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!
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