Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
In 2011 we bought a piece of land between our house and the paved road so that we could put in a driveway and avoid using the (terrible) county road. It came with a house, so we started our landlord adventure. That parcel was put in an LLC with other rentals and all was good.
About 2 years ago we decided that it would be best if the land that the driveway is on was owned by our trust, just like our house, so we split off the part with the rental house and deeded the rest of the land to our trust. Again, all was good. If we ever decide to sell, the driveway goes with the house, or if we decide to sell the rental, we retain ownership of the driveway and the woods that screen our house from the paved road.
So for the past year we have been getting letters like this once or twice a month:
They obviously got the information from tax records - "recently" sold properties. I guess they assumed we bought the property and are now regretting that purchase and looking for someone to give it to. The market value of that land is $2000-2500/acre - about $48,000 to $60,000.
What idiot would fall for such a scam, especially in this this red hot market? And how do they arrive at those ridiculous numbers?
Hence the title, Do these goofy letters actually work?
In 2011 we bought a piece of land between our house and the paved road so that we could put in a driveway and avoid using the (terrible) county road. It came with a house, so we started our landlord adventure. That parcel was put in an LLC with other rentals and all was good.
About 2 years ago we decided that it would be best if the land that the driveway is on was owned by our trust, just like our house, so we split off the part with the rental house and deeded the rest of the land to our trust. Again, all was good. If we ever decide to sell, the driveway goes with the house, or if we decide to sell the rental, we retain ownership of the driveway and the woods that screen our house from the paved road.
So for the past year we have been getting letters like this once or twice a month:
They obviously got the information from tax records - "recently" sold properties. I guess they assumed we bought the property and are now regretting that purchase and looking for someone to give it to. The market value of that land is $2000-2500/acre - about $48,000 to $60,000.
What idiot would fall for such a scam, especially in this this red hot market? And how do they arrive at those ridiculous numbers?
Hence the title, Do these goofy letters actually work?
Sylvia, this is a direct mail campaign.
What may seem goofy to you, is far from it. Right now this goofy letter yield a deal per 2000 sent in this “red hot market”. Pre-covid it was 1 in 800 sent. There are a couple fallacies in your post, where you insert your opinion as fact (the letter came from my company). It’s not a scam, it’s merely marketing. Obviously, you aren’t the target market but you did open the envelope and it did invoke some feeling. So the marketing worked to a point. We can only see so much from county records. As for assuming we picked your property, because you recently purchased and regretted, we mailed vacant land in southern Missouri and northern Arkansas to non corporate owners 20 - 200 acres. It was a total of 7800 letters, currently under contract from the goofy letter is 272 acres. It was a letter to their 40 acre and they said “hey, we have 272 acres, give us your best offer on all of it.” So we did and they agreed. We will do a simple parcel split on a portion and sell it all.
I read in the above comments "Sadly" it works. While the offers may seem low by house wholesaler or BRRR strategy offers, vacant land has fewer exits and typically more deed/title problems. These opportunities all come at a cost. Secondly, vacant rural land gets handed off to family members after deaths, more often than not, they have no desire to keep it and don't want to deal with the disposition (time, issues on deed, no realtor will take a 30k listing), this again creates opportunities.
I’m always down to chat with a fellow investor. We both may gleam an idea or two from our conversation to help our businesses.
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
4y
It's a direct mail campaign. Direct mail does work. I can't speak to the effectiveness of that specific letter, but direct mail as a whole is an effective method for sourcing deals.
Sadly it does work on some people. Usually those who can least afford it and would be better off selling on the open market. If you want to have fun with them, write deceased on the envelope, return it to sender and send them on another rabbit chase.
In 2011 we bought a piece of land between our house and the paved road so that we could put in a driveway and avoid using the (terrible) county road. It came with a house, so we started our landlord adventure. That parcel was put in an LLC with other rentals and all was good.
About 2 years ago we decided that it would be best if the land that the driveway is on was owned by our trust, just like our house, so we split off the part with the rental house and deeded the rest of the land to our trust. Again, all was good. If we ever decide to sell, the driveway goes with the house, or if we decide to sell the rental, we retain ownership of the driveway and the woods that screen our house from the paved road.
So for the past year we have been getting letters like this once or twice a month:
They obviously got the information from tax records - "recently" sold properties. I guess they assumed we bought the property and are now regretting that purchase and looking for someone to give it to. The market value of that land is $2000-2500/acre - about $48,000 to $60,000.
What idiot would fall for such a scam, especially in this this red hot market? And how do they arrive at those ridiculous numbers?
Hence the title, Do these goofy letters actually work?
Sylvia, this is a direct mail campaign.
What may seem goofy to you, is far from it. Right now this goofy letter yield a deal per 2000 sent in this “red hot market”. Pre-covid it was 1 in 800 sent. There are a couple fallacies in your post, where you insert your opinion as fact (the letter came from my company). It’s not a scam, it’s merely marketing. Obviously, you aren’t the target market but you did open the envelope and it did invoke some feeling. So the marketing worked to a point. We can only see so much from county records. As for assuming we picked your property, because you recently purchased and regretted, we mailed vacant land in southern Missouri and northern Arkansas to non corporate owners 20 - 200 acres. It was a total of 7800 letters, currently under contract from the goofy letter is 272 acres. It was a letter to their 40 acre and they said “hey, we have 272 acres, give us your best offer on all of it.” So we did and they agreed. We will do a simple parcel split on a portion and sell it all.
I read in the above comments "Sadly" it works. While the offers may seem low by house wholesaler or BRRR strategy offers, vacant land has fewer exits and typically more deed/title problems. These opportunities all come at a cost. Secondly, vacant rural land gets handed off to family members after deaths, more often than not, they have no desire to keep it and don't want to deal with the disposition (time, issues on deed, no realtor will take a 30k listing), this again creates opportunities.
I’m always down to chat with a fellow investor. We both may gleam an idea or two from our conversation to help our businesses.
In 2011 we bought a piece of land between our house and the paved road so that we could put in a driveway and avoid using the (terrible) county road. It came with a house, so we started our landlord adventure. That parcel was put in an LLC with other rentals and all was good.
About 2 years ago we decided that it would be best if the land that the driveway is on was owned by our trust, just like our house, so we split off the part with the rental house and deeded the rest of the land to our trust. Again, all was good. If we ever decide to sell, the driveway goes with the house, or if we decide to sell the rental, we retain ownership of the driveway and the woods that screen our house from the paved road.
So for the past year we have been getting letters like this once or twice a month:
They obviously got the information from tax records - "recently" sold properties. I guess they assumed we bought the property and are now regretting that purchase and looking for someone to give it to. The market value of that land is $2000-2500/acre - about $48,000 to $60,000.
What idiot would fall for such a scam, especially in this this red hot market? And how do they arrive at those ridiculous numbers?
Hence the title, Do these goofy letters actually work?
Sylvia, this is a direct mail campaign.
What may seem goofy to you, is far from it. Right now this goofy letter yield a deal per 2000 sent in this “red hot market”. Pre-covid it was 1 in 800 sent. There are a couple fallacies in your post, where you insert your opinion as fact (the letter came from my company). It’s not a scam, it’s merely marketing. Obviously, you aren’t the target market but you did open the envelope and it did invoke some feeling. So the marketing worked to a point. We can only see so much from county records. As for assuming we picked your property, because you recently purchased and regretted, we mailed vacant land in southern Missouri and northern Arkansas to non corporate owners 20 - 200 acres. It was a total of 7800 letters, currently under contract from the goofy letter is 272 acres. It was a letter to their 40 acre and they said “hey, we have 272 acres, give us your best offer on all of it.” So we did and they agreed. We will do a simple parcel split on a portion and sell it all.
I read in the above comments "Sadly" it works. While the offers may seem low by house wholesaler or BRRR strategy offers, vacant land has fewer exits and typically more deed/title problems. These opportunities all come at a cost. Secondly, vacant rural land gets handed off to family members after deaths, more often than not, they have no desire to keep it and don't want to deal with the disposition (time, issues on deed, no realtor will take a 30k listing), this again creates opportunities.
I’m always down to chat with a fellow investor. We both may gleam an idea or two from our conversation to help our businesses.
good work Justin.. when I did my land and timber business I created a custom data base of every property owner non corporate who owned 10 acres or more that had standing timber on it based on the last aerial photos. this data base was in valuabled we started at the oregon CA border and ran up I 5 to Olympia WA which is a swath of 450 miles north to south and then 100 to 200 miles east to west.. this created about 10k parcels.. we then marketed to those folks.. Now we did not really send many letters we did live telemarketing and that was quite effective.. Land game is a fun one and your exactly correct on the issues and how its handled by heirs etc.. Although in our area the timber could be worth 100s of thousands.. land not to so much. One prop sticks out 11 acres I took off over 450k NET to us in Timber then sold the land off . WE would bust them up like your doing as well although much harder in our area than yours most likely. I bought a 700 acre tree farm ( commeical doug fir tree farm) and the county road frontage had 5 acre zoning so I was able to get 15 parcels out of that built some homes sold some lots.. then let the trees grow for 15 years and sold to a big mill.. that was a 7 figure profit :) Love land.
@Jay Hinrichs we’ve been using direct mail since 2016 to buy land off market. We’ve used this letter (in different variations) to buy in 42 different states. We just want to look at leads that are warm, we’ll negotiate with anyone that wants to sell. We’ve bought 50ish SFRs and 10 multi fam, using another variation for each asset class. Trying to make that goofy money… I would of at least googled the name on the letter before trying discredit someone.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
@Sylvia B. this is a numbers game. They send these letters to thousands of people on a repeat basis. Eventually they catch someone in a desperate situation or someone who is unaware of current market values. Desperate could be a situation where someone has divorce, bankruptcy, job loss or death of the owner. The people who are unaware of current values are often older or have diminished mental capacity. This is why companies like this can be seen as predatory in many cases.
Yes they work, but they are shotgun marketing at best.
@Joe Splitrock where would the line at predatory get drawn? Blind offer goes out versus a “we buy houses” postcard, both are trying to buy off market for under value… one could say the blind offer is being up front versus the postcard. Since it was my letter being asked about, I can say the last 10 deals from it (in the last 30 days) every person was under the age of 60 and did negotiate up some from the offer price. Average contract was at 55% of current market value, 8 of those 10 had something that had to be corrected in the chain of title. So 80% of those deals needed someone with experience to fix the issues. The client didn’t have the 2-3k to fix the title and wanted it to be a simple transaction.
@Joe Splitrock where would the line at predatory get drawn? Blind offer goes out versus a “we buy houses” postcard, both are trying to buy off market for under value… one could say the blind offer is being up front versus the postcard. Since it was my letter being asked about, I can say the last 10 deals from it (in the last 30 days) every person was under the age of 60 and did negotiate up some from the offer price. Average contract was at 55% of current market value, 8 of those 10 had something that had to be corrected in the chain of title. So 80% of those deals needed someone with experience to fix the issues. The client didn’t have the 2-3k to fix the title and wanted it to be a simple transaction.
Predatory is subjective. Some people believe whatever they can get a seller to agree to is fair. Predatory generally involves deceit and offers that are exceptionally one sided towards the buyer. Buying under market to deal with title problems, fix a distressed property or close fast has value. The question is what margin is fair to compensate for the risk and value you provide? That is the subjective part. Is 20% fair, is 45% fair, is 65% fair, is 80% fair? I don't have that answer, but you have to face your family and sleep at night, so hopefully you have moral compass driving your business.
I watched my elderly mother in law getting taken for a ride more than one time. I sat with her as she cried saying she tried to say no, but the person wouldn't take no for an answer.
Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
4y
Reminds me of the old saying: "One man's trash is another man's treasure". I think that applies to both sides of the coin; sellers often have little regard for found or otherwise headache properties and lack the motivation to capitalize on it themselves. Buyers use methods some consider goofy which never the less have worked for time out of mind. Somewhere in between millions of dollars are made and folks win all around.
@Joe Splitrock sorry to hear about your MIL. There are predators out there and they can give any type of marketing or niche a bad name. The letter in question, is to gauge interest, very similar to a letter of intent. Looking at how you describe your MIL's situation, we are far from that. We have an out for them in the contract that is signed, that they can decide to back out anytime until we close. We don't file memorandum of agreements with the county (which I feel is predatory). We are transparent in our intent with the land. As with all niche's of Real Estate, we are looking to strike an mutual agreeable deal on the front side, that is profitable on our exit. If there is not profit or upside, we'd all be out of business. Cheers...
In 2011 we bought a piece of land between our house and the paved road so that we could put in a driveway and avoid using the (terrible) county road. It came with a house, so we started our landlord adventure. That parcel was put in an LLC with other rentals and all was good.
About 2 years ago we decided that it would be best if the land that the driveway is on was owned by our trust, just like our house, so we split off the part with the rental house and deeded the rest of the land to our trust. Again, all was good. If we ever decide to sell, the driveway goes with the house, or if we decide to sell the rental, we retain ownership of the driveway and the woods that screen our house from the paved road.
So for the past year we have been getting letters like this once or twice a month:
They obviously got the information from tax records - "recently" sold properties. I guess they assumed we bought the property and are now regretting that purchase and looking for someone to give it to. The market value of that land is $2000-2500/acre - about $48,000 to $60,000.
What idiot would fall for such a scam, especially in this this red hot market? And how do they arrive at those ridiculous numbers?
Hence the title, Do these goofy letters actually work?
If you are going to make bad offers you have to make a lot of them. Direct mail is the easiest place to do that. Wouldn't work on me, but plenty of people aren't fluent in money.
@Jay Hinrichs we’ve been using direct mail since 2016 to buy land off market. We’ve used this letter (in different variations) to buy in 42 different states. We just want to look at leads that are warm, we’ll negotiate with anyone that wants to sell. We’ve bought 50ish SFRs and 10 multi fam, using another variation for each asset class. Trying to make that goofy money… I would of at least googled the name on the letter before trying discredit someone.
I did not see your name on the letter where is it located I just saw a generic logo. Either way we all know how folks are that get solicited.. IE How did you get my info? :) or like our business were we are out of state and no debt we get robo called daily on our properties I grew up in the land business and love it to this day.. Carry on !
@Jay Hinrichs, not you googling, the original poster. She was nice and made it just the logo I have on the document and website. Agreed on the responses…I got 4 back today that said, “F You.” and 2 counter offers with additional parcels attached, so 240 total acres over 7 parcels that are warm leads.
@Jay Hinrichs, not you googling, the original poster. She was nice and made it just the logo I have on the document and website. Agreed on the responses…I got 4 back today that said, “F You.” and 2 counter offers with additional parcels attached, so 240 total acres over 7 parcels that are warm leads.
I suspect you work through a lot of access issues or property wont perk or property were they punched a few dry holes into the ground and no water etc etc. But keep in mind and I am not telling you anything you probably dont already know.
But not everyone in the US is into owning cash flow rentals many people want to just own land so they can go camping and shoot their guns etc etc, So this site being a ( cash flow is the only thing someone should invest in site ) its pretty common that those folks with that thought process dont really understand land or others desires to own it.
out west I sold a lot of my stuff to Weed growers they paid premiums and now if you can get a license for legal week those those can make huge up sides.
and then of course there is timber and breaking it up into smaller parcels and selling homesites etc etc.
Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
4y
Perhaps some clarification is in order.
"Do these goofy letters actually work?" was somewhat rhetorical. Yes, I know it's a direct mail campaign, and yes, I know that they do have to have some success, or people wouldn't use them. I suppose it was just my way of expressing my feelings of consternation, disgust, and amusement.
My choice of the word "goofy" was in lieu of a more derogatory term. Perhaps @Joe Splitrock's "predatory" would have been more accurate.
@Justin Sliva if I had intended to discredit you, the image I posted would have included your name and website. However, I did find it interesting that your reply to this thread was your first post. Welcome to BP, by the way. Your letter was simply the latest in the parade of such missives to arrive in our mailbox. We have received many, from many different companies and individuals. If you don't mind, could you explain how you arrived at the interesting amounts in the offer? And thank you for this explanation: "As for assuming we picked your property, because you recently purchased and regretted, we mailed vacant land in southern Missouri and northern Arkansas to non corporate owners 20 - 200 acres." That makes a bit more sense than what I thought.
@Jay Hinrichs yes, yes and yes. haha. We've sold to weed farmers in Oklahoma after splitting from a 40 to 10 acres. when we cut we look to make sure there is water / power in place...We do offer owner finance in a lot of situations to generate some cash flow The land niche is a very small part of this community.
@Sylvia B. It's been since 2017 since I have been on BP, so for some reason it didn't recognize my gmail/username, so thank you for the welcome. As for predatory, I am confused, as it keeps getting thrown around. I broke down numbers above on what typically happens with the letters. What I hope for when my acquisition manager sends out the bulk mailer, is I get a response that says "Hey, I'd like to sell, I saw your offer, it's low, this is what it will take..." and my team goes from there. We have an actual parcel to comp and see if there is value for us on the exit. We will fix deed issues, improve the land, add driveways, split the parcel to add what value we can. While the land niche isn't talked about as much on here as the strategies around SFRs, it's still a viable niche for investors.
To answer your question on pricing there is a mixture of data that goes in based on previous sold comps of vacant / unimproved rec land and we offer a percentage of that to set the anchor for negotiating. With the limited amount of data the county has on lot particulars/details above owner's name, mailing address and size, we have to hedge some risk with them being blind offers. If you were to mail a house blind offer, how would you price it, knowing all you had was an address and have never stepped foot in the house? As an investor you'd be cautious. If we follow the 70% rule of thumb, we'd have to make some assumptions on repairs, closing costs, and what profit you'd want to make, then look at the data available to give yourself an ARV or market value. To achieve that, you'd offer in the 52-56% range, and adjust once you could get an inspection and see what you were actually working with. Luckily, with vacant land, I can get an idea of what the last satellite image shows me, so the physical risk (topography, access, been timbered) I can look at once I have a call back from an interested party. Second piece to this like you said, its a Red Hot Market, we are looking at historical data, and the market is moving fast. Are we looking at a bubble or a blip in the pricing, so as an investor we hedge our risk again. For example, a county in Oklahoma, I could buy as much as a I wanted for 350-450/acre with a market value of 1000/acre, in 2018. Some of those comps will show up in the free sites, this month I paid 2,000 per acre with knowing the market value once cleaned up and split would be 3,000 - 4,000 depending on how small we cut it. So multiple factors are at play.
Hope this clears the air for you...at the end of the day it's bulk mail marketing trying to identify if someone has the least bit of desire to sell and then we help do that. If you decide to go bulk mail, let me know, I have a heck of a pricing rate lined up.
Real Estate Broker · Portland, OR · Member since 2018 · 123 posts · 71 votes
4y
I own rental property and regularly get direct mail from investors who want to buy it. I also represent land sellers who get letters multiple times a year and they regularly save them. When they eventually (sometimes years later) get ready to sell, they pull them out and sometimes call on them. It's a slow drip process, but does work.
Hope this clears the air for you...at the end of the day it's bulk mail marketing trying to identify if someone has the least bit of desire to sell and then we help do that. If you decide to go bulk mail, let me know, I have a heck of a pricing rate lined up.
Thank you for your kind response. Since we only invest in our small town (pop <2500) bulk mail would be unlikely to be useful for us. We aren't looking to build an empire, just improving our little piece of the world while making some money. :-)
Raleigh, NC · Member since 2017 · 347 posts · 94 votes
4y
@Justin Sliva
You mentioned that people who inherit don't have many options. Who is the end buyer of a lot of these besides weed farmers? You mentioned 46 states, surely they can't all be weed farmers?
@Chris C. inherited land tends to have less emotion, not less options. They could put it on the market, like we would. The difference being, if it wasn’t passed along properly there may be a few steps involved insuring marketable title. Secondly, if they dont want to deal with it and would rather take the cash offer with us handling the transaction. Why do people trade their car in or sell to carmax… the simplicity. The weed farmer was one instance in conversation. Our typical buyer is someone who wants a recreational piece of property to hunt, camp, or to get away from the city. In some instances it’s the neighbor that wants to add to their contiguous land.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
4y
I, personally, much prefer the postcards and letters to the many phone calls I get each day telling me they'll pay cash for x address. If I ever was to consider selling, unlikely as I'm leaving them to my children, hopefully many years from now, I might reach out to one of the letters as I feel it's a respectful way of contact. I would never consider the cold calls.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Justin minor data point my custom data base was done PRE google earth we had to earn it and thats why prior to google earth it was so valuable.
I had a young man and a lap top ( they had just come out) go to every county up the 1 5 corridor.
go to the assessors office and in the northwest you have really robust aerial photos that you could marry to the assessors plat maps and determine if there was standing timber or if was recently logged.. then we put the owners info in there too.. it was all done by hand took a year to create. then we back filled it with the reverse directory to get the owners phone numbers .. at that point we had telemarketers come into our office 2 nights a week and cold called.
what was amazing was rural owners dont get called nearly as much as if you lived in the city.. sometimes U could not get them off the phone.. we had two plays One we bought the timber deed only as they did not want to sell the land.. and or we bought land and timber.. And I would say we bought the timber deed probably 70% of the time so the land and timber maybe 30% of the time really created two profitable exits for us.. I then had a 7 figure line of credit with my bank to fund the Timber deeds ( pretty tough for most folks to get these for one most dont know you can buy just the timber on a deed) and a banker that understood what we were doing. Or we got the Mill to give us a 100% advance on the Timber deed at 0 interest.. I mean talk about the BRRRR that goes on on this site. we tied up millions of dollars of timber with not one penny out of pocket .. other than our standard over head. to this day its my favorite thing I did.. not only that it got me in the woods every week .. i had my 4x4 with my quad and well it was just cool. I miss it. Mills wont advance anymore for timber deeds and banks unless your a large timber owner or Mill wont give guys like us a LOC . those all ended with the GFC.
