Do you regularly see a 200% return on investment?
Today when you hear numbers like that, you probably think of a lucky bitcoin investor, and you wouldn’t be wrong to think so.
But what if you could see the same margin investing in raw land?
It’s possible, and here’s a secret that only the most successful land flippers know to get there.
This post will show you how you can locate unmotivated sellers to get the most out of every dollar.
What Is A Motivated Seller?
A motivated seller in real estate is anyone who is purposefully selling a property for profit.
You are a motivated seller when you flip a piece of land or a home, for example.
While you may not be selling for top dollar, you are trying to maximize your margins for the most profit possible. At which point the property isn’t worth reselling for the buyer.
Take a look at some listing sites such as Facebook Marketplace or Land Watch. You will see that, among high prices, most properties are listed by LLCs or partner sellers to the site.
The buyers for these properties, in most cases, will not be other land flippers. For them, it would be like buying a carton of eggs from the supermarket and trying to resell them on the curb.
That is not to say that it’s impossible to find good deals on listing sites if you have the patience and a deep understanding of the market. And that’s a big if. You could spend hours of effort for nothing that could be spent finding one of the thousands of unmotivated landowners in the United States.
What Is An Unmotivated Seller?
As you may have picked up, an unmotivated seller is the converse of a motivated one.
An unmotivated seller owns a piece of land with no intention of selling it. That does not mean they don’t want to get rid of it. It just means that they either can’t, don’t know how, or haven’t thought about selling it.
These are people who likely inherited a property in another state that they have never even seen or bought with the intention of building something that never panned out.
In some cases, the property owner will be happy to sell something they think of as worthless and a drain on their taxes.
How Do You Find Unmotivated Sellers?
The primary way that a land flipper finds unmotivated sellers is through country records research.
Every state and county will provide you with the owners and information of all properties in their area if you ask. You can also look at the properties that fail to pay their taxes, which the state will eventually claim.
Some counties will charge you a fee to retrieve the names, which could either be a flat amount or per name. Overpaying for county records is a possibility, so be sure to do your research.
By going through this list, you can find a near unlimited amount of unmotivated sellers just sitting on land that they don’t want.
Your next step after that is to contact as many of them as possible with an offer.
Contacting Unmotivated Sellers
There are restrictions in the United States that make it difficult for us to cold call or cold email leads.
Under the TCPA, we can call a person’s landline but not their cell phone without prior consent, and the CAN-Spam act makes cold emails rather tricky. It is possible to work within the restrictions, but it severely degrades the chances of your message ever being seen.
The LPG method uses direct mail marketing campaigns to maintain authenticity and have the best chance of reaching our lead. You can do this easily and on your own, although creating and sending out as many letters as you need takes time and investment.
At this point, it is a numbers game. You don’t have to do your due diligence until a seller responds to your offer, so you will send letters to as many leads as possible.
The great thing about raw land is that your letter may be the only offer that the owner has received. Whereas in traditional real estate, development owners receive offers numbering in the hundreds per year. Meaning you will have little to no competition.
Buying The Property
After the seller has responded to your initial offer, you can do your due diligence and respond with an agreement or a counter offer.
Sometimes you may find that there were more taxes on the property than you thought, or it otherwise isn’t worth as much, so you can tell the seller this and lower the offer price. Which usually isn’t an issue.
After that, you will hire a title company to handle the paperwork, and just like that, you have a new property to flip.
Now that you know the steps, there isn’t much more to buying your first property. A title company handles all document signings and keeps everything above the bar. Then it’s up to you to market your property and find a buyer. Our experts have you covered if you want help with any aspect of the land flipping business.