Transcription
Right now is a great time to be in land investing. We're getting a lot of people who are looking to sell their land, but one of the biggest things I'm seeing is that people are missing deals on that first contact.
If they want more money and can give us more time, that's when we offer double closing. Hey, I can give you that 75,000. But now all of a sudden, they're talking this person out of selling their land. And it's not what's best for that person. A lot of times like this person needs the cash, but now all of a sudden they got, you know, dollar signs in their eyes. And that is risk. I have to buy this property. I have to take it down with my own cash, with investors cash.
All right, guys. Welcome back. Today we got Derek B on the podcast and Derek had a great idea on this episode. We're going to talk all things sales. So, you get a lead in the door and what to do with that lead. And this is just a new lead. How to handle it, how to close the deal. So, this is really going over sales, Derek.
Yeah. I mean, this is it's it was kind of triggered, like I said, by um well, not we were talking before the podcast. Um, one of my buddies who's a lawyer has all these like analytics and stuff and he sent me this thing showing people googling sell my land. Yeah. So, it's like trending up and it's like one of the highest it's ever been in the last like five years. And so, there's lots of people out there looking to sell their land. We're sending marketing. I'm seeing like anecdotally, obviously with my clients, I see everything kind of this at scale. We're getting lots of leads. Like, right now is a great time to be in land investing. Right now is a great time to be sending marketing because we're getting a lot of people who are looking to sell their land.
Um, but one of the biggest things I'm seeing is that people are missing deals on that first contact. So, that's I think we're going to really dive into that today. You get a call, what happens?
Yep. And so, if you guys are new here and you guys uh to get a lead, you have to send out marketing. We're going to put that all behind us. We're going to assume you guys have sent out marketing and you guys get a call or text back. Really, those are the two main ones. or uh they can even send a piece of mail back I guess to you. But the calling and texting is a is a really really big one. Um so let's just start from the scratch of like defining a lead I think Derek.
Yep. So this could be something. So as far as like text is concerned, it could be a positive response to your first initial text, right? Whether it's a cold text or even a follow-up text, it's that initial first uh contact with them through text message. Like, let's say I'm doing a follow-up text and I'm like, "Hey, you know, I sent you some mail or um or I'm looking to buy land in this area. I see that you own this parcel um or I see that you're listed as an owner or do you still own it?" Right? I've let them know like, "Hey, I'm interested in buying land and I'm trying to qualify if you own that parcel." A simple yes, I own that parcel is a positive response to that, right? Because they know I'm looking to buy in the area.
Mhm. So, any sort of positive response, sometimes it's, you know, obviously a phone call from a mailer. Hey, I got your mailer. I am interested in selling. You know, a lot of times they'll ask you what's the process or um, you know, are you stuck at this price? Like, what what do we what what's the next steps there that they want to know? Or in some cases, it's just a signed contract and sent back to your mail.
Yeah. So, it's sometimes
Well, that's deal done just about that's as close as you get to deal done without ever talking to them. And that's why that's why like people who aren't as good with sales love mail is because it's like in general you get higher quality leads and you close the deal with less contact points, right? With less personal contact points.
Um, correct.
All right. So, let's just go from uh you send out let's start with texting because I want to focus on that first. Uh, and then we can talk about mail and you get a call back. But texting like Okay. So, you you have a positive response like you said someone messages you back and they say, "Yes, I own that land." Or something positive, right? And then what what's the next step?
Yep. So a positive response from text is really simple because generally I'm sitting at my computer. I get that text message back right there on my kind of text message CRM. I have all their information. I've got their name. I've got their APN. I'm going to go quickly real quick do a threem minute check on their land and see like what am I what kind of land am I dealing with here? And obviously I'm just going to do a quick qualification. Make sure it's not wet. Make sure it's not slope. Make sure I have some sort of access. And generally like because we're doing such a great job filtering sending our marketing all those things are going to be great most of the time. You know 90% of the time we're going to be getting good land leads back. So my next step is to call them. Right? I'm generally not even sending a follow-up text to that situation. If I get a positive lead, I'm calling them right away. Right? Even before I've sent out a, you know, a great, you know, tell me more about the land or whatever it is, like whatever text you want to send next, I'm going right to a phone call. I'm not sending a second text. I'm gonna call them.
That's like really the next big step. And I think people are hesitant like because now all of a sudden the rubber's hitting the road, right? And I think we're missing that like, hey, you have to reach out right away to these people. And honestly, they appreciate it. I see people all the time like, "Oh, wow. You got you got back to me right away."
Interesting.
So, you're uh so I I hear a lot of mixed um not philosophies on it, but how people do this in general. Sometimes people would call. I like your approach because I'm more of the person to just type call, they answer. Uh what's with the best that can happen is they answer and you have a call with them right now. The worst that happens is you do what you were going to do originally and text them back to set up a call. So those are the two options. You can call them back right away or you can text them back to set up a call. If you call them back, I I think calling them back right away is the best option because um one, you get them on the phone now, which is best case scenario. That lead's hot, whatever. um you're texting them, you know they're available, and then two, if they don't answer, you still go to the original step either before that. So, it's like then you try to set up a call. Is that your approach?
Absolutely. So, my second text message 90% of the time is, hey, I just tried to call you, right? Because a lot of times it goes to voicemail. Let's just say nine times out of 10 it's going to go to voicemail. They don't recognize the number I'm calling them back from because maybe it wasn't the same number I'm texting from, right? So, a lot of times because I'm just trying to move quickly, I'm just calling them from my personal cell phone. I'm not even using my Google voice number, whatever. I'm just like, "Hey, let me get in here because I'm excited." Right?
Yeah.
So, I'll call him back and I'll usually say something like, you know, I'll call him, voicemail goes, I'm like, "Hey, this is Derek from, you know, XYZ land company. You know, I saw that you texted me back. Thank you so much for that. I'm really interested in getting more information about your land so I can give you um a quick cash offer for it. Um, give me a call back when you get a chance." And then hang up directly. Go right back to my text message. And my second text message to them is, "Hey, I just called you." that was my personal cell phone, which is probably why you didn't pick up. I get it, but I'd love to learn a little bit more about your land. When's a good time to chat? Or call me when you get a second. And then sometimes I'll even put my my number in there for them to call me back directly.
So, they have those kind of two touch points now of me trying to get a hold of them.
Yep. So, so someone doesn't answer uh or you call them, they don't answer, you voice, you leave a voicemail, right? There's a personal touch. Like, that's good in general. That adds something. That's amazing.
That's so good. You want to know why? And this is this is like such an important thing. Um, a lot of times people get overwhelmed with text messages and they're like, "Oh my gosh, so many text messages coming in and going to get ignored." And we know this in text messaging. You get ghosted all the time just because people get so many text messages. Like I can show you mine. I've got like 180 unread text messages right now. My wife go it drives her crazy, but like I ignore so many text messages because I get so many marketing text messages.
But guess what I do 100% of the time? I listen to my voicemails, right? or I go read the transcript from the voicemails. At at no point have I ever been like, I'm not gonna listen to that voicemail.
You're kind of forced to read it now.
The way that I show up when you don't answer, it shows up on your big screen. Then it goes you get a text with it now, too. It's the trans at least I do. And then it's also it's in three spots and then it's also in your voicemail.
Totally. And like you in your brain, you're like, somebody's taking their time to call me back. Like I always want to know who's taking their time to call me back and why are they why are they leaving a voicemail? Because so many people don't leave voicemails these days, right? If they can't get a hold of you, they'll just text you.
Yep.
So, leaving a voicemail is very powerful, right? I love that. Well, let's get to the meat then. So, someone, this is where it gets really scary to people is someone answers the call. It's like, what do you do on that first call, right? They just responded and said, "Yes, I own 20 acres." You call them, they answer. Where do we go?
Yep. So, the most important thing I think on that first call is finding out how much they want for their land. Now, we have lots of cool tools now, obviously, in the land portal where I can see kind of a an estimate of what their land is worth, right? Um, I don't necessarily need to like get this fully comped on this first call. I don't need to know what I going to offer. I don't know, you know, especially with text message, maybe I haven't like gone through the whole comping process yet. I can just kind of lean on that TLP estimate and and kind of work off that, right? I could always come back and renegotiate this once I've done a little bit of due diligence, but I'm really not going to be moving too far forward until I get a signed contract. So, the most important thing I need to know is how much do they want for this land? So, right away, I'm going to start that conversation. You know, hey, we'll call him Mr. Johnson. Hey, Mr. Johnson, thanks for your text message back. You know, I you know, I I'm really interested in your land here. I see that it's and I usually throw something in that's very specific about their land. see it's on the corner of, you know, Third and Smith Street. Um, it looks like really great land. What can you tell me about it? Right? So, I'm just trying to start a conversation and build a little bit of trust on that first phone call, right, as well. Um, so hopefully they go into start telling me a little bit of story about their land, you know, oh yeah, we bought it back in whatever it is, you know, we bought it we bought it 10 years ago. We were going to build a home on it. You like some of the things I'm trying to kind of get out of them is what why did they buy it? Why are they looking to sell? And then eventually I'm going to say, "Okay, well, what this all sounds great, right? I'm just going to believe everything they say on that first call. There's no reason to not. There's no reason to be like,"Well, you know, I say you got those wetlands." We don't need to bring up all that all the stuff that we already know about their land. We don't need to bring it up right now. What I need to do is just trust them. I will verify here once I get into due diligence, but I'm going to trust them.
Great. All this stuff looks great on your land. You know, they're looking to build a home. Maybe I ask them about utilities. And at some point I need to breach the con the the conversation of how much are you looking to get out of your land.
I'm always going to use a $100,000 example. So let's say on my TLP estimate I see that it's worth $100,000. So I know if they come in at $100,000 retail, I have I have a I have a uh a sales pitch for that retail price, right? I can I can sometimes talk people off that and get into a more of a double close situation. Whatever it is here, I'm generally just trying to get it under contract for something less than retail, right? Let's just say, you know, they're like, well, it's worth it's worth about 100, but I'll probably take, you know, I'd take $80,000. Now, $80,000 for me isn't probably going to work. Even for a double close, that might be a little bit thin, knowing that, you know, the once I start going through and looking at all the, you know, the due diligence portion of it, I'm probably going to need this around 70K. Most of my $100,000 deals, I'm going to need around 70K for a double close. Obviously, I can do 50K for a really quick closing. So, if for whatever reason they're like, we'll take 50K, I'm getting under contract. Anything under, you know, 80K or whatever, I'm going to really push to say, hey, that's great. If it's a text message and I haven't sent them a contract yet, I'm going to say 80K, awesome, Mr. Johnson, I think that's something that maybe we can work with. Do you mind if I send you an email with a uh a contract that we can get this sign and get under contract so I can start my due diligence right away? Right. So, what I'm trying to do here is get that contract signed. If they're interested in selling and they've given me a reasonable, you know, offer, whether it's market value or less, I'm probably getting it under contract.
Got it. And and that's the idea of um of just the different options you have. Sometimes you can subdivide it, sometimes you can double close it. like you're just going to you know it's undermarket value so you're going to try to make something happen out of it.
Correct. Correct.
And you have a pitch you said for people who want retail. What about the people who want and I want to go over that a little bit. What that sounds like the your retail pitch.
Um first off are those most the calls you get they want about retail or more or what what do you see?
Yeah. Um it's kind of a mix. It kind of depends with mail. It's it's not so much right because they have this offer from usually for for 40 to 55%. So, I've already kind of peeled them off the ceiling. So, with mail, it's different. But with text message, yeah, I think the majority of the stuff I'm getting is, you know, at retail, maybe a little bit more um of that. You know, sometimes people just don't understand what their land is worth. So, a lot of times it's it's they're going to say, you know, you know, my neighbor sold their one acre for, you know, 20,000 an acre and I've got 10 of those, so I want 200,000. Right? Like those are like hard conversations because you're like, well, it's probably really only worth 80K and you want 200,000. that's going to be a little bit harder of a negotiation down the line. I'm probably not getting it under contract for 200,000. Um, in that sort of situation where they want an exorbitant amount over retail, I'm probably not getting it under contract and I'll probably say, "Well, let me get, you know, let me get back to you in 30 minutes after I do some quick due diligence even to see if there's, you know, a subdivide play or something like that involved."
Got it.
But if I'm close, I'm probably just going to go ahead and get it under contract.
If you're close, Yeah. Yeah. Yeah. Yeah. Got And I think the biggest reason why I like getting things under contract right away is because it shuts down some of those conversations that they're going to have. So, let's say they've just started thinking about selling their land, right? So, you know, my wife and I have been talking for the last couple weeks about selling our land. You know, we got an offer in the mail that we didn't really like, but you know, you texted me and so yeah, I'd love, you know, I'd love to get $100,000 for it or whatever. Great. Let's get it under contract. you know, maybe maybe I can do some sort of negotiation there where I can get them down a little bit off that 100,000 right away, but I'm getting it under contract. And what that does, and this is the most important thing, is now it takes it out of their brain and it puts it on paper. they're less likely to go, you know, they if they have a commitment to somebody, they have a commitment to me for $80,000, $100,000, whatever that whatever that contract is, they're like, great, that ball is rolling in the direction I want it to roll down. I don't necessarily need to go talk to my aunt or my sister or my wife or my neighbor about this anymore. It kind of takes it off the table for them. They're like, "Great, we're going to sell it." And they've made that commitment, right? If you don't get it under contract, let's say they're like, "Yeah, I could probably do it for 80,000." And you're like, "Okay, well, let me go do some due diligence and I'll get back to you and see if that 80,000." Now, all of a sudden, they might go, you know, we're thinking about selling it for 80. And they might talk to their neighbor who they, you know, have over for dinner that night. And their neighbor's like, "You can probably get 150 for this." And all of a sudden, they're going to get talked out of selling that land because they they're having all these conversations. But once they've committed, those conversations happen far less, right?
Right. So, and and they and they happen. The problem is is that a lot a lot of those conversations happen with people who are emotionally invested in the land. Like, oh, my kids, you know, they they want that land or they or a neighbor who automatically thinks, oh, you know, the Walmart down the street just got built and it's worth this this property is worth half a million dollars and like they don't know, but now all of a sudden they're talking this person out of selling their land. It's not what's best for that person. you know, a lot of times like this person needs the cash, but now all of a sudden they got, you know, dollar signs in their eyes and like you go to call them back and they're like, "No, you know, we think we're going to hold on to it. We think it might be worth, you know, half a million dollars all of a sudden." So,
right, the the contract kind of stops those conversations from happening um on on a on a much broader scale. So, we're trying to keep, you know, them motivated. We're trying to keep them, you know, we're trying to get them that money. And once they think that that's happening, they're like, "Great. Dererick will call me back if anything happens. We'll cross those bridges when we get to him. Is basically the mentality.
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And so of your closings off of that that uh philosophy. So you get it under market value. They want 80,000 it's worth or you get it under under contract under market value. They want 80,000 it's worth 100,000. Let's just say for that example.
Um so that's like a double clo that would be more of a double close than a flip opportunity. What uh just because the margins are tighter. What what's your percentage with that strategy of going in with asking them a price and and uh of double closing it first flipping it? I have a couple questions to follow up on this.
Yeah. So, obviously I I always want to make sure I have enough runway because obviously when we go to list this property, we want to make sure that we're we have enough profit runway to where we can get aggressive with the price. Especially with something like a double close, I have 90 days to sell this thing. So, it's never going to be like I need, you know, 30% margin because in some cases I need less than 30% margin. Let's say it's a 500,000 prop $500,000 deal, right? I probably can double close that at 400 or even 450,000. I might be able to get, you know, closer and that's, you know, closer to like 80 or 90%. The less the the property is worth, the the the higher that percentage gets. You know, if it's a $50,000 property, you know, I can maybe double close at 30,000, but things are starting to get a little bit tight there. So, um, usually around 50,000 is where I kind of I can still double close, but I'm really double closing at that 50% margin a lot of times in those cases.
And and if you have 10 deals, how many of them are double closed versus traditional flip?
It's a good question. In your business, first year it was a lot of just flipping. Second year, it was a lot of double closes. I got really good at double closing. Um, I really like double closing because it was able for me, I was able to maintain more profitability there. So, I moved a lot a lot into that because that helped me build my business until I can start getting into either self-funding or doing a little bit more hard money loans. Um, so I think, you know, I think for a lot of people early on, they want to get that second set of eyes and get a deal funer. And I think that's great. Um, but double closing is such a is such a great profit builder for your business that it has to be a part of your tool belt for for deals.
Yeah, it's infinite return. But the one thing what I wanted to go at is so uh cuz we started introducing a lot of double closing into our business a while back and one thing we noticed is we're getting with with offering that we're getting less flips than we normally would have. We're getting more double closes and less flips and then we realized the reason uh is because a lot of those people we were double closing with and offering that to would have taken a $48,000 52 a $55,000 offer. But we asked what we followed that approach and off you know asked what they wanted and got it under contract early and then we didn't have time to hard negotiate down essentially because it was under contract and we already pitched the double closing. So we got more deals overall which is great because it's uh you're re you're sell or you're buying from sellers who wouldn't have sold at uh flipping price of 50% value but at the same time we were losing margin some of the time a lot of the times because we weren't hard negotiating down on that. So, it's a balance I think and every like you said for newer people especially double close it's infinite returns it's insane but you have to when you're talking to that customer you have to be have your sales hat on and you're talking to that potential seller you have to have your sales hat on
and and you can still fight a price you just because they say $80,000 and that's the biggest lesson I learned just because they say that $80,000 doesn't mean they won't go on down to 72 on the spot doesn't mean I would push them more than not push them at all and just see what you can get with the price because if you're just taking their price every time you're going to lose margins because you're talking to people who would probably take half of that sometimes and you're just not hitting that spot. What do you think about that?
Yeah. Yeah. I mean, I'm listening to that story right away, right? Why did you buy the land? Why are you looking to sell the land is probably the biggest question you can ask on that first call because then you're going to get the story, right? So, if they don't really have a good reason to sell their land, right? Oh, we just thought now would be a good time. You know, there's no like there's no time constraint to get that because I think the biggest advantage to the lower offers, the 50, you know, the the 40 to 55% offers, the quick flips, is they need cash fast. A lot of times they know they know the the value of their land, but once again, they don't necessarily care. And I think we're really moving into that time right now um of people looking to sell their land who are actually looking to take those better margins. So, if I hear that story, you know, hey, I lost my job or whatever it is. I'm behind. Yeah, I'm divorced. Um, I'm behind on taxes. Um, my kids are going to college and we didn't have a college fund set up and they just got into, you know, Harvard and we need to pay for that. Right? A lot of times land is the first thing to go. They're not going to sell their main residence. They're not going to sell their cars. They're probably going to sell this asset that they're not doing anything with, right? But if they need the cash fast, I'm generally going right to there almost probably right away, right?
Right. And and at that point, like if they say that, so when I'm building that trust and I'm asking them those questions, if I hear that story, that painoint story, I'm like, "Okay, great. Let's talk about how quickly I can get you cash, right?" And I kind of go right into that pitch. I use the TLP estimate. Let's say I can see it's worth 100,000. I'm like, "Listen, if you need if you need cash really quickly by the end of this month, here's what I can do, right? My financing department has already approved a offer on this one at $50,000 and I could do that in the 15 days and we can get this thing closed and get you that cash fast. Yeah. Right. And that's how's that sound? Let's let's get you that contract.
And that's the misconception that people have. They're like, you're stealing people's land, blah blah blah blah blah. I already know what the comments are going to say about this. Um, but when you have someone who wants money fast and you need funding, you have to have a price that you can get it at to where it makes sense to where you can even buy it. If I could buy his land with cash with funding at 70 75%, that's a little bit different. But we can offer double if they want more money and can give us more time, that's when we offer double closing. Hey, I can give you that 75,000, but you want your money in two and a half weeks and you're pushing me like that is risk. I have to buy this property. I have to take it down with my own cash, with investors cash, and I have to I'm going to have to sit on it for a long time with my money out. There's risk there. And essentially, you're trading the risk for the margin essentially. So like if and that's the that's what people I think a lot of times when they're newer in the space, they wonder why someone would sell at 50% of market value. We can give them the option to sell at 75 80 90% even uh with the double close, but then you need more time, right? It's like at that point it's almost more like listing with a realtor because with a realtor because you're going to have to wait list on the market. You have to wait for it to sell. It might not sell. There's no guaranteed money. When it's the cash, you have guaranteed money at this price and I'll get you that money in two and a half weeks. There's a big value to that and I just want to uh verify that with everyone listening because um I think it's an overseen concept like quick cash is very powerful.
Quick. Yeah. And you have to remember that land is not liquid, right? It's not like it's not like a stock that I can just go quick and sell and get my money out or gold where I can run to a bank or a pawn shop and exchange that gold for cash.
Land is illquid. And not only is it illquid, banks don't like lending on land. They like lending on homes. So, if they want to sell their land and use a realtor, we all know that's going to take 6 to 12 months because it's hard to find buyers for land, especially when they're going through the financing, the traditional financing channels. It's it's not an easy asset to sell. So, being able to say, "Hey, if you need cash fast, if you need to liquidate this fast, I can do that." Right? And there's and there's a million reasons why people need cash fast. And I always think it's it's kind of sad when people are like, "You're stealing people's land. Like, you're offering such a low price." It's like, we're helping this person out. Like, how dare you say that like they need cash fast. Like, they're in a tough situation and you're saying they need to go list it and wait 6 months to get their cash. like you go pay him 80,000. When you're looking at that kind of money, guys, and it's like all the risk, it's easy to say from the outside of you're buying it for 50 or 55,000 and selling it for 100. That's that's scamming people. But it's $55,000 cash in two weeks that I need to get for this person. You know what I mean? Like when it's your money, you look at it a little bit different. All of a sudden, they ask for 70. That deal doesn't work for me. I'm like, "No, I don't want my money out for that deal." It just the market speaks for itself. I think% it's like there are options to get you that 70, but my cash out for this time where I have to pay you, I have to list it, I have to have all these fees out, I might need a survey, I need to do all that. Just doesn't make sense at that point. That's what the market is.
But I did want to get to so we talked about texting um and and what to do with the first time lead with texting and the uh strategies you use for that.
What's the difference with texting and mail? Let's dive into mail a little bit and talk about any differences you see.
Yeah. So, with mail, obviously, they have that piece of paper in their hand that says, "I can turn your land into this amount of cash." It's a powerful piece of marketing. It's a it's it's why I love mail. It's just because that piece of paper in their hand is so powerful, right? And automatically kind of sets expectations as far as like, hey, this is what I can do for you cash-wise. They can have an assumption that their land is worth whatever they want to. But when they know that I can give you cash for this amount, it kind of it kind of sets the expectation of, hey, like you're I know you think it's worth this, but this is what I can do cashwise really quickly, right? So, a lot of times they come into that conversation with a positive phone call. Obviously, we're never going to talk somebody into selling their land who doesn't want to sell their land. Like, that's never going to You can turn those people into buyers, right? But you're not going to turn those people into sellers. And that's great, right? It's just how the just how it is, right? Like they love their land, they're passionate about it. Great. Um but when they call you from a piece of mail positively, you know, you're already in the ballpark, right? You already know like, hey, like we are look I just got a call yesterday from a parcel that I that I'm looking at buying. Um, and I offered it's a it's a $370,000 lot here in Tennessee. I offered him like $200,000. So, I was a little bit high in my offering price. I think I offered him 60%. Because of the road frontage and the possibility of subdividing this one, but right away he knew and he would and he's okay with that because it's it's hard to sell those larger parcels for cash, right? To have a cash buyer on hand like once again people when when the when the price gets up there, they have to go through financing channels. So, he was already like excited about the cash offer. Yeah. Like for him, he's like, I've been trying to sell it, you know, for the last few years. My wife and I, we moved away. Um, you know, it's and he knows how much it's worth. He's like, you know, we had it listed for, you know, $400,000, you know, a few years ago and we didn't get any takers. Um, they had it under contract one point. The financing fell through. That's a pretty normal thing in land. So, he was already, you know, like he he was already ready to go for the cash. Now, he does want a little bit more, but it's still going to work number-wise. So it the calls from mail are a little bit easier to get those especially those quick close deals for sure
because it's the set expectation up front. They have an offer like if typically and I know you get hate calls, right? So there's hate calls and there's interested uh potential sellers as well.
Correct.
Um but you get so much less leads because they see that $62,000 offer on it and it either intrigues them or it doesn't intrigue them. If it absolutely doesn't, they might call you and scream at you and that does happen. But if it's somewhere in the middle and they're intrigued by the offer, the lead's very very good that's calling in. That's why we have always loved mail. If you have a 9 to5, you have a little marketing capital. Uh mail's phenomenal because you don't need to spend that much time on your leads. Leads take a lot of time to nurture over text and cold calling and all this other stuff. Mail gets to the point and you get a lot of qualified leads coming in very early. And to your point, there's like very at the top, right, where you have $400,000 properties, 200, 300, there's very little competition there because no one has that money. Not a lot of people have that money liquid in general. Like anytime you go to the top of something and you're that expensive, the competition is just it's like buying a $200 million business versus a $250,000 million or $250,000 business, right? There's going to be a much more buyers for a business at 250,000 to a million than there is at 200 million. You know, it's just a whole another level. Um, so the funnel was much much more narrow for those and I've always loved that. But one thing also um that we were talking about is and we were talking about this last night on the call. It's getting more from each lead and double closing was a good intro to that. So you have originally we were just buying and flipping land in our business for a long time and we asked ourel how can we get more from leads right we constantly ask us that ask the same question right in wholesaling they do referrals to realators okay if they can't wholesale they can't get the price down let's refer it to a good realtor and the realtor is going to give me a $500 kickback or $1,000 kickback right there there's that that's that's getting more from a lead right you're spending all this marketing money how can we get more uh from our perspective there's subdividing, right? So, like if you can get if if the lead wants market value, do I have the option to subdivide to take that price up, get more from that lead that wouldn't have existed because I can't buy it at market value if I don't subdivide it? Survey hacking. They don't want to sell their land, but they called you and you found out they would sell 10 acres of it and they have 70 acres. Um, so they want to sell part of their land. That's another way to take it uh get more from your lead. And there's you in your business, you should always be asking yourself, how can I get something from each leader? how can I get more from each lead? Because you'll just get a much better return on your ad spend, return on your marketing, your dollars out.
Mhm.
You get much more. And that's how this whole that's how everything started from double closing to subdividing. We're just looking for more from each lead.
Yep. Exactly. And there's like there's so many tools you need to have in your toolbox in those situations, right? Like for instance, like the one I just did or the one I'm working on, like I'm I'm willing to offer a little bit more. Like I came up to like my initial offer was 60% because I knew he has the road frontage. I knew that there was a certain amount of buildability on that lot. So, I know that it probably can be subdivided. So, that's kind of the the way I was going with that. Um, and you know, there's there's a lot of times you can offer retail value. You know, if it's $5,000 an acre, but you know, if you subdivide it, you can get $20,000 an acre, like you can offer retail for that and still, you know, three, fourx your money on a lot of those deals. So, um, it's always an option. Like I said, like that's why I don't necessarily shy away from getting a contract for full price.
Yeah.
You know, now if I have to back out of the contract, like after I've done my due diligence and I realize it's not going to, you know, I always I always say like once you get it under contract, I'm like, "Okay, great. Thanks for signing that contract or I'll get it sent over to you. Once you sign that, I can start my due diligence. I'm going to take five days to kind of get some get some due diligence done on the property to make sure it is what it is, right? I'm get that's when I'm going to either try to get my drone out there. I'm going to call the county. I'm make sure they're on the deed." like that's when I'm kind of like going through I'm going see if I can subdivide it. Um and then then if everything works out really well, obviously I'm opening title. If it doesn't work out right, I find out, hey, there's something wrong with the property or there's some, you know, whatever the case is. There's some slope that that makes it not work. I can just call them and be like, hey, it's not going to work at this price, but I can make it work at this price. Then I can go into a little bit more of a hard negotiation because then then it just really becomes facts. Here's what I can do for this property. um because it's worth this, right? And a lot of times it's, hey, it is worth a h 100,000. And this is kind of where that double close, you know, let's say I get under contract for 100,000. I come back and I'm like, you know, I knew I knew exactly what I was getting into, so I knew I was going to have to come back. And I'm going say, hey, like I always tell people what their land is worth. There's too many things out there to to know what their land is worth. There's too many ways for them to find this out. So I don't lie to them. I just say, "Hey, yeah, your land's worth $100,000." I can do like I give them the three offers, right? And this kind of goes back to texting a lot of times because I haven't given them anything yet. I'll go, "Listen, if you need cash fast, I can do that. I can do $50,000 in 15 days and we can make that happen." You had already said that you'd maybe take 80 for this. Um, so I know the 50 might be a little bit of a stretch. Your second option, I can do 70k in 90 days. Now, your third option, you can list this with a realtor. And that's when I tell them the process of using a realtor.
Yeah.
And that $70,000 offer is about what they're going to get if they use a realtor. They end up paying all their closing costs, they get it septic approved, they get their survey done, all the things being said, like they're probably, especially if they're willing to take 80. If a realtor lists it for 100, it sits on the market for six months, somebody comes in and offers them 80,000, they're probably going to be like, "Yeah, that's what I wanted." They'll take that offer, but then after all the fees and everything, they're going to walk with 60.
Yeah. And that's like I could have given you 70 in 90 days and you're walking with 60 in six months. Like that's not a good deal for that person.
Well, that's if Yeah, that's if they didn't keep dropping price and everything too. Like how what's the percentage of properties now listed with a realtor where it goes from 100,000 to 92 to 86 and it drops and then it goes to 80 80 and then it goes pending and then it sells for 70. You know what I mean? You see I see it all the time.
Yeah. And the average So the average property and we did a study on land portal with this with my machine learning team. average property sells in the United States sells 10 even in a hot market like last year sells 10% under asking price for land right so if it's listed for 100 it's going to sell 90 and that's listing price that's not including the drops from original price or anything right so if they dropped it doesn't include that so you can explain that you can use that in your leverage like there's a good you're okay you list with the realer here's what happens maybe you'll sell in two weeks for asking price but let me give you the stats on that over 75% of the time and just start feeding them right and uh it says 10% under and then you owe another 10% to the realer and then you have the title fees and all
These other things and then like you're netting 62 grand on average from this, you know?
Yep.
Or you can get your money quick and so it's it's I like what you said because you're you're leaning into the value that we have instead of hiding from it from what we're the realtor situation everything else, right? You're leaning into our value and comparing it to the other options instead of hiding from it like a lot of people do and they try to avoid this and double closing and let's not tell them we're listing it anywhere. They're trying to hide from different things, but we have a value we can lean into and that's what you're doing and it will build trust and transparency and you'll get more deals that way over the long run.
You'll be able to sleep better, too. You're not lying to them, right? And a lot of times if they if they take option three, this is my favorite thing to do. They take option three. We're going to list it with a realtor. Great. No problem. Let me send you some realtors in the area who have sold land. I want you to have the best shot at this. Right? Here's the problem. Realtors, even those even those that have sold land, don't like selling land. They'd rather sell homes. They get bigger bigger commissions, right? They're hard to get a hold of. For whatever reason, realtors aren't like natural entrepreneurs. They don't answer their phone. They're hard to get a hold of. If they do get a hold of one, great. All that realtor is going to do is confirm everything that you just said. They're going to come back and they're going to say, "Yes, your land is worth this amount of money. Oh, Derek was right. Oh, you're, you know, yes, there's going to be a commission. It's going to be around, you know, $10,000 commission because it doesn't hit my, you know, $200,000 threshold or whatever. So, I have a flat rate $10,000 commission or $5,000 commission. The problem is if somebody else comes in with the realtor, they're going to want the same commission, right? Which is always tough. Like, if if I if I'm selling land and there's another realtor on that other side, like they're going to want the commission as well. So, if I'm paying $5,000 to this guy, this guy's also going to want $5,000. So now we're $10,000 in. Right. So this realtor, I hope they get a hold of a realtor because that realtor's going to confirm everything I just said. Yes, it'll probably take about six months to sell this property. Yes, you know, it's it's worth $100,000. Yes, this is my commission. Yes, you're going to have to pay closing costs."
Six-month contract, though.
That's what you need to bring up. Like if Yeah. Well, if you don't six-month realtor contract, if they don't sell this, that's a good thing to hint at, too. Like if they don't sell this in the first three months, I know you need your money soon. They get you in a six or 12 month contract, minimum six months, right? If you push back on them, usually it's nine or 12 a lot of times even.
And you can't just back out of that. It's not like us talking now casually like you can't you're stuck in that contract. So you there's a good chance you don't have that money in six months and then you know what happens? The realtor just going to come back to you and ask for another six-month extension on it.
Y
And that's just shows the how illiquid it is. Why do you think they get them in six-month contracts, nine months? Because that stuff happens. They want they want their best chance to sell. I understand it. I would do the same thing like you're committing to me. Give me six months to sell it, you know?
Yep. Totally. And I and I I get I used to be a realtor. I understood that. I understand that stuff. I didn't like selling land as a realtor unless it was my own land. But I like selling homes, right? They were easier to sell.
It's an hour away from your house. The they got to drive two hours the real from like we're talking rural America here. There's not just like Cincinnati or Nashville or any of these other cities. You call you call one guy's phone and you get 20 realtors calling you back in an hour telling you they can sell. You know what I mean? That's We're not in a city. We're talking rural America. It's an hour and a half from a city. There's just not floating realtors in every block like there is.
Yep. Exactly. So, they confirm everything you just said. Usually what happens is a week later I get a phone call. Hey, I talked to my wife. I think we're going to go with your deal. Great. Awesome. Let me get that contract over to you. Right. Because they just that realtor just confirmed everything I said.
Right? Because I was just telling them the truth. That's how it works. So you can use that realtor almost as your sales team on, you know, on a on a deal that maybe doesn't look like it's going to happen. Let the realtor sell it for you. It's great.
Yeah. Yeah. I love that strategy. That's good. I think this was a really solid episode. Anything that we missed out that you want to go over?
No, I just think the main thing is uh you know, try to get if you can try to get things locked up under contract in that first call, right? Let them know you're going to do some due diligence. Like you could even tell them like, "Hey, we might still need to negotiate down on this, but I'd like to get this under contract so I can start my due diligence." Right? Because too many people are missing out on great deals where they have them they have maybe even a verbal approved price, but they don't have a contract signed yet because they want to do their due diligence or they want to get it comped or they want to send it to their coach or they want to wait till Wednesday and do a deal review. Like it's too long, right?
Like you have to shorten that period of when you get a positive contact to getting that contract signed, right? Lock it in. You can always come back and negotiate later. The nice part about it is once they have that momentum in that direction, so I get a contract signed for 80,000. I have positive momentum. They've committed, right? If I come back and I'm like, "Hey, Mr. Johnson, your land looks great. Here's the thing. You know, we're going have to get a septic approved. I'm going to have to get a survey. I'm going to, you know, the closing costs, you know, I called a couple title companies. I'm going to have to get this under contract for 70,000, right? I can renegotiate that contract on that second call after I've done some due diligence." and they're more likely to negotiate with you because they already have that positive like momentum in that direction, right? They've already committed. So once you have that once you have that commitment, once you have that mot that motivation towards you, they trust you already. They don't want to like they don't want to pull back and start this whole thing over again. Like they've already in their mind they're they've already spent the money, right? Like great, I can get my kid to college or, you know, this will help me get through the next, you know, 78, nine months or whatever it is of of not having to work. Like, great, right? Like, a lot of times that those negotiations that you have on that second call aren't going to kill the deal um because you're still going to give them a good chunk of money, right?
So, Right.
Yeah.
No, I love that. And just to reframe everything. So, uh, on your first call, guys, you're texting. Uh, you do a quick little, you said you do a quick little three-minute due diligence, verify it's good land real quick. You get a after you get a a lead that you classify as a lead, you do a quick little check on land portal. Then you call them. Don't set up a time. That's one of the key takeaways I had from this. Don't set up a time to call. Call them first. They answer, great. They don't answer, you leave a voicemail, right? Best of both worlds there. And then you send them a text and say, "Hey, I tried to call you. Uh, when's a better time to talk?" And then they hear the voicemail. You're building trust right off the rip. And then you get them on the phone. And then you go through all the different strategies that we talked about trying to get them. The main thing is trying to get them to tell you what price they're looking for. And you can negotiate based on that. You have double closing options, you have buy and flip options, but this was packed with a lot of solid info. As always guys, if you're listening on Spotify, make sure to give us a like, give us a review as well. If you're on YouTube, let us know what you guys think in the comment. What are you guys texting mailing strategies that you're using for sales? Give us a comment and make sure to subscribe. But as always, Derek, thanks for joining.