Marketing Land 101 (JJ 691)
Marketing Land 101 (JJ 691)
Transcript:
Jack Butala: Jack and Jill here.
Jill DeWit: Hi.
Jack Butala: Welcome to the Jack Jill show, entertaining real estate investment talk. I’m Steven Jack Butala.
Jill DeWit: I’m Jill DeWit, broadcasting from sunny Southern California.
Jack Butala: Today, Jill and I talk about marketing land 101, which seems really fitting, Jill, because I know you just got off the phone and sold a 40 acre property.
Jill DeWit: Every time I do that, you know, I learn more about it. You know what I mean?
Jack Butala: It’s amazing how much you learn just from one phone call from a land buyer, even, we’ve been doing this since the ’90s.
Jill DeWit: Exactly.
Jack Butala: Every single time I talk to, even a Land Academy member about their experiences. I mean, that’s kind of the whole point of the show here, is to share our experiences so you can skip 20 years.
Jill DeWit: Exactly, that’s for sure.
Jack Butala: Real quick, what happened with, I know this …
Jill DeWit: I’ll tell you on the show.
Jack Butala: Oh, all right. Before we get into it, let’s take a question posted by one of our members on the jackjill.com online community. It’s free.
Jill DeWit: Thank you. It’s on landinvestors.com, by the way, that’s where you go to find this. Okay, Neal asks, “This was my first country mailer, and I think it perfectly reflects why eventually it’s better to target subdivisions separately with more specific pricing.” “Ding ding,” to quote you Jack, Steven.
Jack Butala: Well, you know, go ahead, we’ll finish the question. I have lots to say about pricing and targeting.
Jill DeWit: Okay, “I’m getting a good response, but one signed and returned offer in the subdivision of my choice, New Mexico, makes me think that this offer was way too high, despite it being less than the 20% of the assessed value per the county and less than 25% of the going market value general to the county on Land Watch and Land Pin”
Jack Butala: I’m going to stop you right there for one second.
Jill DeWit: Okay.
Jack Butala: We never advocate using the assessed value for pricing.
Jill DeWit: It’s true.
Jack Butala: Never. Assessed value is very different county to county and extremely different state to state. If you’ve ever looked at your property taxes on your house, you know that.
Jill DeWit: They’re often behind. I think they’re always behind.
Jack Butala: Here’s the good news, you know, you got the first one out of your way.
Jill DeWit: The first mistake?
Jack Butala: Yeah. [inaudible 00:02:16] more people. Go ahead.
Jill DeWit: Yeah, yeah. All right, “My offer worked out to be $262 per acre for a five acre parcel,” so it was $1,311.
Jack Butala: Not bad.
Jill DeWit: “I am now trying to do my due diligence in the area and work more specific to the subdivision, but I’m also not finding any sold comps. I’m looking in Zillow, Trulia, Redfin Realtor, so it’s hard to feel good about my offer price for this particular parcel, especially when it’s not exactly enriched with Jack’s four As.” He puts in here, here’s the things. “It’s barren, flat with not even a bush, it looks like the parcel’s locked in there, no physical barriers to the road, I don’t know, but only affordable if I priced well.” This is why you’re here. You’re getting all this stuff out of the way. Okay, “In short, my first query is that I would love anyone’s input on what else I might try to help me better approximate its value.”
Jack Butala: Good. That is the best question right there.
Jill DeWit: “I thought I might try a local realtor or a surveyor in the area, but felt that the best advice would probably come from other land investors familiar with the area.
Jack Butala: Exactly.
Jill DeWit: Good question.
Jack Butala: This is an area of New Mexico that Jill and I have done a tremendous amount of successful investing in land flipping specifically. Neal, here’s the good news. You’re asking all the right questions. You had what it takes to get an offer in the mail, and you’re buying a piece of property. Those are all great things. Let’s kick up the education just a couple notches forward here. What do you say?
Jill DeWit: Yes, go. I mean, are you going to add something? Is that the answer?
Jack Butala: Jill’s still reeling from this 40 acre phone call I think, this sales phone call.
Jill DeWit: No, I think it’s …
Jack Butala: She’s on a little bit of a sales high, I think. I like it.
Jill DeWit: This is a great question.
Jack Butala: I’m paraphrasing. His question is, how can I do this better next time? Number one, I already mentioned it, please don’t use assessed value ever when you’re pricing an offer campaign. We’ve said it over the years on this show.
Jill DeWit: You want to explain why? Can we really say why?
Jack Butala: Yeah, because everybody in every municipality, whether it’s the city, county, state, or even … Well, not so much the feds. The city, county, state has a different way it’s going to assess property. Why do we assess property, or why do they assess property? So they can send us a tax bill every year. In some cases, two times a year. That’s all it is. It truly, in my opinion, this is just my opinion, has nothing to do with the value of the actual property.
Jill DeWit: It’s true.
Jack Butala: Jill and I live on a block where, we almost live in the same house as all of us give or take, and some of our property taxes are $60,000 a year and some of them are $1,200. Do you think the county made a mistake there? Now, I don’t want to get philosophical about this, but yeah, they are not in the business of valuing real estate. They would argue with that, and we have assessors in our group that argue with that, but I’ll tell you right now, who’s better at it, the assessor or you? You are, us.
Jill DeWit: Well, can I add one thing to this, too, about assessed value? It’s usually something that triggers them to reassess your property. A lot of properties …
Jack Butala: Like a sale.
Jill DeWit: Right, like a sale. If there’s no transactions in your area, nothing’s for sale and so there’s no reason for them to re-look at this area, they’re not going to change it. Then one sale comes in and then it’s months by the time they …
Jack Butala: Or years.
Jill DeWit: Right, they go out and they look at it and they measure or whatever the process is.
Jack Butala: Whatever methodology they use …
Jill DeWit: Exactly.
Jack Butala: To adjust the assessed value of your property, no one really knows.
Jill DeWit: Then it’s one and two years, traditionally behind, and I mean up in value or down in value. You know? That’s the thing. The bottom line is, it’s not an accurate gauge of what the property’s worth. What is an accurate gauge is what people are willing to pay.
Jack Butala: Exactly, so where do you get that data? I’m a data person. You sit there at a spreadsheet, you’re looking at the assessed value, you’re like, “Oh wait, it goes up and down and up and down. That’s what it must be worth.” I’m not picking on you Neal, it’s a rookie mistake. I’ve actually made it. It makes sense. It logically makes sense.
Jill DeWit: It does, because you think, “Oh, it’s assessed at this.”
Jack Butala: Jill nailed it. What matters is what’s for sale and what’s been sold. You’ve heard of comps. For land, it’s very … Neal eludes to this later on in his question, it’s real hard to find sales comparables for rural vacant land.
Jill DeWit: It’s true.
Jack Butala: What do we do? This is all in the program, all in the Cashflow from Land program. I walk you through it step by step. What do you do? You take a look at what’s existing and for sale. Then you price yourself at least half of what that is when you send out a mailer. I’m really skipping along the top of all of the details that really have to go on, and again, I cover it in our education products. Please don’t use assessed value.
Jill DeWit: I want to back up too, oh, go ahead. I’m sorry.
Jack Butala: Then, my final point in here is about the four As.
Jill DeWit: I was going to bring that up too.
Jack Butala: Go ahead. What are the four As? Can you remember it?
Jill DeWit: Can I remember?
Jack Butala: You know, it usually takes two of us to remember the four As.
Jill DeWit: I got it. You’re hilarious.
Jack Butala: Affordability, lower’s better. Acreage, higher’s better. This is for land only. Attribute, like a beautiful mountain view, it’s 10 minutes to the Grand Canyon, and access. You always want access.
Jill DeWit: You’re correct.
Jack Butala: I did remember it, I did remember it. I know this area of New Mexico incredibly well, and I have to disagree that there’s no attributes. It’s right along the Monsanto Mountains, it’s about 20 miles from Albuquerque.
Jill DeWit: It’s pretty views.
Jack Butala: This is in a subdivision, you chose well. It’s in a subdivision where there’s fully functional ranches, like, you can drive through there, it’s like a movie.
Jill DeWit: Yeah, and see horses.
Jack Butala: There’s horses, there’s wild horses even.
Jill DeWit: It’s really cool.
Jack Butala: While you don’t see when you’re looking at it, I’m sure on Google Earth and you might be doing it from a big city, this comes up all the time with Jill and I. Somebody sees a beautiful, beautiful life in what you see as barren and potentially no access. That’s someone’s dream.
Jill DeWit: Someone’s dream is just to own a piece of property. They almost don’t care what it is if it fits their price range.
Jack Butala: Your dream might be to own a penthouse in Manhattan, New York and live there happily. That’s not my dream. We were just talking about this earlier today. I can’t get Little House on the Prairie out of my head.
Jill DeWit: Isn’t that funny? Yeah, we were talking about that. That’s your dream and mine was the beach house. I like [crosstalk 00:08:51] fun.
Jack Butala: We have both.
Jill DeWit: This is the best for me. Thank you Jack.
Jack Butala: Yeah, and one last point. Neal, we talk about a lot of things on this show, but the way you price real estate, it really depends on what type of real estate it is. You’re kind of mixing up houses and land pricing and mailing. They’re really separate. If you go back to our podcasts there, you read through the titles about houses, it’s really specific how to price houses and how to price land. In fact, the last two days the titles are How to Price Houses and How to Price Land, the last two days of the podcasts, so that should really help.
Jill DeWit: Yeah.
Jack Butala: Today’s topic: marketing land 101. You’ve bought it, now what do you do when you sell it? This is the meat of the show. Jill, please kick us off with your 40 acre story that you just got off the phone with somebody who’s, I think, did you close the deal or are they …
Jill DeWit: You know what’s funny? He wants to go out there and see it. I said, “That’s fine.”
Jack Butala: Good.
Jill DeWit: He’s like, “Do you mind if I go out there and do that?” I said, “No, absolutely.” I asked a little about what he’s looking for, and I’m kind of actually, I’ll tell you what I’m trying to do in the beginning. I’m trying to figure out if they’re a tire-kicker or not. If they’re tire-kicker and they’re just now picking up the phone going, “Hey baby, I think we should invest this $50,000 we just got in some property,” or whatever it is. You know what I mean? They know nothing, don’t spend much time with them, because all it is going to do is take up all of your time.
Jack Butala: Who’s hey baby?
Jill DeWit: His wife, whoever is … Yeah.
Jack Butala: I thought guys get on the phone and they say, “Hey Jill, baby.”
Jill DeWit: No, no, no, his wife. He’s got this money, no, and he’s thinking about doing something. You are in goof off mode and I’m in business mode today. How weird is that? Sorry.
Jack Butala: I wanted to get angry with some guy who calls you, “Hey baby.”
Jill DeWit: No, sorry. It wasn’t even like that.
Jack Butala: Couldn’t even get mad about that today.
Jill DeWit: Nope. The point is, when you’re first taking these calls, you have a piece of property, it’s posted out there and we’ll get to all that in a minute here. You get this call like I got this guy. I’m trying to first, you know, ascertain if he’s even legit, and he is legit. I ask what he wants to do with it. What he wants to do is, he wants a place to take his, he obviously lives in Phoenix area, and I can tell with the phone number coming in. This is up in Apache County that he’s looking for some land that is a couple hours drives away. He wants to be able to go up there, hunt, take their camper, spend some time. Then eventually, he might want to live there. He actually had already done some homework too, which I appreciated. He’s like, “Yeah, you know, depending on how it goes, I might plop something down there where we drive our own water up and we have a generator and we have solar.”
Jack Butala: See?
Jill DeWit: See, right?
Jack Butala: Those are all good things.
Jill DeWit: Right, I was really happy. I’m like, “All right, this guy’s doing his homework.” I was talking to him, I was said, “Isn’t that great how easy it is nowadays?” I mean, back when we started in the ’90s it was not as easy to do all this stuff. Nowadays you could buy a pre-fab ready to go thing.
Jack Butala: You could drop a house there, yeah.
Jill DeWit: Exactly, and just roll it up there and take the wheels off if you want, or leave them on. You know what I mean? It’s so nice nowadays. Anyways, so we’re talking about that. His questions were really about the transaction, which was really good. That tells me, too, he’s further along. He’s got it picked out. He actually owns property near Williams.
Jack Butala: Oh, that’s good.
Jill DeWit: In Coconino County, so he knows about it.
Jack Butala: These are all good signs.
Jill DeWit: His wife like Apache, likes the St. John’s area, because we talked about that. I said, “Yeah, it’s a great area. You can get, for the same price as what you paid in Coconino you can get more property.” He says, “Yeah, I noticed that.” I said, “Yeah, it’s great,” so they’re going to probably go up there, and he’s like, “Do you mind if I check it out?” I’m like, “Knock yourself out.” I said, “Nothing would make me happier than if you spent the weekend on it and fell in love with it.” I’m like, “Go for it,” kind of thing. Can’t hurt it.
Jack Butala: Let’s talk about marketing land 101, and why Jill got that phone call in the first place, and should she have taken the call? You know, these are all philosophical things that I’ll tell you, there’s a mix of them that really have historically worked for us extremely well. We’re going on 16,000 completed deals.
Number one, when you’re purchasing a property or you’re in the process of purchasing it, and you’re pretty much sure it’s going to go through, anything can happen until the bitter end, but when you’re just about done purchasing the property, you need to start posting it. Collecting pictures of the land, you can decide whether or not you’re going to send somebody out there to take pictures, or yourself if you’re brand new. Posting, posting, posting is the key. You got to post it on Land Pin, Land Watch, Land and Farm, Zillow, Trulia, Realtor, and in this case, this guy got to us, I cheated and looked before we sat down to do the show, we posted this 40 acre property in the MLS as a test and it’s actually really working out. We found a really inexpensive flat rate, no commission MLS poster.
The whole key, if you’re listening to one point in this whole show, is to make sure you post it everywhere. Oh, and Craigslist and Ebay too. Those will work really well. You also, this is a takeaway also, absolutely need to accept credit cards on a website, and it ends up being your own website, so that they can check out easily. It’s very conceivable, very, very conceivable this guy doesn’t happen to know about our website, that he could have just gone in the middle of the night and checked out, put it on his American Express card and been done with the whole thing. I think we’re talking about eight grand here.
Jill DeWit: Can I tell you what really went down here too, a couple points here?
Jack Butala: Sure.
Jill DeWit: One of the things he did ask me was about the photos. I said, “You know what? Here’s the best thing anyway. Pop those GPS coordinates in your cell phone, right now you can do this, and you’re going to get sometimes even more current than I have. Some of my photos in the area and stuff like that, it’s not the same as looking at Google Earth for yourself.” You know what I mean, [inaudible 00:14:47] standing there, and I really encouraged him to do that, and he’s like, “Oh.” The nice thing is too, the dates are on there. I tell people, when you’re looking at these photos on Google Earth, we use Google Earth Pro. It shows …
Jack Butala: Google Earth Pro.
Jill DeWit: Google Earth Pro, I can’t talk. It shows that the picture was taken, it probably says January 3, 2018. You know that. I’m like, “Oh, that’s great. Not much has happened in three months.” You know, I know that’s a really good photo.
Jack Butala: Plus, it’s fun. You can go back to like, 1994 satellite images, and you can go up to really recent. I noticed that they’re getting more current and more current and more current.
Jill DeWit: Right, they’re really doing a good job. That was really great and that was good for him. He’s like, “Oh, thank you.” I also told him, too, in our postings that we do have, he was asking if, “Is it staked?” I was like, I had no … I gave him the whole discussion about that, so now he understands how that works and he understands that we do have all the coordinates in there. I said, “If you really wanted to, you could with your cell phone walk the property and all the things are there.” He’s like, “Okay, got it.” Then, you just also touched on payment. One of the things that … This is seller specific. You and I are pretty much cash people. We try to price them so well that it’s just a no-brainer.
Jack Butala: Meaning, we buy for cash and sell for cash. A lot of people love to sell on terms. They buy a piece of property and then they resell it for $200 down and $200 a month forever.
Jill DeWit: Right, exactly. You know, I don’t know if this is … The comment that he was asking is … I [inaudible 00:16:22] are priced so well, you know what I told the guy? Here’s the thing, I told the guy our property’s priced so well even if you want to put it on a credit card and you’re making those interest payments for whatever months, it’s priced that well that you’re going to feel good about it. He’s like, “You know, you’re right.” That’s really what it came down to.
Jack Butala: I mean, you took it right out of my mouth. My whole point is about sales and marketing, there’s no replacement for a fantastic price.
Jill DeWit: Right.
Jack Butala: There’s just no replacement for it. There’s no replacement for price. There’s no replacement for a couple of good maps and some good pictures on the internet, and that property’s going to sell.
Jill DeWit: Yeah, because you know what? That’s the whole point. You’re right, Jack. The point of marketing 101 is you want them to look at your posting. Once they get into your posting and they read it, that’s really what they’re looking for, that right area, now they’re in. Now your price is going to push them over the edge. You got to have that initial curb appeal for them to want to walk in.
Jack Butala: Yep. At some point, you really have to take a look, and Jill and I have long since passed this mile marker. It’s not possible to talk to every buyer. It’s just not. You need to have clear instructions on your website and you need to encourage them, it is a call to action so to speak, to check out buying a piece of real estate, rural vacant land, like they’re buying something on Amazon. Period. You’re going to do yourself a ton of favors.
All the most successful people in our group, including us, accept credit cards online. No, you can’t use PayPal, you can’t use Stripe. They have specific provisions about this product type. For whatever reason, it’s beyond their risk threshold. If you go to landinvestors.com and look up in the right hand corner, we have cut a deal with Heartland Payment Systems. They set up an office for us because they encourage us, this credit card provider encourages real estate …
Jill DeWit: Transactions.
Jack Butala: Transactions, thank you, on the internet. We have a special deal, if you do the click through thing through us it’s cheaper and better and you get to the right people. It took us two years to establish this.
Jill DeWit: I know, that’s one of the things that I know that our community loves. You don’t have to be a member, by the way, to use this.
Jack Butala: Yeah, you can just do it.
Jill DeWit: Spread the word. Anyone out there who is buying and selling land and has been kicked off of PayPal and kicked off of MoonClerk and kicked off of this, and that one caught up, and don’t forget Stripe, Stripe doesn’t like it. We finally, finally, finally, finally, finally found someone that’ll do it. Just go through us, and then if you go through us …
Jack Butala: It’s not really going through us.
Jill DeWit: Not really going through us.
Jack Butala: We don’t make any money on this. Full disclosure, we just have, they set up an office.
Jill DeWit: The point is, they understand our property type, and if you go through us they get it. They’ll know exactly who you are and what’s going on. It’s cool, and you can do all kinds of properties here. Thank you Jack.
Jack Butala: Well, you’ve done it again, spent about 20 minutes listening to the Jack Jill show. Join us tomorrow where we discuss best land sales practices. Jill and I talk about it, it’s kind of an extension of what happened here today.
Jill DeWit: Yep, and we answer your question, should you have one, found on our online community. You can find it at jackjill.com or landinvestors.com, it’s free.
Jack Butala: You are not alone in your real estate ambition. I hope we got the point across that, you know …
Jill DeWit: Describe it well, photos, post it everywhere, price it right.
Jack Butala: You know what we didn’t mention? Two reasons a piece of property doesn’t sell, and this is any property, from apartment building to skyscrapers to rural vacant land. You’re not getting the word out, meaning you’re not posting it in enough places, or it’s just plain not priced right. Price, we all have control over, complete control over. Well, we have control over both things.
Jill DeWit: Exactly. Hey, share the fun by subscribing on iTunes or wherever you’re listening. While you’re at it, please rate us there. We are Jack and Jill.
Jack Butala: We are Jack and Jill, information …
Jill DeWit: And inspiration …
Jack Butala: To buy undervalued property.
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