How to use PropStream software for Real Estate Investing
PropStream is like a good Swiss Army Knife.
It does so many different things for real estate investing, and when you don't have it, you just feel lost.
Finding ARV and Comps
If you want to find the best part of town to get deals in, a good tool to use is PropStream.
To find those hot pockets in your market, you can use their analytics tool in the upper right hand corner of the maps and that's going to color code the map based on whatever you're selecting.
So if I wanted to know the parts of the city with the highest valued properties, I could see that they're clustered on the north side. But if I wanted to see what parts of the city had the most growth in the last year, I can kind of see that that's clustered on the south side.
They even have preset lists that you can look at.
So if I wanted to know where most cash buyers were active, I could do that as well. I could also do even more specifically and look at Flippers, which means a property that was purchased for cash but then re-listed on the market sometime after that.
So just that quickly, I can see that it's most expensive on the north side, it seems to be growing on the south side, and the west side seems to have a lot of active cash buyers and Flippers.
I could then even zoom in closer on the map to figure out what individual neighborhoods in those areas have the most activity.
So let's keep going and jump to analyzing deals.
This step is all about running your numbers. That's going to be finding your ARV, estimating rehab, and putting things into the Maximum Allowable Offer formula so that you know what to offer to the seller.
If we start off with ARV, which stands for the After Repair Value, Propstream can help us with this.
As an example, I found this fixer upper, which is for sale for $165,000. Now, you might be thinking 165k for a fixer upper is a great price or it's a horrible price, but we actually don't know the answer to that question until we know what that property would be worth after the repair is done.
So this is where we need to look for a comp that is similar to this subject property but has already been repaired.
You can pull up the property and hitting the Comps tab. You start looking in that neighborhood at recently sold homes, and you can find the property listed there.
So as I looked through which properties in that same neighborhood have recently sold, I came across a property that is one bedroom bigger but was completely renovated and sold for 227,000 just three months ago.
So this is a good start in seeing the possibility of what our subject property might be worth after it's renovated.
A benefit to using PropStream over something like Redfin is they generally have a bit more data.
For example, on Redfin, we couldn't see any pictures of this renovated property, but on PropStream there's a ton.
Also, Redfin wasn't able to show us the square footage of our subject property, but on PropStream, we're able to see it.
A downside to PropStream is that they no longer have MLS sold and failed listing data.
This can be a bit of a bummer if you live in a non-disclosure state like Texas, which means when you pull up a property in one of those states on Redfin, you're going to see the last list price and not what the property actually sold for.
We all know that as the market gets hotter and hotter, properties are going for over their list price, sometimes by ten, twenty, $30,000 or more.
So you're kind of missing that information. Now, PropStream used to have this data until the National Association of Realtors, who owns the MLS, pretty much made it illegal to share MLS data with people who aren't licensed Realtors.
Now, this is a conversation for another day, and there's a lot of people out there talking about this in terms of, should you get your real estate license, is it legal for the National Association of Realtors to have such a monopoly on the MLS, etc.
I'm not going to get into that. But what you'll see on PropStream is you no longer have the actual sold data, but you have an estimate of what that property sold for. So in this case, they are estimating that the property sold for quite a bit over listing, but that's not a 100% sure bet.
Now, if you don't live in one of the eleven non-disclosure states, then even though you don't see that sold data on PropStream, you will be able to see what the property sold for just right through Redfin or Zillow.
So if you are in a non-disclosure state and you really feel like you're missing out on getting that true sold data, pretty much your options right now are to get your real estate license yourself, or to build a relationship with a Realtor who can run comps for you.
Now, I tried to do a little research to see if there are any other softwares out there that can give you that sold data if you're in a non-disclosure state. And it seems like the National Association of Realtors is cracking down on all data providers, and won't allow anyone to give that information to a person who's not licensed as a real estate agent.
It seems like we just hear more about it happening to PropStream because maybe they're one of the bigger players, but I wasn't able to see any data provider that can give that information in a non-disclosure state.
So build a relationship with the Realtor, get your license yourself, etc.
If you are gonna run comps on PropStream though, one thing I really like that you can't really do on Redfin is you can select the comps you want and then generate a comp report which puts all of those comps together in a very organized and professional-looking PDF, which is going to make you seem more professional when you send that to your cash buyers and it's probably gonna help you create a better relationship with them.
One cool thing I like about PropStream, is that as you select the different comps, it's going to average out the pricing for you to show you the average price per square foot, the average price sold for those comps that you selected, and help you easily calculate the average so that you get your ARV.
So those are some good options to choose from but just remember that whatever tool or software you use, you still need to understand the fundamentals of comps. You want to be able to select properties that are similar enough to your subject property to give you an accurate understanding of what it might sell for after the renovation is done.
If you just go to Redfin or to the Zillow estimate, you have no idea what their backend algorithm is doing to select that number, so those are not the numbers you want to use. You want to use a tool or software that lets you look at all of the properties that meet the criteria, and then you can choose from those yourself to get your ARV.
Now, for finding the rehab budget, this can be a little more complicated for a beginner if you don't have past construction experience, so I put together a free rehab calculator that has some prices baked into it so that you can get an estimate of how much a roof should cost, how much it should cost to lay new flooring, et cetera, et cetera.
I'll say that my tool is like a wrench. You need it, use it. It also has a free trial. So what are you waiting for?
Finding Leads
Once you're good at analyzing deals, the next step is to start marketing to potential leads.
For finding leads, I again use PropStream most commonly to pull a list and so I can look at all of the vacant properties in my area or all of the properties that have some type of lien, but I can also stack different criteria to create a more customized list.
So for example, I can select owner-occupied properties that are single family, have been owned for 15 years or more and have at least 75% of equity.
You can also stack using their quick list features so I could look at all of the vacant pre-foreclosures.
For example, a free way to find potential leads is to call up your local county and ask them for a specific list which would be properties that have had their water shut off for example or properties that have outstanding fines for having junk in the yard or not cutting their grass.
These lists are usually free or maybe just a couple of cents for them to print them out for you, but they do take a lot of time and effort to find the right person at the county and build a relationship with them so that they give you the list.
But on the other hand, anything that takes more time and effort for you to get means it also takes more time and effort for other people to get which means most people are not going to do it. So if you do it, you've probably got a gold mine of good leads that you're the only person trying to reach.
If using lists isn't something that interests you, you could also go driving for dollars which means you drive around your town and you identify properties that are likely in distress and likely have a reason for wanting to sell their property for cash.
Driving for Dollars
So to drive for dollars, I use both PropStream and DealMachine.
As you can tell, I'm already using PropStream a lot so it's just super nice that it has a built-in driving for dollars feature.
With DealMachine, I really like the design of the app and I also like that I can send out Ballpoint Marketing direct mail letters directly through the DealMachine app and they're free.
The way that I started out finding all of my leads is to just look for distressed properties listed for sale on Redfin or Zillow. Finding these deals take a lot more time than using those off-market methods that I discussed before, but on-market is free and it's how I got my first few deals.
So regardless of how you decide to get the leads, once you've got them, you need to contact them and if you're doing on-market, just contact the listing agent. That's the person who's representing the seller, and you do all of your negotiations and offer-making through them.
If you've got a list of leads that aren't on-market, you can do things like direct mail, which I mentioned I use Ballpoint Marketing (discount code: Lili) letters for, and there's definitely less expensive options than that.
Direct Mail
For direct mail, you can send out cheaper options both through PropStream and through DealMachine.
I will say it's important to keep in mind that cheaper is not always better. With those less expensive, like yellow postcards, people just automatically assume they're spam and pretty much throw them away without ever reading them.
I really like the Ballpoint Marketing letters because they come in an envelope rather than just being on a postcard.
So people are more likely to open that brightly colored envelope and then also the printed message that's on there looks like it's handwritten with a pen, so it just seems much more personalized and much less spammy than some of those cheaper options.
So that's something for you to decide, based on how much you have to spend and how well you want those pieces of mail to perform.
You'd likely have to send out a lot more of the cheaper ones to get a good response and likely fewer of the more expensive ones to get a response.
I also pair the direct mail that I use with Call Porter (discount code: Lili), which is an answering service, which basically means that when I send those letters out, people get them, and the number on those letters is not my cell phone number, it's the Call Porter number.
They answer the call for me and if the person is interested, they qualify the lead. Then they will make an appointment with that person and put it on my calendar so that I can then go out to the property and make them an offer.
A cheaper option, which this isn't something that I do personally, is to hire a VA (virtual assistant) to answer those phone calls and schedule your appointments for you. And a free option is you can just put your number on all of those direct mail pieces and have people call you directly.
Skip Tracing
So regardless of who's making the calls, in order to get the phone number of the people on your list, you're going to need to skip trace it.
I do my skip tracing through PropStream, which costs me ten cents per phone number. There are other skip tracing services out there, like Batch skip tracing. I've never tried them before for, but they are definitely an option for me.
I try to use specific services that do multiple different things for me, rather than trying to piece together a bunch of different ones, which is why I stick with PropStream for a lot of the things that I use.
I also like PropStream skip tracing because they recently introduced Do Not Call list scanning. So whenever you skip trace a list for whatever numbers it returns, it will tell you if that number is on the national Do Not Call list.
So whenever that happens, I remove those numbers from my list so that we're not cold calling people who are on the Do Not Call Registry and we'd have to worry about them suing us.
Also, we're no longer using just Google Voice to hand dial our cold calls. I cold call through ReSimpli, which is a CRM, which we'll talk about in a moment, but they also have a single line dialer, which lets you just work through your leads one at a time and call them directly through the ReSimpli desktop app or through your phone app.
There are other dialers out there which can do single line dialing or triple line dialing, and triple line just means that three different leads get called all at once. I believe it works in the way that when one person answers, the other two lines just hang up. I think that's how it works. I haven't tried any of these out, but I know that Batch has a dialer that you can use and I know that Mojo Dialer has one.
I've heard good things about both of those but I haven't personally tried them out.
Managing your Leads
So once you've got your leads and you know how to contact them, step seven is to learn to manage them.
Lead management systems can get super complicated, but the things that I think are most important that your system can do is, one, organize the leads. You don't want to just have a bunch of sticky notes and random pieces of paper with people's names and numbers on them.
You want your system to be able to track how well things are going.
How many leads are you contacting a month? How many offers are you making a month? And what's your average profit per deal?
You’ve got to know these things.
Then, you want a system that can follow up with your leads to the point where it automatically sends out text messages or ringless voicemails, or it reminds you to go in and manually do those things.
I used to use free Excel sheets and Notion templates for this, and it was actually a mistake. I was horrible at following up with leads. I didn't keep things very organized. As soon as the Excel document or the Notion document got too long, things just were all over the place.
When somebody asked me to call them back on this day, I forgot or I couldn't connect the number with the person that I had cold called in my Google Voice.
Using Excel or Notion is like having a screwdriver. It seems perfectly reasonable at first, like it works, use it, it's cheap, but then you get a drill. And this is how I view legitimate lead management systems.
The system that I use is ReSimpli, and I know another popular one is Podio. Now, the screwdriver seems perfectly good, but once I have to screw in more than one or two things, it's over.
I'm not using this, especially once I know I get to use a drill. So basically, if you're serious about wholesaling, is this something you're legitimately going to be doing?
Get a drill, stop using the screwdriver.
So that's why I now use ReSimpli to keep track of all of our leads. So for each one we can see if we've made contact with that lead or not, as well as what list the lead came from and how we're trying to reach them and has a bird's eye view of all of the leads, we can see where our money is going.
So for right now, we're focusing on cold calling and on doing direct mail. The cold calling cost us just over $200. That number will go up at the end of the month when we actually pay the cold callers.
For the direct mail, you see, that costs over $5,000. So it's important to know how much you're spending on each type of marketing and how much money that type of marketing is bringing in.
If the cold calling costs me $200 but brings in $100 and the direct mail cost me $5,000 and brings in $100, well, then you know which one I'm going to go for.
But on the flip side, if I'm able to see that the direct mail brings in much more than that five grand, I can make a decision of where to put future money and to reinvest into what type of marketing.
If you're doing other types of marketing like bandit signs or door knocking, they could go here as well.
Closing Contracts
So when you move to the next step, it's your contract and escrow system, which essentially means how are you putting deals under contract and how are you closing them.
You'll need a title company to close, but that's not really a tool. But in order to put deals under contract, you're going to have to get those contracts to people and get signatures so you could print them out and drive over to the person's house or wherever you're going to meet them and have them physically sign the contract.
That would be just about free, but this is an example of where free isn't always better, because printed contracts, to be honest, people just don't want to deal with them that much.
So using an online signing tool like DocuSign or Dot Loop is going to be much more convenient, much faster, and it's going to make you seem like much more of a professional who knows what they're doing.
Finding Buyers
Once you've got a deal under contract with the seller, next is your disposition system, which is finding a buyer.
You can find local meetups and collect business cards completely for free. You can also use sites like Bigger Pockets and Facebook to find buyers.
I've also started keeping my buyer's list in ReSimpli the same way I keep all of my leads in recently. For any interested buyer I meet, whether on social media or in person, to send them a link that allows them to put their own information in so they can add themselves to my buyer database.
That way, when I get a deal, I can just select which buyers I want it to go out to and send them a booking email or a booking text with all the details.
START YOUR REAL ESTATE INVESTING JOURNEY TODAY!
So, now that you've gotten an intro to PropStream, are you ready to start? My link gets a free 7-day trial of the Propstream software, just make sure you have the code LILI included at the end of the trial link!
You can also use my Free Resource Pack to help get your real estate investing journey off the ground. It includes:
- My Offer Sheet Template
- My Phone Scripts for Calling Real Estate Agents
- The Wholesaling Deal Tracker
So what are you waiting for?
Start your real estate investing journey towards financial freedom today!
