Looking at Sold Properties to Figure out Market Value and Filtering List

I've noticed a pattern ever since I've started sending out letters/postcards. The location of the land I'm planning to give an offer has only 1-2 sales in the last 6-12 months. These vacant properties are usually 1-2 hr drive from a metropolitan city. It took me 6 months of sending letters/postcards to get my first property.

I'm sitting here trying to figure out what changes I need to make to increase the chances of getting more properties. Thinking of ways to determine market value even if there isn't any vacant land sales in a particular area of a county (houses are being sold in the area).

I'm still motivated after doing this for 6 months.

If anyone have any feedback, I truly appreciate it.

FYI: I've learned vacant land on zillow can be listed under the houses category.

@ordep890, I think this is an interesting topic, but just to confirm, it sounds like you're drawing a link between the lack of previous sales data, and what feels like a low number of your offers being accepted. Is that the case, and if so, does that link come down to: as a result of the lack of previous sales data, you think you're possibly being very cautious (meaning, assuming lower prices) for both your property valuations and therefore your offers, which is causing a lower percentage of your offers to be accepted than they otherwise would be?

If I'm tracking that right, that link does make perfect sense to me, but also, my first gut reaction is, depending on the specific numbers, you might be doing everything right, at this stage. I say that because, while recognizing that you don't want to be sending out thousands of mail pieces for each closed deal, generally speaking having a low offer acceptance rate is a sign that you're doing something right in this business, and that you're not pricing your offers higher than you should be. Further to that point, there could be some major advantages to finding a market where you are able to reliably resell properties for a nice return, within a timeframe that works for you, but the local sales data is so sparse or unavailable that both the owners you're buying from, as well as your potential competition, don't really have a solid read on what the properties around there are worth. And it would be understandable that it would take you several months and iterations of mailers, offers, etc. before you'd develop that local knowledge and really nail down the numbers yourself, due to that same lack of data.

How many owners did you mail to over that 6 month period that resulted in the one deal (excluding any that you mailed to within the past, say, 3 to 4 weeks, which you can't really write off as a miss, yet)?

How quickly did your first deal resell, or if it hasn't yet, assuming that it's listed for sale already, how active have the responses been?

How have you tried valuing properties and pricing your offers so far? For instance, are you basing them off the limited past sales data on Zillow; or some discount percentage off of current listings on Zillow/MLS; or some other approach?

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@dl7573 Correct. I'm trying to improve my response rate through mailers and better determine the market value of a property before giving an offer. Higher response rate = more offers = Higher chance of getting an offer accepted. Which is why I'm working to figure out ways to tweak my mailing list, copy, etc.

I've done about 3000 mailers in the last 6 months. 80% of them went to Texas and the remaining 20% went to Tennessee. I've discovered this website after realizing paying $1500 for a land investing course in 2019 (not Seth's) that left more questions than answers. I've started sending mailers in Tennessee in October after realizing Texas might be too competitive for a beginner.

I do value properties by using sold listings on Zillow. I've heard some investors use a discount percentage approach off current listings on Zillow/MLS. My biggest hiccup is I don't see enough sold listings of vacant land on Zillow. However, I see other properties (not vacant land) being sold. The course I brought claimed vacant land is 15% of the other real estate properties being sold. So yes, it's a challenge trying to figure out what's a reasonable offer.

I got my first offer accepted the beginning of last month. It's a waiting game dealing with title companies when it comes to closing. I have an ad ready to use. I'm waiting for the title company to hurry up. The last thing I want is for the seller to change his/her mind while having the property for sale.

Hopefully my response gave more clarification. Just trying to have a lower cost per lead while maximizing my profits.

Thanks, @Ordep890. First, I should have said that I'm not at all claiming to be some sort of expert. I've mentioned on this forum before, but it's worth repeating here, that while I've studied the land business for an embarrassingly long time, I've actually only been putting things into practice for less than a year myself, so feel free to take my input with a grain of salt. Also, my questions are only intended to help zero in on the point in the process that I might personally focus on first if I were you and were trying to optimize the total number of offers accepted, and are not meant to be critical in any way. By all means, please take these questions as the type of thought-starters that I would use, and feel free to respond here, or don't, as you like.

From your comments here, I take it that you have not been sending blind offers as your initial mailer to the property owners. If that's the case, can I ask, what have you been sending: neutral letter, postcard, etc.? Again, not an expert, but I've heard it said by others who supposedly have measured such things that while postcards are cheaper to send, the response rates may be lower than with letters. I haven't tested that personally, though, and I've also heard still other people say that at least with a postcard, you know they had to glance at it before throwing it out, so who knows. Out of the 3,000 mail pieces you estimated that you've sent in the past 6 months, do you have a rough idea how many of the owners have responded in any sort of positive way? Meaning they contacted you and were interested in receiving an offer, whether or not you ultimately sent them one or they accepted it or not, etc.

I'm just thinking that, if you're not doing blind offers (which I'm not, currently, either), then I would try to figure out whether the first area to optimize is in the Response Rate or the Offer Acceptance Rate, since those are separate things. Even if done perfectly, we're all going to lose a lot of numbers at each stage -- i.e. only a minority subset of the owners respond to the mailer positively, and then a further smaller subset of those will accept an offer -- so I'm just trying to get a sense of whether I would necessarily focus on your valuations / lack of comps being the first factor to optimize, if you're most concerned with getting more total offers accepted.

What kind of lists did you mail to, mostly? For example, tax delinquent owners, or owners out of state/county (but not necessarily tax delinquent)? If the overall Response rate to a neutral letter is low, for example, then perhaps that could be a result of relative lack of motivation to sell, in general, within that mailing list, and perhaps a different list source / filtering criteria could make a difference.

Next, I'd look at, how many total offers did I make, which ultimately resulted in the one deal, so far. Assuming for a moment that the offer prices are the issue, if you don't mind my asking, what percentage of estimated property value are you offering? In other words, even if your value estimates were pretty solid, maybe it's the discount percentage that's turned people off, in the current market. If you were already offering 20% of what you estimated the value to be, for example, then I definitely wouldn't advise you to go higher as a base starting point, personally, unless there were some strong circumstances on a particular property that made it worth it (documented evidence of plentiful buyers, short days on market for recent comp sales, etc.). But on the other hand, if you were consistently offering something like 5% of current estimated value, you might try bumping that up, as long as your numbers would still work for you and you've seen evidence that you'd be able to resell the properties within a timeframe that's acceptable to you, as well.

Regarding valuation, you might try looking at Redfin, as well as Zillow. Personally, I've found that Redfin doesn't have any data available in some counties while Zillow does, but where they both have data available, it seems to me that sometimes Redfin's might be more accurate or complete (maybe). Also, since you mentioned having mailed to Texas, it's worth pointing out that they are a non-disclosure state, so all of the online real estate platforms (Zillow, Redfin, etc.), as well as the counties themselves in my limited experience, don't provide good previous sales data. Seth did a great blog post, with a map, about disclosure/non-disclosure states, nationwide: https://retipster.com/non-disc...

Like I touched on in my first response in this thread, the non-disclosure topic kind of takes it back to an interesting discussion that a few of us were having on a mastermind call recently, which is: is it better to work a market that has great previous sales data (which obviously helps for valuations and pricing your offers), but which has a lot of competition from other investors and/or has similarly well-informed owners (they can easily see what comps have sold for on Zillow, too, if they're so inclined), OR is it better to come up the learning curve yourself on a market that doesn't have great, publicly available comp sales data, might have less competition (or at least more variance between investors' offer pricing) and less readily-available data for the owners to compare against, as well. In effect, with the latter, the only number you might have to rationalize against in discussions with the seller might be that of the county's appraisal, which, assuming there is demand for property in that area, might have some advantages to the investor on both the buy and resale side.

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@dl7573 Thanks again. I will consider these points.


A decent strategy for calculating market value of vacant land could be:

  • Look for a sold house in the target area.
  • Identify the ratio from assessed land value to assessed total value.
  • Multiply the sold price with the ratio to get a virtual land value.

Now you can compare properties with similar sizes and start evaluating your blind offer.

To get sold comps of properties you can use scraping tools like webharvy.

What you also need is the tax assessed data for ALL properties from the county to join the data to the sold comps with the apn as join key.

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