Land Postings % – High or Low?

[Bryan]

Quick version: Is a higher or lower ratio of Land Postings (on LOA, etc) to Total Properties in a county preferable when identifying target county markets?

Longer Context: In LA 1.0 Ch 3, while J&J don’t go into great detail on this, they seem to heavily imply that a higher Land Posting:Total Property ratio is a positive sign since they format the 4 chosen counties in Green with higher %’s, and they offer 2 cities with lower %’s formatted in Red as what you don’t want to see. I took this at face value on my initial county analysis although it didn’t totally make sense intuitively because a higher ratio could also mean a flooded land market. This morning, I got an email from J&J offering advice on finalizing a first target county, where they suggest to research LOA, etc. for counties with very few properties listed – “This is not a silver bullet, but a sneaky way to find property nobody knows about. It’s a great indication that there may be sellers who have wanted to liquidate their land for a while, but no-one has sent them an offer.” This implies rather a low ratio is better, and logically makes more sense to me than looking for higher ratio because while we want cheap, unimproved land we also want to minimize local competition in strong markets. I assume the answer lies in more nuanced context, and it’s not as simple as we want “higher or lower ratio” but rather either can be a good sign depending on other factors at play. Can any experienced people shed light on the intuitive nature of this metric of market identification, especially within certain other contexts? I’m close to choosing my first market for my first mailer, and filtering Population Density 1st, then Days on Market, then looking at other criteria, and I think after I feel good about Land Posting:Total Posting ratio I may make my selection. I need to play it cheap on my first couple deals, such as “buy for $1000, sell for $2200” base hits, and will be playing in the upper Midwest region.

BTW this is my first post- loving LA so far (joined a week ago) and everything J&J have to teach. Seems like this industry is on the cusp of great change/disruption and excited to jump in. Especially enjoy the posts of Kevin Farrell, Laurie Phillips, and Luke Smith. Great community!

Topic

[Kevin Farrell]

#27506

Bryan – I look for counties with fewer than 40 listings for each parcel size. For example, I search listings for 4 to 6 acres (ie 5 acre parcesl) and skip the counties that have more than 40 listings. I don’t want to deal with a market that has more listings than that. I just move on to another county.

Each of us finds our own rules of thumb for weeding out counties for our mailers.

Kevin Farrell - Moderator
Need more help?
Schedule a 30 minute call - https://calendly.com/kevin-629

[Bryan]

#27507

Thanks for the clarity Kevin! Before this mornings email I was totally going to go for simply the highest Land Posting:Total Posting ratio which would have been a mistake- luckily I got this morning’s email from J&J and your input. Difficult to understand the metric variables at play fully until you have the “domain knowledge” that only an experienced land investor has.

[James]

#27823

Me and my family are trying to get started and stuck on step 1 pick a target market. Since we live in Texas we are looking at a county such as Pecos County (desert area in West Texas as lend is cheaper). I like the advice about no more than 40 properties (assume this is properties listed for sale in zillow or realtor.com) in the area your searching. Like to play it safe like Bryan above on my first few deals and would like advice on buying land in Texas since it is a non-disclosure state with less sales data or should we start with another state? Thank you, James

[Kevin Farrell]

#27826

James – Carefully go through all the training and make sure that you understand what to do. It is all in there. I like TX – many different markets to choose from. Make sure that any county that you are considering has land that you can actually find on PF or on TP247. Some data in those western TX counties are a mess. Also, be sure that you are not sending a bunch of offers for small parcels with oil & gas wells. These won’t sell very well to someone who wants to put a home on it. I have worked successfully in several markets that are non-diclosure. If you make an error on setting the offer price, it will be better to be low than high. So when in doubt, guess a little low. Good luck.

Kevin Farrell - Moderator
Need more help?
Schedule a 30 minute call - https://calendly.com/kevin-629

[James]

#27831

Thank you Kevin, will do. Appreciate you putting in context how to use parcel fact and title pro and see that the membership does allow for use of those tools. Also, will avoid buying properties with oil rigs as part of due diligence. James

[Kevin Farrell]

#27834

James – If you mail to a county with thousands of oil wells on small lots, then that is what you will get back. Rather than trying to sort out some with no oil wells during due diligence, you may want to look at counties that have fewer oil wells. I do that by looking at Google Earth. Just pick a county and zoom in. You can see them very easily. In some counties they are everywhere and you will notice NO HOMES. Best of luck to you.

Kevin Farrell - Moderator
Need more help?
Schedule a 30 minute call - https://calendly.com/kevin-629

[James]

#27835

Thank you, that is helpful and tried to look up some of the properties on title pro since to make sure that i have the ability to do due diligence when I get an offer. I looked at zillow first to get an address as I am not able to access real quest today and then plugged that address into title pro and some came up but the information on title pro seems to be limited to name and address. Thanks again, more work to do in learning the tools.

[Author]

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