Today’s REI Classroom Lesson
As Mark Podolsky explains, your mailing list needs to be targeted for people who are own raw land and are for one reason or another, unattached to it. Whether they live out of state or owe back taxes, these are the people most willing to sell off raw land at a low price.
REI Classroom Summary
Mark tells us what people to weed out of your mailing list so that you’re being effective with your marketing. By providing an offer directly by mail, you can hope for a 3-5% acceptance rate (although if your % is way off from this, you should reconsider your offer prices).
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Mark: Hey, it’s Mark Podolsky, the Land Geek, with thelandgeek.com and I am so honored and humbled to be back as a host of the REI Classroom. And the last classroom session that we talked about was all about sending out offers to a list of people that own raw land.
Mike: This show is sponsored by passiverental.com.
Mark: We did that, we had our margin and safety so we’re making 300% to a 1000%. And the way that we did that was we looked at the comps, we divide it by four, we sent out offers to a list. Well, who do we mail to? What should our list be? Because we don’t want to email to people that own industrial property, we don’t want to mail to people that have commercial property, we don’t want to mail to people that have houses, we don’t want to mail to people that have vacant land that’s worth over $1 million. So the first thing we want to do, then, is get a list and scrub that list and get rid of all those properties that we don’t want to mail to because we don’t want to waste a lot of postage. I hope that makes sense.
So we’re going to get rid of the industrial property, we’re going to get rid of the commercial property, we’re going to get rid of the homes and a quick and dirty way to kind of do this is either sort by use code, which would be VL, vacant land, and we can even take out assessed value. So if the assessed values are over, let’s say $30,000, we’re pretty much assured we’re going to get rid of a lot of the homes, commercial property, industrial property, and really expensive pieces of land because we don’t want to mail those people. So then, the real lowest hanging fruit, and we can get this by calling the county treasurer, is getting a list of people that owe back taxes. If they owe back taxes, they’re advertising to us that they don’t value their land anymore. So they are more likely to accept our “top dollar offer” of $0.20 to $0.30 on the dollar.
So once we get that list from the treasurer of people that owe back taxes, what’s even better is once we scrub that list, is if we mail to people that owe back taxes and live out of state. They have no emotional connection to the property. Maybe their parents bought it years ago and they inherited it and now they’re never going to see the property. Maybe they bought it as a long-term investment and that investment has now converted into a liability because they’re tired of paying the taxes on it and they’re not using it.
So there could be a variety of reasons why they haven’t paid their taxes, but we know definitively that they don’t value that property anymore and they’re not visiting that property. They have no emotional connection to it so we can go ahead and send out an offer to those people $0.20 to $0.30 on the dollar based on our pricing structure and we are going to get an accepted rate of 3 to 5%.
So if we know that we are getting 3 to 5% acceptance rate, we know we’ve priced right. If it’s over 5%, we are probably a little too high. We might have to renegotiate. If it’s under 3%, we are probably too low in our comps and need to re-mail again to get that rate higher. So to recap, we want to look at people that owe back taxes, live out of the state and own raw land. We can get that property list from the county treasurer, ideally in Excel or .CSV format. Do a mail merge and send out our offer letters and really maximize our time. Anyways, go ahead, learn more all about this system at thelandgeek.com and we’ll show you how to do this. Again, this is Mark Podolsky, the Land Geek, from thelandgeek.com and I’ll see you on the other side.
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