Long time lurker but finally taking action and in the data pulling phase.
Does it make sense to filter out owners that have owned the property for less than 5 years? What about ag land? I see those as a filter options.
At the minimum lot size I’m getting few property records. My rationale for filtering owners that have not owned the property too long is that they’d only sell for above their recent purchase price.
Thoughts?
Thank you!
Hi @cchicoine, thanks for jumping into the forum! Great questions.
Yes, I think it makes sense to filter out owners like that. Whether it’s 5, 7, 10 or more years… there is a noticeable correlation between a property owner’s length of ownership and their motivation to sell.
Unless I’m buying from another wholesaler at their marked-up price (which I don’t usually do if I can help it), it would be unusual for a normal landowner to sell me their land at a discount when they just bought it within the past 12-24 months.
I have gotten some good deals from normal landowners who bought their property within the past 3 years… so it’s not impossible, but even that would be somewhat abnormal, IMO. If you’re looking to cast a wider net but avoid the people who are least likely to sell at a discount, that 5-year ownership period seems like a decent place to start.
I send mail to ag land… not that I get many of those deals, but they can come up. You have to consider what your plan is for the property and how much you’re willing to pay.
If it’s a large, productive parcel of tillable farmland, you probably aren’t going to get an amazing deal on those (because they make decent money for the owner and unless the owner is working it themselves, it’s a pretty hands-off source of income). But if you’re planning to subdivide or develop in some way, it could be worth paying a much higher percentage of market value.
Also, realize that not all land zoned agricultural is the same. Some parcels may be tillable farmland, but some could be smaller lots that just aren’t being used for anything, and you could get a great deal on those.
Thank you Seth for your thoughtful response and insights. Very much appreciated!