Is anyone else having trouble getting people to accept low offers? Seems like everybody wants full retail price. I have one that will sell for half of what they paid for it because of her husband is sick but other than that, nothing. It’s my 3rd mailing. I still have many more counties to mail, but just wondering how everyone else is doing?
@carolinajay With the real estate market in general being so hot, this has been the hardest part for me. I’m relatively new still, so take my opinions with a grain of salt. This is just what has worked for me so far.
I like to mail areas with a reasonably high number of transactions over the past 6 months. It’s not the only metric I look for, but it’s been one of the most important for me. The reason is if I’m the first low offer they’ve seen, they’re not even warmed up to the idea of selling at such a price. And you can beat out 95% of investors just by answering the phone (Patlive works too, just get back to them in a reasonable amount of time if it’s a potentially good deal).
That being said, I find I end up buying properties at 35% - 42% market value. I only mail in the southeast, so I can’t speak for other parts of the country.
Last thing is make sure you’re sending enough mail. You can still close on good deals sending few units of mail if you’re great at pricing a specific area. But if you’re sending less that 1500 units in a month, I’d up my amount of mail sent before I made any changes to pricing.
Good luck!
7 Likes
I worry about this too. I don’t have the funds to risk sinking thousands into mailers for nothing. I have been researching land investing for months and am really eager to jump in, but this is the part that is holding me back at the moment.
@bj Thanks for the advice. Yeah, it seems I may have to up my offers.
@mizugori Yeah, to keep spending on mailers and not getting any deals is frustrating, but I’ll keep on til I do. Try some test mailers and just see what happens. Do a small one like 500-1000. That’s all I’ve done so far. I get alot of calls, just no deals, yet.
1 Like
@bj What a great reply to Jay. Thanks for the information. Very helpful for us beginners. Sincerely Magnus
@bj Great advise! Thank you!
The market on the lower priced land has gotten quite competitive. Many Gurus still teach this exclusively. Disgruntled house investors have migrated to land. Property owners are getting inundated with multiple offers on hotter areas. With greater competition we need to adapt. Talk to any of those responded to your mailings and ask how many different offers have they gotten from fellow investors. If your area is hot you need to prepare to pay more. I look at the sold to for sale ratio, days on market, and what percentage the total number of vacant lands is active in the market place to determine hot or cool markets. I have learned this from more seasoned investors than I in the land space. If I am convinced that I can flip a lot quick I will gladly pay more and make a smaller percentage ROI. I rather look for velocity rather than holding out for the last buck
2 Likes
@quickbuyland this varies a bit by market. I have no doubt these conditions exist in some areas, but definitely not everywhere. I’ve seen both extremes in recent months in different pockets of the country. It also changes based on what kind of list you’re using and the price range you’re going after.
I do think those are some valid ways to feel out the competitiveness of an area. Thanks for dropping the knowledge. Have you found and specific ratios to be a turning point one way or another?
@donyost You bring up an important point, perhaps I was too general in my response. There are may variations in many markets. Basically, if there is a lot more listings than sales than I would want to know why, you may get more offers accepted and at a lower price but can you flip it. On the other hand, if a market is selling as soon as it is listed You may need to be prepared to pay more as a percentage of market value. But at least you can have faster turn over. The later example is were I have found the most competition from other land investors.
You guys are giving us some great insight. Thanks.