Merritt WhitmanParticipantSeptember 11, 2017 at 10:48 amPost count: 77
I’m wondering about everyone’s experience with competition and how they engage with it. To give you a little context, I joined Land Academy a few months back on the heels of successfully buying, rehabbing, and renting two houses in the Indianapolis area after 9 months worth of effort involving being outbid, out-hustled, and nearly swindled a couple of times by “turnkey” operators. I was finally able to beat away the ravenous Roman mob (average >10 offers per property I was considering) and score two wholesale deals which should net me a 12-15% COC return—relative to Land Academy profits about as anemic as Julius Caesar looking at his twenty-three draining stab holes. Hearing various podcasts and reading others’ experiences injected fresh blood into my Hope, Greed, and Ambition Triumvirate and made me think there was relatively no competition in the land ring. I was definitely wrong but not sure it matters…
I’m still zipping up acquisitions on my first mailer of 2600 offers (3 deals closed, 3 in varying stages of closing) and have had at least ten potential sellers tell me they’ve received multiple offers from land buyers with similar letters at around the same time as mine. Two out of the three that I closed last week told me they had had higher offers than mine but had decided to go with me anyway as I was first and that they liked how I had treated them. My fourth deal has taken longer (it’s still tied up with a title company) and the seller has recently called me back telling me she had a much higher offer come in. We both have been frustrated with the title company being slower than steam off of cold cow dung, and when she told me I’d have to match the higher offer, I politely balked (I had already raised my original offer to her by $1500 as it still looked like a sweet deal). Here’s how it went down…
What I thought: ‘Gee, thanks for wasting my time over the past several weeks you greedy little dishonorable used-mattress saleswoman. I’m sorry this hasn’t worked out for you but I’m glad you found a less barbaric, less smelly, bottom-eating dreg of humanity land pirate to work with. Hope he delivers you a phony certified cashier’s check along with a stale slice of County cake to choke down that sweet pie-hole of yours. Sayonara!’
What I actually said: “Well, that’s disappointing to hear Mrs. Smith. But I’m really happy you found a better offer. I would go with that as it’s a great deal for you and I just won’t be able to give you any more money for your property–I’m out of acquisition funds for this cycle. I really enjoyed working with you and wish you well.”
Her response: “Wait a minute, Merritt. You know what? You’ve put alot of work into this and been really nice to me. No…No…You were first and I’m gonna do the right thing and go with you.”
My Feelings: It’s been a sobering gut-check having all of these folks tell me they’ve had multiple offers. I really thought there’d probably be no competition–haha, naiveté strikes again! But this is still much better than the house flipping racket…
What I think: Don’t think it matters as long as you treat people well, try to close deals quickly, and send out more mail…just like Jack & Jill teach.
What do you guys think–any thoughts on dealing with competition?
MerrittKevin FarrellParticipantSeptember 11, 2017 at 12:58 pmPost count: 497
Merritt – You have made some great points here. I always assume that people have received other letters before and after mine. If they call me, it is because they finally decided to do something with the property. Maybe the time is right, who knows? Like Jill says, you want to close them quickly. Other offers are coming in and they might get a better deal. Like you, I tell them to do what is best for them.
In spite of the competition, if I mail 1,000 letters to a county for a certain parcel size, I can expect to get up to a 5% response with about a 1% success rate closing deals on purchased land. Think about the numbers – 95% of the people, 950 of them, did not respond immediately. That is still a lot of potential for the next person who mails to that county. A different 5% will be ready at that time to pull the trigger and accept the offer.
Do good research and keep mailing offers.Merritt WhitmanParticipantSeptember 11, 2017 at 2:19 pmPost count: 77
Great point, Kevin. Hadn’t thought about it that way. Makes me even more relaxed now 🙂 I ended up with about a 1.5% response rate but totally bombed 1 out of 3 counties I mailed. Turns out I underpriced all 3 (1 horribly so) but ended up with some great looking deals anyway. Passed on about 8 deals that might actually have been okay but got worried about flood zone/wet land potential in that area. Picked one up as a trial–we’ll see, maybe I can get back some of the ones I passed on if it sells well. If I add in the ones I passed up that may have been decent my conversion rate was just over .5%.Kevin FarrellParticipantSeptember 11, 2017 at 3:14 pmPost count: 497
Merritt – thanks for sharing the part about being underpriced and still getting some deals. Other people need to hear that. It’s OK to make a mistake. You almost have to try to lose money in this business. Learn from mistakes and get better with each mailer and in each county that you work in.Merritt WhitmanParticipantSeptember 11, 2017 at 9:51 pmPost count: 77
Cheers, Kevin. Appreciate the encouragement and all of the guidance you give in these forums. As I learn to price the mailers better and better, I know the conversion rates will increase. So far this has been a blast!MilanParticipantSeptember 12, 2017 at 9:16 amPost count: 350
Merritt, you have a great points here. I went through similar stage you are going through. I found out from my experience, that you have to manage your expectations. If you start expecting as much as this business is sold by many, you will feel miserable.
And you need patience. I by nature don’t possess these skills. But I am working on it. This can be slow moving forward business. Make sure you have what it takes to persist. Manage you capital expenditure wisely and be patient.Merritt WhitmanParticipantSeptember 12, 2017 at 1:41 pmPost count: 77
Good advice, Milan. I think we must be made from the same fiber regarding patience. Accept I can’t surf for crap!Luke SmithParticipantSeptember 12, 2017 at 9:20 pmPost count: 1067
If they get so many offers why do they still get pissed and call to complain about my offer? It’s not like I’m offering credit cards. I get those mailers almost daily. Couldn’t imaging calling them to complain or writing them back and whining about their horrible fee riddled offers to enslave people.
You must be logged in to reply to this topic.