Should You Use Realtors to Sell Land?
You might be wondering if it’s beneficial to use real estate agents to sell your flips or if you should be listing them yourself. I'm going to break down both scenarios so you can make a decision on which way is most beneficial for you.
Testing Out An Agent
You may have real estate agents in your network already, but are they efficient at selling your flips, or should you list them yourself and keep all the profits in your pocket? Recently I decided to put this to the test. I had a property in Florida that I had taken back. I thought, you know what, I'm going to give this to an agent and see what he could do with this property. So I reached out to an agent I've worked with before and said, hey, I’ve got this property available; what are these going for right now? He told me they were going for $5,500 cash. Initially, I bought the property for $1,200, so I had the agent list it on the MLS. His fee was ten percent of the gross sale amount, which was fine with me to test this out and see if it's beneficial.
So he listed this roughly three weeks ago. Usually, when I sell properties or list them with my existing database, it sells immediately on seller financing terms. Now to be fair, I have thousands of email subscribers, so things move pretty fast. It makes me a bit jaded, a little skewed when I can sell things the next day. The difference is I’m using seller financing; most of my buyers are not making immediate cash purchases. So we list it on the MLS, and week one goes by…nothing. Week two goes by…nothing. Week three goes by…nothing. I started thinking—I should have just kept it to myself, blasted it out to my list, and had a note. But at the end of week three, he reaches out with an offer on the property for $4,000. I accepted, and we got the contract signed.
In real estate, nothing is official until it transfers, but they have earnest money deposited with the title company, and everything's looking good. So as of right now, we're moving forward nicely, and I was able to get a lump sum of cash. Now I can take that sum and buy more direct mail marketing, put a little bit of money in my pocket, or get on to the next deal. So overall, it worked out fantastically. The only issue was getting used to a different scenario, which is selling things the second I send an email out.
Deciding What’s Best For You
So if you’re trying to figure out which way is best for you, here's what I'm thinking—if you're new to the land investment game and targeting properties that you could list for $5K or more, you should consider using a real estate agent. Suppose the agent is a fantastic marketer, a hard worker, answers their phone, and always follows up on emails. In that case, this may be the person to connect with. However, remember that sometimes people answer their phones right away and follow up on all their emails because they're new and don't have any business. They're trying to earn your business—which is fantastic. But if you're just getting started, you may not have the client base to sell the property. So just keep that in your head, but don't let it steer you too much either way. Just find the person listing properties in that area. That person will probably be your go-to, assuming they get back to you and have good communication skills.
So if you're brand new, maybe you do a direct mail marketing campaign, and you get three accepted offers. If you're getting them for around $1,000 a pop, you can list them on the MLS for $5,000. You don't have your own personal database yet because you just started. If you were to take these and sell them yourself, you would have to buy ad space on land investment platforms. I highly recommend doing this, but if you purchase ad space on the platforms and leads start coming in, you have to connect with all these leads. You have to convert all these leads, get the deposits, and get things over to the title company. It’s a lot of moving parts, but this is what it takes to build your own database.
Be Smart About Your Approach
So when you're starting out in this price point, $5,000 type deals or above, and you take down three properties off of your first mailer, go ahead and market two of those yourself. Try to start drumming up leads so you can connect with people. You need this database for sure, but at the same time, give one deal to a real estate agent and see if they can get a full conversion within six weeks. By full conversion, I mean contract signed, sent to the title company, and check is in your bank account within six weeks. This is beneficial for you because the money for your direct mail marketing probably cashed you out on all the properties you just purchased, and you're ahead. Now you have two properties leftover that you're marketing on your own and ideally doing seller financing because it sells faster. With the two free properties you have, you can create a note. Let's keep it simple and say it was a $5,000 note. Now you're going to get much more on a note, but using the example of two $5,000 notes gives you a $10K pool. Now you’re bringing in $150 a month in passive income, and you’re winning and ahead of the game. Then your next mailer goes out, and you're going to rinse and repeat. So you want to use both methods for sure.
Now, suppose you're targeting cheap, cheap properties as I recommend. In that case, you’ll start building out your land investment business, and you’ll begin to get a feel for how it all works. If you're going after properties that are a few hundred dollars and flipping them for $2,000, don't bring an agent in on it because there's no meat on the bone. They're not going to be motivated to sell for you, and if they do sell for you, you're walking away with nothing. These are the deals you use to build your database. Buy ad space on the platforms, create videos on YouTube, and start an Instagram page if you like Instagram. Whatever the case may be, start drumming up a buzz and leads on these cheap properties, selling them on seller financing terms, and building that database out.
Using your database, you could also build connections with people. You could give them good tips on why it's fantastic to have land in your portfolio and what areas they should be investing in. You could talk about the raw land deals you have coming up, what they can expect to pay, and some strategies. You're building a relationship, and with that relationship, they will absolutely purchase from you in the future. I think it's good to have this as a side strategy. A year or two ago, I never would have used a real estate agent. I always stayed in the driver's seat. But if you want a way to build and scale, you’ll have to outsource and automate some of your business.
Wrapping Up
If you want more content like this, I’m building out a group and adding resources so individuals can get out there and start building their land portfolio. This will help you learn how to take down deals, close deals, flip deals, market deals, and earn additional passive income streams. I want to see you reach your financial freedom dream, whatever that may be. If you need help getting through your first or next land investment deal, you can get that at landflippingmichael.com.
Check out my YouTube channel if you’re interested in more land investing tips. Also, if you have any questions about the land investing business and need some coaching, shoot me a text an EMAIL Then, we can see if we're a right fit for each other and lock you in for a coaching call.
