Creating an Absentee Owner List

Investors who are finding it difficult to compete will usually receive advice to build an absentee owner list first, as this allows them to skirt the edges of the competition and find juicy off-market deals. If the phrase is unfamiliar to you, absentee owners are property owners who don’t live on the property they own. The owners may reside in the area or in a different part of the country, and use said residence as their primary address.
Finding an absentee owner may seem like an intimidating prospect. They are using a different property’s address in all of their their public-facing information.  It’s difficult to know their status as absentee owners just from their public profiles, but there are a few tricks you can use to build an absentee owner list, such as:

Try to Secure the Services of a List Broker

This is useful if you have no experience with the creation of an absentee owner list. A list broker can help guide you and provide tips. They have experience in the field and can make suggestions regarding strategy and area targeting.

Prioritize High Equity Absentee Homeowners

This should be self-explanatory, but the main problem is finding out the LTV (Loan to Value). This is used to calculate the equity. It could be difficult because it relies on comparing the original mortgage amount with the current home market value, but since the current loan balance is credit bureau information, it won’t be public. The workaround is to exclude loan payments from the LTV. A list broker will be helpful in this regard, as they might be able to access information that’s limited to credit bureaus.

Consider the Logistics of Printing and Postage

Creating an absentee owner list is a numbers game, so in an ideal world you should get as many leads as you can. However, you will be limited by the printing and postage budget. So if you are sending out more than a thousand letters, it would be more prudent to break it down into smaller batches. This helps avoid minimum order charges.

Decide on the Kind of Property You Want to Buy

You have to play to your strengths and focus on your preferred properties. Many investors choose single family homes because it’s simple and straightforward, but you might want to mix in condominiums. It could muddle up operations, but the increased potential will more than make up for the additional headache. The important part is to decide which strategy you are more comfortable with.

Take Into Account the Size of The Absentee Owner List

You should decide on your plan of attack based on the size of your list:

• If your list ends up smaller than expected, you can choose to loosen up on the criteria used to winnow the list, or you can expand your target area.
• If your list ends up being longer than you want, you can split the list into smaller batches, then send mail to each batch under a rotating schedule. This also opens up opportunities for split-testing, where you can start eliminating poor performing and/or invalid leads.
• Alternatively, you can also choose to expand your list if you think you can handle more. This also applies if you start getting the hang of things and expand your operations.

Decide on the Market Area You Want to Target

You should take into account population and housing density when choosing where to buy property, because this will have a noticeable effect on the size of your list.

Consider the Minor Details in Your Absentee Owner List

Some real estate investors tend to focus too much on the big picture that they miss out some small, yet useful information. These include how long the leads have owned their property or the owner’s age. Many investors have found greater success when targeting people who have owned the property for at least 5 years, and that specific age groups have different goals—for instance, younger owners have long-term plans for the house while owners that are in their senior years are more likely to sell.
Lastly, you need to remember that these tips are not rules but mere guidelines. They are not laws to be followed to the letter, but rather tools that you can use to optimize your mailing list. The goal is not to build the largest absentee owner list, but to have a list that converts more leads into property purchases.