So I plan to get started this next month (finalizing all the details of prep work now and finally have business name, etc. setup). My most fearful “sticking point” is still in the pricing. I think I want to send out to a 6 county area first - not necessarily all at once. It depends how many listings that is after DataTree is setup, but I’d like to do 4-5000 mailers every month.
I only have about $20K I can use for marketing/mailing and another $15K I can use to actually buy property. So of course… I can’t shake the thought, “What if all my mail campaigns are a complete bust?”
In all these counties, it just really seems that retail land is selling about $10K an acre (a couple outliers in each direction but not by a lot)… and between all of them, there’s a couple dozen sales in the last year and many actively listed now. (I like the area because it’s close and close to a lot of fishing/camping places). My original plan was to send out blind offers of $2K an acre to everyone (looking for up to 5 acres), but then I thought… Maybe I should go as high as $3K to make sure I can get something, since I have to make this work on $20K and would hate to get to the end of my $$ and realize I just didn’t go high enough. Then… I watched a lot of youtube videos and see several people saying… buy at 50% and sell at 80%. Ok… maybe that’s the path I should take?!
And finally… I come back to… maybe I shouldn’t send blind offers to anyone and just use the ‘call me’ template… as that would give me a lot of more experience in talking to people… but even then, I’m back to… “I still have to ultimately decide how to price and I have to get a couple acres with this initial money or I’m out of the game!”
So easy to psyche myself out when I start thinking so much!!
@scott79 I understand the ‘psyching yourself out’ thing; it’s easy to feel paralyzed when thinking of all the “what ifs” and mistakes that can be made.
I will say, though, $20K is a nice amount of money to work with. It would be highly unlikely you’d spend even half that much on direct mail without getting anything.
If it if were me, I would probably break that up into chunks of $2,500 and isolate those amounts for various direct mail approaches. You could start with one solid campaign of 5,000ish mailers, using the blind offer approach like you’re explaining (I might start at 30% of market value, maybe more if it’s a hot area with lots of land sales over the past 90 days).
If that doesn’t work, you could try upping the offers on your second $2,500 campaign, or try the same approach in a different market, or go with the “call me” neutral letter.
My point is, don’t get stuck on one approach and blow your entire budget before you know what’s actually working. Chunk it up a bit so you have an opportunity to see what is working before you dive into your next campaign. Granted, this will take some time (it’ll be at least a few weeks before you get the bulk of your responses back from a campaign), but that’s okay. It’s better to have a good look at what is/isn’t working before you throw more money toward the cause.
@scott79 I struggled with the same vexing question when I got started a few years ago. Eventually I decided that I had to be OK with losing all the money I spent on mailing in order to find out if this business would work for me. After accepting this reality I was able to move forward.
@john-pitkin Thanks for the input, John. Could not agree more. What’s funny is I bought the course last year and on realizing how much marketing would cost and all, I got shy and shelved it for a while. This year, work has been so rough that I had your exact thought. “I’m just going to do it and even if I lose it all… at least I tried and won’t always wonder!” So in truth, losing all my money and failing doesn’t even bother me now. It’s just the realization that if I do fail, I have to spend another 15 years going in to the office everyday. That’s my motivation to make it work. Fingers crossed!
@Scott79 All of us started at the same place you are right now. The most important thing to do at this stage is to take action and limit your expenses. Seth advice is great and that should help you along your way. My best mailing campaign to date was priced completely wrong and I still pulled deals out of it. One of the things I’ve discovered over the years is that the pricing isn’t important as you may think it is. Sellers that are motivated will reach out you regardless.
@scott79 I agree with all of the comments made so far. My one concern is your comment that there have been “a couple dozen sales in the last year and many actively listed now”. Is that among all 6 counties? If so, that’s not much sold activity. We like to see more than that to one county we are marketing to. Just a thought.
@scott79 one of the most common things is to think your pricing has to be with in a few bucks to work. In all honesty, you can put 30% or 40%, the point is you are trying to find an opportunity where they want to sell, and they’ll call you. You will negotiate on 90+% of the deals you buy. I switched to range offers and offer 25-40%, then say if you want to sell and you think its worth more call me and lets discuss. Secondly, I’ll hit the same list with a postcard 6 weeks later, no price…and get the same amount of deals. So in short…get mail in the boxes for them to know you want to buy and look at the lead, give your best offer, and buy what you can and if its not worth what they want politely tell them this is the best you can do then move on.
@justinsliva How many times you hit the same list? Two? You used the postcard in the second hit to save some bucks or there’s another strategic reason for that? Thank you!
@maxcanevaro we hit the same list with multiple mediums. These list have been ran through propertyaccess.io and are in the 200 mile radius of our target market. Almost all marketing theory uses multiple touches, so we followed suit on our more targeted mailers.
@justinsliva Thank you very much. Wow, 200 miles? I would never think about going farther than 40 miles…I assume it is different when you talk about infill or FDL’s or rural higher than 5 acres…
Have a wonderful weekend!
@scott79 I struggled with the same vexing question when I got started a few years ago. Eventually I decided that I had to be OK with losing all the money I spent on mailing in order to find out if this business would work for me. After accepting this reality I was able to move forward.
I’ve heard similar sentiments from people who have done pretty well in the stock market. Totally different investing medium… but a similar psychological issue.
@avandoski you’d have to start by defining what your market area is (certain zip codes? a specific county? a city? an entire state?). Keep in mind, even if you’re looking at one county, you also have to acknowledge the size of the county (east coast counties tend to be much smaller than west coast counties).
Then you’d have to define what property size range you’re going after (if you’re only looking at properties 40 acres and up, then it won’t be quite as consequential what’s going on with the 0.50 acre properties).
So… my point is, it’s hard to give you one number that defines the temperature of all counties… BUT in the counties I’m most familiar with, looking at all vacant lot sales, I would consider a few hundred property sales in the past 90 days to be at warm/hot.
