Learning how to navigate the world of land investing can initially appear as a daunting task, with a myriad of technical jargon and industry-specific terms to learn.
However, delving into these terms is a crucial step in fortifying your foothold in the land investing business.
Understanding common terms not only empowers you with the knowledge to make informed decisions, but also helps you navigate the complexities of the market with confidence.
After familiarizing yourself with this list, you will feel more confident assessing opportunities, negotiating deals, and mitigating potential risks, ultimately positioning your land investment business for sustainable growth and success.
Acquisition: In real estate, “acquisition” describes the effort, action, and process of buying a property.
Appraisal: an unbiased assessment of a property’s value, prepared by a professional appraiser, accompanied by supporting data to support the validity of the valuation.
Capital: the money a company needs to function on a daily basis and to expand.
Cash Flow: measures cash and cash equivalents that are flowing in and out of an organization. Example: property owner generates cash flow when they lease their property to a tenant in return for monthly rent payments.
Comparables: Often abbreviated as “comps”, are properties that have similar attributes (such as the size, age, location, condition, and features) to the property you are evaluating for purchase.
Delinquency: This occurs when a person or company is behind on payments, usually more than 30 days past the due date. You would come across this term if you are offering seller financing a property.
Direct Mail: A type of marketing that involves sending a physical letter to interested parties through a courier. This is our preferred marketing method and we typically include a Purchase Agreement with an Offer in the letter.
Drone: An unmanned aerial vehicle without any human pilot, crew, or passengers on board. We use these to survey land and take photos when we can’t get boots on the property.
Due Diligence: in short, due diligence means investigating facts about the physical and financial condition of a property and where the property is located. To put in short, due diligence is “doing your homework” both before you make an offer and after your contract is accepted.
Escrow: Funds or assets that are temporarily transferred to and held by a third party, usually on behalf of a buyer and seller to facilitate a transaction.
Floodplains: floodplains stretch from the banks of a river channel to the base of the enclosing valley, and experience flooding during periods of high precipitation.
Multiple Listings Service (MLS): a database established by cooperating real estate brokers to provide data about properties for sale. This database allows brokers to see one another’s listings of properties for sale with the goal of connecting buyers to sellers.
Owner Occupied: refers to property that is the titleholder’s primary residence.
Purchase Agreement (PA): an agreement between a buyer and seller that spells out the terms of a real estate transaction. As its name suggests, it’s a contract to purchase a property.
Return on Investment (ROI): measures the profitability of an investment. ROI is an investment’s net gain or loss ratio versus its return.
Skip Tracing: a method of searching public and private records and contacting neighbors and associates to find the current contact information of a property owner.
Subdividing: involves taking one piece of land and dividing it into two or more “tracts” of land that can be used for development or sale.
Land Survey: used to map out the shape and boundaries of a piece of land. It’s an exact drawing of the dimensions of the parcel, as well as any physical features, both natural and manufactured.
Tax Assessment: the job of determining the value, and sometimes determining the use, of property, usually to calculate a property tax.
Title Insurance: type of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property.
Title Search: examines public records on the property to confirm the property’s rightful legal owner. The title search should also reveal if there are any claims or liens on the property that could affect your purchase.
Wetland: an area of land where water covers the soil or is present at or near the soil’s surface that has either permanently or seasonally saturated soil, specific soil types, and distinct vegetation.
Wholesaling: a strategy in which a wholesaler obtains a contract on a property with its seller, and in turn sells the contract to an investor.
Zoning: categorizes land into specified sectors for specific developmental or operational uses and sets limits on how the land can be used.
Ron: Hi everybody. Welcome back to the real estate investing podcast. I’m your host, Ron Apke. Very excited to have Anthony Weiler on with me again.
He is our COO, our chief operating officer of. Key land. He takes on all of our deals. He manages our deals. Um, he manages our deal funding process. So he’s probably worked with a lot of you. If you’ve brought us deals, I’m very excited to have Anthony with us again as a co host. And today I really, really like this topic for where we are in this business right now.
It’s how to sell your land quickly. Uh, and there’s so many different strategies that go on with this. Sometimes use a realtor. Sometimes you don’t use a realtor, Anthony. Um, you, you’ve been very successful selling land quickly, so I’m happy to have you on here.
Anthony: Yeah, this is, um, something I’m excited to be on too.
This is a big topic, uh, just the way the market’s been for people. Um, I think this is a good one to jump into though. Should be some good value here.
Ron: Yeah. And it’s such like a diverse market. Like everyone tries to like put the real estate market in a box, um, in terms of like, Oh, the market’s slow. The market’s fast.
Like, no, each city, each Metro area has its own market. Um, like it’s such a common thing. Like, yeah, we’re in a real estate recession, whatever it is. Like there are places where I’ll sell my land within 24 hours for market price for over market price. Uh, so like understanding your individual market guys is very, very important, but let’s kind of get into just our data, like what we’re seeing right now, Anthony, in terms of the market, our selling time right now is, and when I say selling time, it’s more so getting under contract and we’re pretty strict with the type of.
Uh, contracts we take in terms of we don’t want high contingency contracts, I’d rather a lower price with the cash offer. Um, and, uh, our normal selling time right now going under contract, our average is probably around 14 to 17 days, maybe three weeks, 21 days, 14 to 21 days. Um, is that what you’re kind of seeing with our stuff, Anthony, and our deal funders or our managers, our partners right now as well?
Anthony: Yeah, it’s around, if you’re priced right, it’s around 14 to 21 days. I think there are some markets where it’ll sit a little bit longer, especially with conversations I’ve had with agents right now in August. It’s a big back to school month, so people aren’t really looking at land as much. But it picks up again in September.
So just little seasons like that to look out for, um, but yeah, if you’re priced right, it should be around 14 to 21 days is what I’m seeing. If it’s, um, if you’re marketing it correctly and you’re reaching out to the, um, or responding to leads correctly, um, I think you’ll be in a good spot.
Ron: I’ve heard everything from, from realtors on why they can’t sell properties back to school time.
And there’s no house on the property. Like, yeah, I’m trying to have you sell land. Like these, these realtors will come off with everything for why, like, what does back to school time mean about not selling land? Um, but you’ll, you’ll hear everything from them, but yeah, guys, 14 to 21 days is a really normal time right now.
If you’re posted up correctly, like there are markets. Where you can drop your price to sell really fast. There are markets also guys where there aren’t that many buyers and you just have to wait for the right buyer to come along in those markets. It’s a lot more important to make sure you’re posted everywhere.
Make sure you get assigned. You need every single potential buyer to see your property. And then there’s markets where there’s hundreds of buyers. And if you’re overpriced, it’s not going to sell. If you’re price, right, it’s going to sell really darn fast. Um, where do we post Anthony? Like, let’s just get into where do we post?
Let’s not really talk about realtors right now. Where is our, like, if you’re judging one of our properties, if you’re judging a manager’s property, where do you want to see that posted? I
Anthony: want to see it practically everywhere. I’m going to want to see it on Facebook marketplace. Is it on land. com? Is it on the MLS?
Um, is it on Craigslist? Like you need to have it available everywhere. Cause you, you never know where these leads are going to come from. Cause one of my Big projects is understanding where are our buyers leads coming from? And they’re pretty much coming from everywhere. Um, believe it or not, even Craigslist.
So definitely don’t pigeonhole yourself and get it just on Facebook marketplace. Um, Facebook marketplace is great. You’ll be surprised. You’ll still get some good sales there, but You’re just pigeonholing yourself if you don’t have it everywhere as possible. So land. com is a great one. Facebook marketplace, like I was saying, the MLS, um, Craigslist, um, and I think those are the, those are the big players.
Um, correct me if I’m missing one, um, but I think those are the main ones to go off of. ,
Ron: Yeah, get on the MLS. If you’re using a flat rate, we’re saying not using a broker. So use the flat rate broker. And that’s essentially someone who will post it up on the MLS for you. And then you’ll take the leads in, um, post on the MLS, post on land.
com, post it on Facebook, post on Craigslist. Like those are the big four, I think for us, um, to get a property sold. Like Anthony said, the importance of getting it in front of as many eyes as possible is so, so important. If I only post my properties on Facebook. Uh, I’m going to lose a lot of potential buyers, uh, because some people might just be looking at Craigslist.
Some people don’t have a Facebook. Um, some people only are looking on the MLS. There’s just so many different ways. You’re not getting event in front of any realtor eyes. If you’re not posting on the MLS and then land. com is a, you’re not going to get a high volume of leads, but the quality of leads on land.
com, their network is unbelievable. Like you have a land people who are looking for land on land. com. You are looking for people, investors, a lot of times, not necessarily investors to go develop the property, but you have a lot of just like land people who want to own five acres and they don’t have any purpose for the five acres right now, but they know it’s going to appreciate 15% a year for the next 15 years, whatever it is.
And they understand the market really well going into that, like we didn’t talk about realtors yet, except for, uh, your little realtor thing with the back to school time. Um, how do we choose a realtor, uh, Anthony, like let’s get into what to look for when choosing a realtor. And the thing about this guys is you really don’t know till, you know, uh, like you really do not know until you sign that contract, who they are, like they are salespeople and they, once you get that, they, you sign a, um, an exclusive listing contract with them.
Once you sign that you’re going to figure out who they actually are, but Anthony, how do we choose them to try to minimize the bad situations?
Anthony: Yeah, So I think this is really important. Um, you know, especially just starting off because you, you don’t want to get yourself into like a one year contract and then they sign it and then you’re like, there’s no contact anymore at that point.
So it’s really important. You definitely want to test them out. Cause like you were just saying, Ron, they’re, they’re salespeople. And so if you’re reaching out to someone and they know that they can get 6% commission from you, then at that point. I’ll tell you whatever you want to hear to be able to get this contract signed.
So you’re going to want to test them. You’re going to want them to let them know, like, Hey, I have this property under contract. You know, it’s going through title. You know, I would want to partner with the realtor. I’m still on the fence and having them actually, you know, go out and walk on the land. Like, are they picking up your calls?
Are https: otter. ai You know, giving you a good opinion, um, there’s realtors that we’ve partnered with. I had someone send me an email and it was like three pages long of a marketing strategy, what they thought when they walked the land. Um, and they got back to me within a day. Those are things that I really want to see from a realtor.
And then since then, he’s been phenomenal with us to, um, handling situations. So, uh, those, you definitely want to test them. You want to know too, if they’re. specialized in land. Have they done any land deals? Because if you’re working with someone that doesn’t know land, that’s where it can get really, really wonky.
There’s some people all, they’ll ask for an address, like, well, I have the coordinates and they don’t really understand how to operate that, which is definitely not a good thing. So you want to test out your realtor. You want to call them, see if they’re picking up the phone. And even when you sign a contract with them, use a different cell phone number and call them, see if they’re actually calling you back or have someone else call.
So you want to test them as much as you can, because this is a partnership. You’re essentially hiring a salesperson to sell this land for you so you can focus on your marketing and keep acquiring more deals. So I think those things are really important in testing them out as much as possible. Calling a handful of realtors, cause you’ll be surprised.
You’ll call like 15 realtors, maybe three to. Three to five will respond, believe it or not. So definitely, definitely take your time and be very picky and choosy, you know, with the realtor.
Ron: And going on that guys right now, like there are less real estate deals being done since COVID, um, essentially like since before COVID.
Or since I guess COVID kind of started. Uh, so there are, which means when there’s less deals happening, when the prices have dropped or steadied out, like they’re realtors are making less money. Um, not all of them, but they have to fight for deals more. So they become even more salesy. They might give you better service up front, but if they don’t know how to sell land, like that is going to be an issue for you on the back end.
And you heard Anthony quite a few times. Say, make sure they are being responsive. Make sure they’re answering your phone. Um, and this is before you sign a contract, make sure you, they’re answering your phone and the reason being guys, like you’re going to have buyers. Buyers are going to be calling your realtor.
That is the point of them. Uh, if they aren’t answering your phone call, they certainly aren’t answering buyers phone calls, which means they’re not walking the property with buyers and it just spirals out of control. I’ve seen people, there are times when realtors will get you more money for your property.
There are also times when realtors will get you less money and it will take you 6 months longer than what it should have taken to sell. Did you see, uh, did you see Michael’s comment the other day? I think it was, uh, I don’t know if it was, he said he, so it was a big property, it’s a 400, 000 property. And, um, he, he said, I regretted this, right?
I don’t know if he said right when I signed the contract. Or right when he saw the listing, the listing was a hand drawn. The first picture, I think this realtor will be fine in the long run. Like he did get the posting up quickly. Um, it’s, it’s a big incentive for him to sell the property, but it’s a little nerve wracking, like when that’s your initial reaction, uh, do you see that?
Anthony: Yeah. I saw that. And especially with a large deal too. Um, that’s why it’s important when you’re vetting out realtors, take a look at land. com, take a look at their listings or their previous Zillow listings, whatever you can find out about them and understand what their marketing looks like and being as transparent as possible.
Like, Hey, Hey, This is exactly what I’m looking for. But I think he’s in a good spot. Apparently he’s really responsive, but the first marketing, I was like, Oh, no,
Ron: you’re rarely going to get the full package with realtors, guys. Like you need to, you need to choose your thing. Like some realtors are going to have unbelievable buyers list, but they’re not going to, uh, Posted everywhere where you might expect them to post it.
Some realtors are going to have unbelievable marketing, but they’re not going to have a buyer’s list. Um, so you just have the combination of realtors. You’re rarely going to get the full package with realtors. I believe we have one of those who is just unbelievable with all aspects. Maybe the marketing, he could be a little better, but I’m fine.
We’ll get him pictures, everything like that. Um. But yeah, that’s what you need to do in choosing a realtor. Treat it like you’re a buyer. Like you can, you need to get multiple opinions for one, especially when you’re on bigger deals because they will fight for it. Like they, you’ll have a realtors fight for that 400, 000 property.
Uh, so make sure you’re getting multiple opinions. Make sure they understand land. And then if you feel it in your gut, Anthony, if you feel it in your gut, that that’s not the right person for your property to sell, like something’s it’s typically right. Like that gut feeling of that realtor isn’t like something’s off.
Uh, it’s typically right. So go with your gut on that. Uh, then last topic here, Anthony is when should you price drop? I think some people price drop too soon. I think some people price drop too small. Um, there are a lot of different factors that go into this and it kind of a loaded question, but from your experience, like.
Let’s say you post property up for 50, 000. Uh, let’s say no realtor. Um, you post it up for 50, 000. You post it everywhere. And then, uh, whatever a month later, you’ve had a few leads, but it’s not selling like, is that when you price drop was what’s kind of your opinion on this?
Anthony: Gosh, this really is a loaded question.
Um, I, I guess the best way to answer that is using a scenario that I’m actually in. We have one listed in the county and it’s been there for a good amount of time, a lot longer than what I, than what I’d want it to be. And taking a look at it, it seems to be a slower market and we’ve actually have done multiple price drops.
And I think that I had done it incorrectly because I think I did like a 5, 000 price drop and then another 5, 000 price drop. Rather than trying to price drop to fit into another buyer’s pool. Um, so for example, if you’re priced at, I know you gave an example, but I’ll use this one. Let’s say you’re priced at 60, 000.
Um, and you drop it to, let’s say, you know, 57, 000, not too much of a drop. You’re not really. Entering a new buyer’s pool, right? There’s not people looking, um, within a new price range at that point, but there’s so many things to take a look at. Um, you want to know like when, when you’re evaluating it and it’s listed for sale, like why is this taking a lot longer than I expected?
Um, and analyzing other comps for sale, but gosh, it’s, it’s so tricky. And it’s such a touch and feel thing in my, in my opinion. Um, so. If you, if you’re not having that many leads, you really need to figure out like what other comps are there and how long have they been on the market for. And if they’re similar to your situation, it’s like, okay, maybe this is a slower market.
But if you’re seeing other comps starting to sell, it’s like, why isn’t my selling in my price wrong? What am I marketing incorrectly? What are my photos look like? Are there people struggling to walk the land or what, what feedback have I gotten from the leads that I do have? Um, then at that point you try to make that adjustment and it depends on your situation too.
Like if, if, um, you have someone. Um, investing in your deal and you have a certain timeframe, you have to take that into account. So there’s these little variables that, that can definitely come into play. But I try to take a look at the big picture and go off of a touch and feel type of, uh, almost like a gut feeling.
It definitely is a gut feeling, but you want to price drop to put yourself in a position to where you expose yourself to new buyers as well. Yep.
Ron: Exactly. And that’s a really, that’s well put for sure. Uh, so in Anthony’s situation, like if you’re at 60, 000, I hate, I really dislike these thousand dollar price drops.
Like I am, I do not believe in them. Uh, I think it shows desperation from a seller’s perspective. So. Anthony’s example, like let’s say you’re at 60, 000 and you dropped a 57, five. Like, are you giving anyone new who’s interested? So you have buyers who are looking for like, let’s say you have buyers who are like their max budgets, 50, 000.
Is that going to kind of, uh, get an offer? I don’t know. Like maybe some of them will see that. But if you see someone, if you’re post up for 60, 000 and you post up for 52 five, and then someone who has a 50, 000 budget, like you’re, there’s a very good chance you could get an offer from someone like that.
You’re entering a new buyer’s poll. And that’s what Anthony is explaining on there. I think he did a great job. But, and it’s so much situation by situation guys, if your property is not posted correctly, like if you are using a realtor, realtors are going to push you to drop prices. Um, but that’s not always a reason like you need to actually gauge what’s going on and you can undersell with the realtor.
I know we’re kind of beating up realtors these last few minutes. Um, There’s a lot of good ones out there, but it’s like your realtor is not responding to offers or not offers, uh, to buyers, then like, you’re not going to price drop. I’m not price dropping just to get you to be able to sell the property faster.
Like do your job, take some people out to the property, sell the property. Um, so that is kind of our advice of that. It is so. Dependent deal by deal dependence. Um, but, uh, anything to add to this episode, Anthony, I think that was really valuable. So whole thing about this episode is how to sell your darn property, how to get it off your hands.
Like our business is flipping or flipping fast. We want to flip fast, not necessarily under sell things too much, but we need to be quick. We need to turn our money so we can put our money into more deals. Um, anything to add though, Anthony.
Anthony: Yeah, absolutely. Just one thing to add it. Like we were talking with price drops.
One thing is the more you do price drops, don’t be surprised that you’ll receive more lowball offers because people are going to see that you’re desperate. You’re doing multiple price drops. They know you probably want to sell it fast. Don’t be surprised if someone’s like, Hey, I’ll okay? I’ll give you an offer for like 60%, pretty much something almost like what we’re doing, because they see that desperation.
They know you need the money quickly. So definitely keep that, um, top of mind as well. But no, I think this was a great episode. I think people will get some good value from it. So I’m, you know, looking forward to what people got to say about it.
Ron: Yeah. And try to post your property up. So you don’t need to ever price drop.
Like that is the biggest thing I’m telling you guys. If you post it up, if Anthony posts is up at 55, 000 instead of 6, 000, I’m not saying his situation, I don’t know the situation that well, if he posted up at 55, 000 initially instead of 60, like that is the way to sell your property fast, getting your property posted for a selling price right off the get.
Is such an important thing. Um, but thank you so much, Anthony, again, for coming on, uh, guys, if you haven’t, please leave us a review on Apple podcasts, like it really helps spread the word land investing, everything like this, it really helps grow our community, which is our goal. Um, helping other people, uh, achieve financial freedom, which, uh, achieved the freedom of time.
Leave us a review review on Apple podcasts. Thank you so much for watching. We’ll see you next time.
Anthony: Take care guys.