Transcription
I think that's a pretty common thing; they don't understand what even title means. You know, it's just like, "Well, of course I own it; I live here, I pay the property taxes." Whose name is on the property taxes? Well, my grandma's, right? She died 5,000 years ago, right?
[Music]
Welcome to the Turning Profit podcast, Heather.
It's great to be here again.
Yeah, I'm excited. What are we talking about today?
Well, we're talking about the questions to ask a seller when you're talking to them about their land.
Okay, easy. So the person you're buying from, the person that you're buying from, basically, we've got a whole list of questions that we ask a seller every single time. And it's designed to kind of get them talking about their property and to learn as much about it as we can. Now, sometimes people know nothing about their properties, depending on the situation. Sometimes they've never been here. But it's true; sometimes I've never been there. They inherited the property, and it's in a different state, and they've never been there. So there's very limited things that they can tell us. But there are some questions that they can answer. So I've got this here; this is part of our training program, by the way, which will be released very soon, and it's uh, it's in our land flipping community, and it's completely free. It will be completely free when it's done. Where is that? Um, you can find it on turningprofit.com; there's a button there, or if you're watching this on YouTube, there will be a link right below this video.
Okay, cool.
Yeah, so why don't we get into kind of the current events part of this uh, podcast where we're talking about what's in the news, Heather? I know this is your kind of favorite session.
Yeah, I know. But this time it's actually—I was reaching for my phone; I just remember I didn't really—I normally like screenshot things, but I didn't. It's kind of boring; it feels like the same old, same old in the sense that like, is commercial real estate crashing? You like, you hear about WeWork is defaulted, but you know, on some things, you know, and strategically is what I would imagine that's why it doesn't scare me. Like I know that if you see a headline and and WeWork has done this—do you remember when the pandemic first started and we saw there was news at Cheesecake Factory had like told all their landlords that they were going to be defaulting? Like that was a strategic move; it wasn't like they were like, "Okay, we're gonna have the money, and then suddenly they don't have the money." Like they were looking at the big picture, and they were saying, "Hey, this is gonna happen."
Yeah, yeah. And they were using it as a leverage to maybe renegotiate their leases, right?
Right. And I think that when—so when you hear these things like, "Okay, commercial properties or commercial leases are doing all these things, or the lease doors, or you know, all this stuff happening," you have to remember that it's not like it's something that happened; it's more like they're stating it because they're structuring things, and that's way better than, you know—
Yeah, if someone expecting to get this big check and then not getting it, right?
Yeah. And there's like a ton of turmoil in the commercial space because a lot of things are changing, and people are trying to wonder where things are going. But the big thing that I think is interesting, kind of—I mean, it's been current news for for a while now—but is the whole AI—
Well, okay, so you steal my thunder there; like I was literally gonna—I was trying to segue—
Were you worried I forgot?
I was worried you forgot.
Yeah, that's hilarious. You told me that's what you're going to talk about, commercials. I don't know. So I think that's like the big real estate—like if we're just talking about real estate—but then the big news is AI, and you are super excited about that. So that's why—what I—I don't normally tell you ahead of time what we're going to talk about in this segment, but yesterday I was like, "Pete, guess what I'm gonna bring out because you love AI," right?
Yeah.
Well, it's going to disrupt everything. Now, pretty much every single industry, and you know, it's hard to even fathom how each industry is going to be disrupted. I mean, some things we we kind of have a good idea, but some industries are going to be disrupted in ways that we can't really even fathom at this point. And so when we were were talking about like, "How does that work with land investing and real estate in general?" And we were talking about this on our walk, and I think like I was trying—I originally was trying to think of all the things, or I was trying to count how many things that you said during like a five-minute thing, but then I got lost in our conversation. But just in that initial couple minutes, you were like, "Well, well, it could help in the land business in this way, this way," and then you got into like broader real estate, and like the next thing I knew it was like 45 minutes later, and we were turning around on our walk, and we were, you know what I mean, right? Because and then then we were talking about how all those things, but I was like, "But then the thing is that at the end of that, it's gonna—because we'll get to this point—then there's gonna be so many things that we can't even think about right now," right?
Yeah.
They're gonna be down the road as this technology improves and as these different tools that are developed are able to communicate with each other and kind of make things seamless. So give me an example of something like land investing.
Well, one thing that we're experimenting with right now, which preliminarily has been some pretty good results, is that we're using an AI company that uses some AI-related things to kind of trim our list down. So basically, they've built a whole algorithm to to determine which sellers are the most likely to sell. We send them a huge list; they basically trim it down and give us 50 of that list and say, "Hey, these are the people most likely to sell." So the goal here—they reasoned for doing it—is that you know, if we're only sending to 50 of our list, and that list is the part of the list it's actually going to sell to us, we're going to be able to save a whole lot of mailing expenses. But I view it in a different way, in that we can send twice as much mail and then have twice as, you know, had twice as many leads, twice as many deals, twice as, you know, twice as much profit. So that's the way I look at it. So that's one area we're experimenting with. I think that there's so many different things from the side of the processes and efficiencies that you can kind of build into your business, depending where you're at. I've got some really cool ideas that I want to work on; I want to pay people to develop for us, but you know, I try not to get sidetracked too much as well.
Yeah, this weekend you were—I could tell you were really into it; you were like, "Okay, I could do all this," and I was like, "This is really cool," but but you need to focus, Pete, and get your training program finished, this, and then you can have free reign over that. But I think that the reality is that we don't know—just like we're like, "Where's the market going?"—we don't know how far this is going to take us, because everything that it's gonna be able to eventually do, we can't even imagine it doing because it's not happening right now. Right? There will still need to be—obviously there will still need to be that that physical connection with the real world that's very difficult to complete with AI. Although on 60 Minutes they had all these robots that were there; they were training to do different things with their AI. But Google has this—but you know—so maybe we'll have the robots to help us in the physical world also, right? But I think that a lot of the things will still need to have like a human touch to them, and obviously those won't get replaced—like the person that does your hair, the person, you know—that I don't know, though. Well, maybe there will be a hair-cutting robot, but wouldn't it—or even coloring—like it'd be more um, precise—precise—but I don't know; I'm not—I'm not a hair stylist, so maybe that's actually not the way you do it; like maybe it's not precise; it's like other things that go into it that you know—and and before a lot of these tools came out, you would have thought that art was one of those things that was going to be not replaceable, but there are some really cool um, tools related to art, photography, all these things that are—you would have thought would be off limits for AI—but are actually being impacted the most right now. We talked about that too—that the people who are going to be the most successful are the people that aren't going to push away from it; it's going to be the artists that say, "Okay, I just need to—because of my artistic brain"—and I know, you know, like we're talking about um, the different things on a camera, like the f-stop or the aperture or all that kind of stuff—the people who are abrasive and know how to speak both languages—so they know the cameras, they know what the magic thing the camera can do, they know about the timing and the lighting and all that—but then they're also able to speak the language to replicate that—I think are the ones who are going to come out ahead. Like I think there's some things you can't replace.
Yeah, you have to embrace it, and it can supercharge whatever you're good at, right? So you know, just kind of think of it that way; don't be scared; the robots are not going to take over anytime soon.
No, well, I don't think—I know—I'm just waiting for Rosie, that one from The Jetsons, that can clean our house and cook food and stuff like that.
Yeah, that would be cool.
I know. Right now the robots are only doing singular things; remember how they were saying that, right? And they're doing it like they're playing soccer, kind of.
Yeah.
But so I guess I would like the way that we're looking at this is everything that we're doing that can be systemized or like, "Gosh, if I had someone that was not emotionally invested in this that could look at the big picture," like think of, "Okay, could you create a use AI to help you do this?" So think of every single thing you're doing and what's right—where could you use that, right?
Yeah. And believe me, over this next year, there's going to be so many different niche type AI tools that are developed to help in many different aspects of business and life, and uh, yeah, just be exciting to kind of see where it goes. So I think in the immediate near term, the big thing will be to get all these different niche tools and things to talk to each other, work together seamlessly, and solve bigger problems.
Yeah. And make it so that people can ask for help and play in English—like not English, but plain language. You don't want to have to be a programmer to to understand and use all these different tools. So right, to kind of make that easier, you know, for the general public, because it's the same thing with with kind of home computers and their evolution, you know, they really started taking off with Windows and things which made it very easy to interact with the computer instead of having to write programs and code and all this kind of stuff, which most people are not going to learn how to do. You need to be able to just type something in and have it do something, right? Not like this—click a mouse and how to do something.
Yeah. Do you remember when you first used a computer? Did you do the flip screen where you wrote the program? Like I don't even know if it was called that; I just remember that it was an Apple, and it would be able to see—
Yes, I remember working on those. I have no idea if that was—if it probably was, right?
Okay. Yeah, that's what our school had, but we had like in the library; it was like so exciting to go, but was like, "Okay, everybody do the flip screen," and I think you pushed a button, and then you'd like typed in some code, and then you flipped it back, and you were like, "I made a square move!" And it was like, "No way!" You know, it's like things are a little more advanced than that, right? But like that excitement, it's the same kind of thing; it's like, "Wait, I can actually do this!"
A whole new world we're entering into, and we'll just have to see where it goes. So yeah, but I think um, it will help in real estate; just need—it will—yeah, just just keep your eyes open and kind of look for opportunities and ways to improve your processes and things, and you know, maybe don't do some of these things manually if you can automate them and bring in an AI friend to do that work for you.
I thought of something else we were going to talk about before we even get to that—um, I don't even know if you remember it, but we were talking about how I'm scatterbrained a lot, you know, like I keep a list of everything that like I have to get done, and I could see myself getting hung up on some of like the processes for this if it weren't, you know, for you. And I'm sure that there's other people out there that kind of are on the same thing, like once again—get it started, what you—and you told me—like I can't remember the exact like phrase you used—but pretty much that like you have to have system—like you know what I mean? Do you remember that? You want to talk about what that was? You would have to have systems and processes in place. So once you identify what needs to happen in order for your, you know, say your business as a whole to run—like you've got all these different things that need to happen—what was the one thing though that you said like you have to do? You cannot get off; it has to be like clockwork.
Oh, it's sending out the mail.
Yeah, you know, the lead generation side of things—that has to be systematized, and it has to be—it has to be like clockwork, or you are going to have a lot of ups and downs and things in this business which are completely not necessary. It sounds like the easiest thing in the world to do, and most people will blow me off when I say that, but most people won't actually do it, you know. I was like, "I don't know; I thought maybe—"
Well, I'm sure phrase—yeah, well, I'm sure people hear that and they say, "Okay, sending out the mail every Tuesday," yeah, a little too obvious. But the fact is that most people don't do it, and it—they overcomplicate things; like it doesn't—it's not that complicated, but it's maybe hard if if you're not that type of person. And if you're not that type of person, then you need to put a system in place that takes that kind of out of your hands; like maybe you hire an assistant; their only job is to make sure that mail goes out every two weeks, and you—you know—because you know that for you to actually do that is going to be too difficult; like it may happen this week or next and next time, but you know, over the long haul, it's probably not going to happen. So you need to put some sort of system in place to make sure that happens. And I think too—once the leads start coming in and you're like, "Oh my gosh, I've got all these leads," I know—okay, well, you're not going to make time to send out the mail exactly because it's like you're really busy. But the problem is if you don't send it out now, since there's that lead time and down the line, and we tell that story about how when we went on that cross-country road trip and I, you know, we decided not to send it out to give you a little bit of a break because you were doing the major majority of it yourself, and then it took like three months to catch up—
Yeah, it's terrible. It was dumb; it was like—with the momentum going, and then we stopped. But I think that's the same case in every—especially real estate business—like it's because the ones that you're—like seeds that you're planting today will be—you know—
Well, that's right; like the mail we send out right now is, you know, it's probably 90 to 120 days away from actually receiving any sort of profit or income from that, right? So it's—it's hard—it's hard to kind of think that far ahead, and really—that's not in business—that's not that far ahead—
No, but you know—so if you're not doing that now, you're going to be struggling months down the road, and it's, you know, it's something that could have been completely avoided. But I could just see myself with all—and the whole reason we're talking about is I could see myself saying, "Well, I'm really busy right now," or, "I don't have time to sit down," or, "That's sending out a chunk of money," or, "I'm sure"—what other excuse could you hear from lots of them—but but thank you; that's a great piece. I mean, I don't know—like I think that that it causes other problems too. So say you don't have as many—are we still talking about the mail—like the mail and the consistency? So like if you're not sending out enough mail, you're not getting, you know, consistently—you're getting in leads or potential deals that are not as good, so you're gonna end up taking some deals thinking that this is like kind of like the best thing that's all I've got, right?
Yeah.
Oh, I gotta make something work. And then in reality, you're probably taking a marginal deal that is going to be hard to sell; it's going to take longer to sell; you won't make as much money on, and it's just going to have a chain reaction of events, but that can all be avoided if you got the deal flow coming in, you've got the leads coming in like clockwork, you're like, "I don't need to take this because I don't need to take this crappy deal."
Yeah, because something better will come.
Exactly. How many times do people hear people say something like, "Yeah, it's just not working; like I'm just not getting uh, good deals," and then you ask them like, "Well, how much mail do you send?" You're like, "There's—"
Yeah, you didn't send—do you think that's common?
I think it's common. Yeah, I think people will get—look at a number and say, "Okay, I sent out, you know, 5,000 letters," and they're expecting to get, you know, you know, ten, and it just—you will get a bunch of leads from that, but how many will actually turn into deals is another thing—deals that you want to do that have enough profit that check all the boxes, you know. So if you don't—if you're not sending out enough mail, you're not going to get enough deals at the end. And I I've said this numerous times—like for us at this point, we're sending—like each deal costs us about three thousand dollars, which is about six thousand—six thousand letters. Now, we're very picky in the deals that we go forward with; we're only doing bigger properties at this point. Like if you do smaller properties, you can get a lot better ratio; you can—you can get more deals than that for every piece of mail that you send; you know, that ratio would be a lot better. But for us, we've kind of progressed to the point where we want to do just kind of the bigger deals, and so that's where we're at. So you need to figure out what your numbers are and make sure you're sending out enough mail in order to generate the type of business you want to generate, right? But I think if you had—like I used to always compare things—like a sandwich shop—let's say you're spending three thousand dollars on advertising for a sandwich shop, and how much do you think you would make—like one of those big deals—just give me a random number.
Oh, a pretty decent deal—50 grand.
Okay. So if you—a sandwich shop—you need to spend three thousand dollars in advertising, but you're gonna get income of fifty thousand dollars from that—I mean—yeah, they'd be all over—I don't know how many sandwich shop places would be like, "That's bull; you know, I'm not doing it; you're horrible." So I know that like it seems like, "Wow, that's three thousand dollars for something that's actually going to turn into something," but if you look at it that way—like if you put it—it makes sense. So I think the big takeaway and what I was trying to get out is that for someone like me that would give every single excuse not to send mail in my natural statham—I'm better now—right?
Right.
Um, the best way to combat that is to put it on your calendar and don't—don't even think about any outside forces; it's just that, "Oh, it's the 15th of the month; I need to buy more mail," all right, you know? And then do we ever get one where it's like—maybe we're sending two—we do two mailings, and it's two pretty much the same area, and some of them just—it's just not the best leads, and some of them it's like, "My gosh, there's so many leads; it's insane!"
Oh, yeah, it happens all the time, and it's just the time of the year or, you know, it's not even like anything else has really changed, so that does happen, right?
Oh, yeah. And you know, many of these areas, you know, I have mail every—the minute there is that I really like a lot—I mail every three months. So I've mailed these people many times; like I've mailed them probably for a year and a half, some of these people—they're like the seasons—yeah, and they're like emailing me again—or not emailing you—but sending me a letter—this guy just doesn't give up. But but obviously they didn't respond to my other pieces of mail that I sent them, but now they're responding; they've got the letter in their hand; they're like, "Maybe the time is right; maybe we do need to sell; maybe something in their life has come up where they could use the cash rather than this piece of land that's doing them nothing."
Maybe if we sell it to him, he'll stop mailing us.
That's right. Yeah, no, but I mean, that's the reality is they say that like a lot of times if you don't like a food—if you try it three times—it—you know, it's the same kind of thing, though. They might—they might look at it; they see your name and they throw it away; they don't even really look at it the second time; they're like, "What—what is he mailing me?" Okay, so I don't want some island. And then the third time they're like—but after that second time they're like, "Huh, I wonder if I did sell that land, what I could do with that," you know, they—or the money or whatever it is. And then the third one they're like, "I'm gonna set this aside; okay, hey, I'm gonna call them; maybe they'll pay me more for them; maybe," you know, who knows what the case is, but uh, yeah, so I, you know, I'm big on the consistency of the mail, and if you could take care of that thing—that part of it—then so many other things are going to fall—well, because then you're forced to deal with the leads as they come in, all right? It—you can't—you know—shut down—I mean, you could, but you're not gonna want to because it's exciting. So it's very simple; this business is very simple from that aspect of it; take care of that, and everything else will take care of itself—eventually.
Yeah, eventually everything will be okay—unless—everything else will—everything else will fall into place, and it'll create more problems—like how to deal with all these leads and, you know, how to fund all these deals and stuff like that. But those are good problems to have, and those are all solvable one by one. I think again, to reiterate, if you have a good enough deal, you can find the money.
Oh, yes. Good enough deals, you know.
Yeah, the good deals are—are gold, so—is you're mining for those gems, right? And someone will—I mean—and if they're not willing to do it, then it wasn't a good deal, right? So it—but so don't let that be your limiting factor.
Well, it's not a limiting factor, and in fact—that again with the way my brain works—that would be like, "Well, okay, you know, where would we get the money to do all these different—" I could see myself saying something like that, right? And if you're—if you're wondering like, "Where do I find these people?" That's in our community or Lane flipping community; link below this video or on turning profits—give it like a five-second—give me that really quick so I can just read it.
Okay, thank you. And then just give like a couple seconds about what that looks like because if someone's just joining us—what it means—
Oh, yes—finding it, you know, the funding side of things.
Yeah, like so I have a really good deal—
Oh, okay.
Yeah, so the basics of it are—in this business, you don't need to actually have the money to buy these deals. There are plenty of partners out there—deal funding partners—who will—if you've got a good deal—they will actually send the money to close the transaction to buy the property. You, as the land investor, are bringing the deal to the table, and then after you resell the property and you make a profit, then both parties split the—that profit. So say you bought a property for fifty thousand—uh, it was worth a hundred thousand—after you resold it and remarketed the property, you've got a 25 000 profit for each, you know, the the funder and 25 000 for yourself, and then obviously the funder gets their original money paid back to them as well. But so you make 25 grand in that situation, and you didn't even put any of your money towards a deal—obviously you put some money towards the marketing to generate that deal—but the man didn't have to actually buy it yourself, right?
Okay. So I think that's um, probably another hick—I'm trying to think of all these things that—that would be common—um, you know, things that would—
Yeah, yeah, you know, I understand—that's—that's always a question—like the money—so like this all sounds great; I think, you know, it makes sense that I can get these deals and things like that, but how do I actually make them happen? That part of it is really pretty easy. And then what would you say is like your ideal first mailing—how many pieces?
I go big on everything, so maybe I'm not the right person to ask, but you know, I think 5,000 is a pretty good amount, and um, you know, as long as you're not mailing like super huge properties, I guess, you know, if you—if you mailed a list of 5,000, you know, maybe smaller type properties where you're gonna have a better ratio, and maybe—soup—not into areas that are super highly competitive, you know, that's a mistake—I—I talked about—I made on my first mail where I—I mailed this area; it was like the hottest area in the country, and uh, and then I offered them such a low percentage; I think I offered them 25% of market value, something like that, and it was, you know, it was too low, and it was also into a highly competitive market, so I really didn't—I didn't get any deals out of that first mailer, and that was 10 000.
Wow.
Yeah, I didn't really tell you at the time; I told you those deals were coming, but they never came from that mailer. How much um, do you think that uh, 5,000—like just on average—that would cost?
I think, you know, doing some beginner type volume like that, you're probably looking at 60 cents per letter, so what is that—three thousand dollars or something like that?
See, now in my brain, because I'm, you know, more cautious than you, that doesn't sound insane.
No, no—like I could do that—obviously you could put that in a business credit card or something like that—um, as long as you have the plan to put—pay it back as well.
Yeah. Okay. Well, um, thank you for letting me go off on a tangent okay about that. Um, okay, so you—this is—you've created or you've written down everything that we asked—the questions for sellers. So this would be someone who you sent a letter to, and it's like the first contact; they call back or or you've gone through our—it's gone through like the minimal to get to this point, right? What—what has it gone—
Well, yeah, so what—what happens is that our process is that we'll send out the letters; they either call, the email, text back, something like that, or mail us back sometimes, but generally this is when we get someone on the phone—when we talk to them on the phone. Also, we do the same thing by email if someone wants to communicate by email. But if we get someone on the phone, uh, here is what we do: Like we'll look at the property before we call them and kind of get some some general idea—like, "Hey, is this property look like it could have a potential uh?" And then if it does look like that, we'll call them, and we'll go through this list of questions to find out any more information about the property that help us make a decision on that. So we send them out an actual offer price. Now, that offer price may or may not be accurate; we go through these questions to kind of drill down on that and figure out where we're at on it.
Okay. So the first one you ask is, "What can you tell me about the property?" So I mean, that makes sense; like you just ask them a broad question—"What can you tell me about it?"
Yep. It's an open-ended thing, and just to get—designed to get them to talk about the property. A lot of times they'll open up about things that you never anticipate stated about it; they might say stuff like, "I just got to get rid of it, no matter what the cost," or, you know, right—you know, they'd say all kinds of things. But I know the tendency or the maybe the urge is to kind of butt in and like kind of, you know, stop people when they're talking, but you really at this point in time you just want to let them talk.
You're right. Thank you. I think so. What's some crazy things you've heard—stuff like that—like, "I need to sell this property right away; I don't care what I get for it," you know, things like that—ethical—you know, we're gonna—I'm not gonna like take advantage of a situation like that, but the wrong person would—I think—but you know—so things like we hear things like, you know, family situations, and they go into all the steps about all these different things—things that happen behind the scenes in their family and while they ended up at this property and things like that—like a lot of that stuff is irrelevant to what we're doing, but really the things that I'm concerned about are, you know, titles—title to the property—go—we go through a list of questions, but but um, it's just interesting, and and uh, sometimes I'll just tell you some interesting things about the property—sometimes some of the things they say make the property more valuable than I realized it wasn't initially, right? They might say like, "Oh, yeah, and this is, you know, it's got this really cool access," or who knows, you know—
Yeah.
Or they might tell you like, "All 50 descendants were born by the log by the side of that river."
Yeah. But even if they talk about something like that, you might not be able to see necessarily—this—you're like, "Yeah, the trees cover this big pond," which you might not see, you know what I mean? Or you know, floods, whatever.
Okay. Um, and then you ask them, "How long have you owned it?"
Yep. And that's obviously a pretty easy question, but that'll sometimes get in—they'll start then talking about how they acquired the property or things like that, so kind of interesting sometimes, and sometimes some information we can use.
Okay. Is it in your name only, or are there others on the title as well? If there are others, are they on board to sell as well? This is super important, right?
Yeah. It's really important—first of all, they have to be the owner of the property in order to sell it to you, right? So when I say, "Are they on title?" That means like, "Do they own the property?" And you'd be surprised that many people call in and say, "Oh, yes, I own uh, 25% of this property; can I just sell my 25% share?" Or which is obviously—we're not gonna do—we're not gonna be partners with whoever their family is in this property; it's just absurd—uh, or you know, sometimes they'll say something like, "Well, my great-grandmother, you know, uh, she got this property from so and so, who said that they could live here, and then this whole time we just paid all the property taxes," and you know, that type of thing—like so weird situations, you know, where they—they've actually got possession of the property, and no one's really challenging their possession of the property, but they don't really have clear title to the property—you know, those types of things can happen. So you know
They’re willing to move out before we close, you know, escrow. So those types of things are really important. Like, you don’t want to end up with a property with a squatter-type tenant that’s not paying anything and doesn’t want to leave your property. And you know, so those are types of issues you don’t want to deal with unless you get the property for super cheap and it’s worth your time to to deal with that; you deal with an eviction or to deal with that type of situation. So, and people who don’t know, that’s like a very extended, depending on the air, depending on the state, you know, because the whole plan for the land is to buy it low, sell it low, still, you know, not top dollar and flip it fast.
That’s right, you know, do whatever we can if we need to. So if you get someone in there and you’re thinking, well, it’s not a big deal, it can get pricey, and it can extend that time right substantially, or they can sabotage it, or you know, all these other things. Can you imagine trying to, you know, list and sell a property and then, you know, they, your tenants, your squatter tenants are greeting someone with a shotgun every time they try to come under the property? You’re not going to sell it.
What if they breed wild boars?
Yeah, yeah. So you’re not going to sell it until you deal with that that situation first. So it’s very important for us to know those things. And you also ask if there’s other things like tires or barrels or anything, like anything. Is there anything on this land? Yeah. And sometimes uh old houses as well, like sometimes there’s old houses on there, and they may be like, okay, well, there was an old house there that fell down or something like that. Or literally, yeah, it’s interesting to at least know the history of of these properties and mobile homes that comes up a lot because sometimes people just, you know, wheel a mobile home on their under the trees and you don’t really, you know, no one knows it’s even there in those types of situations. You know, we want to know stuff like, is it officially connected connected to a septic system? Is there electricity? You know, things, follow-up questions. And the other thing we ask about mobile homes is, they’re a title to that property, and are you willing to transfer that title to us during the during the purchase process? So, and because of that, it could have a different person that owns you to do a private property eviction, you know, because then again that’s yeah, it can bring up a lot of issues. But we’ve bought properties before where there’s a mobile homes, a lot of other properties actually, mobile homes on it, doesn’t come with the title, you know, and then we just resell it kind of as is and just to let them know, hey, there’s an old mobile home on there, we don’t have a title to it, it’s vacant, you know, but no one’s doing a claim or anything, right? So and then sometimes we do end up with the title to the mobile home, which makes it more valuable, and then we can resell it with that title to the next person, and it’s more valuable. It’s kind of crazy because mobile homes are kind of like they’re cars.
Yeah, you know, so if you think of it that way, it makes sense, but some people depend on it for an actual home, so you don’t want to be you don’t want to be a landlord, right? Unless you want to be a landlord, unless you want to. Right. Okay, this is a really important one though: Have there ever been any perk tests done on the property? If so, what were the results? Yeah. And this is kind of uh depending on the area as well, and sometimes, you know, if an area has sewer access or something like that, maybe that’s that question is not really relevant, but in certain areas perk tests are pretty important, so we always ask about that. I mean, depending on what they say, people lie, you know, we asked them, hey, has there ever been a perk test in the property? They may say, oh yeah, we had a perk test done a couple years ago, I’ve got the copy for it if you want, you know, and instantly that makes it more valuable to us, so we look at it from that perspective, or they may be honest and say, oh, it failed a perk test five years ago, but we think that we could get a perked in a different area. So it’s just some more information, you know, I wouldn’t like completely discount that property, but I would be a little bit more cautious and and maybe ensure that we get a perk test during while we’re under contract and see if we can get it perked, and if not, maybe we’re buying it cheap enough that we could just sell it as a recreational property where it doesn’t really matter either way. So those are the things that we look at, but you know, sometimes they’ll they’ll say those, you know, sometimes they’ll say, oh no, I don’t think so, but we still check that; we still called accounting and see if there’s anything on file for a particular, and especially if it’s inherited, they might not be doing it maliciously, they might not know. People don’t even understand like getting the perk test, they might not even think of it called that; they might think of it’s as a septic test or something, you know. I mean, when you say a word, they’re like, no, we’ve never done that.
Yeah. And the other thing is too, we can come back to that, like, say for instance they said, oh no, there’s never been a perk deaths on the property. Okay, we’ve taken that information, what they said is kind of the Gospel, right? And then during our due diligence process, we call the county, and the county says, oh, there’s been like 55 perk tests, we would then go back to the seller and say, hey, you didn’t tell us about this, that’s obviously an issue, so we can’t pay that that amount we were going to pay because we thought that that was not a problem. So based on this new information, this is what it would have to be in order for it to make sense for us, so we can then come revisit that and use that that situation to our advantage, but you know, obviously we would have probably gone in with that same, you know, lower price at the beginning had we known there was an issue from the start. So it’s not an unethical situation at all; it’s like they were withholding information from you, or maybe they didn’t know the information, but it came up during our Discovery and uh, you know, so it is. Yeah, it was a little scary after this many years of marriage, each other’s sentences, right? But um, and then the other thing I think is interesting is that in certain areas certain types of septic tanks are more, you know, like certain systems or different things are more common, so it, you know, just because of it doesn’t mean that it’s an absolute no-no, because maybe in that street or whatever it’s or there there’s going to be sewer coming soon or something.
Okay. Has any timber been removed from the property recently? If so, and when, and why? Does this matter? Well, obviously on these satellite, we’re looking at satellite images to really do a lot of our evaluation, so most people prefer to have a nice, you know, if it’s if this is the type of property that they’re wanting to buy, it’s like a a nice forested property or something like that is worth more than a property that has just been clear-cut of all the trees and big ruts and stumps and things everywhere that’s kind of left in disarray. So those trees are actually worth money that they can sell to a Timber Company generally, uh, and then they regrow over time, and then they sell it again. So we’ve had a number of situations where on the satellite image everything looks good, it looks like a nice forested property, and then we send the photographer out, there’s no Teresa at all. So we based our price that we were going to buy the property on the fact that there’s all these trees there and it’s a nice retailable type property, and then we get out there and it’s just like a Barren Wasteland of stumps and, you know, there’s very limited things that you can do with the property after that point, you know, uh, in some of these areas because it’s not, you know, aesthetically, yeah, it’s not aesthetically pleasing, and you’re you’d have to spend a lot of money in order to to kind of reforest it or see.
Yeah, exactly. So we always ask them about that, so you know, generally find out, but it’s just good to have. Exactly. Well, and it helps the value from the beginning because I don’t like to have to go back to people and say, Hey, you know, we can’t pay what we thought we were going to be able to pay because of this. I’d rather know all this information from the start and say, Hey, you know, since you tempered the property, it’s really not worth as much to us, here’s what we can do, right? And we ourselves don’t Timber properties.
No, no, no. And I know that’s that’s a that’s a way people make money and and obviously that’s that’s a way that it can be done. There’s ways that it can be done sustainably, and some of these properties are just it’s almost like a farm, like they plant these pine trees just so they can cut them every 10 years or something like that, you know. So we’re not big into destroying natural habitats or anything like that, but maybe if it was for if we were doing a project for solar panels or something and that would make sense because the benefit would outweigh the right detriment to the environment. Okay. And also when you ask about like how long ago, because like you said, if it’s one of those ones where this is what they do and it’s been six years, right, you know, and you know that the it’s a 10-year cycle or whatever, these trees are pretty like in some of these areas these trees can get pretty big in like six years, so right um, you know, but it’s good to know because that also people who really know that who are looking at that area you might still take off a little bit because they would want ones that are taller, whatever. Okay. So just because it doesn’t apply to us and we say that all the time, like California, that wouldn’t apply to us, right? That’s why you need to to know the local area.
Um, okay. And then you flat out ask them, are there any problems or negatives with the property? Right. Yeah, again, just trying to kind of flesh out anything that we didn’t ask them about that maybe, you know, we kind of that’s kind of a more direct question, like any negative things. And a lot of people say, no, not nothing that I know about, but then sometimes they will say something like, well, you know, we got this one neighbor who’s kind of a jerk and, you know, so things like that have, you know, come up from some time to time and they do affect the value of the property, so we’d like to actually ask them about that. And that’s kind of a maybe not a 100 deal breaker, but that’s almost a deal breaker for us, like we’re not looking to deal with crazy neighbors. But it’s like when you go to the DMV and they you’re renewing your driver’s license, they’re like, have you done illegal drugs or something, you know, like who in the world is gonna say uh yeah, like right before I walked in I did, you know.
Yeah, exactly. You know what I mean? And it’s because it’s it’s you it seems stupid just to because you’re like, who’s gonna say that? But then yeah, one time I asked him like, do people all the time, and I was like, man, so it sounds silly to say like, are there any problems or negatives? Yeah, well, you know, but I think if I was telling it if I was in the situation as a seller, someone asked me, you know, I try to be up front as I can, and I could let them know all the info about the property. If they want to buy it, great; if they don’t, no, I would I wouldn’t try to withhold anything. So if I had something in the back of my mind that I considered a negative, I would probably mention it to him, and it might not even be right, it might not be something that affects the value at all, but you know, they’re like, there’s mines everywhere, right? It’s booby traps; that would not be good. I was like, has that happened? No. Okay, please don’t let that happen.
Um, okay, is okay, the next question is, is there a loan or any money that is owed on the property? If so, how much is owed? Yeah, so obviously that’s a big thing when you’re talking about stop it, a lot, not too often, no, but but it does come up from time to time when you’re talking about single-family homes, right? Almost every home has has some sort of loan on there. Are some people own them outright, obviously, but but it’s very the common thing is that there is a loan, there is money owed against the property. This happens with land as well; sometimes people take out land loans or some sometimes they’ve got another loan that’s kind of secured by the property or something like that. So we ask that question; sometimes it comes up, we just want to know about that during the process and so we can make sure that that’s being being dealt with right, because you don’t want to say they’re like, okay, I owe 50 000, and you offered them 25 000, like they’re like sold, and then you’re like, yeah, I don’t think they’re really figuring out how they’re going to pay off that deficit.
Yeah, exactly. You’re like, I’m not really looking to pay 75 000, right? And then you just let it also ask, is there anything else that we should know about the property? Right. Another open-ended question, and maybe just kind of the last final thing, asking, hey, is there anything else we should know about? Right. And a lot of times, like you said, it’s yeah, you’ll get some stuff that’s the negative, but there’s also a lot of stuff on the positive, and you don’t know every single area, you don’t know like this one, yeah, this one’s really cool because it’s like right down the street from blah blah blah, you know, which is a national whatever, right? And they’re building this thing down the road here and, you know, all these kind of things that maybe good information to have, but you don’t know everything, right? A minute, I know mostly everything, right? Yeah, uh, I don’t I don’t actually have these conversations anymore; our team does these things, but these are very important things, and obviously this is uh this is a list of questions we developed over time, and it didn’t always start asking all these questions, but certain things came up over time which made me at want to add them to our list.
Okay, so you also go in to ask you ask them, oh okay, ask this only if there’s a possibility being landlocked. Okay. Yes, the map shows that there could be an access issue to the property. Do you know if there is deeded access, and if so, where is the access from? And you’re specific and dated access, like yes, exactly, not just that your neighbor were just, yeah, oh, there’s a dirt road, you know. And a lot of times, you know, that’s a big thing, so we buy properties that are on the main roads; that’s our preference because those are the easiest to sell and those are the most valuable really, but then we also buy properties that are uh not on Frontage on a main road, but they may have like on the map they may have a dirt road going there, and it’s just by looking at the maps you don’t know if that’s actually deeded access or if that’s just access like someone can is actually driving their car up there and, you know, through someone else’s property. It’s important for us to make sure that that’s needed access and uh and on and that generally means that on the deed there is something that says in perpetuity there’s a, you know, 30-foot wide access running from this point to this point out to this main road, or it could also say something like all easements and everything noted on this plat map done by this survey or on this date, and then you would actually have to pull up that plat map and and survey and see what shows on that map and that there’s an easement noted on there, like a little road showing on there, an easement, then that’s actually part of the deed as well, so it’s just not like directly written on there. So uh, we want to make sure that there’s something noted about the access on these properties, and if there’s not, then you know, it’s generally something we’re not dealing with is because it’s considered landlocked, right? And if you’re looking at it, you’ll think, okay, well, you were saying originally you like front of, you know, Road Furniture Road Frontage, but sometimes it’s like down the street; that’s not uncommon in a lot of areas, so that shouldn’t be an instant like no, but it’s not. And also Road Frontage doesn’t mean that it’s you know a busy busy busy road; it could be just a common Road I guess you’d say, and then you know there’s the kind of the maybe even it is a little road and then the house is off of that, but that one’s dirt, right? In some areas that’s totally common; here that’s very uncommon, but in a lot of places it’s the norm. Yeah, just the way things were parceled out over time, and it’s just um you just want to make sure that your property is not officially landlocked. And obviously sometimes the sellers don’t really know, and sometimes we can’t pull up, you know, sometimes we can pull up the Deeds online and these plat maps online and kind of piece it all together to see if there is dated access, but a lot of times we don’t actually get that information until we go through the process and get the title company to actually review it. So in those types of situations it’s kind of a gray area, so if if someone says, well, there’s this dirt road in front of our house, I I think it’s uh deeded access, but they don’t really know for sure, you know, that type of thing happens a lot, so we’ll look at it and we’ll see if there’s other homes in that that dirt road and things like that to kind of piece it together and think like logically there probably would be needed access in this situation. We’re not going to be able to know or verify that until we get the title report back, so we’re going to roll the dice, move forward with this one in the hopes that it is deeded access and everything is going to work out fine. It happens sometimes where we do that and and we spend money on photographer, we spend money on due diligence, we waste kind of time going to the process, and the title company comes back and says there’s no needed access, then we have to cancel the deal. So it happens like that sometimes, but more than uh more than likely in a situation like that, we if we got a pretty good idea that there would be deeded access, it generally works out that they get confirmation on that and we’re good. But right, and and sometimes the sellers aren’t trying to pull fast one like that term deeded access might be something that they have absolutely no idea, maybe never looked at the deed, right, you know, I mean, and they don’t even know if that’s like a thing, there’s a there’s a road right, I drive on it to get to my property, there’s access, right?
You know, exactly. And it’s like, yeah, that’s cool, except for that it also could not be cool, and so we just need it to be like set in stone, right? Yeah. And that’s what we why we go through the title companies from our attorneys and escrow companies when we purchase these properties because we want to make sure everything’s good and uh, you know, last thing I you know I I hate wasting money on properties that never turn into an actual deal, never turned into an actual closing, but uh but you know, sometimes sometimes you got to go down that road or otherwise you’re kind of throwing out a lot of good potential deals. Um, put it as it’s just the cost of doing business. Yeah. And I know that we could save a lot of money not using attorneys, not using titled whatever insurance, I mean, not a lot, but we could, right? But I would much rather the cost of doing business and spending that money to ensure that our transactions it’s safer for the seller, it’s safer for us, it’s better for resale. Yep. We’ve saved a lot of money by by not going ahead on certain deals where we discovered something like that during that process, so I think it’s money well spent. Isn’t necessary; I was just part of the process, like you need it. And then the other thing too is, let’s say you get a property that you’re like, this is just a really good property and you don’t have deeded access, but they’ve been driving on this road or whatever, if you have the time and you and the resources, you could say, okay, I have to pause this right now, or I’m going to buy it for a lot cheaper because it doesn’t have it, and then you could either concurrently with the escrow or after you close it if you get it for a lot cheaper, get that deeded access, right? Yeah, you work with the neighbors to try to get it official, or you can even attempt to sell it to one of the neighbors. Yeah, I think there’s actually some neighbors don’t I mean, I wouldn’t Bank on this, but that if you went to them when you were like, hey, I’ve always had this, they’d be like, yes, of course you have, let’s do it, make it official, you pay for my you’d have to pay for their attorneys, yeah, you pay for a survey or to get the official and, you know, maybe pay him a little bit of money to, you know, make it make it all good, but right, so it’s not like the end of the world, it’s just not what we do because again it’s just not part of our business plan, right? Maybe in the future. Okay.
Um, I’ve got some questions that Peter sent over to me, and these are from our land flipping community, and if you’re not a member yet, we would highly encourage you to join. There’s a link below this video in YouTube. Here you stole my thing; I was like, where did they find, you know. Okay. Or you can go to turningprofit.com; there’s a button on there, just press that and uh and join our land flipping Community where there will be a brand new man flipping training program released in there very soon as I get it done. Okay, I’m close. Okay, so um I know I say botch people’s names and I gotta complain about that and I apologize; I’m not trying to, but I keep doing it just because I suck obviously. Um, anyways, this is from Anson, and I’m not going to pronounce your last name because I don’t want to get in trouble for, you know, watching it. I’ve received several leads from my first mailer using two counties delinquent tax lists, but I’m finding that all the leads so far end up demanding market value and turning down lower offers. That’s kind of funny; it’s like at a tax sale, right? But anyways, okay, I keep going. Some of them are not even behind on their taxes at all. Oh, after all. Okay, that makes sense. Has anyone ever uh else experienced this or switched to a data service instead of using or instead of the details due to this reason? Yeah, so basically what Anson is talking about is delinquent tax list. When people are behind on their property taxes, there are companies that will put together these lists of property owners that are, you know, obviously late on their taxes, and you would think in a lot of cases that these are motivated sellers or or people that obviously, you know, may have a financial need in order to sell. So basically it should be a higher converting list, and I would imagine that it probably is like if you only sent to the people that are Delinquent Tax um list, you could probably get a better conversion rate on your list, but then on the other hand there are other problems that go with that, you know, some of these people uh, you know, are not motivated to sell, they just they just only pay their property taxes every few years and, you know, and then they’re getting inundated from a lot of investors that are using these same type of lists and uh so it’s one of those things that you can experiment with, and maybe as you’re trying to break into a new area maybe you just focus on these people first and then you broaden out from there. I’ve thought about doing some things like that in the past, but yeah, so it’s something to test and, you know, one area may be completely different from the others, but it’s like anything else, some some of the people will be completely unreasonable with what they think the property is worth, some of the people will be interested and and willing to work out a deal; it’s just kind of a numbers thing. So I’ll add my spin to a lot of people don’t I know people like this who will wait until they get that notice and pay their taxes, right? So by the time you the list is generated then they’ve already paid it, right, you know, I mean, that’s the first thing. The second thing is, you’ve got more people like more competition because these lists are easily easier to come by, so I wonder how much they actually cost versus a few. It’s put that towards right, you know, it’s not working for you and you like he’s clearly capable, you know what I mean? So it’s like maybe if he diverted funds towards doing the other kind of Milling he would have a lot more success. I would say most investors don’t just focus on those type of lists; most land investors focus on broader criteria and really don’t worry about the Delinquent Tax list. I mean, there naturally will be a lot of those delinquent tax people in your broader list, but yeah, you know, it’s not uh it doesn’t have to be any sort of focus on those types of things, right? So you’re kind of dealing with the entry because it makes sense because then you’re not if you don’t know how to formulate the list this makes sense. Yeah, and there’s a lot of different things that you can do kind of like that, like some people only focus on absentee owners; that could be a good way to kind of break into an area. Absentee owners maybe in the land business could be something like someone that lives in a different state but owns this property in this other state, so uh, you know, those types of things you might get a higher return on your, you know, conversion rate in your list, but I just have a feeling that since he’s already doing this like he’s ready to take it to the next step, yeah, you know what I mean? I would go with a broader list at this point, yeah, personally, but okay.
And then Todd Smith says, pricing non-disclosure States, looking for pricing best practices in non-disclosure States, any advice or guidelines? Now Pete race responded to this, should I read Pete Reese’s response or can you? I can I can give you a few greases, let me know, I’ll let you know if you get close. Yeah, yeah, if it’s the same advice, I hope that’s not what he said. Yeah, yeah, I wanted to highlight this one because I thought it was it’s a pretty interesting thing. So first of all, non-disclosure State means that they don’t publish their sold prices publicly, so when you look at a lot of Norm normal states I guess you say that disclosure States, obviously you can look on Zillow, you can look on Redfin, see exactly what properties sold for, it’s just public record. Now some of these non-disclosure States, it’s not public records, so basically you kind of have to piece the puzzle together a little bit in order to figure out comps, so real estate agents have access to this information in a lot of these areas, but you don’t want to be calling up real estate agents to you know see um you know every single potential deal, it won’t end well for you, it will be good. So you need to use the online tools available to you and the information that’s out there to kind of piece it together. Now it’s not going to be exact in these areas, but the kind of the way I do it is that first of all I look at what’s listed, so those prices are obviously public, so you see what kind of properties are listed out there using Redfin or Zillow generally, and then what I look at is, you know, are these properties, how long have they been on the market for? That’ll tell me if the list price is too high or if it’s right on what type of activity they’re getting on Zillow. When you click on a property of listing, you can see how many views it’s had, how many saves it’s had, so those are indications to me that those are generally priced pretty well, and then you know you look at the list dates and see if it when they went pending and things like that. So if a property was on the market for, you know, seven days and it went pending right away, you know, the list price is pretty probably pretty accurate, you know, you might want to back off ten percent or something like that just to be safe to kind of come up with your estimated value, but you you’ll just want to use all those kind of hints to be to piece together your your comps, basically, context clues. And yes, and my little take on that too is that this is way harder to do than a state that’s, however, having said that, any barrier to entry is to your advantage, so if you’re willing to do that leg work, 99 of people won’t, so you’ve got a leg up, right? But it just comes down to like, could you spend more time like, you know, I mean, like, where’s that balance, right? And you know, and then you know the other layer of it is that once you piece together what you think the comps are, you know, to get an idea of what you think the value is, get the property under contract, and then that’s the point where you bring in a local broker agent to kind of confirm the values that you assume there are, so right, and they could also once you have an agent that you have a good working relationship with, they can do print like they can print out market trends and.
Yeah, exactly. Yeah, and you may be able to, you know, once you start building these relationships in these areas, sometimes you can get these opinions before you go under contract and get their, you know, kind of ballpark on something. Yeah, we can lock this one up, what do you think? Yeah, exactly, right. Okay. Steven says, mailing, I’m new, so be merciful. Let’s be horrible to him. Um, has Pete ever done a deep detailed dive into the process of mailing? How does he find the list? How does he narrow it down? How does he have a tailored offer because already included in thousands of letters? What are some things that you want to include to ensure success? I’m not done yet. Oh, I know absolutely nothing about mass mailing, so a detailed explanation would be amazing. Okay, night permission to. Okay, well, I’ve actually got two full levels of our training program and we’re not calling they’re not modules; they’re levels in our training program that are releasing events aren’t they, kids, little hints um that are devoted to this; there’s basically the building the list, choosing your areas, that type of stuff, and then the next part of it is it’s a logistic part of actually doing the mail uh getting the mail sent out and all the different steps that you need to do in that, so go through every single piece of that, and obviously it’s way too much to just kind of answer, and I was gonna be like, there’s no way I’m letting you do that, but yeah, there are specific steps that you need to go through, and you can’t skip any of them if you if you want to have success, but uh one of the little things in there is the you mentioned how do you send out all these, you know, different offers to all these different people? You basically build a list, you have a letter, and then it gets merged together, and then it gets sent out by your mailing company. He doesn’t sleep the night; he’s in here in the same room right here writing out offers, yes, a handwriter signs them, I read them with like a calligraphy, yeah, calligraphy and a quill and um you know that type of thing. If you’re lucky enough to get one of those offers, frame it. No. Um, I think that the thing is that you you Stephen know exactly that there’s a lot to it, and so it wouldn’t do justice to even talk touch on those; I think that when you get to the training program that’s that’s the whole goal, so that he’s sharing each specific step. I just bit the microphone. Okay. All right. Well, you know, I think that’s a good place to wrap up; we’ve talked for a long time today, but uh maybe I’m a win bag. No, I’m the one who talks too much. Oh, you’re the one who talks too much. Okay. All right, Heather, don’t read the comments. Anyhow, we hope you enjoyed this episode, and a couple last things to kind of go over: If you haven’t checked out our website, turningprofit.com, we do a monthly income report about land flipping. You do? I do. Okay, monthly income report about land flipping, talk about the revenue we took in, the profit that month, each and every deal we did, what we bought it for, what we sold it for, how many days we held it for, notes on each individual deal, so check that out. The other thing is that we do an extensive video along with that, and you can find that on our YouTube channel. What else we have to say? Join our land flipping Community if you haven’t already, and I guess we’ll see you next week. Yeah. All right, bye guys.