TL;DR
- Tier 1 signals (3+ stacked): 3.8% conversion
- Tier 2 signals (2 stacked): 1.9% conversion
- Tier 3 signals (1 signal): 0.7% conversion
- Commodity absentee list: 0.4% conversion
Quality vs Quantity Economics
This isn't philosophy - it's math. Here's a side-by-side comparison with real numbers:
Volume Approach (Quantity)
Monthly spend: $5,000 - Records: 50,000 at $0.10 each - Mail cost: $0.50/piece = mail only 10,000 - Response rate: 0.5% = 50 leads - Lead-to-deal: 2.8% = 1.4 deals - CPD: $3,571
Quality Approach (AI-Targeted)
Monthly spend: $5,000 - Records: 6,000 at $0.35 each = $2,100 - Mail cost: $0.50/piece = mail all 6,000 = $3,000 - Response rate: 2.2% = 132 leads - Lead-to-deal: 4.8% = 6.3 deals - CPD: $794
Same budget, 4.5x more deals, 77% lower CPD.
Motivation Signal Tiers
Not all signals are equal. Here's what the data shows:
Tier 1: Urgent Motivation (3.8% average conversion)
Client Results
“We ran the same math on our last 6 months. Volume approach: $28,000 spent, 8 deals. After switching to quality approach: $26,000 spent, 19 deals. I used to think list providers were a scam. Now I realize commodity lists are the scam.”
— Jacksonville investor, 58 deals/year
These signals indicate immediate selling need:
| Signal | Conversion Rate | Competition Level |
|---|---|---|
| Pre-foreclosure (NOD filed) | 4.2% | High |
| Tax sale scheduled | 5.1% | High |
| Active probate (out-of-state heir) | 4.8% | Medium |
| Divorce with property division | 3.6% | Medium |
Tier 1 signals deliver highest conversion but also highest competition. The key: timing and exclusivity.
Tier 2: Strong Motivation (1.9% average conversion)
These signals suggest selling willingness:
| Signal | Conversion Rate | Competition Level |
|---|---|---|
| Tax delinquent 2+ years | 2.3% | Medium |
| Vacant 6+ months | 1.8% | Medium |
| Out-of-state owner (100+ miles) | 1.6% | Low-Medium |
| Failed listing (expired 60+ days) | 2.1% | Medium |
Tier 2 offers the best risk-adjusted returns: solid conversion with moderate competition.
Tier 3: Possible Motivation (0.7% average conversion)
These need stacking to perform:
| Signal | Solo Conversion | Stacked Conversion |
|---|---|---|
| Absentee owner | 0.4% | 1.8% (with Tier 2) |
| High equity (60%+) | 0.5% | 2.1% (with Tier 2) |
| Long tenure (10+ years) | 0.6% | 1.9% (with Tier 2) |
| Senior owner (65+) | 0.7% | 2.2% (with life event) |
Tier 3 signals alone = commodity lists. Tier 3 signals stacked with Tier 2 = performance lists.
Hidden Gems: The AI Advantage
Hidden Gems are properties that don't match any traditional criteria but show high sell probability through pattern matching.
Hidden Gems performance: - Conversion rate: 2.9% (between Tier 1 and Tier 2) - Mail competition: 60% less than Tier 1 properties - Percentage of deals: 35-45% for operators using AI targeting
These properties are invisible to manual list building but visible to machine learning analyzing 50+ variables.
The Exclusivity Factor
When multiple investors mail the same list, everyone's results suffer:
| Investors on Same List | Response Degradation |
|---|---|
| 1 (exclusive) | Baseline |
| 2-3 | -12% |
| 5-10 | -28% |
| 10+ | -45% |
Market reality check: - In Phoenix, the average PropStream absentee list has 15+ investors mailing it - In smaller MSAs, that number drops to 3-5 - Exclusive lists show 35-50% higher response rates than identical commodity lists
Client Results
“I was paying $0.10/record and getting 0.4% response. Switched to exclusive market allocation at $0.40/record. Response jumped to 1.8%. The math: I went from spending $25 per response to $22 per response while getting 4.5x more responses.”
— Tucson investor, 42 deals/year
Data Freshness Impact
Contact data decays predictably. Here's the degradation curve:
| Data Age | Address Accuracy | Phone Accuracy | Owner Match |
|---|---|---|---|
| 0-30 days | 98% | 92% | 97% |
| 30-60 days | 96% | 87% | 95% |
| 60-90 days | 93% | 81% | 92% |
| 90-180 days | 88% | 72% | 86% |
| 180+ days | 79% | 58% | 74% |
Best practice: Refresh lists every 60-90 days. Re-skip trace any records you're calling that haven't been updated in 6+ months.
Evaluating List Providers
Questions That Matter
- How often do you update? (Monthly minimum, weekly preferred)
- How many data sources? (6+ sources = better accuracy)
- Do you offer market exclusivity? (If no, assume 10+ competitors)
- Can you show conversion data? (If no, they don't track quality)
- How is pricing structured? (Per record vs unlimited suggests quality difference)
Red Flags
- "Unlimited leads" = quantity over quality, low motivation density
- "Proprietary algorithm" with no explanation = marketing fluff
- No freshness guarantees = stale data
- Per-zip pricing (not per-record) = commoditized approach
- No exclusivity option = you're competing with everyone