Does adding mobile homes or houses to your land business make you more money? In this episode of the Land Academy Show, Steven Jack Butala and Jill DeWit dive into the financial implications of adding mobile homes to your land business. They discuss the pros and cons of this strategy, the importance of mailer yield, and how it can impact your overall success. Don’t miss out on this game-changing episode! This episode is packed with valuable insights to boost your bottom line. Tune in now and transform your land into a goldmine!

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Can Mobile Homes Increase Your Land Business Profits?

Topics For This Week

This is episode number 2066. We’re talking about adding mobile homes or houses so your already existing land business makes you money. The answer has been yes . There are issues. There are things that may or may not be acceptable to you as an investor, and we’ll cover what those are in this episode. This week, we’re talking about what works and what doesn’t in your land bus business.

It is Wednesday. We’re talking about mobile homes. On Thursday, we’re talking about the five types of land that you should be flipping and where to do it in the country. On Friday, we’re going to have a real candid conversation about why and how we’ve kept food on the table flipping land. The truth is we know how to do it now, but back in the day, it was a pretty huge learning curve. Do you remember that?

I do.

Mailer Yield And Efficiency

Each day on the show, we answer a question from the Land Academy member Discord forum and take a deep dive into land-related topics by popular request. Let’s take a question.

Mike wrote, “How many mailers do I need to send out to get one land transaction?”

I don’t know. This is an age-old question. We had the second installment of Career Path and had some very experienced people there. They were asked that question by some newer people in Career Path and they said 3,000. They send out 3,000 a month to complete 1 transaction. That number is probably pretty close to what our number is, but you should never use that for yourself. If you’re brand new, it’s going to be closer to 10,000. I want it to be intentionally 10,000. I want you to make sure you pick the best transaction possible so you can win. As time goes on, your yield, which is called mailer yield, will hopefully go down.

I’m not a big fan of calculating mailer yield. We stopped doing it many years ago. What happens is you send a bunch of mail out at some number. It might be 3,000 or 23,000. You get a bunch of deals back and you start loading up your bank account. That’s the truth. You’re then like, “I don’t care. I know that I spend $5,000 or $6,000 on mail a month or whatever the numbers end up being and I know we have revenue coming in of $30, $40, %40, $80, or $150.” A lot more comes in than goes out.

Mailer efficiency is always and always will be a huge topic with people who are new, which I understand because they don’t want to spend a lot of money for nothing. If you follow the way that we do it, it’s going to work. What do you think about this topic? What’s your reaction? We’ve answered this question hundreds of times.

Mailer efficiency has always been, and always will be, a huge topic for people new to the land business because they don't want to waste money. Share on X

It varies so much. It depends on who’s answering the phone too. There are so many variables that go into mailer yield. It’s crazy. Is it going to voicemail? Is it going to PATLive? Is it you? How responsive are you? Many people look at mailer yield as a transaction that goes all the way to the end. What about the 50 people who called you back that day that it hit? That’s mailer yield too. You have to look at that. If all 50 people call you back and are hot and you’re in Hawaii for 2 weeks, and you get back to me and don’t get a deal and they all move on and all lose interest, then I’m going to argue that it was you. The mailer did its thing. You didn’t follow through. You can see there are lots of variables that go into that.

The Role Of Consistency And Phone Skills

The people that we have there are really successful with their Land Academy Pro. Land Academy Pro is a product Jill and I launched a while ago where we allow certain people to use our staff so they don’t have to go out and get their own transaction coordinators and all that and charge them for it. We all get together and talk. They all have one thing in common. They are relentless on the phone. There’s nobody in that group that I can say, “They’re so good at pricing.”

Pricing, mailer yield, and things like that are concerns of new people, which I understand. I’m not knocking it. When you get to after 10, 20, 30, or 50 deals, all we talk about is, “How are you handling this situation with the seller?” We don’t talk about Excel. All the stuff that I do is relatively insignificant. It’s necessary to do it and do it consistently, but all I’m doing is supporting Jill and what Jill does on the phone with the sellers.

Thank you.

How many mailers do I send out, if that’s the question, to get one deal? You can’t split-test it.

How about this? See how it goes. You’re going to watch your mailer yield increase as you keep doing this and get better, number one. Number two, if you’re not getting the deals you want, then send out more mail and look at all those other things. You have to adjust.

If you're not getting the deals you want, send out more mail and look at all those other things. You have to adjust. Share on X

Mobile Homes And Houses In Land Business

Get better at what Jill does. This topic is, does adding mobile homes and houses make you more money in your land business? Heck yes. Here’s the deal. When you send out an offer campaign and price it to buy mobile homes and/or houses, it’s very easy to price houses and mobile homes. It’s very precise and fast.

We have a product called Smart Pricing. Line by line, it gets priced through all kinds of algorithms so business pricing and mailer goes away entirely. These are the differences between mobile homes, houses, and then land. For mobile homes and houses, I put them in the same category because they’re generally the same when you do the deal. I’ll explain.

It’s way easier to do a mailer faster and pricing is very accurate, number one. Number two, my job’s way easier when we buy mobile homes and houses. Once the thing gets out, we have to send out a lot more mail because people who own houses or mobile homes, in general, are pretty aware of what their property’s worth. Does it stop us from buying them? No. They’re coming from places where their sister-in-law is a real estate agent and they’re telling them how much their house is worth for better or for worse. There are all kinds of dynamics that Jill has to deal with once they pick up the phone, call her, and say, “I got your letter. I do want to sell my house but.” She’s got to deal with that. We probably send 2 to 3 times more mail out to get 1 of these transactions because of that.

Number three, once everybody agrees on a price that we want to buy, we have to go to work to review that asset to see if it’s okay. In buying a piece of land, you check to see if it’s in a floodplain and if it has access. You spend maybe 20 or 30 minutes seeing if you want to buy it and go through the due diligence period. That’s not the case with the house or a mobile home. The physical asset matters.

It’s very inefficient for me or Jill, the business owners, to personally go do that. You have to orchestrate inspections and concrete and decide, “Is the actual physical asset viable for me to flip it in its same condition without any improvements?” That’s the only way we do this. A lot of time is spent on the actual asset. With land, no time is spent on it.

We would always say in the land business, “If you’re leaving your desk, you’re losing money. It’s inefficient.” That’s not the case with houses. There’s a lot of extra work that goes on. However, when it passes all your tests, the physical asset is good, and the economics work, your sale time and the saleability of the asset from a risk standpoint are amazing. Of all the house deals and mobile home deals, I don’t think we’ve ever owned one of those assets for more than a week.

In the land business, if you're leaving your desk, you're losing money. It's inefficient. Share on X

We also picked the right areas too. I was thinking about one that came up again. It was presented to me this week as a funding deal. He wanted to buy it for $32,000 and thought he could sell it for $100,000 something. I’m looking at it. We got the inspection back. I’m looking at the photos and I’m looking at the agent. I’m really digging into what’s going on in the area. There’s nothing happening in that area. I said, “Here’s the scoop. It’s heyday. That would be a good mobile home deal. It ties to what you’re saying, but it also has to be a moving area. This area has nothing. There are no sales supporting anything. They’re really low. I can find a mobile that sold for less than $20,000.” That’s that area.

We know how to pick the areas that start with the trolling so when it comes in, everything is true. I want to make sure you know that not every mobile home is going to fly off the shelf. I had to go back and say, “I’m super sorry. I don’t mean to insult anybody, but I have to value this as a land deal. This is a perk. We’re talking less than $10,000 that I would pay for this.”

I glossed over that in the beginning. Thank you for bringing that up. It’s got to pass the Red Green Yellow Test and you have to price it correctly. That sounds to me like the area didn’t pass the Red Green Yellow Test.

Here’s the reason why. The person didn’t mail for that. That’s the thing. You have to watch out for that. The person came back with, “I don’t want to sell this but I do want to get rid of this.”That’s how it all started. That’s how I got pulled in because the person was like, “I don’t know this area. I don’t even know mobiles. I was like, “Let me see what I can do here.” The good news is I’m sure I  educated and helped that person. I’m good with that. They know like, “I got it. Noted.”

To summarize, if you’re trying to make $100,000 on a land deal, it’s going to be a lot of upfront work, a lot of pricing, and a lot of jack-type work. You’re going to send out a rational amount of mail. Jill, if, hopefully, it’s you, or somebody else is going to convert those would-be deals into money. It’s a little bit riskier on the sell side because there are more unknowns. It’s a little bit riskier from a pricing standpoint because there are unknowns. With mobiles and houses, there are very few unknowns in the mailer process and few unknowns in value, risk, and all those things.

Your due diligence process and boots-on-the-ground effort in getting hands and eyes on the physical asset is imperative. You have to choose what you like. Some people like to work with their hands. I don’t. I like to hit the keyboard. Some people like to talk on the phone. Jill does. I don’t. Neither one of us enjoys walking through a house or a mobile home at all when it comes to this unless it’s our own house. J oin us in the next episode. We’re going to talk about the five types of land that you should be flipping and where in the country to do it. You are not alone in your real estate ambition. We are information and inspiration to buy undervalued property.