When Data Tells You to Pull the Plug on a Mailer (LA 1292)
When Data Tells You to Pull the Plug on a Mailer (LA 1292)
Transcript:
Steven Butala:
Steven and Jill here.
Jill DeWit:
Hi.
Steven Butala:
Welcome to the Land Academy show entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill Dewitt broadcasting from sunny Southern California
Steven Butala:
Today. Jill and I talk about what to do when data tells you to pull the plug on a mailer.
Jill DeWit:
This is funny. I like this.
Steven Butala:
Before we get into it, though, let’s take a question posted by one of our members on the landacademy.com online community. It’s free.
Jill DeWit:
Landinvestors.com. Thank you.
Steven Butala:
Yeah, Land Investors.
Jill DeWit:
Eraldo, If I’m saying that correctly, wrote, “I have a property under contract in which the electric poles and the lines cut across the property. I’m not exactly sure if they’re more on the edge or if they run through the middle, but I would assume this would affect the pricing somehow, correct? Does anyone have any experience with this?
Steven Butala:
I have tons of experience with this turns out. When you send a mailer out the way that we do the data, what you’re looking at are the basic facts that are provided by the assessor. So that that data set includes basic stuff like size, value, location sometimes. So it’s a dataset that doesn’t give you all the information. For instance, the assessor doesn’t care if your property has a power line easement on it, and it also doesn’t care if it’s waterfront or any of that stuff. It assigns a value based on an algorithm that’s probably been used for … It’s probably outdated, quite honestly. You’re never going to tell some of these attributes, specifically in this case with the power lines running through it, until it comes back. And by design, these mailers are designed so that you can very efficiently send out thousands of mailers, but people choose the ones that they want to sell. They come back to you.
Jill DeWit:
They self-select.
Steven Butala:
Self-select. Yeah. It works itself out. And then you’re staring at 20 or 30 or 40 deals if you do it right and choosing the best one. Well, in this case, this one came back and it’s got, I’m assuming, huge power lines going from some power plant somewhere out to the public. And this comes back with us all the time, because chances are the seller has had some tough, some experience or lack of experience selling the property. So they sign your offer, send it back and they say, “Yeah, I do want to sell.” And you find out that there’s an easement on the property in it. So Eraldo’s question is, do I care? And the short answer is, heck yes, you care. It’s probably going to kill the deal, in my opinion. However, if it’s around the 20 acres or more and the poles aren’t running right through the middle, you can get around it, but there’s still going to be power lines there. And they’re still going to be, in my opinion, relatively devalued because of this. Jill’s probably going to say some stuff like, well now wait a second. We don’t want to kill the deal yet.
Jill DeWit:
No, I was just going to say I’m not exactly sure if they’re on the edge or in the middle. I’m guessing that he may send out some offers. He doesn’t have the right tools he needs to look at the property in full, by the way. I was kind of reading it like maybe the owner disclosed that, which they probably did. There’s power lines there and he’s probably going, uh-oh. How do I find out where they are? It’s easy. Neighbor scoop. You need to have a good tool. If you don’t, you have to, it’ll save you so much time. And you can stare at it and decide what’s possible. And I totally agree with you. If it’s a 40 acre property and it’s over here dividing up five and 35, done. I could totally work with that. I’m okay with 35 acres. And even the other five, whoever this person, whoever the buyers going to be, they can make that work because-
Steven Butala:
If it’s cheap enough, it’s going to be fine.
Jill DeWit:
If it’s a 1.2 acre property, now we’re talking a different story. That’s the point I think.
Steven Butala:
It’s all about the money. I mean, I’ve purchased property specifically in California because land in LA County is so scarce that they find ways to use this property, like for nurseries and stuff. So I’ve purchased property very inexpensively and sold it for a heck of a lot more to somebody who gets it. It’s all about just redistributing it. So that’s the way to look at that. It all comes down to price. His question is, does it affect pricing somehow? And the answer is heck yes.
Today’s topic, when the data tells you to pull the plug on a mailer. This is why you’re listening. So you’re traveling along in your career, you choose a place to send mail. Let’s say it’s a county or a couple of zip codes, and you’re going through your checklist. How many properties are for sale? How many properties have sold? Yep. Yep. Check, check, check, check, check. Then you download the data and smack, something hits you in the face that you didn’t think of. Here’s a perfect example of what happened to me recently, half the darn zip codes are missing. What do I do?
Jill DeWit:
How do I price it?
Steven Butala:
How do I price it without the zip codes? How do I do address the fact that almost all the mail … This is another example, all the mailing address where I’m going to send the offers, not the situs address where the property is, the mailing address, half of them are Canadian owned, because you’re trying to mail a northern state. We’re not set up to send international mail at all. It’s very expensive to send even a regular letter to Canada. So there’s these things that can come up in your dataset. And here’s my personal experience, because there’s so many options and places to send mail. I just abort the whole thing. You can back into it. Here’s another alternative. And we have people in our group that are very good at this. The chances are no one’s ever sent a mailer ever to these places. So you can paste it back together and work it all out somehow.
Jill DeWit:
Spend some time off.
Steven Butala:
You’re going to get a fantastic mailer response more than regular.
Jill DeWit:
I don’t know if you want to talk about pricing by APN scheme, do you want to teach that here real quick? Or is that too much?
Steven Butala:
I mean, It’s kind of off the topic. If you don’t have zip codes to send this mail, the offers to-
Jill DeWit:
Oh, I meant-
Steven Butala:
Pricing by zip codes is not going to matter. I mean, pricing by APN.
Jill DeWit:
Wait, I have a good dataset, but I don’t have a zip code, but I have an APN.
Steven Butala:
If I don’t have the zip code to the actual owner’s mailing address-
Jill DeWit:
No, I’m talking about a zip code for the property, the situs stuff. I don’t care about the situs. Is that what you’re talking about?
Steven Butala:
There’s a situs address Jill, where the property is located.
Jill DeWit:
Yes, I know that.
Steven Butala:
And then there’s the mailing address where the owner is located.
Jill DeWit:
I’m talking about a situs zip code.
Steven Butala:
I just pulled a dataset where the zip codes for the people, their owners are missing.
Jill DeWit:
That’s sad. That’s crazy.
Steven Butala:
So there’s some. And by the way, all this data that we pull is directly reported to by the assessor. So the assessor either something went wrong and in the translation, or-
Jill DeWit:
How often does this happen?
Steven Butala:
Well, I just did a 10 county mailer and I had to pull one of the counties because of that. And I just replaced it by replacing-
Jill DeWit:
That’s not that often.
Steven Butala:
It happens. If you’re going to do a 10 county mailer, it’s going to happen pretty often.
Jill DeWit:
You think so?
Steven Butala:
And it’s not just the zip code thing. You just get in there and you’re like, the pricing doesn’t make any sense to me.
Jill DeWit:
That’s what I wanted to say. I don’t want to say that our data’s crappy and you run the risk of not having addresses. I don’t see that to be true. Our data’s pretty darn amazing.
Steven Butala:
It’s just about-
Jill DeWit:
[crosstalk 00:07:40] It’s core logic. That’s what I’m saying. And the assessors have to send them tax information. This is not a list. This is not whatever, but maybe I misunderstood this topic. I thought the topic was pulling the plug on a mailer for various reasons, which is most likely like I’m having trouble figuring out pricing. Maybe I don’t have as many comps in the area? Maybe I got into it and the days on market are so high? Am I on the right path?
Steven Butala:
Yeah. I mean, there’s a lot of reasons that you would pull the plug on a mailer and that’s one of them. You can’t get enough comparison values, but you shouldn’t be pulling the data, and this is what we teach, before you’ve checked pricing and comps and availability. That’s what I said, in the beginning, you’re traveling along your little path to do a mailer. Long before you pull the data, you’re out on realtor.com and Zillow and you’re checking to see how many properties in the county that you want to mail are for sale. How many properties have been sold recently? And that data’s going to tell you. You check a lot of places before you ultimately choose the one that you’re in it. So it’s a happy day, right? Then you pull it and you find out it’s not right. So pricing or availability, you should know that long before you spend even 10 cents on one line of data. The tragedy happens, and it doesn’t happen very often, is when there’s just huge holes. You see this in Arkansas, for some reason, just incomplete addresses, like truly 101 assessor stuff. I don’t know how they get their tax bills out. So that stuff happens.
Jill DeWit:
But it’s not that often.
Steven Butala:
It’s not that often, Jill.
Jill DeWit:
That’s what I was trying to convey and to check. So thank you. Any other glaring things about this? What else? Is there any surprises recently in the last couple of years that you’re like, huh? Not doing it.
Steven Butala:
It almost always is address related or just lack of data. There’s no legal descriptions at all. So that can be a problem. It doesn’t mean that you should. For me at my level, that’s a problem for me. For some people, it probably might not be. My point is this, and it’s in the title, when you’re not feeling it with the data and you spent a few hundred bucks, just stop right there. Don’t try to push your way all the way through and spend the money on the mail.
Jill DeWit:
That’s good advice. Who cares about the $300? It’s more about your time and energy in the mail and that you have to move on to another area.
Steven Butala:
Exactly.
Jill DeWit:
No big deal.
Steven Butala:
No. If your car needs a part and you order the part and they send you the wrong one, you don’t try to make it work.
Jill DeWit:
Isn’t that funny?
Steven Butala:
You send it back.
Jill DeWit:
That’s a good example. I’ve had that. You order something from Amazon, it’s like, “Darn it. I ordered the wrong size case for my cell phone. Shucks.” And you stare at yourself going, it was $8. Do I mail it back and try to get a refund?
Steven Butala:
That’s a perfect example.
Jill DeWit:
That’s a good example. Like, no. No, you put that in the donate pile. Someone else will use it down the road. You don’t need to send it back and get your $8 back.
Steven Butala:
Exactly.
Jill DeWit:
Happy you could join us today. Monday through Friday, you can find us right here on the Land Academy show.
Steven Butala:
Tomorrow the episode on the Land Academy show is called, How to Maintain Your Enthusiasm and Your Revenue Stream During a Plague. You are not alone in your real estate ambition. It’s Friday, so the topic is fun.
Jill DeWit:
Oh, that does sound fun. I love it. Yeah, because I’m sure everyone right now is just like, “What projects should I tackle next with this COVID free time I have?” All the closets are done. Remember when that was the thing? This first happened to be like, “Hey, now’s the time to clean out your closet. Now’s the time to start a blog and write a book and everything.” This’ll be funny. I’m excited.
Steven Butala:
One of our employees is going through a pretty big move, physical move into a house. And I was just talking with her and she said, “Three months ago when this started my roommate and I got rid of two thirds of our stuff just one day.” One day they’re staring at each other and they said, “Let’s clean out the closets.” Two thirds of their stuff they got rid of.
Jill DeWit:
I did not know that. That’s cool. That sure helps now for moving?
Steven Butala:
Yeah.
Jill DeWit:
Good. That’s awesome. The Land Academy show remains commercial free for you, our loyal listener. Wherever you’re watching or wherever you’re listening, please subscribe and rate us there.
Steve & Jill:
We are Steve and Jill.
Steven Butala:
Information.
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
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