First Successful Land Flip

[Victor Noriega]

Hi BiggerPockets,

My wife and I would like to share our first successful land flip.  

The deal:

Purchased the property for $3000 paid the back taxes of $2200 and the closing costs were ~$700, so total investment was $5900.  I closed on the property on October 30, 2014.  Sold the property on January 6, 2015 for $15,000.  After closing costs, we made a profit of $7,600.

How we got this deal:

We used the method learned from Seth William's website, which we found after hearing the biggerpockets podcast.  The direct mail campaign targeted tax delinquent property owners.  The owner had purchased the property from a county auction.  I believe he broke even on the deal.  We sold the property to a neighbor adjacent to the property.  The negotiation was easy on both ends, and it was a cash deal so our closings were quick.  

We are reinvesting our profits into our business, and are looking for more deals.  We have purchased two more properties since this deal.

[Brooks Rembert]

@Victor Noriega 

Congratulations! I have not tried a tax delinquent list, but it sounds like something worth pursuing.

[Mason Hickman]

@Victor Noriega What was your response rate like on the direct mail? Do you know how many mailers you sent to that owner before they responded?

[Mason Hickman]

@Victor Noriega it got cut from my last post.... Nice Job!!

[Kathia L.]

Congratz good job

[Seth Williams]

That is so awesome @Victor Noriega - I'm so pumped to see that you took action and made the strategy work for you. Thanks for sharing your story!

[Martin Scherer]

Targeting land owners generally gets a higher response to mailings in my experience.  Those properties in areas around lakes that were sold via late night tv are excellent areas to target.

We had a buyer for 23 lots like that and it took 2 years we but got nearly all of them.

We sent out letters to all 23 and only got one response the first month subsequent mailings every other month got anywhere from 2 -3  responses and sales.  The only two we didn't purchase were those that owed 5 times the value of the land in taxes.  The benefit of these repeated mailings is that some of these owners owned multiple lots in the same general area and we sold 12 more of those.

Nothing fancy about the mailings just "we would like to purchase your lot".  "We are offering this much money".  "Call us".

People bought and then wondered why every they got a tax bill. They are mired in inertia so they just keep paying.  It takes the repeated mailings to get them to call as they fear a scam.

Putting the amount offered in the letter was key to this for us.  Yes, we may have paid a couple of extra dollars more than they would have taken but it I doubt it.  We had a buyer so we knew how much we could pay.  The other reason we were successful is that the people got used to us and realized we weren't going away. They would get another letter in 60 days and we just wore their resistance down.  The other reason  is we knew the property we were targeting so other than a title report and a County assessor call we knew we would buy the property and didn't have to put all kinds of conditions in the contract.  The people began to trust us and referred us to others. That was our experience.

[H. Duplechain]

Great job @Victor Noriega !!

I am working on a list of delinquent tax properties to mail to now. We have an upcoming tax sale with more than 6,000 properties, so I'd love to hear your numbers too. Also, which podcast was it that@Seth Williams did? I am working my way thru but I don't think I heard that one yet.

[Victor Noriega]

thanks everyone for the responses!  And Seth thanks for the blog. 

Mason, I've had 5 mailing campaigns to 5 different counties and an average response rate of 5%. For this individual deal, I had only sent them one mail piece. I've picked up two other lots and am working in the third. The other properties will take more work to market and sell, but the profit margins should be the same. 

[Jake Hartnett]

Great work Victor,

I am building my first vacant land tax delinquent list right now and I'm excited to share my first success story as soon as possible.

Thanks.

[Josh Lawrence]

Great post! Definitely something to look into and keep in mind... Thanks!

[Jason Pachomski]

COngrats @Victor Noriega love hearing success stories. I've just sent out my first round of mailings to vacant land owners. Fingers crossed that I have better luck with these than I've had with SFR

[David Carbajal]

Jason Pachomski & Jake H. I am right behind you guys with my first list ...
We should stay in touch for support and help as we start up our venture ...

Victor Noriega that is great!!
Thank you for sharing ...
Any advice for someone starting out ?

[Adrian Chu]

Sounds like you have a great niche.    Are the lots you look at build-able?  

[Jack Butala]

Congratulations @Victor Noriega.

We love your success story.

Please share your success along the way.

Here's my advice: Buy as inexpensively as you possibly can.

Check this out:

@Brooks Rembert @Mason Hickman @Kathia L. @Martin Scherer @Jake Hartnett

We just bought 10 acres in Southern California for $800.00 total cost and sold it for $10,000 before the deed was recorded.

[Greg Pereira]

Very impressive, and Congratulations!

[Jason Pachomski]

Nice! I've had an insane response from both my first letter campaign as well as my site. Closing on 3 of them this week and I have one other under contract that I'm gonna try and wholesale.

[Bhekizwe M.]

Congrats @ Victor Noriega.way to go

[David Battle]

@Martin Scherer how did you come across your land buyers before you purchased the land?

[Steven Paul]

@Victor Noriegahow were your closing costs so cheap?

[Victor Noriega]

I actually thought the costs were too high as this is land. these are the standard charges that the title company charged for title insurance and admin fees. 

[Steven Paul]

@Victor Noriega I just sent out my first direct mail campaign for vacant land too. When you sent out the letter how soon did you get calls and how many days after the first call did people continue to call? I'm asking because i sent my list on Thursday and today is Monday i already received a call, and only one. I'm worried

[Mike T.]

How many letters did you send?  What was the call to action.  I sent 900 letters last Monday, I received 10 calls on Friday and had had a few more every day since then.

[Account Closed]

Good for you. Bottom line is you were successful because you went out and did it. You didn't talk about doing it you did it!

[Victor Noriega]

my call volume for this year has been very low almost 0%. I've been sending out about 100 letters a week for Jan - March. But last fall, I had great return rate, close to 5%. I am not sure why. But I know that you should not give up. One thing you can do, if you use a mail service like click2mail, add yourself as one of the receipients. This way you know when your targets get the letter. To answer your original question, you get calls about three after the letters are mails out and they last for about a week. So you need to keep mailing in a weekly basis to keep your call volume constant. Hope that helps. 

[Luke Smith]

If the numbers work so well why not send out offers to thousands of people? The mailing rates go down that way. You are scrubbing the data anyway so why not make it count? Pulled 10,761 land owner records this weekend. Scrubbed the list down to the ones I wanted and sent out 5,035 offers to buy their land for cash. 

Plan to do a bigger one next weekend and every weekend after that. 

Keeping the deal flow coming, it is a sweet thing to have lots of deals to choose from. 

Have fun answering the phone as fast as you can and just cherry pick the best of the lot to buy.

On the sales side have been selling almost one land deal a day like the guys above are talking about.

Yesterday it was 18.9 acres for $1,890 sold for $4,500 less about $200 in closing and postage cost. Mailer probably cost about $60 for this deal if I divide it up amongst lots of deals from the same mailer.

Today it was 20 acres for $2,000 sold for $4,900 less about $300 in cost as the buyer put it on his credit card. I direct them to go check out on my website to buy the land they want anytime of the day or night. Online check out sure makes checking email fun and seeing orders come in.

The numbers @Steven Butala is talking about above are defiantly out there. My favourite one so far cost $75 and sold it for $7,100. 

Now I'm looking for ways to turn up the volume.