How to Price Your Land Offer Campaign (LA 1128)
How to Price Your Land Offer Campaign (LA 1128)
Transcript:
Steven Butala: Steve and Jill here.
Jill: Hello.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill: And I’m Jill Dewitt, broadcasting from sunny Southern California.
Steven Butala: Today Jill and I talk about how to price your land offer campaign successfully.
Jill: More importantly because it’s the holidays, I would like to talk how to price holiday jewelry for your spouse.
Steven Butala: This is a good question because I go back and forth on this.
Jill: That’s way more important than this dumb land thing.
Steven Butala: I’ve got a lot of questions. I’m so glad you brought this up. Seriously. Jill and I keep these pre-topic discussions from each other so we try to keep it real.
Jill: Yes. Oh it’s real. We can tell.
Steven Butala: If you have, a lot of people in our group are doing, they had a pretty good year and they have spouses. Is it expected? I’ve always wondered this. If you spend $50,000 on jewelry, is that okay? If you spend 500, is that okay? If you spent 2200, assuming that everybody in this group is going to get a reasonably good deal and not go into a mall and pay retail.
Jill: Okay. Number one, it should be relative to your situation. Please don’t spend $50,000 on something to try to impress somebody and get them a Rolex, because that’s just dumb. There are a lot of nice watches out there you can get for a couple thousand dollars, if that’s your game.
Steven Butala: A couple thousand dollars, she says, a couple thousand dollars. Now we’re getting somewhere.
Jill: That’s actually what I prefer. I wouldn’t wear a Rolex if you gave me one, and I know you wouldn’t either. We’ve actually, we’ve had this discussion. So that’s too much. Yeah, $500 in Sears. Not a fan. Even though you’ve got a really good deal and it was 90% off. I don’t know.
Steven Butala: This is a moving target, landmine field. You have no idea how hard this is for men. Seriously. They have no idea what to do.
Jill: Well, do you know your woman? You should know your woman. How’s that? Let’s start with that.
Steven Butala: No, I don’t. I don’t know my woman and I’ve been with her for quite some time, and that’s the truth.
Jill: You could ask your woman.
Steven Butala: I have to say, you’re like really easy to buy. You’re very appreciative no matter what.
Jill: Yeah.
Steven Butala: You find some some slot for it in your head.
Jill: Right. Why I like to think that we talk about it and I leave clues. Well not clues. I try to make it hit you in the face because all women, every woman knows that if you leave clues around they’re not going to see them. It doesn’t matter. It could be taped on their side of the mirror. They’re not going to see it.
Steven Butala: Absolutely true.
Jill: Have a circle and an arrow pointing to it, it still might get missed. I guess just ask. That’s all. Just ask.
Steven Butala: Just ask. That’s what I think. I mean unless you’re really young and still haven’t accepted reality yet and you actually believe the person that you’re with is going to buy you something that you want without using, you still think that other person can read your mind, then this isn’t the show for you, but anyway-
Jill: By the way, it goes both ways. I want to say, I even ask you. I flat out say, “What do you want for Christmas?” Because you are the opposite. If I overspend or something that you don’t think is really necessary, you’re not happy about that.
Steven Butala: Yeah. Overspending really that actually makes me upset. I don’t care what you buy me. I don’t care anything about that at all, but overspending is bad.
Jill: You like useful things.
Steven Butala: Yeah.
Jill: You don’t want a bunch of stuff.
Steven Butala: I think 2000 bucks for jewelry is a lot, unless you’re just financially done.
Jill: Right. Well, that’s true. Okay. For a couple hundred dollars, something really nice. Really nice diamond earrings. When in doubt, go very simple and basic and you won’t go wrong there. I don’t know how this got into shopping by Jill but-
Steven Butala: I still think it’s just a minefield. Every guy’s shaking their head yes right now, who’s listening to this. I shouldn’t say guy. It’s just everybody.
Jill: Let’s move on. Move on.
Steven Butala: Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill: Josh asks, “Hi all. I wanted to get some opinions on a couple of things. I joined Land Academy a few years back and worked at it for almost two years. I completed almost two dozen deals, but they were all the standard cheap desert properties. It doesn’t seem like I was always breaking even on the deals since there wasn’t much margin to begin with. Needless to say, I got burned out with that. Along with that, I haven’t been able to do much with my land business for quite some time now with other things going on, job, et cetera, but I’m really looking to ramp things back up and get back into it. Currently I have a .org as my domain and I really feel like I should change this to a .com. Would anyone agree? Is it worth redoing my entire website, email, social media, et cetera to make this change or should I just continue with what I currently have set up and move on? Just curious what your thoughts are.”
Jill: “Also while trying to gain some momentum on this, I only have a very small budget to get started and I really don’t want to chase the small, cheap desert properties like I did before. I don’t want to get burnt out on those again. I know there’ve been a lot of developments with Atlantic and [inaudible 00:05:21] funding and such, which is awesome, so should I just focus on finding deals and partnering with someone on the financing portion of it? Or should I try to do some smaller deals to begin with and try to build some capital? Thoughts? I really want to get things going again with this business because I really see the value in it. I’ve proven to myself that it works, but I guess it can be a little overwhelming getting started again. I want to get off on the right foot. Any advice or suggestions would be greatly appreciated.” How cool is this? This happens.
Steven Butala: This is very, very frequent in our groups.
Jill: Life gets in the way, you know there’s something there and that’s what’s so funny. We have members that have been our group just like you, Josh, for some time and they left and then six months, maybe even a year later, here they come again and they’re like, “I know there’s something. I know this is right.” It wasn’t the education, it wasn’t this. It wasn’t that. It was me.
Steven Butala: I had a job change or something, didn’t have time.
Jill: My life got in the way, something happened with my family and it’s never a bad thing because now they’re inspired and fired up and determined and they traditionally come in hot and kill it.
Jill: So I would like to go through these questions, just briefly answer each one and tackle each one instead of as a whole. So I think you, you did a great job, too, Josh, of explaining your back story. So that was awesome. So the first question I found is the .com .org thing. I personally don’t like .org and I’ll tell you we did this too in the beginning. Landacademy.com was not free, but landacademy.org was. So people had been with us that long, remember when we changed from landacademy.org to .com. It wasn’t that hard and that wasn’t big of a deal. And for us, it made more sense for this business model because I don’t want you thinking that this education is nonprofit and that’s what people kept doing.
Steven Butala: Here’s what we didn’t change. Our brand. We just changed a .com to a .org. You don’t want to go-
Jill: It was still Land Academy.
Steven Butala: That’s a big, huge, if you change the actual name and then slap a .com on it, now you’re going to change your whole brand and all that.
Jill: Right.
Steven Butala: So it’s going to be your call. If it’s like more than eight characters as a .org or.com, I would consider making some changes. You really want the shortest .com you can get hopefully two syllables.
Jill: Hopefully it was like Joshland.org and now it can be Joshland.com.
Steven Butala: You might have to buy it.
Jill: And you can and you might have to spend some money to get it, whatever it is.
Steven Butala: I will tell you this really quickly. I know Jill was trying to move through this. This whole notion of having the sell side website and all this other stuff is becoming less and less and less important for some reason. You do have to have a strong internet presence in social media, and a strong presence when you send mail out so they can look you up and see you’ve got followers and you’ve got a website that doesn’t have to be complicated at all. You don’t have to sell anything on it. It’s just has to be a reference. You to look good on the internet when they look you up because they’re going to spend five minutes doing it. And that’s it.
Jill: Thank you. His other thing is, okay, do I start out with it in, you’re not alone in that. A lot of people with a cheap desert properties, do I want to, I don’t want to chase those cheap small desert properties like I did before and get burnout. And I agree, I wouldn’t want you to do that, too. And one of the things that we are reminding again, and I don’t, last thing I want to do is nag. Those are just meant to be a reference in our program. We really don’t want you to do that. But just giving you some examples.
Steven Butala: Showing you what’s possible.
Jill: … of what’s out there. I would rather you do these deals in a whole different part of the country or state or region, something that you know better. A lot of people came in doing the desert properties based on what we knew, which, great, we proved that, but you need to apply that to the area that you know and use it with your thoughts. And then I want you to come in and price them accordingly. What if by doing it somewhere in Georgia where the best properties are buy for 10,000, sell for $30,000. You don’t have that money, but you know that area so well. You know it’s possible. I would rather you split your money, invest in that data, invest in those mailers, get those deals and then do some deal funding.
Steven Butala: Couldn’t have said it better myself.
Jill: Thank you. Because you know those.
Steven Butala: By the way, we’re not the only deal funders out there. There’s tons and tons and tons of deal funders, tons of people with money in our group all over landinvestors.com or LandTank or HouseTank.
Jill: I’m hearing every week on our Thursday member calls, by the way that, gosh, every time someone puts a deal in a LandTank for funding, it’s gobbled up so quick. Yep. They are. So don’t worry, Josh, there’s people out there to help you with this and you already have some experience coming in. I would feel good working with you.
Steven Butala: LandTank is the first place I would put it.
Jill: Exactly.
Steven Butala: Regardless of where you are in your career and regardless of the amount, there are people staring at LandTank waiting for submissions.
Jill: and it is a great way to build some capital. Instead of doing, buy for one, sell for five, buy for 10, sell for 30. You’re going to get there faster. And the last thing is, I think that’s kind of covered it. Do you have any other suggestions or advice?
Steven Butala: What I would do is you obviously know what you’re doing and you’ve cut your teeth, you’ve done 10 deals. Like Jill always says, get 10 deals under your belt. See if this is for you, you’re passed all that. And you’re not, this isn’t unusual and it’s not bad. You got some, you found out it was for you, you got some deals under your belt and now you’re trying to figure out what to specialize in. And you see it for whatever reason, it makes sense to you to do bigger deals and get them funded. So just follow through. You have what it takes to follow through in the desert property. It’s the exact same thing with bigger properties. It’s just a larger dollar amount.
Jill: And then as the inspiration side of all this too, kudos to you for figuring this out, that you know what, what was in your way before was you. And I’m sure you’re going to make all the changes, I’m sure you’re going to hold yourself accountable. I’m sure you’re going to stick to a schedule. I’m sure you’re going to like power through. You know what has to happen. You did it before and now you’ve just got to really up your game and you’ll do great. Please keep us posted.
Steven Butala: We have both. We have both side by side, desert operations and large transaction operations and in newly have multimillion dollar operation. So I can speak, feel very qualified to talk about this. We buy properties for $100 an acre or about $500 a lot, 400 or $500 a lot in the desert and we sell them for 200 or $300 an acre or about a thousand bucks. We double our money, like 30, 40, 50 properties a month very successfully.
Steven Butala: We have one guy managing it for us. I’ve trained him and he does a great job and we kind of put that on the shelf and take the money out of it when we need to. The other stuff, and I would honestly, I think I would recommend to you that maybe you continue down that path if you can double your money on it. Get somebody involved where you can just let it run itself and then it funds the other bigger stuff. So the bigger stuff you’re going to is more like buy for 25 or 30 and sell for 75 or 80 and you’re only going to do one or two deals a month like that. And so you can really pick up some capital and some resources cause it’s begins to be a lot of work. It becomes a non part time thing and then the bigger deals will come.
Jill: Perfect.
Steven Butala: Today’s topic, how to price your land offer campaign. This is the meat of the show.
Steven Butala: Yesterday it was all about houses and how to price your campaign. Today it’s all about land. The two and the steps are very, very similar. What makes them not identical is the geography that you choose to send mail to. With houses, it’s zip codes. With land, rural, vacant land, anyway, it’s counties and pricing. Those are the two different things. All the other steps are the same.
Steven Butala: So how do you pick a good county? By looking and eyeballing and research on sites like Redfin, realtor.com, LandWatch and Land And Farm. And what you’re trying to do there is establish a range, price per acre for for sale property. And so let’s say you go on all these sites, do a bunch of research and you determine that the properties that are available for sale in the, let’s say the 5 to 10 acre range because you determine that’s what you want, are $250 an acre. And that’s like now you’re 90% of the way there if you can figure out what that number is. Once you decide that that’s the number, you can build an offer.
Steven Butala: Get the data, pull all the data down just like we talked about yesterday, scrub the stuff out like we talk about in all of our education programs, take out hospitals and it’s the silly stuff, properties with improvements on them. And getting real good data set as my point, a land data set for those acres, that acreage slot. You have determined that they’re for sale for 250 and you want to send it 250 an acre. You want to send an offer campaign out that’s obviously below that and do some math on it to see how you can double your money. Is it a $100 an acre to sell for 250, 125ish, some number like that and run a bunch of tests.
Steven Butala: Take a look at your data set once you’ve all priced it and see if you actually take 20 of them out of your dataset and if you’d be actually buy them for that number, somebody signs a purchase agreement and sends it back and you buy it. Can you sell it for what you think you can sell it for? Are you still at the bottom of the market out there? So pricing land is a little bit more nebulous. There’s a little bit more art to it than houses. Houses is really just all math, but it really, really can pay off. What’s different about houses and land is that you can hit a home run out of land. We do all the time. With houses, you’re hitting a lot of singles. Maybe you hit a double once in a while, but a lot of singles.
Jill: That’s what I was going to say with land. It’s so interesting. Even right now, if you go look on LandWatch, you’ll find some areas, it’s like all over the place. You know what they’re pricing things for. You can really, like what you just said, you can really find more amazing deals with land than houses and with houses, there’s just so much more information. I think that’s a lot of it. I don’t think it’s that people don’t know.
Steven Butala: That’s it, Jill.
Jill: I think it’s just more information available.
Steven Butala: More data.
Jill: A lot of land transactions are bundled up in multiple deals and so there’s not good comps out there, so people don’t even really know what it’s worth. But we do. That’s the value. We know how to get through those. We know how to read through that. We know how to download that and figure out a really good offer price and get them out there and the person reading it, they don’t know what that sold for or that sold for or this sold for. Maybe nothing’s really sold, that they know of, if that makes sense.
Steven Butala: Sure.
Jill: So getting an offer and they all they know is what they paid for it and what they want to get out of it. That’s usually it. And usually too, it comes back to the whole situation thing. What they want to get out of it is to stop paying the taxes on it because they’re not using it. And that’s, they’re not living in it. They’re not loving it. It’s not mom’s house. They’re not trying to maximize price. They’re trying to be done with it. So that’s a whole other driving force that makes this so much more fun and easier. I just love land. At the end of the day, I love it. I love it more than houses. So I really do.
Steven Butala: The takeaway is this, yeah, so do I. The takeaway is this. You have to come up with a number of a price per acre for for-sale property in that county and then work your way backwards from there. That’s the whole way to price a successful land offer campaign. And I will leave you with this thought. Very, very, very often, almost always actually, pricing the whole entire county at one price per acre amount isn’t going to, it’ll work, but it’s not going to be as effective as breaking up the county.
Steven Butala: There’s a lot of different ways to do that. If you think about it, every county has got a real urban area or multiple urban areas in it. Really rural areas, maybe some agricultural areas, maybe some industrial areas. That’s what a master plan, what sort of a civil engineer does. They plan these things out. So once you do a few deals, you would do yourself a huge service to isolate these pockets or these sections of any given county and price it a little bit differently. This is just a one-on-one overview.
Jill: And then within that too, not just the pockets but the sizes. Which makes me think of one other thing I just remembered, too. We have a contest going on right now. It’s going to be really cool. We gave everybody on our Thursday member call, so those of you who are members, you know about this contest going on right now. So Steven picked a county and gave an exercise and said, “I want everybody to price, you know up to one acre and price one to five acres and I think it was like 5 to 10 and then 20 to 40 and then he’s going to do his pricing thing. It’s going to be a contest to see how close everybody comes to his pricing and then there’s a prize. It’s just going to be fun.
Steven Butala: And somebody’s going to, I almost can guarantee, somebody’s going to have better information and more accurate reasons why the price is the price over mine.
Jill: We’ll see.
Steven Butala: I want to see.
Jill: It’s going to be cool. I’m excited. Happy you could join us today. Remember every Monday, Wednesday and Friday, you can find us right here on the land Academy Show and on Tuesdays and Thursdays, don’t worry, we’re still here, but we’re over on the House Academy Show.
Steven Butala: Next week, join us on the Land Academy Show on Monday for another interesting episode. You are not alone in your real estate ambition.
Jill: Happy Friday.
Steven Butala: Happy Friday to you, Jill. Happy holidays.
Jill: Thank you. I’m going to go shopping now.
Jill: The Land Academy Show remains commercial free for you, our loyal listener, so wherever you’re watching or wherever you’re listening, please subscribe and rate us there.
Speaker 3: We are, Steve and Jill.
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Jill: And inspiration.
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