This is episode number 2221. Jill and I are talking about the worst states you can select for land investment. What comes with the worst and the best? Why did I choose ‘worst’ to put right in the title? It’s because this is what people want. All week, this is what the internet is telling us to talk about and what people are chattering about.

I would want to know, too. Right away, what are the worst ones, so that I don’t even deal with them? This is what we’re going to help you with.

At the end of this, Jill is going to throw out state names, and I’m going to say yes or no, and why.

We’ll play that game. I like that.

Each day on the show, we answer a question from our Land Academy Member Discord Forum and take a deep dive into land-related topics at your request.

Ram Road said, “I’m performing the Red, Yellow, Green Test for 5 to 60 acres of vacant land. I get way different for-sale and sold ratio results between Zillow, Landwatch, Land.com, and Redfin. What do you feel is the most accurate for this purpose? Thanks.”

The Discrepancy & Reliability Of Online Real Estate Data Sources

This is a diamond-in-the-rough, brilliant question that goes very deep into data and into the internet. This internet, whatever it is now, was not the internet many years ago that we have now. There’s a sense of trust and a sense of unquestioning things that are on the internet now. When you look at Zillow, Landwatch, Land.com, Redfin, Realtor.com, and all the sources of data that we have out there, we tend to think it’s all real, correct, and awesome. It’s there for our taking, and we own it. It is not the case.

What’s behind Zillow is a mom and pop. Everybody inputs stuff into Zillow. Whatever they put in there could be real or couldn’t be. I don’t know. In Landwatch, it’s the same thing. Land.com and Landwatch are owned by the same company. They draw from the same data source. There’s no way you could know this unless you got right in. Redfin has contracts with the MLS, but only with certain MLSs. There are 344 MLSs in the entire country. Most people think there’s just one. There are tiny factions of MLSs all over the place. Realtor.com is the actual National Association of Realtors data. It’s only the data that they allow us to see.

My point is this. You’re going to get different numbers on all this stuff because the back-end data that feeds all these sources that we use is different. It’s not coming from the same place. You take that how you will take it. There are certain data set sources that I trust. Zillow is one. Realtor.com is one. Redfin for houses is great. Redfin is amazing for houses, but not for land. How do I know that? From experience.

You can spend as much time as you want comparing these data sets, or you can choose the ones that you trust. I can tell you for sure that you’re not going to get the same answers across the board. This is what I was talking about, the mistakes that people make. We want this to be like trading stock. “It’s worth $32. I’m going to buy it. I hope it goes up to 40, and then I sell it. I made some money.”

You can spend as much time as you want comparing data sets, or you can just choose the ones you really trust. But one thing is for sure—you’re not going to get the same answers across the board. Share on X

That isn’t anywhere near what goes on here. That’s why there are so few people doing it and why the people who do it right make so much money. Great question. Choose your data sources wisely. We use DataTree. Jill and I love it. We’ve been using it for a very long time. It loves us back. This episode’s topic is the worst states to select for land investment.

This will be fun.

Key Indicators For Identifying Good Land Investment States

Ask yourself these questions, and they will tell you whether or not it’s a good place to send mail out in general. There are exceptions, but this is, in general, a data exception. At the end, we’re going to play the little state game. Is anybody moving there or vacationing there? How about Florida? Do they move there and vacation there? How about Maine?

When do they go there? Is it seasonal? Is it permanent? There are things like that, too. I can’t even think of the name of that site. Maybe it was a U-Haul. One of them was a U-Haul site. They tracked where people were renting equipment. They put it up there, where they were renting from and going to, and then the opposite, if they were leaving that state. You could see where they’re going. It was interesting. You could track that stuff.

On Redfin data or Redfin research, type in those two words in Google. You’ll get to the back end of a Redfin data analysis. One of the things that’s deep in there is the searches that people are doing. You’re sitting somewhere, doing a search about looking at real estate in a different place. They publish all those statistics. It’s easy to see and read. For example, people in Los Angeles are all dreaming of moving to Phoenix because it’s cheaper. It’s very obvious by their internet searches. That makes sense. Are people dreaming of moving to North Dakota? If you live in Winnipeg, that might be an improvement. I don’t know. It’s all relative.

How about the Deep South? Who would be thinking of that?

Is Rural Mississippi experiencing a massive influx of people moving there? I don’t know, but I can tell you this is a good indicator of where you can buy property. I’m not saying you can’t buy cheap property in any of those places. This is what the Red, Green, Yellow Test is designed for. Run a Red, Green, Yellow Test in a couple of counties that are in North Dakota. You see how it comes back if there are any sales there at all.

A massive influx of people is a strong indicator of where you should be buying property. Share on X

Number two, are there any real year-over-year price increases? Someone’s like, “I’m from Michigan. My entire family has purchased real estate and sold it. This is what happens, or what used to happen in my family. I bought that house for $80,000 and sold it for $130,000 twelve years later. I made $50,000 on this deal. Are you kidding? This is amazing.”

You didn’t make that at all. Between the interest expense and the maintenance cost, the mortgage insurance, and all of it, that’s not a real year-over-year price increase. My dad bought a house when I was a teenager on a lake for $700,000, and he sold it when his wife died 25 or 30 years later for $720,000 after paying all the interest expense on that for that long.

What was the purchase price again?

$700,000 and sold it for $720,000. That house in Southern California would be bought for $700,000 and sold for $4 million.

That’s what I grew up with.

People from Southern California believe the whole country is like that. They have no idea that there’s no growth in real estate in the Midwest.

There’s pretty much a Southern California rule. Wait ten years and it’ll double. For the most part, that’s true.

The first time I heard that, I said, “That’s the funniest thing ever.” I walked out of the bar, and then I went and checked.

You’re like, “I am wrong.”

Your year-over-year price increase is a very good place to send mail in general.

That’s it. You see growth. Do you know what’s interesting, too? You’re in the business. We’re in it. The internet is getting even better, smarter, and knows what I’m looking at. It serves up data for me on a platter all the time. One of the things is that I get a monthly report on the ZIP codes I’ve been watching. It will tell me the home values now and the home values one year ago. It gives me the predictions of where it’s going. A lot of them were up, and now most of them are down. Predictions are going down. Feel free to watch that stuff and go, “I need to rethink sending mail there.”

The Role Of Seasonal Price Adjustments In Land Investment & A State-by-State Assessment

The Red, Yellow, Green test that Jill and I teach in Land Academy smoke this out for houses and for land. Finally, and I can talk about this for hours, does the market that you’re considering have seasonally predictable price adjustments? For example, if you’re going to buy a house in Northern Montana, is the price the same in January as it is in July? The answer should be no. You should see a massive accelerated interest in buying properties and properties trading hands in the summer versus the winter. It’s opposite in Phoenix because it’s hot here in the summer. It’s predictable like the sun going up and down. Tell me a season or a time when the stock market is that predictable, where you know prices are going to be 28% more.

It doesn’t happen. I wish it would, but it doesn’t. Shall I play the state game a little bit?

Does the price change in the Upper Peninsula of Michigan between the summer and the winter? Does anybody buy real estate there at all? You should go look. I don’t know. I don’t think so. Not the way we needed to. State game. We covered Florida.

What was the answer in Florida?

Buy property there.

Idaho.

It’s trendy. The Red, Green, Yellow Test says that, only in the summer.

Oklahoma.

Everybody in Texas wants to buy a vacation property, believe it or not, in Oklahoma, because there are a lot of lakes and stuff there.

Connecticut.

You’re on your own there. I would not buy property in Connecticut. Not all the states, but Connecticut specifically, is a tough state to buy and sell land.

Washington state.

Yes.

Alaska.

No. There’s not enough activity there. The Red, Green, Yellow Test smokes it out.

Hawaii.

No. Same deal.

California.

Absolutely.

New Mexico.

Yes, but tread lightly. If you stay around the major cities, you’re going to do great. There are some rural properties, like those in Arizona, that are very difficult.

Wisconsin.

Some parts of it can work.

Ohio.

Probably not unless you’re local. All these Rust Belt states, if you’re local there and you understand the intricacies of little markets, agricultural land, and all that, you can make a fortune. We have two people in our group who are killing it there. They lived there, are from there, and spent their whole lives there.

Georgia.

In the Deep South, property values are very low. If you’re buying properties for $5,000 and selling them for $10,000, and that’s what you want to do, you’re going to do great. You’re not going to become a millionaire in 24 months if you do that.

One more. Texas.

Texas has been and always will be great. Everybody loves moving to Texas, and then some people move out afterward.

Maybe they’re chased out. After all, it’s Texas. If you don’t have the right attitude, that could happen. I like Texas.

If you walk into Texas thinking that you’re going to change people’s minds and profess amazing things to them that are going to be life-changing because you have this altruistic opinion of yourself as some kind of helper and spreader of amazing news and political stuff, you’d better run out of there.

You will be chased.

You decide who you are. Hats off to Texas. Thanks, Jill. That was a good one. You saved that up at the end, for sure.

I just came up with that.

Join us in the next episode. We discuss what to expect as a brand-new land investor. You’re not alone in your real estate ambition. We’re Jack and Jill, information and inspiration to buy undervalued property.