird dogs and direct mail marketing. An investor should also research:
Missed utility payments and differing addresses in the county property records can be clues that an absentee owner or distressed seller situation exists.
You can conduct your own internet search to locate these paid companies, or you can utilize your network. Prices will range from cheap lists to expensive lists, depending on the search criteria and the location desirability.
It is important to curate an absentee owner mailing list that gives you potential investment properties you would actually consider. There are a number of criteria you can select from when building your lists, including the number of bedrooms, number of bathrooms, estimated home value, zip codes, or property type (single-family homes, condo, multi-family homes, or commercial).
You can also find specifics around the absentee owner including contact information (mailing address and phone number), types of ownership, estimated loan to value ratios, or remaining mortgage balances or outstanding tax bills.
If a list is too small after entering your search criteria, consider other search factors to cast a wider net. If the list is too large after entering your search criteria, consider breaking up the lists into smaller segments, or narrowing your search criteria.
Don’t be afraid to reach out to fellow investors for recommendations, tips, and tricks on selecting a reputable list service and selecting the best search parameters for your investment goals.
Finally, a paid real estate investing software like PropStream can allow you to build your own absentee owner lists. Here's a video walkthrough of how to create your own list using this tool (click the link under the video for a free 7-day FREE trial!).
Direct mail continues to be a mainstay in the real estate investor marketing world. When combined with a robust digital marketing strategy, a direct mail campaign can be a powerful force.
Let’s review the pros and cons of sending direct mail to absentee owners.
If you have an accurate address for the absentee owner, a major pro is that you know you have direct access to the owner. If you have designed an attractive piece of mail, the absentee owner will be more enticed to open the mail and read your message.
Absentee owner leads can produce incredible real estate deals. Many landlords own property for a few years, then decide it's time to sell. If you reach out to them at the right time, their motivation to sell can be quite high.
Direct mail campaigns can be expensive. Do your research and due diligence ahead of time and plan out your total cost of running a long-term campaign.
Studies have shown that it can take 6-8 contact “touches” before a prospect is interested in working with you. Therefore, you must budget and plan accordingly in order to ride out this lengthy timeline.
Direct mail campaigns can take time. You have to have patience and commit to a campaign of at least 6 months before you see results. Many real estate investors often do not reach success with direct mail campaigns until they have built up substantial time and systems around the campaigns.
For direct mail campaigns to be successful, consistent effort is key. Direct mail is a long-term strategy play. It is not a “get rich quick” or “instant results”.
As housing inventory remains low, it is critically important for real estate investors to think outside the box and create their own inventory. Building an absentee owner list is one strategy that will help your real estate investing strategy and long term real estate marketing campaigns!
Have you built an absentee owner list? What strategies worked for you? Tell us about your absentee owner lists in the comments below!
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