Any advice for LSM Land unsoliticted offers for my property?

Question

On 2/8/2023 LSM Land sent me a letter stating:

Hi Reuben Gathright,We are a real estate investment firm based in Austin, Texas.  As we were researching the county public records, we found you as the owner of a property that meets our general investment purposes.  We are very interested in purchasing this property from you.Give us a call today xxx-xxx-xxxx and we will make you our highest and best cash offer the offer price will depend on several characteristics such as access to utilities, buildability, paced roads, slopping, back taxes owed, HOA dues etc.

They included a parcel number and the legal description.  Out of my extensive portfolio, the one property they want to buy is in Calcasieu Parish, Louisiana and land locked.

On 2/16/2023, I called the phone number provided a secretary said their agent will call me back from a number with area code xxx.

I have also received to unsolicited phone calls from buyers in Louisiana this month about making an offer on properties in this small region as well.

Henry Clark · Answer

Couple approaches if they fit. You might already be doing tax lien investing.

You’re close enough to Texas.  Do the tax sales.

Start with the off auction list properties that you can just make an offer and buy.  Stick to just land.

Do the actual auctions.   Again just land.   You get ownership in 6 months versus 2 years on a house.

Fort Polk.  Saw the post where military investors can’t find properties.   Do what you do and buy some property you can put utilities and roads close to base but off the road.   Scatter lots out with hookups.  Don’t do a straight line packed trailer park.   Make a casual RV park.

Research and develop a business model for the military investor where they buy a really nice used motor home. Something that isn’t new and loses value when you drive it off. Something that 3 years older retains most of its value.

They have a couple options when they move.   Move it and sell, sell in place or rent out.

They make money even if they sell for less if they manage their numbers. They get some of the government BAH base allowance for housing back.

Say they buy a $60,000 used coach home. Sell it for $45,000 three years later. Depending on rank and Base say they get $20,000 per year on BAH. Then the full $45,000 is Cashflow to them. Less their utilities and lot rental to you. Say 36 months lot rental of $300, don’t gouge them, utilities and trash $150 for total of $450. $16,000 total. They make $29,000 tax free. That’s the same as a $40,000 pretax gain for you and me.

Doesnt sound like a lot of money?
But in the military and starting your snowball that’s pretty good when your 25 years old.

They sell to the next Soldier for the $45,000 and they do the same thing.

How do you make money? You rent the lots out. Over in Texas los rent for $500 up to $800. You’re going to rent for around $300 to cover your costs and make a profit. Also to make the overall model work. 4 lots per acre for $1,200 beats $200 per month on a rental unit. You never want to own the RV.

Leave a bunch of trees for your conservation interests.

Roy Oliphant · Answer

Dang, Henry!  You're giving the shop away here.  Seriously, this is a great approach.  This also works outside of military areas but you want to own the RV's even less.

The real issue is there is almost no way for someone to have a safe, clean, dry place to eat, sleep and keep some personal things for under $800 per month.  Permanent RV, Cabins (tiny-houses that aren't built to mansion finish-outs), container homes, manufactured housing, and other alternative housing is the only way to keep these folks housed.    Add in small town land prices and you can build a win-win investment strategy.

Henry Clark · Answer

Bumped into your post.  I’m from Pickering, LA.   Grew up outside Ft Polk.

Forget the individual deals, what is your overall objective?

If you get a chance stop by a gas station and post a picture of a stick of boudin.  It’s 5 degrees up here and that will warm me up.

Reuben Gathright · Answer

@Henry Clark I was asking for tips about LSM Land, has anyone talked to them yet?

You gave great advice for any investor seeking opportunities in rural real estate but do not quite grasp the potential of these properties.  Traditional buy and flip investors seek a clean title to protect the large investments they make in their homes.  However, rural investors are buying the potential use of a land rather than the right to develop the land.

The recent surge from Mexico of immigrants is bringing new faces to America daily that want a property they can develop.  Immigrants see the potential that American buyers do not, in terms of a vacant property that no one has ever lived in.Government agencies are another buyer of my tax deed properties in Louisiana and likely in other states.  Local and state governments seek areas they can install new or increase the acreage of existing properties.  For example, buying land at tax sale near a school or military base is hedging that they will buy if called.  Also, some governments have the right to take property for unpaid taxes if not bid on at public auction.  My favorite tax sale property flip is the neighbor next door.  Someone seems always willing to buy your matured tax sale property when you finally show up and clean it up.  For this reason, I have also learned how and file my own Quit Claim deeds for property.  I can draft up the document using a laptop in my vehicle, usually print in their home on my legal paper and canvass for a few witnesses while we are waiting on a mobile notary.

Another hidden gem in tax sale investing would be pipeline property.  Many investors fear issues with the lease and right of way but I embrace it.  I often buy on the pipeline and in surrounding areas.  Once matured to a tax deed, I appear on my new hunting land.  Hunting lease owners chase me around for a few days with verbal abuse but I remain calm.  A few months later one of their club members calls asking to buy the land so they can have prime hunting property.  I write up a deed or in these cases involving multiple contesting parties, I will get a lawyer to make the deed.

As always, I am full disclosure on my dealings in regards to tax deed and their limitations without quiet title action lawsuits.  However, I also have 3 different procedures for "due process notification" and filing of the accumulated signatures in the local parish courthouse.  Seals the fate for the former owners at that point, some redeem but I do not care.

@Henry Clark You say tax sales are good investments and I agree if done so in bulk.  Buying a dozen properties or more at a time.  I get a 75% redemption rate because I notify at 2.5 years into the tax title maturing.  I get 18% return on that cash spent on taxes while also gaining 25% tax deeds that have rock solid legal disclosure.  Yes, my buyers get copies of signatures from former owners or my skip tracing report and an affidavit from a private investigator about his own findings about the former owners.

Cheers, keep motivating because we cannot let the government keep getting these properties!  There are just way to many out there never being bought.

Any advice for LSM Land unsoliticted offers for my property?

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