All Forum Posts by: Justin Sliva

@Jay Hinrichs I got goose bumps reading that… awesome play! 

@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. 

@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. 

@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. 

@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...

@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. 

@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. 

Quote from @Sylvia B.:

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.