For real estate investors who are starting out, getting that first deal is probably one of the biggest moments in their journey. But how about closing your 16,000th deal? While that number seems amazingly high, acquisition pros, Jill and Steven, from Land Academy and House Academy, are here today to reveal how they used data and targeted direct mail to close that many deals.
Before getting into their investing strategy, they were buying and selling assisted living facilities in the 1990s. Because deals usually take a year to close, they decided to transition to land investing.
Jill and Steven would first create a data set of land properties before they’d send out an offer to their list. Their goal is to get a property purchased, put it up on the internet, and get it sold.
The partners have carefully divided up the work with Jill taking care of sales and Steven focusing on acquisitions. Even with the availability of property data from DataTree, RealQuest Pro, and TitlePro247, they believed that there must be a better way to reach more potential sellers.
After putting in a lot of thought in their strategy, how they compile their data by looking into factors such as the area, what’s going to go on there, etc., the partners would then send well-thought-of postcards to the property owners with a specific offer for their land.
Their method takes out the need of chasing sellers down as nowadays they just wake up and shift through the offers that come in.
There’s so much available data on each product type available. So Jill and Steven would send out 10,000 postcards. With the way their algorithm is set up, the price they offer is specific up to the last cent.
The partners also never improve on the asset they acquire. With rehab being potentially a pain in the ass where all kinds of things can happen, they prefer a risk-averse approach of just selling below retail price to sell it fast.
Jill and Steven would only mark up by $60,000-70,000 a $300,000 property, which flippers would buy for $270,000 and sell it for $400,000. By selling below retail, their buyers, who mostly are flippers, make more money than them and would later come back to buy from them again later.
In fact, most flippers are beating down their doors looking for more properties they could buy.
To find the flippers or buyers for their properties, Jill and Steven would do an investor open house where they could get 25 investors in the market.
They believe the only reason a property doesn’t sell is because of price and reach. You’re either selling it for too much or you’re not reaching the right people. The few properties they have unsold are in the $30,000 range, and they weren’t really marketing them.
Most of the time, a life event triggers the decision for people to sell. It could be that they got older and found that nobody wants the property anymore. Every year property owners are given tax bills, and at some point, they just want to be done with the property.
Sometimes people just want the convenience. The land may have been passed to them after being in the family for years. Since Jill and Steven offer cash to the owners and they receive it fast,, the owners can quickly be on their way to their retirement.
Some of the property owners even save Jill and Steven’s letters because it was written in a very personal way. And then 10 years later, they’re calling Jill and Steven to take them up on their offer.
About 90% of what they need to know about the property is gathered online. In some cases, they go to the county to confirm something.
Data gathering starts by choosing a zip code or county. Then they look up all the properties that have been sold or are for sale. All of that is put into a data set.
Then they extrapolate a retail price based on a per acreage or per square foot. From that number, they back down by 20-30%. That would then be the basis for their offer.
Direct mail doesn’t really cost much if you think about what you could possibly get. It costs 55 cents to send a letter. Jill and Steven budgets for sending 10,000 letters a month, which costs around $6,000. From that, they could end up buying at least 3 houses, or 20 land properties.
Jill and Steven look at land in all sizes, whether it’s 5-10 acres, 10-20 acres, or even bigger. Surprisingly, they never go to see the property. They just let data choose the market.
When it comes to choosing a market, they first look at how many days properties have been on market, preferring a market with properties on the market for below 30 days.
They also prefer a market which has properties for sale that comprise only 0.75% of all the properties in the county. Another thing they look at is the data on the new list versus sold properties.
For a long time, buyers have been asking them how they are able to buy properties for such a cheap price. Because of that, they decided to put a program together that teaches others what they do.
Released in 2015, the program includes their whole business model even how to build a social media presence. In 5 years, it has grown into a huge community as they can supply professional tools that they didn’t have when they first started.
The benefit of their program is that they created potential partners for themselves, so now they can pick and choose which partners they want to work with. As long as you have a good deal, they’re willing to provide funding.
Having prior business experience is a huge advantage. Jill and Steven also notice that there are two sets of people that do really well – accountants and engineers or tech people. The reason is that data analysis is a strong skill among accountants and engineers.
Jill and Steven build their company from the ground up. They can now send half a million letters a month and have data downloads of 700,000 units per month.
On Jill’s side, she’s been getting her team to close more deals faster.
They were at pre-launch for Car Academy, but they had to stop that. While they were also considering doing text offers, due to spam rules, it also wasn’t viable.
Both are always looking for new ways to improve their buying and selling model and then share it with the community.
Be organized and bring something to the table. Having the right attitude is needed to start a business.
Real estate investing is not easy. There’s a lot of work involved, and there are a lot of moving parts.
So when you find your first deals, make sure that they work.
Clint Coons is one of the founders of Anderson Business Advisors, a firm that specializes in creating asset protection entities…
Justin is a real estate investor who has done almost 2000 deals across the nation and in this episode, he’ll…
David is a real estate investor and a real estate coach. He has been investing in properties for almost 20…
Andrew, a real estate investment developer, is the owner of IronGall Investments, an Austin, Texas-based real estate development company. They…
Chris is the President and CEO of Smart Growth Inc., a California-based real estate and development firm. They are focused…
Rafael is a real estate coach and an organizational psychologist based in Miracle Valley, Arizona. He owns several real estate…