So, I started a yellow letter campaign and have sent out about 100 handwritten letters to non-owner occupied properties. I got ONE call from a man and his wife that owned 2 lots of land (right next to each other) in a very hot area in Atlanta. They wanted nothing less than $500k for both lots (combined). We did the research and saw that it wasn't a bad deal and made an appointment to meet with them.
We drove to see the land the day before the meeting and saw "For sale by owner" signs tacked onto a tree. The houses surrounding the land were selling for about $800k-$1.2 million. We did our numbers and figured we would try and make them an offer.
So the next day we meet with the husband....he seemed friendly but not really motivated or receptive to our offers/interest. AND on top of that a real estate agent had come through, removed their signs, and replaced them with her own signs. He told us they were going under contract with the agent in 2 days and to talk with her if we were interested. (So frustrating! lol) So we followed up with husband again the next day on the phone and he was a little grumpy and said that if he were to take our offer he wants nothing less than $500k and we shouldn't need more than a day to close/get the money (we planned on wholesaling the land to a developer). At this point we decided to let it go and just follow up again in a month or so.
So long story short this was discouraging. I plan on writing more letters soon (I have a list of about 800 people) but I feel like maybe the sellers won't be motivated in this type of market (Atlanta is a huge seller's market at the moment). I wrote up bandit signs last night and will be putting them out. I also plan on driving for dollars all day tomorrow. Annnddd... I'm in the middle of completing my exams to become a licensed agent. So there's a lot going on and I feel a little scattered. Does anyone have any advice or even words of enlightenment to get through this little rough patch lol? Does it sound like we potentially missed out on a good deal?
Erin Royster so wholesaling raw land to a developer is going to be extremely tough. I don’t think you missed out on a deal at all really. At 500k, with an exit value of 1.2M I’m not sure there’s enough room there to make a profit as a developer.
I think handwritten letters are a good start but I think you need to send more, a lot more. Think minimum a thousand. Someone else on BP just did a handwritten campaign a bit ago and wrote the entire ordeal up and had a lot of success, but they weren’t wholesaling they were just buying the properties themselves.
I think you’re going to find wholesaling is very difficult. If they have an agent or don’t seem motivated you should probably move on right away. You can also try probate leads as I know some people who have had some success with this.
@Caleb Heimsoth You're so right. It probably would've been difficult to make that deal attractive to a developer
I;m definitely going to write up more letters and then try a different type of seller for the next list. Do you have a link to that post about the handwritten letters?
Just writing this post actually helped me put things back into perspective. I had been so much in my head that I'd forgotten the true reality of wholesaling. It's really a numbers game so I'm going to keep pushing and marketing as much as possible. Thanks for the response!
Sounds like you actually got a decent response from the 100 mailers. One percent return sounds about right to me when dealing with Atlanta area. It's possible you may have spooked the guy by saying you would close in one day. I would never ever say anything less than "about two weeks" unless you have the cash waiting in your bank account. Anything involving land deals can take a ton of time for the developer to sign off on. They most often need to get there engineer out to the site, check city zoning, city restrictions, water and sewer access ( this varies wildly from site to site). Suppose what I'm saying is I would give land deals wide berth at around 60 to 90 days to close.
But if you had the developer all ready to buy it sounds like you just missed the deal, and that there will be more. It takes me around 3,000 letters in my area to get a deal. Which sounds crazy, but that $1,5000 has made me $20k my first deal. Just keep plugging away. If you have more time then money don't forget your craigslist ads, and that dialing for dollars is a quick way to get in touch with homeowners.
Best of luck finding your next deal!