Spec Builders - Methods for contacting lot owners?

Question

We build spec homes in New Orleans and I'm having a lot of trouble getting in touch with the owners of infill lots to buy properties. We intended to buy a property by 1/15 and we're currently running behind on that. Going forward we intend on picking up a new lot at least every 2 or 3 months. Our niche area & criteria is pretty small ... Does anyone have some suggestions?

I do cold-calling, cold-texting, and mailers. I also recently posted on criagslist with a keyword that people can text me to receive a free cash offer on their lot, but havn't received any hits on that yet. I haven't tried bandit signs or door knocking. What methods do ya'll typically rely on? Any specific advice on scripts or best practices with regards to any of these methods?

Lastly ... do ya'll work with wholesalers? I feel a bit wary about this, because so many of them seem like they don't know what they're doing. And if I tell them our criteria and what we're looking for, I'm a bit worried they'll snatch up the lots that I'm looking to buy, try to sell to me for a premium and/or turn around and sell to someone else. Has anypone had success workign with wholesalers to buy infill lots? Any tips?

Thanks a ton!!

Mike Wood · Answer

@Leilah Davis I assume your term NRDRD is the historical commission (HDLC), although I have never seen the term NRDRD used. If yes, than I agree that it is difficult to get a house demolished if its historically significant (as defined by the HDLC). But if the house is not defined as historically significant, the HDLC will allow for demolition with approved redevelopment plans. Google 1205 Bartholomew for an example of a non-significant house that the HDLC would allow demolished with redevelopment plans, based on my conversations with HDLC (I was interested in this house 4-5 years ago, but decided to pass on it after my previous experience with HDLC new construction).I will say that doing work in any HDLC controlled area is a big pain in the butt and definitely increases costs. I have done one(1) new construction and am in the process of a renovation/addition project. I actively avoid HDLC controlled area, due to the excesses cost and lack of exterior design options, but if the pricing is right for the PITA factor, I do consider projects. I highly doubt I would ever do another new construction in an HDLC area, its just not worth it.

Jay Hinrichs · Answer

city of Charleston is like that as well.. i call those houses leaners LOL.. cant tear them down so you just prey for a fire.. then you can.in these older areas or gentrifying areas you have many times title issues that preclude the homes from selling with title insurance so they become zombies.. as we talked about in another thread create a data base of your targets and start aggressively dripping on them.. just like the wholesalers do.. most wholesalers dont go after dirt.. thats one thing.

Mike Wood · Answer

@Leilah Davis Several of the local Wholesales in NOLA will often offer up a vacant lot from time to time. While I have not purchased from any of them yet, if the right lot was offered at a reasonable price, I would not hesitate. But as you may now, lot in good area are not cheap and often trade on the MLS. Lately, I have not seen any empty lots worth pursuing, most of them in are less desirable areas.You may have better luck finding a teardown, as there is less demand for that then vacant land. Demo costs (assuming its not a slab house) is pretty cheap, but something to consider if buying a teardown for land value only.

Leilah Davis · Answer

@Mike Wood - this is what I'm refering to: https://www.nola.gov/safety-an... I forget where I saw it refered to as "NRDRD", I think it was somewhere on One Stop. (I'm so done with all these acronyms, lol!) If I'm reading that page correctly, it sounds like any area that is considered a "historic district" (see the map here, https://laocd.maps.arcgis.com/...) even if it's outside of an HDLC area, requires city approval for demolition. Right? The house I referenced earlier, that had issues with the demolition getting approved, is on my block. We're not in an HDLC area, but it is a "historic district". You mentioned that they'll approve it if you have redevelopment plans ... it's possible the owner didn't have a permit approval when all of this went down. He did build on it after the house got torn down, but maybe he just went about it the wrong way, and only submitted for permitting after the house was finally demolished? Really not sure, but if you haven't had any issues with getting them to approve demolition that's encouraging!And yeah, we have been totally avoiding HDLC areas alltogether. I've heard the same thing from a lot of people, that's it's basically a huge pain in the ass! Thanks for confirming, haha.

Leilah Davis · Answer

@Jay Hinrichs oh man, yeah it's a real headache! We had a hunch that our neighbor secretly cut the roof rafters with a chainsaw so that it would finally get on the blighted list and they'd let him tear it down, lol. And yes, in New Orleans specifically there are TONS of title issues, specifixcally because of hurricane Katrina. Good note about wholesalers not really going after land much. I have been noticing that ... that's good for me because it means most of the people I'm contacting won't have been bombarded by calls before I get to them. @Greg Dickerson thanks for the tips! I am a realtor myself. I'm pretty good about keeping business cards on me and handing them out to pretty much everyone I meet haha. I often mention, just casually, that we're looking for lots and having a hard time finding anything. I guess I hadn't thought of this as a method for finding deals, since no deals have come my way from it yet, but it's definitely a good thing to keep doing! You never know who could help, whether they just happen to know someone who has a vacant lot or whatever.

Greg Dickerson · Answer

In addition to calling and mailing lot owners directly make to you contact every realtor in your area and let them know what you are looking for. Also most wholesalers don’t know what to do with vacant land so you can reach out to them to let you know when they have land in your area. Lastly is tearing down existing houses and commercial buildings or doing boundary line adjustments on parcels that have excess land.

Leilah Davis · Answer

@Guillermo Oyola great thanks!

Guillermo Oyola · Answer

Leilah Davis · Answer

@Guillermo Oyola ok gotcha. Yeah that's what I thought skip tracing was ... what's the cost on that generally? As I said I'm currently just looking up phone numbers and contact info through White Pages. Having info on judgments & liens would definitely help!!

Guillermo Oyola · Answer

Skip tracing is when you search someones name and/or address on a data base and it comes back with telephone numbers, email, addresses. Also, shows judgements, liens, criminal/traffic. Even shows transaction history of a property. There are numerous services out there online you can use. I use one called idicore but only use it as last resort and when I'm closing in on a possible deal. I'm not a wholesaler but that's what they mostly use. I only use it as needed for properties I'm looking to fix and flip or to buy and hold.