Real Cost of Bad Real Estate Data
Jack Butala: Real Cost of Bad Real Estate Data. Every Single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala here for Land Academy. Welcome to our “Cash Flow from Land” show. In this episode, Jill and I talk about the cost, the real cost, of getting data from an old or a bad source. Jill, I think this topic was designed for me. That’s how much I love this topic.
Jill DeWit: I do too, though. I get calls on this all the time.
Jack Butala: There’s so much …
Jill DeWit: I have a lot to say about it, too.
Jack Butala: Oh, good.
Jill DeWit: Yeah.
Jack Butala: There’s so much bad data, and only a few places to really get good data. Before we really get into it- and I can’t wait to get into it- let’s answer a question from a member.
Jill DeWit: Okay. This individual called in. Her name’s really Bernadette?
Jack Butala: Yeah, that’s what she said.
Jill DeWit: Okay. I haven’t seen that name in a while. That’s a pretty name. It’s a long name. Bernadette from Maine says, “I concentrate on buying property at online tax sales. Why would I send out a mailer, too?” Ooh, I like this question.
Jack Butala: Yeah, and I love this question, too. That’s why I chose it. Jill and I have, in a million different ways, said that … It comes up with Driving for Dollars and everything. What Bernadette’s doing, and my hat’s off to her, because it’s great, I think … She’s going out and seeking an opportunity out. She’s either logging on to, let’s say, BidForAssets.com, or there’s a lot of little web sites … Florida has its own web site where they auction property off, I think every single week or every other week.
That’s great, but what she’s doing is actively going out and finding property. You could use this for Driving for Dollars, which we all think is awful. You could do this to search through the MLS, multiple listing service. What you do when you effectively do a mailer is that you reach a million people, or as many people as you possibly can, very intelligently, by choosing the people that you think are sending you the message that they want to sell their property or at a reduced price, and then you’re having them contact you.
Every morning, you wake up, you open the mailbox and you look at the phone, and there’s 15 messages in there and a ton of mail in there about all the purchase agreements that you sent out, and they’re bringing it back to you. You’ve sent it out, but it’s all coming back. It’s so much more efficient from a time standpoint and from a financial standpoint. You’re not actively waking up and seeking out properties to look at and review.
Jill DeWit: It’s just so much more time efficient, I think. You’ve talked about … You want to wait, you want to spend all Sunday finding a good property and doing all your research, and then next Sunday you got to do it again, and next Sunday do it again. How about we send out one mailer, let everybody call us back.
Jack Butala: Right.
Jill DeWit: I already know the area, already done my research, I know all of that in this area.
Jack Butala: Right, Jill. It’s all coming back.
Jill DeWit: Totally.
Jack Butala: Plus, you send … We get calls regularly from 2005, 2006 mailers that we sent out, and everything in between. People get these offers. We’re not sending postcards out, by the way. We’re sending out offers. They get these offers, they put it in a file, wherever the paper file that they have regarding this property that they own. When two, three, four, ten years later, they pull it out and say, “Wow, you know what? I do want to sell this now.”
Or they get the tax bill, they pay it, and they open that file. The last time they opened the file was a year ago. They open the file and they see the offer there and they look at how much they’re paying in the taxes, or “Do I want to pay a check or get a check? Do I want to pay these county taxes, or do I want to get a check and just be done with this property I’m never going to use?”
Jill DeWit: I like that. Is that in the e-book or in the program? I’m trying to remember.
Jack Butala: It’s everywhere.
Jill DeWit: Okay. I love that example, because you have a picture of a tax bill and it shows … No, it’s really great. It’s like a 40-acre property or something, and they owe $1,000 or whatever, because they let it go for a few years on taxes. They’re staring at a bill for $1,000, but then they also have a letter from us saying, “I’ll buy it for 2 or 3 or 4 or whatever it is.” Yeah. Gee, I would … It’s not hard to make that decision. “I can pay 1,000 today or get 4,000 tomorrow. Hmm, let me think about this. Am I really going to use it?”
Jack Butala: It’s incredibly effective, too, if the person that bought the property is gone or deceased and the heirs, or the kids, are looking at this thing saying, “I’d rather just have the 4,000 bucks. I don’t want to pay 1,000. I’m never going to use this property. My dad thought he was going to use it, but he’s not.”
Jill DeWit: Right, exactly. That was a really good question.
Jack Butala: It really was, and it ties into this data thing, too, what the show is actually about. What’s the real cost of bad data? What do we mean? Let me take a couple steps back and about 30 seconds, explain what our basic business model is here. We acquire data from a tax roll. The source of the data is from a tax roll in any given county. Let’s use Elko County, Nevada, as just a random example I just thought of.
Elko County, Nevada, just like every other county, it has a huge list of people that own property. It’s called the assessor’s database. They make an assessment on the property and they send out tax bills every year. That data is incredibly important to title companies, because they write title policies and they have a huge vested interest in managing and using that data to their advantage so they can write insurance policies.
We get data from a title company, and we analyze it and crunch it and scrub it and take out the ones … We reduce the data set down to the point where we only are looking at properties that we want to buy and for the right price. Let’s say in Elko County, Nevada, we only want to buy five-acre properties, we only want to buy them for $500, we do not want any back taxes on them, we want to make sure there’s no loans or mortgages on them, and just to be safe, we don’t really want to contact anybody whose property has an assessed value of, I don’t know, more than 5 or $8,000. Let’s just say $10,000.
We don’t want to send a $500 offer to somebody who has five acres with an assessed value of $14.2 million, like it’s on Las Vegas strip or something. That’s a waste of money. It’s a waste of your time, a waste of a postage stamp, and it’s a waste of … You’re going to really upset some people and get some bad feedback. The business model is get the data, crunch it down to where you want very intelligently, and then send them an offer.
In this case, we send offers out for five-acre properties at $500 all the time. We teach that, and our members do it, and they buy a ton of property. If you want to independently check that out yourself, go to SuccessPlant.com. It’s where everybody in our little group gets together and talks about the successes that they’re having or where they’re stuck or basically anything to do with what we do here for a living.
Then we buy it, and we resell it online through social media, through our web site, LandStay.com, and all of that. That’s been our business. It’s what the free e-book’s about, and it’s been … I’ve been doing it since the late ’90s. Jill’s doing her nails again.
Jill DeWit: No, no. It’s all good. It’s a perfect explanation, I’m just sitting here enjoying listening.
Jack Butala: The question is why … You got to have the right data, or none of that’s going to work.
Jill DeWit: Right. Let’s back up. I want to hear the cost of … That’s the right way. Tell me the wrong way. I have bad data, and what could that do to me? What is bad data?
Jack Butala: Bad data is data that you can purchase from a reseller or that you get possibly directly from the county. You’re buying data from somebody who doesn’t have a vested interest in having really, really good, high-quality, fresh data.
Jill DeWit: Fresh.
Jack Butala: There’s several places you can buy data on the Internet, and most of them are bad.
Jill DeWit: They’re old.
Jack Butala: We are a licensed seller of data for First American Title, one of their divisional companies. It’s actually their data company.
Jill DeWit: Provider. We’re a provider.
Jack Butala: Yeah. We’re a licensed provider. That’s exactly how it’s said. What did I say?
Jill DeWit: Seller. We’re a provider.
Jack Butala: Oh, provider. We have the access to … First American has a direct feed to 98% of the counties or 99% of the counties in the country. They link their databases up. This is not a sales pitch. We don’t mark this data up. We provide it at the same price that we have agreed to get it for, which is five cents a record. Whether you buy three records or three million or thirty million.
That’s the good data. The bad data is … If you just do a Google search, real estate data, there’s lots of places. One in particular is called Agent 24/7 Pro, which is … It’s not so much that that data is bad. It’s geared toward houses. They possibly could be a reseller of this data, so I don’t know. I don’t know what the source of their data is. I tried to find out, and they just really didn’t want to tell me.
Jill DeWit: That’s very interesting.
Jack Butala: It’s not that there’s so much even bad data, it’s just not the most appropriate data.
Jill DeWit: Can I say … Here’s my thing, too, and I just talked to a woman about this last week, who just joined Land Academy. Sometimes it’s spending your time and wasting your time and not being efficient. You might have good … She was telling me a story about how she went to the county and she got some free data, which is great, but it took her weeks to decipher it, figure it out. Then it’s not in a form that she could use, too. It didn’t come in an Excel spreadsheet that you can really work with.
Jack Butala: Let me interject right there, because the source of all this data is directly from the county.
Jill DeWit: Right.
Jack Butala: If you call most counties, most of them will say, “Oh, yes.” Because it’s a matter of public record from a statute standpoint, they assessor’s database has to be available.
Jill DeWit: It’s not free, though, always. [crosstalk 00:10:32]
Jack Butala: It’s not always free. Sometimes they’re going to send you a green bar stack of paper off of an IBM printer from the ’70s. Yeah, Jill, you nailed it. Yes, you can call a county. Sometimes it’s free, sometimes it’s not. For sure, I’ll tell you this. Here’s the tragic part of this. Every county’s different, so the format that you … Unless you have a PhD in data analysis, it’s extremely difficult, in my opinion, for most people … I’m speaking from experience, because we have a lot of members who struggle with this, or struggled with it with a couple of our competitors.
What they teach is … Our competitors teach go to the county, get this data, try to get it for free, get it on a disk, and then hire …
Jill DeWit: A VA.
Jack Butala: Yeah, hire a virtual assistant to break it all down for you and put it in the format that you want.
Jill DeWit: Here’s my point. My point on that was, that’s great, I can get the data. I’ve got in in my hands. I send it to a VA, but they can’t properly do what I need. I have to be able to understand it first. Sometimes the format that it comes in, not all the things jive. It may not make sense. You’ve got to understand it first before you can even give it to someone to have them do it.
Do we want to … I described what I can get done in an eight-hour day in this, and what you can get done, how an eight-hour day would go there. It’s very different. You and I, it’s serious. I know you, because you’re a pro, you could get this data and have a mailer ready to go in not even two hours.
Jack Butala: That’s right. That’s not the goal of somebody who’s new at this.
Jill DeWit: No.
Jack Butala: You know why that is? Because the data every single county is the same. The columns and the data is all structured in the same format, whether it’s in Massachusetts or in Oregon or everything in between. It’s not hard after five or six or ten times of analyzing this and going through it to really get to understand it really well and be really efficient at it.
The other thing, too, that I’ve noticed about county data … Oh, I know how to do this, by the way, because I did it all the wrong ways. I did it the wrong way for a long time. The other thing about county data is that a lot of it’s missing. Yeah, the law says, “Yes, you have to make this database accessible,” but they don’t say you have to include lien values and amounts and all kinds of stuff.
Sometimes you get the data back, you spend some money on it, you get it back from the county, and it’s just APN … I saw a data set like this. It cracks me up. It was just a big huge list of APNs, assessor parcel numbers, the person’s name, and their address.
Jill DeWit: That was it. You got nothing. You don’t know the size.
Jack Butala: You don’t know assessed value.
Jill DeWit: You don’t know the value. Don’t know where the taxes, you don’t know the … Wow.
Jack Butala: One of the reasons that our method is so successful over other people’s methods is that we take out- and we do this for houses, too- we take out properties that have mortgage amounts. When you’re negotiating with somebody who owns a piece of property, and they have a mortgage, they’re absolutely tied to the mortgage value of that property. That’s the rock-bottom price they can pay. Usually it’s even higher.
When they don’t have a mortgage on a house or a piece of land or anything else, they can sell it for whatever they want. This gets incredibly overlooked. We don’t even bother sending them … I don’t even ever send a letter to anybody who’s got a mortgage or a lien on a property. A mortgage is a form of a lien. A lot of the data that you get directly from the county doesn’t even go into that much detail at all.
Jill DeWit: Got it.
Jack Butala: What’s the cost of bad data? Jeez, if it’s not obvious by now …
Jill DeWit: Oh, my goodness.
Jack Butala: Let’s say you get a bunch of bad data, you send everybody a letter. Not bad data, you just don’t use it right, or you get it from the county, and it doesn’t have all the stuff that you need. It’s not your fault. You send them out a letter. What’s the cost? The obvious cost there is …
Jill DeWit: Your time, up front.
Jack Butala: Your time. The amount of money that you spent on postage and all that, and then, in there is a … Sending those $500 offer letters out to people who own $25 million property, that’s not going to come down well on you.
Jill DeWit: Right.
Jack Butala: You don’t want to do that. It’s going to tie up your phone and cause some people to be real angry.
Jill DeWit: You know what? That just brought up a good point, too. If I got a letter, and you were so far off, I would question your knowledge in this industry, and that might make me look at you differently, too. You want to know what you’re doing.
Jack Butala: A great point.
Jill DeWit: I didn’t think about … I just thought about that. You do want to come across like you know what you’re doing. You’re making a reasonable offer and you’re going to stand behind it. When you do it all right, and if someone calls you back and says, “I really think it’s worth 2,000. Let’s talk about that.” We’ll go from there. Maybe I might come up to 700. I don’t know. We’ll figure it out.
If you have any questions or comments, please feel free to email me directly at steve@LandAcademy.com.
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