I might as well drop this here as well, where Justin Melquist shares a TON of practical knowledge on the subject.
Handling an Area with a TON of Land on Market
Hi Guys I'm new to the REtipster forum but have been following Seth for about 2 years now. Finally pulling the trigger!
My question is when determining a market to go into do you take into consideration the number of vacant land properties currently for sale?
A few markets I'm looking at have a TON of land for sale and others hardly have any. How do you weigh the current number of land properties on the market?
Joshua Thompson, it's an interesting question. Probably depends on a number of other factors, and one in particular that comes to mind is the data (prices, days on market, etc.) of the sold properties in the area.
In other words, if you came across a market that was just very active, with a lot of properties for sale at any one time, with many of them being sold fairly quickly, that's not a bad thing at all. On the other hand, if no one seems to be finding buyers for their properties in a given market, that's obviously not good, unless you can find properties that are more desirable and/or priced lower than everyone else.
David Ludwig That is a great point. If the properties are selling quickly then possibly it isn't a bad market to be in.
It would be great if there was software that could give the average days on market for vacant lots in a given area. "Calling all app builders"
How did you weigh this information when deciding on an area to operate in?
Joshua Thompson, I honestly haven't performed that level of analysis prior to sending my first mailing to any particular area. Not saying it's a bad idea or anything; just not something I've done personally. Instead of that kind of analysis, I've just started with markets where I've had some level of familiarity with the area, either because I've lived there at some point, know people who live there, or I've visited and thought it seemed like a place that some people would likely want to buy property.
That's not to say that I've tried pursuing land in every area that checks the above (admittedly pretty loose) criteria. The key additional items that I've then filtered by were availability of good online property records, and some viable source of leads. The area where I lived the longest (so far) in my life actually has horrible online property records (GIS, etc.), as near as I can tell, so while I know it has a very active real estate market, I've skipped it so far.
Not sure it answers your question, but that's essentially how I've (unscientifically) approached screening markets, pre-mailing.
After I've sent mail (neutral letters, with no blind offer), and hopefully get some calls or emails, then I do try to assess the prospects of selling that particular owner's parcel, before I make them an offer. That's the point where I can spend more time researching pricing and days on market (when available) for the sold comps specific to that property.
Joshua Thompson Great question! In my humble opinion having a lot of property for sale in a given market is not enough information to make an educated decision.
If the land is just sitting there with long days on market then you should probably stay away. However, if the land is being bought as fast as it's being listed then you should probably jump in.
David Ludwig How were you able to determine a bad county property records vs a good one. The few I've had the chance to look into didn't have any red flags, which could've been pure luck.
I see you took the master land course. Did it go into this topic in detail to make you feel confident in your decision?
Thanks for the insight
Georgui Kassaev What are you using to research surrounding land sold? I know Zillow used to be great at this but it seems recently they don't list sale prices as frequently as they used to.
Georgui Kassaev Thanks you! I also found some good information on Redfin if you are ever looking for another site to compare. I know I got my RE license a few years ago maybe it will finally come in handy!
Do you use RPR as well as a site like DataTree for property research?
Joshua Thompson, yeah I probably made it sound more complicated than it is, in terms of the quality of the county's online records. Really, a lot of counties have very good online records at this point, so those that don't almost seem to be the exception and not the rule, but I'm talking about fundamental things like, do they have an online GIS system that allows you to look up properties by parcel ID, owner's name, etc., and see the location and basic attributes of the subject property, such as size, shape, zoning, etc.
Many people are very successful in states that don't publicize previous sales data for properties, but personally, up to this point, I prefer to work in states/counties where I can also see what at least the current owner of the property paid for it and when they bought it. Some counties' systems will show you the last several transactions' dates and prices.
Other than that, I'd like to be able to look up on a county website: what the property taxes are, and whether the current owner is current on their property taxes, or how much they owe currently if they're not current.
And yes, Seth's course has good content on all things related to selecting a market and doing research on properties (where some of the county tools come in).
David Ludwig Thank you! I'll probably be joining the master course here soon. My goal is to first see if this is something I'm going to be able to commit to and then jump in the course and take action after each module.