How To Buy Land From Private Sellers
So, you're looking to buy land ridiculously cheap, well below value, directly from the seller. You don't want to deal with real estate agents or wholesalers. You want to go direct to the seller to negotiate a great deal and take your next property down. But maybe you're not a hundred percent how it works. I will walk you through exactly how I make this happen. Before I get into this, though, we just launched The Land Flipping Formula Ebook. If you need help getting through your next land deal, this can help set you up for success.
Getting Started
Now let's talk about how we buy properties from private sellers ridiculously cheap. To start, I went to Zillow and searched for Putnam County, Florida. I then decided to search properties from $0-$10,000. I want to know what’s going for retail pricing within that range. So there were a lot of properties from $4,500-$10,000. Obviously, each area will have different prices, but I’m not just looking at basic quarter-acre lots. I’m thinking worst-case scenario these are worth $4,500. Once I determine that I write down the addresses, what real estate agents were listing them for, and what agents had the properties. You know, just collecting data.
From there, we make offers on the properties. When I determine my exit price of $4,500, I want to make an offer anywhere from ten to twenty percent of retail value. So today, I reached out to offers2owners.com. I promote them quite a bit, but I'm not an affiliate whatsoever; I just really value their service. I haven't ordered direct mail from them in at least a month, and when I went on the site, they used to have a button for full-service mail merge. You would click that button and purchase a minimum of five hundred letters at .99 cents each. I went on there today, and the button no longer exists! So, I picked up the phone and called them. They still offer the service, but they just do it over the phone. So don't get discouraged if you go there and check this out. When I called, they said they’re bringing it back, new and improved. So, it’s not on the site yet but will be again soon. I had offers2owners send direct mail offers to out-of-state owners only. I also don’t want any properties under LLCs because it’s probably an investor, and they're more likely to want more. However, a personal owner may have inherited the property. If they're disconnected from it, they might sell it really cheap.
Next Steps
To reiterate, we want private sellers that live out of state and not under an LLC, and we want quarter-acre lots. Then everybody gets an offer price of $500 across the board, and we only started with five hundred mailers. I’ll typically do five hundred to a thousand right off the bat. I do this because I want to get feedback from the community I'm mailing to. So when I send out these offers at $500 a pop, I first test with only 500 mailers. If people respond with “eff you, I can't believe you'd insult me with this offer price,” or if they answer, “yeah, I’ll take $500, great!” Either way, I need to know how people will react and respond. So I test that with a little $500 or $1,000 investment. Ideally, we want to get deals right off the bat. When we get that response, we know we can mail more, and our price point is good. If we get a ton of people that say yes, like if five hundred offers went out and I get fifty yeses, then I offered too much. I cut that back to $300 on the following mailing and see what happens. If I only get one to four accepted offers, somewhere in there, I'm priced right.
Time To Close
Now the ones that say yes, sign the contract and send it back to me. Via email, hopefully. Worst case, they do snail mail to my P.O. box, I get the letter back, forward it to the title company and say we're closing on this; it’s a net $500. To the title company, this means if there are back taxes owed, I'm paying all the closing costs and fees. Also, always check how much taxes are owed to ensure it doesn't blow your deal. If there's a couple of hundred bucks owed, I don't care. I'll absorb that because I know there's enough meat in the middle to profit. That's why I make my offers so low. Next, the title company takes all the paperwork and says, okay, the seller's getting $500, buyer must pay the closing costs and the taxes, so Mike, you need to wire us a check for $1,000. Then they handle the closing and fees and everything and deed it to your company. That's precisely how we make this happen.
Let’s say we get three accepted offers at $300-$500 a piece, plus the cost of my mailers, and I know my exit price is $4,500 per property. I’ve got a good margin at this point. So right off the bat, I will typically put these out to my email subscribers. I know they love buying properties on seller financing terms, so I'll flip it for $75 a month for X number of months to get that $4,500 mark on my profit. As a beginner you might start out in the red initially, and even for the first year or two, you’re just working on getting that investment back. Once the investment is back, it's all cash flow from there.
Another way to get cheap properties is to search Zillow and look for real estate agents with listings in that county with a very low on-market time. On-market time will tell you how long the property's been on the market. So, if an agent has properties listed for twenty-five days or has multiple properties, they may be flipping. You want to reach out to those agents and say I just took down three properties, the titles are good, and everything's paid up. What can you list these at for a fast resale? Now they may say, you know, if you're willing to take $3,900 a pop, plus $500 bucks for our fee, then we can go ahead and get this done with the quickness. So, you'd walk away with $3,400 after their fee. That's a nice chunk of change there.
Wrapping Up
Now you want to take some of that money you just made and put it into marketing, and then you pocket a little cash. Maybe pay off some credit card debt, wherever you're at on your journey, and then rinse and repeat. So that's exactly how you buy land from private sellers and profit wildly.
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 an EMAIL or check out landflippingmichael.com. Then, we can see if we are a right fit for each other and lock you in for a coaching call.
