Why the Data Picks Your Market, Not Your Gut

Why the Data Picks Your Market, Not Your Gut

By Jill DeWit, Co-founder of Land Academy

On our member call last Thursday, someone put a county on the screen that neither Jack nor I had ever heard of.

We both assumed they had typed it in wrong. Then we looked it up. The math was beautiful. They had gone out, set their own criteria, run their own numbers, and found a market that worked in a part of the country I would have told you was not moving right now.

I would have been wrong. They did not ask me. They asked the data.

That is the whole idea behind doing land investing online the way we teach it. You are not guessing which state is hot. You are not following a headline. You are running a repeatable test that tells you where to send mail, and then you go send it.

In this post, I’m going to walk you through exactly how we pick a market. The three steps, in order. How to test the concept yourself in about ten minutes. The three ways your gut sneaks back in and quietly wrecks a good plan. And what to do once the data has actually chosen for you.

Your Gut Is Just Something You Heard

Here is what usually happens.

All your friends are moving to Florida. So Florida must be hot. That has to be where you buy.

Or you saw a headline about a big company relocating from California to Texas, so Texas must be it. Everybody is going there. That is where the money is.

I understand the impulse. And honestly, a headline can be a legitimate starting point. It can be the thing that makes you look at a place. But it is not a decision. Right now it is a reaction to something you overheard, and you have not done a single piece of math yet.

Here is what almost nobody tells you: what is hot today is not hot tomorrow. I have been buying and selling land alongside Jack since 2007, so we are going on nineteen years for me, and we have mailed areas that performed beautifully for years and then simply stopped. And then, sometimes, came back.

If Jack were not checking the data constantly, we would not know that. We would still be mailing a market on the strength of a memory.

Start With the Money, Not With the Map

The first step is not choosing a county. It is choosing your acquisition criteria, and I mean that in both senses.

Jack always starts with the property profile. Properties between two and five acres. No structures on the parcel, though we do want structures nearby. Something we can buy for less than twenty percent of what we think we can sell it for. Whatever your criteria are, decide them first. What you never want to do is run it backwards, where you look at whatever happens to show up and say, well, if it looks like a good deal, maybe I will buy it. That is a goose chase.

I like to go one level bigger than that and start with the money. Open a blank spreadsheet and back into it.

How much do I want to make this year? Say a hundred thousand. How many deals am I willing to do a month? I still have a day job, so let’s say two. That is twenty four deals a year, so I need to average a little over four thousand dollars per deal to hit a hundred thousand.

And here is where I would push you. Those are easy numbers, and they are honestly kind of low. Aim higher. Set the goal at two hundred fifty thousand, still do two deals a month, and make sure you net at least ten thousand on each one.

Now I know what I am shopping for. If I need to net ten thousand a deal and I am buying at roughly twenty percent of retail, then I need to be looking at properties that sell in the range of forty to sixty thousand dollars, because I will be buying them somewhere around ten to twenty. That gives me real cushion.

One of our members, Tyler, spent twenty years in finance and still overthought this part. He used the equity planner to back into it: fifteen thousand a month, which meant about two deals a month, which meant three to four thousand offers going out per month. He hit that number in month three and has not missed it since. Last month he netted just over nineteen thousand.

He put it better than I could. This business is math.

The Zillow Step: Where Land Investing Online Actually Starts

Now you have a price band and a parcel size. Go find out where properties like that are actually selling.

Jack and I both like Zillow for this, though you can use whatever tool you prefer. It is free, and it is genuinely kind of fun.

Set your filters. Land only. Your acreage range. Your sale price band, meaning what you expect to sell for, not what you expect to pay. Then start moving around the map and toggling the timeframes. What sold in the last thirty days? Now the last ninety. Now the last twelve months. Is it trending up or trending down?

You are looking for clusters. When your filters are set correctly, sold properties light up on the map, and you will start to see pockets where things that fit your criteria are actually moving.

This is not a five minute exercise. I want you to spend hours on this, maybe spread over a couple of days. When you are done, you should be able to say out loud that this zip code looks better than the one next to it, and here is why.

That is the part of land investing online that people skip because it looks tedious. It is tedious. It is also the difference between a mailer that produces calls and a mailer that produces silence.

Confirm It With Data, Zip Code Against Zip Code

Clicking around a map produces candidates. It does not produce a decision. Step three is where you confirm.

Take the county you like and put its zip codes head to head against each other. The core question Jack asks first is simple: how many properties sold in the last thirty days versus how many were listed in the last thirty days?

If far more property is selling than is being listed, that tells you something real. It means that when you send blind offers to owners there, and you have priced correctly, you have a much better chance of reselling for a profit than you would in a very rural market where fewer people are looking at property online in the first place.

Then look at days on market. If you only get one piece of data about a zip code, that is the one to take. It is more complicated than that once you are actually buying and selling, but days on market will tell you faster than anything else whether a market is alive.

Stack those signals up and you are building what Jack calls the red, yellow, green test. It is all actual data and common sense, and it ends with a list of zip codes sorted into ones you mail and ones you do not.

You can do this in a spreadsheet. For a long time that is exactly how we did it, and you had to know your way around Excel to keep up. That is the single most common thing people tell me held them back from joining us. They would say, I love what you two do, but I am not a spreadsheet person and I did not think I could keep up.

That is why we built DealComplete.com. You drop the zip codes in, it pits them against each other, and it pulls in the additional stats that make the comparison meaningful. It also handles the rest of the engine: pulling the data, scrubbing it, pricing it with Jack’s model, sending the mail, and tracking the calls when they come back.

Land Investing Online Means You Never Have to Set Foot in the County

A member named Michelle wrote in with a question I hear constantly. The data pointed her to a county she had never heard of, in a state she had never visited, and she kept wanting to drive out and see it before mailing. She asked us to talk her out of it.

Consider yourself talked out of it.

Driving out there is a waste of your time. One of the real benefits of this business model is that all of it happens from your desk. Maybe once or twice a year we look at property in person, usually because we happen to be nearby in the RV, not because a deal required it.

I will tell you something that surprises people. I have never gone to look at a property before I owned it. Not once.

And here is the trap. When we have gone to see properties we already own, the reaction is almost always the same. Oh, this is gorgeous. Why would we sell this? I can find something beautiful in every single parcel we buy. If you go stand on your inventory, you will have a very hard time selling it.

There is no financial reward for reviewing vacant land in person. It is not like houses. And if you truly need eyes on a parcel, you have Google Earth and every mapping tool available, and beyond that you can hire a local photographer. Most of them shoot drone now. If you buy the property, you already have your listing photos and drone shots ready to hand the agent. If you pass, you spent a few hundred dollars instead of thirty thousand finding out.

If you are leaving your desk, you are losing money.

The Three Ways Your Gut Sneaks Back In

Even people who believe in the data get pulled off it. It shows up in three predictable ways.

Familiarity. I live in Texas, so I should invest in Texas. Maybe. Maybe the data says yes. But which part of Texas? Dallas might work. A remote county in West Texas probably will not. Living somewhere gives you affection for it, not information about it.

Shiny object syndrome. Somebody on the member call just made forty thousand dollars in a county, so now everyone wants to mail that county. Hold on. What does the whole market say? When did they buy it? How long did it take them? One great deal is not a market. It might turn out to be a wonderful county, but check it yourself.

Analysis paralysis. This one is the most expensive because it looks like caution. Kevin wrote to us and said he spent four months paralyzed trying to pick his first county. Three states, back and forth, forums, videos, second guessing everything. Then he sat down with the data the way Jack teaches it, looked at sold versus active ratios, days on market, and pricing trends, and a few hours later he had his county. He sent thirty five hundred offers.

Four months of thinking. A few hours of measuring. The data does not make you braver. It just removes the question.

Three Rules That Make Land Investing Online Pay More

Once the data has narrowed things down, these three rules decide how much money the same amount of work produces.

Mail the higher dollar areas. Three reasons. First, sellers actually respond. Picture someone who just lost a job, sitting on a cabin lot they bought as an investment years ago and have not visited in a decade. An offer for twenty five hundred dollars does not solve anything for them. An offer for twenty five thousand gets their attention because it changes something. Second, agents want your listing. Nobody is jumping up and down to sell a twenty thousand dollar parcel, but they will work hard for a hundred twenty thousand dollar one. Look at it from their commission. Third, you simply make more on the same transaction.

And forget what your bank balance says. That should never be the thing that decides which market you mail. Jack does deal funding all day long. We did not build Land Academy just to be an education company. We actually want to be in business with you.

Do not chase the overheated market. Everybody remembers when Nashville was the answer to every question. When a market gets that hot, you end up in a bidding war, and a bidding war is not a strategy. I want an active market. I do not want a circus, and I do not have to accept one.

Never waver on your offer percentage. This comes up on almost every member call. Somebody asks whether they would get a better response rate mailing at fifty percent of retail instead of twenty. Do not do it. Two reasons. If you overpay and something goes sideways in due diligence, you have no financial room to recover. And you eliminate every home run. I have lost count of the deals where I thought, that will never happen again, and then it happened again. It happened because we did not move our number.

Every Property Is Just a Line Item on a Spreadsheet

Jack told me this years ago and I have never had a reason to argue with it. Every property is a line item. The math works or it does not.

That applies past choosing a county, all the way down to the individual deal. It could be the most beautiful parcel you have ever seen. If they want eighty thousand and it sells for ninety five, move on. There is no version of that where your affection for the property improves the spread.

Sandra wrote to tell us she just closed deal number seven this year, all in the same county. Once the data told her a market was working, she stopped county hopping and just kept mailing. One of those was a five acre parcel she bought for forty two hundred and sold for fourteen thousand. Her profit for the year is a little over fifty eight thousand dollars, and she has not left her home office.

That is what this looks like when it clicks. Not a lucky county. Not a hot state. One market that the numbers verified, and then repetition.

Jack was buying and selling land for more than twenty years before we started Land Academy, we have now been teaching it for eleven, and between us we have completed more than sixteen thousand transactions. In all that time the thing that separates the members who build something from the members who stall has almost never been intelligence or capital. It is whether they let the numbers make the call.

Data, not gut feelings. It is not a slogan. It is the job.

If you are ready to run this the right way and you want us in it with you, come join us at landacademy.com/join.