How to Price a Mailer by Land Type (LA 797)

How to Price a Mailer by Land Type (LA 797)


Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hello.

Steven Butala:                   Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.

Jill DeWit:                            And I’m Jill DeWit. Broadcasting with Steven from sunny southern California.

Steven Butala:                   Today Jill and I talk about how to price a mailer by land type.

Well what the heck is that?

Jill DeWit:                            Yeah, wait a minute. What?

Steven Butala:                   There’s rural vacant land, there’s infill lots, there’s commercial property, there’s all kind of sub sections and stuff like commodity type property, like farmland. Or land that needs to be converted to sub divisions that is farmland. We’ll talk all about it.

Jill DeWit:                            Cool. It’s like a laundry list. There’s a lot.

Steven Butala:                   I try to run thor it quickly just to … oh, I don’t know why.

Jill DeWit:                            You know, it’s so good because so many people think, “Oh, it’s just land,” they don’t even see there’s land that’s zoned for mobiles and land you can do this. If you think you buy a piece of dirt and you can just put anything you want on it, you can’t.

Steven Butala:                   That’s right.

Jill DeWit:                            And I think some people are confused by that too. “What do you mean? It’s mine.” Yeah, but there’s rules though, depending on where it is. Even the type of construction you can do, there might be rules.

Steven Butala:                   However, the good news is if you know what you’re doing and comply with these rules, fortunes are made. Jill and I are splitting property right now in an urban area that should’ve been split a long time ago. We’re doing okay.

Before we get into the topic, let’s take a question posted by one of our members on a Land Investors online community. It’s free.

Jill DeWit:                            Carl asked, “Hello, I’ve been studying for a month for land business. And yesterday was my first time I contacted counties for the delinquent list. I emailed them.” Oh, I’m like who’d you email? He emailed the county clerk. “I went to the county clerk office. Most of the county clerk representatives told me they don’t know of any list.” Oh. Boy. This is such good information.

Steven Butala:                   You’re answering your question.

Jill DeWit:                            This is awesome. “And that maybe I need to contact each township’s tax collector.”

Steven Butala:                   I can read Jill’s mind right now.

Jill DeWit:                            “So my question is,”-

Steven Butala:                   And I love what’s in your mind right now.

Jill DeWit:                            “My question is, am I contacting each town or the counties? The only county I spoke to said they have no list and taxes are submitted on municipals\township level. What has me confused is everything I heard and read about this getting already is from the counties. Also, one county tax office told me they can not give me that type of information and I would need to fill out an open republic relations actually form.” Oh, my gosh. “Are others needing to do this? Thank you, Carl.”

Steven Butala:                   Go ahead, Jill.

Jill DeWit:                            Carl, Carl, Carl. Boy, can we help you.

Steven Butala:                   Yeah.

Jill DeWit:                            It’s like I’m trying to give it-

Steven Butala:                   Carl’s clearly not a member. He’s not a member of Land Academy.

Jill DeWit:                            And I’m glad you’re working on this and I’m glad you’re studying on this. This is the stuff that you have to learn. There’s such an easier way to do this. First of all, you need to know what you’re looking for, number one. And to going district delinquent tax properties is not what you should be looking for.

Steven Butala:                   Exactly.

Jill DeWit:                            Unless you wanna just do only problem properties and be done in six months and have lost a lot of money, then you should stay on this path.

Steven Butala:                   And a lot of crying.

Jill DeWit:                            And a lot of tears and a lot of sweat. Your family will disown you. No, I’m just kidding. But you know what I mean. That’s not the right way to do this. So, let me back up. Where would you start here?

Steven Butala:                   We do not advocate nor have we ever advocated mailing back tax delinquent property only. We’ve done it, we’ve had members come to us with tragic stories, and here’s why.

Back tax property carries along with it a tremendous other problems. People have either passed away, it’s got liens against it, you’re setting yourself up. Even if you got everything you wanted, what you just tried to do here, and you actually got a great list of X, Y, and Z counties, you got a delinquent list and you sent the mail out. And you even sent the mail out right, you offered, how we do it, we price it right. Which is what we’re actually gonna talk about here in a minute, how to price that mailer. You price it right and it got to the right people. And a high percentage are gonna say, “Absolutely, I would love to sell you this piece of property for the offer that you submitted it. I’m signing it and sending it back.” And you’re gonna jump up and down and say, “That’s the greatest thing, it worked.” And you’re gonna get into it and you’re gonna find out that the person that signed it, well, they signed on behalf of their deceased parents. And they have 22 siblings.

Jill DeWit:                            And they think they own it but they don’t.

Steven Butala:                   And on, and on, and on, and on. Or there’s a medical lien, or there’s all kinds of issues with this back tax property.

Jill DeWit:                            Right.

Steven Butala:                   So Jill and I avoid back tax property with a vengeance, let’s say. And we’re very vocal about this on the show and that’s not what we teach.

Jill DeWit:                            It’s like I don’t weed them out.

Steven Butala:                   I don’t know where this came from. Would you rather buy … it all comes back to this one concept. Picture two houses are right next to each other and at the end retail, they’re both worth $100,000. One’s falling down and one is in great shape. It needs to be updated but it’s in great shape. You would like to buy $75,000 and market up to $100,000, make $30,000 on that deal. Do you want the dilapidated one? Or do you want the one that’s renovated? Or not renovated but tenatable, it’s livable.

Jill DeWit:                            Right.

Steven Butala:                   Of course, you want the one that has less work, but it’s poor summaries and the world believes that they have to buy crappy property.

Jill DeWit:                            I know.

Steven Butala:                   Property with problems. The reason that the person … just one second Jill, and then you can go. The reason that people sell property is not because … the reason a person decides to sell a piece of property has nothing to do with the property, it had everything to do with the life situation they’re in. So that person that has that great house, they just want to move somewhere, they got a new job, who knows. There’s a million reason, things change in their life and they’re ready to move.

By the way, I just read that 20% of the population in this country moves every year. That’s staggering.

Jill DeWit:                            We do it.

Steven Butala:                   That’s millions and millions of houses. Millions.

Jill DeWit:                            Exactly.

Steven Butala:                   So this is like myth number 72. To really be good at real estate investing, you have to dispel all the stuff that you’ve learned from the 70s and 80s and 90s and 00s, it just doesn’t apply any longer, it probably never applied then.

Jill DeWit:                            The big picture is those back tax properties are usually back taxes for a reason. Every person whose done this, you listening here, you’re nodding, you’re gonna nod with me.

Steven Butala:                   Everyone’s laughing.

Jill DeWit:                            You’re gonna go, “Yeah, been there, done that.” If you’re a house flipper and you’ve ever driven around and found a little hidden gem on a beautiful street that’s all boarded up and it’s been abandoned for a year. You’re like, “Oh, my gosh. I’m the only one that found it. I can’t believe it’s sitting here. Nobody knows. I can’t believe they never found it.” And then you got into it and you realize, “Oh, that’s why it’s been boarded up for six years. No one can do anything with it.”

Steven Butala:                   Nobody knows who owns it.

Jill DeWit:                            Yeah, or it’s upside down. Nobody wants it. There’s 18 problems with it. And the eight months that you would attempt to spend to get this deal done, you could’ve done 10, 20 deals and made so much more money. So, this whole back tax thing, you have to get yourself out of this … it’s a concept. What you’re looking for, like what Steven just said, it’s a situation. And I just discussed this with a team of people working with us on houses just the other day. They’re hung up on the school district, and I have to remind them, they’re like, “Oh, this is such a great buy. We should get this one because of where the school.” … I heard it’s a really good school district. I don’t really care. The bottom line is, you’re looking for a situation, whatever it is, that’s the concept number one.

Steven Butala:                   They sent a mailer out based on a school district?

Jill DeWit:                            Hold on a moment.

And then you can’t see an asset for anything other than a line item. That’s my thing too. You can’t get hung up on the thing.

No, what they were just trying to sell me on is why should buy this asset because it’s n a good school district. We just found this out. And I’m like I don’t really care about the school district. That has nothing to do with it. What’s gonna sell this house is how well it’s priced. And we already know how we’re gonna committee ein and how fast we’re gonna do it and it’s gonna be great. You have to look at stuff that way.

Steven Butala:                   What’s gonna sell the house is how well it’s priced.

Jill DeWit:                            Right.

Steven Butala:                   What you’re gonna buy it for has nothing to do with the house and everything to do with whatever they sell it to you, what’s going on in their life.

Jill DeWit:                            Right.

Steven Butala:                   They got a new job, both their parents were recently deceased and they inherited it. Theresa million reasons why things change in life and that’s it.

Jill DeWit:                            I’m gonna help Carl one more thing, ’cause I’m sure-

Steven Butala:                   I have one more thing to say too.

Jill DeWit:                            I’m sure this came really directly from our online community. So if you are reading the answer by the way and you wanna see what other people said, go into Land Investors and you’ll see Carl’s question.

Steven Butala:                   Yeah, it’s a real question.

Jill DeWit:                            So Carl, I’m sure everybody has already weighed in. And yes, there is a better way. And when you’re ready, we will help you. So basically, we have the insight track to all the counties data. You never have to call the county anymore. You can Carl, I don’t care if it’s 10 a.m. or it’s 10 p.m.-

Steven Butala:                   That’s not where they get the data anyway.

Jill DeWit:                            You can sit at your desk. We are the licensed provider of all the-

Steven Butala:                   All three assessor aggregators. Assessor data aggregators.

Jill DeWit:                            Thank you.

So, basically what I was trying to say Carl, is you can go in, download the data on you’re own. Not have to deal with these people, and get it exactly how you want it when you want it. Because unfortunately, the way you’re going, when you do hit a county and you do find someone that doesn’t have a brand new employee obviously answering the phones, who understands what you’re looking for. Even when you have that person on the other end, it’s hard to make sure that they give you all the stuff that you need. It’s gonna be hard for you to say, “Heres a list.” Good luck keeping them on the phone. But you essentially wanna say, “Alright, I want a list of all of the people who own property in this county that are between 4.2 acres and 5.5 acres because I’m going for that five acre niche. I want all these properties. I need all of the contact information, I need to know the tax information, size, legal description, assessed. Oh, and I only want it zoned this way. And I only want it assessed to this amount and this range.” This person’s gonna go, “Uh, huh. Uh huh.”

And you know what I mean? They’re not gonna do that. And then what you’re gonna get back … what you’re gonna get back is of course, gonna have half of the things that you asked for. And you’re gonna be trying to make that work. You don’t wanna go about it that way. Your time, your money, your energy is too valuable. You wanna get in there, pull the data yourself, exactly what you want, download the list, scrub it to what you want, and then send out offers.

Steven Butala:                   Let me take it back one step further. Carl, we’ve made an example of you enough.

Jill DeWit:                            Yeah, we’re not picking on you, Carl. It’s good.

Steven Butala:                   If you send 3,000 well placed letters out, unsolicited offers that are priced right and you’ve done your research just like we teach. We teach ever single step on how to do this. To 3,000 houses or 300 land owners, 300 house owners, 3,000 house owners, 300 land owners, one of them is going to be in a life situation where they sign it and they send it back.

Now, do you want to close the deal and resell it for 20 to 30 or 40,000 more? Or do you want to undo somebody’s problem? So stop with the back tax property and stop with the falling down houses. You’re setting yourself up to fail. And that’s the truth of it.

Jill DeWit:                            It’s so interesting, this is such a good topic. How many people … when you take a step back … people don’t believe it but then they go, “Oh, yeah, of course. My parents, their house is paid for and they pay their taxes.” When you really take a step back, there are a lot more people out there with fully paid for assets that are happily paying their taxes that for some reason, there’s gonna be a situation when they go, “You know what? We’re kind of done.”

Steven Butala:                   They don’t wanna clean the basement out.

Jill DeWit:                            And the kids have all moved on. And, “God, this house is just getting too much for us to take care of.”

Steven Butala:                   They paid $18,000 for it 40 years ago, it’s worth $800,000.

Jill DeWit:                            And I happen to get a letter for six-

Steven Butala:                   Hold on a second.

Do you think they care of it’s worth 800? Do you think they care that we’re gonna spend $780,000 and they can move out next weekend. And we’re gonna sell it for 800.

Jill DeWit:                            Right.

Steven Butala:                   That’s exactly what happens. Exactly.

Jill DeWit:                            And then for land-

Steven Butala:                   This is so foreign to people.

Jill DeWit:                            It’s even easier.

Steven Butala:                   I don’t know why.

Jill DeWit:                            It’s the same thing.

Steven Butala:                   Today’s topic, how to price a mailer by land type. This is the meat of the show. Jill and I … all week this week is frequently asked questions. I got with our person who handles customer service and spent an hour with her and we talked about, in great detail, questions that she thought the general public needed to hear from us directly. Or most of these are technical questions. But later in the week, there’s some questions that are more, let’s call them spiritual.

Jill DeWit:                            What the heck?

Steven Butala:                   Not spiritual.

Jill DeWit:                            That’s Steven’s way of saying, “Jill, you don’t have to worry your pretty little head about this.” Listen, you know what’s so funny about that? I have to say something real quick here. Okay, number three is in high school now.

Steven Butala:                   Our number three kid.

Jill DeWit:                            Yes, our number three child, not employee or life partner. Although, there might be anum three, keep it up. Just kidding. Just kidding.

Steven Butala:                   Oh, that’s some classic stuff.

Jill DeWit:                            But our number three child, you guys are having a discussion about their classes and they’re talking about this. And I don’t know even if you know that you did this but everybody forgets that I was a physics pro and I love math and I can do numbers. But for some reason, because it’s not the thing that I talk about very much, I don’t go there very often, I don’t get in deep, people kind of forget that, “Oh, yeah. Jill can do math.” Hello, I can do math.

Steven Butala:                   I know you can do math, pilot.

Jill DeWit:                            All right, well it kind of sounded like, “Well, this is kind of my week Jill, you can just kind of go over here.” No, but I really do like this stuff. So thank you.

Steven Butala:                   I know you’re smart, Jill.

Jill DeWit:                            Thank you.

Steven Butala:                   Here’s the deal. If you’re the kind of person who takes notes for this thing, now’s the time. And then the rest of it’s gonna be fun.

Here’s a short list of the types of land that are out there. Rural vacant land, which is what Land Academy 1.0 is all about. You know, properties that are way out there and super cheap and the sky’s the limit on what you can use them for. There are infill lots. So you’re driving down the street and you see house, house, house, vacant piece of property, and a house and a house and a house and a house. Usually in older subdivisions, not master plan areas. Then it gets a little bit more specific. There’s commercial type property that is zoned for, let’s say, industrial property. Or a church or a subdivision, it’s zoned for residential subdivision, maybe it’s even zoned for like a playground. Urban planners are famous now for pre-zoning the areas that are further out in their municipality that are undeveloped so that it’s all kind of done. It’s zoned that way.

And then finally, there’s what I call commodity type property like farmland, that actually has a price attached to it. If you ask three guys in a coffee shop in Iowa what an acre farmland is going for, they’re all gonna say some version of, “3,200, 3,300, 3,100,” one’s not gonna say $30,000 an acre and one’s not gonna say $1,000 an acre.

Jill DeWit:                            It’s all pretty consistent.

Steven Butala:                   So that type of property, in my opinion, is the hardest to buy. Although, we have members that buy all the time. And they just buy it for two or $300 cheaper than … they think they call sell it per acre or they lease it. They specifically buy it at that commodity price and then they lease it and that’s their whole thing. They just use us to figure out who to send mail offers out to the people, the finest seller, without using brokers and stuff. Which is great, it’s a great use of our program.

So, the real deal is, the real topic today is how is it different? There’s different ways to attract a seller using a mail campaign. They’re diametrically different. Let’s take the first one. Rural vacant land, you find a county that’s relatively rural but close to an urban area. And then you look at what’s for sale on the internet, land and farm, ;and watch, and that’s your sale price, that’s where your starting top point. You never want to be at retail when you’re all done, so we work to backwards. You take it down, I don’t know, you wanna be probably 50 to 60 to 70% of that retail top dollar because you wanna sell it fast. So that’s your sale price and then from there, you offer half.

This is rural vacant land, why? People who own rural vacant land, a very large percentage of them have no interest in owing it at all. They’re just waiting for somebody like you to send them a letter, which no one ever does. Saying, “You know what? On Thursday, I’m gonna give you $4,200 for this property. Yeah yeah, I know you know it’s worth eight or ten. $4,200 is what we wanna offer because we’re in the business of reselling land and you have a couple choices. You can sell it to me, get $4,200 bucks on Thursday, or you can call a broker and wait six months and pray a lot.” Every 300 letters we send out, like I said earlier for that type of property, we buy a piece of property. For exactly how we want it and resell it.

Infill lots are completely different. Infill lots, the value is based on if it had a house on it and the house was done and it was new. What? So wait a minute, you don’t look at other infill lots that are available for sale in the market? No. Here’s how it works. Take a look at the price per square foot of the houses that are done and for sale, all on that market. Let’s say it’s a zip code. Let’s say they’re $100,000. The universal knowledge of if you look at a house, the value of a house is $100,000 and that’s what it sells for, 20 to 25% of that value is land. So 20 to $25,000 is what a new home builder would probably budget to build a house. And this goes for extremely expensive houses too. And I’m not talking about big ranches with lots of acreage, I’m talking about a little infill lot that slips right into two existing houses. So great, now you got a property that’s worth $25,000 retail, that’s probably what a builder would pay, maybe $20,000. Now you wanna come in half at that. So you wanna offer maybe eight to $10,000. Maybe even less.

We go in on deals like that, five of $6,000 bucks, ’cause they just wanna get rid of it.

Jill DeWit:                            Exactly.

Steven Butala:                   And then we sell it for 10 or 15 to make sure our customer, the home builder, is getting a smoking deal and wants to come back. That’s how you price … and that’s what Land Academy 2.0 is all about. Exactly how to price that in spreadsheets and I’ll give you templates and the whole thing.

Commodity property we just talked about. Like farmland, you offer pretty much what it’s worth minus a few hundred dollars an acre. Just because you wanna lease it or resell it. That’s a whole different game. It’s not a game that Jill and I choose to play. But boy, we have some members who are doing great, doing great with that. It’s the same concept of buying a house and renting it out. You buy a house, hopefully for less than you think it’s worth, and then you rent it out and it’s long view. Same thing with farmland, buy it for what you think it’s worth. Now maybe a little less and you lease it to a farmer. Hopefully an industrial farmer whose gonna pay the lease payment. And it’s a long, long view. 30, 40 years.

And then, there’s property where you can change the use or subdivide, like I said earlier. The best example of this type of property is outlying farmland in an urban area that you know and everybody knows, including the farmer, will be converted to a subdivision at some point, it’s just a matter of when. And so he’s buying his time.

Did you ever seen a Christmas tree farm? It’s the same concept. They’re just growing Christmas trees so that it’s a tax thing, they’re not making any money on the Christmas trees. And chances are the farmer’s not making too much on that either. But he knows the real valuer is in the land.

That type of property, because you’re changing its use, imagine buying a piece of farmland that’s worth $3,200 an acre. And when it’s done I’ll subdivide, that same acre you can put six or seven or eight houses on it if you’re really cramming them in there. That is now worth $900,000, maybe more. If you understand the math, that type of property is really exciting to buy. It’s very complicated. I would not recommend starting on that. So it has to do with the value of what it is. It’s just like with the infill lots, it has to do with the value at the end and you work your way backwards.

Jill DeWit:                            Exactly.

Steven Butala:                   And then you get it cheaper than that. Or you get it for what it’s worth if you’re the home builder. If you’re a company like Toll Brothers or Shea Homes, these huge publicly traded companies. And they live and die by doing master plan communities, big ones. You have an office building full of acquisition guys talking to farmers all day. So that’s a game, if you know those acquisition guys and you can get in the middle of that, that’s a game and you can win it and do really well as a career. And people who us do that are people who have worked for these companies as acquisition people. And we have a handful of members that actually use this program for that.

So my whole point is, my very lengthy point now, is its very different how you send mailers out is very specific to the type of land. We’re getting this question a lot so I figured I publicly address it.

Jill DeWit:                            I love it. You know I only have one question I’d like to add. Do you like this nail color?

Steven Butala:                   Yeah, Jill just did her nails. I totally just went off.

Jill DeWit:                            It’s all good.

Steven Butala:                   Well, you’ve done it again, you spent another 25 minutes, 25 minutes now listening to the Land Academy show. Join us next time where we discuss how to chose a county to send offers. And that’s the first land type rule they can land.

Jill DeWit:                            Love these questions and more questions. And if you have any, please go post them on our online community, it is free. And you can find it at

Steven Butala:                   You are not alone in your real estate ambition. Yeah, yeah, I went off.

Jill DeWit:                            That was good.

Steven Butala:                   It needs to be said. Don’t you think?

Jill DeWit:                            Yeah! No, I’m serious. I didn’t have anything to add, you covered it perfectly. I don’t know what to say. It’s a great question. Actually, that’s one of the shows I think people are gonna go back and re-listen to.

Steven Butala:                   I’m gonna copy and paste the transcript for Aaron, our customer service person, so she can just put it in the FAQ.

Jill DeWit:                            That’s a great idea. That would be perfect.

Steven Butala:                   ‘Cause you can’t switch them. Like if you apply the price amounts of rural vacant land, it just doesn’t work and vise versa. I see a lot of our members, which is one of the reasons we’re doing Land Academy 2.0, it’s all about infill lots. Applying the pricing model for rural vacant lands to infill lots.

Jill DeWit:                            And other little niches.

Steven Butala:                   It’s kooks.

Jill DeWit:                            And there are different, there’s some little nuances and we can help you.

Steven Butala:                   Yeah.

Jill DeWit:                            Share the fun by subscribing on iTunes or wherever you are listening. And while you’re at it, please rate us there.

We are Steve and Jill.

Steven Butala:                   Information.

Jill DeWit:                            And inspiration.

Steven Butala:                   To buy under valued property.

If you enjoyed the podcast, please review it in iTunes . Reviews are incredibly important for rankings on iTunes. My staff and I read each and every one.

If you have any questions or comments, please feel free to email me directly at

The BuWit Family of Companies include:

I would like to think it’s entertaining and informative and in the end profitable.

And finally, don’t forget to subscribe to the show on iTunes.