Chapter #1: The Micro-Flip Play

Play number one, the microflip play. Anything less than the best is a felony, Manella Ice. Manella Ice, ever heard of him? Unless you were living under a rock, in 1990, you couldn't escape the song Ice Ice Baby. Maybe you can hear it in your head now. Dun dun dun dun dun dun dun dun dun dun dun dun. Why though, are we even talking about 90s hip hop? Why focus on that in a chapter that we said only a few pages ago was going to be about Play number one of the Land Investors Playbook. The reason is that Land Investors who run Play number one, the microflip play, are comparable to these 90s bands. Naturally, the average Land Investor isn't wearing goofy-looking MC Hammer pants. So on those obvious and immediate levels, there's no connection. It's only when you go meta looking at the overall situation versus the ground level details that a connection emerges. The connection is that Land Investors often get stuck on Play number one. What I mean is that investors will discover Play number one, the microflip play, have some success, often spectacular early success with it, and then only do Play number one. When this happens, it's as though these investors are one hit wonders. They have a single Play and just keep running it, even when new opportunities exist. They stick to what they are familiar with, regardless of the opportunity cost. The result is a situation comparable to any of our 90s bands from earlier. Each of those bands also had their one hit, which they would play in the literal sense on the stage and on the radio, over and over and over until it became played out. Playing the hit song undoubtedly paid the bills for the members of these groups, helping them at the very least to keep the lights on. Yet none of the bands ever got past their one hit, and that's a problem. For the record, I'm not a music expert, but from what I can gather, there's no shortage of pop or hip-hop songs. There's their shortage of artists seeking to have their big hit. So if hits then are a dime a dozen, and everyone's running, we're trying to run this first play for success in the music industry, you're going to have a spectacularly competitive space. Artists can, of course, choose to fight for a spot on the charts, but it isn't the only option. From the limited knowledge I have on the music industry, it's apparent that there are other plays a band can run. Look for example at the band Iron Maiden. I'm not a fan of their music and couldn't name a single song they've released. I was, however, at a youth basketball tournament for my son when I saw this kid walking in wearing an Iron Maiden shirt. It seemed odd, so I made it a point to scan the rest of the crowd and the kids walking in. None of them had changed into their jerseys yet for the game. They all had their street clothes on. I noticed another kid wearing a misfit shirt. Now this wouldn't seem odd if I were in the Pacific Northwest at a mall, but this was downtown Phoenix at a basketball tournament and the merch didn't match the sport. I was intrigued so I got my cell phone and during warm-ups I started googling merch sales for these bands. It was then that I discovered that band teas were in style with all youth, regardless of whether these kids had ever listened to a song or could even name a single band member. It was then that I had the epiphany that for a band like Iron Maiden, the idea probably isn't to have chart-propping hits. That's not the main play that these kind of bands seem to be running. In place of hits, the bands have focused on another play, clothing, or as my kids call it merch. As a result, it's a good bet that you've seen someone wearing an Iron Maiden t-shirt. These would be the shirts with a ghoulish-looking figure on them in the words "Iron Maiden" just below. Search online and you'll see what I'm talking about. Another example here would be the band "Misfits." Misfits like Iron Maiden may have great songs. I wouldn't know. Yet in the misfits case, they too have succeeded with the music industry by running the clothing play. With a ubiquitous t-shirt, this one's got a skeleton on it followed by a rough-looking logo saying "Misfits." Again, pictures can be found online if you're that intrigued or have never seen people wearing the shirt. Beyond the clothing strategy, a band could run other plays, such as doing film soundtracks. On soundtracks, think about folks like Randy Newman or Hans Zimmer. Newman's credits include the music in the Toy Story films. Well, Zimmer's credit with doing the music for the Christian Bale Batman movies. Could either of these films score master-focused on having a hit single? Probably, but they've looked beyond that first entry-level play to see what other plays could also be run. Let's get back to land now and let's tie this all together. The point in everything we've just discussed is that there are many different plays that you can run. Whether in land investing or in the music industry. I'm stressing this notion now ahead of play number one in order to give the play some context. Play number one should be regarded as a starting point rather than the final destination. Let me say that again. Play number one, the micro-play should be regarded as a starting point rather than the final destination. You can start there by all means. I certainly did, as do most land investors. But play number one, the micro-flip shouldn't be all you have in your arsenal. Otherwise, you may end up as the vanilla ice of land investing, running the exact same play over and over again and never making it as big as you could. I'm going to strongly advise you against making a career out of play number one. Often land investors who focus exclusively on play number one, the micro-flip end up on the endless treadmill to nowhere and their entrepreneurial experience looks a lot more like self-employment than being a true business owner. Should you skip this chapter? It's an unusual question, one you've probably not used to seeing at the start of a book. The question ought to be answered though, before you read any farther. After all, chances are you're not a newbie when it comes to consuming educational content. That content may be in the form of books or may come from, for example, is video courses or audio books. I'll be direct with you because I want you to get the most out of this book. If you are already a very experienced land investor, then you should probably skip to the start of play number two. What is, unless you're like me, and actually are so fanatically obsessed with land that you want to consume every piece of content possible? Seriously though, my feelings won't be hurt and you won't have to spend your time reviewing what you already know as a high-level land investor. Everyone else? There will be no skipping of anything. You'll want to devour this chapter. Is it will help you understand the world of land investing at its most basic level? Very similar to knowing how to block and tackle in the game of football. If you already consider yourself an all-pro in the NFL of land investing, then you're okay to skip ahead play number two. However, if you are a rookie within the space of land investing, then please stick with me through the entirety of this chapter. Hitting singles. Play number one is a strategy that my coaching students and I often refer to as the single. In leading this play to baseball, the focus is to hit singles versus taking risk and going for the deep ball or home runs, doing deeper and more sophisticated deals. While you're doing play number one, your goal is to invest a small amount of your own money and then double or triple your investment. While each of us probably has different financial targets, I've found over the years that those who run play number one are typically seeking to profit $1,000 to $5,000 per deal. This range has become apparent through conversations with those that I'm coaching and other land investors elsewhere. Collectively, these land investors have all been drawn to play number one. When asked why, they tend to offer two distinct reasons. When number one would be that they as land investors, respectively, they're looking to validate the model. Perhaps they've heard about land investing through a podcast as I did. Or maybe they've discovered the land business through another means, whether with this book or via someone they know who's flipping land. Whatever it is, these individuals are now itching to see whether you can actually make any money from land investing. Does this really work? That's the burning question on the mind of your average entry-level land investor. To answer the question, those at the entry level may aim to make particular. between 1000 and 5000 on a land deal or two. Earning one K to 5K from a deal probably won't be life changing for them. Not in the way for example, that receiving a massive inheritance or winning the lottery would be. That amount of money though is big enough, however, that can't just be brushed off. After all, an average American salary according to the 2021 stats from the US Bureau of Labor is about 51,480 annually. If you divide that amount by 12 months of a year, you get approximately 5000 a month, rounding up a little. Thus, if you can earn 5K from a land deal, then you're earning the equivalent of a month's salary. Even if your earnings are at the lower end of a range, say 1000 or 2000, that's still nothing to scoff at. You know, $1,000 for example, it's probably enough to cover groceries for you and your family over the course of at least one month. Just as importantly though, earnings of 1000, they validate the model. That is, earnings extinguish that question, does this really work? There can be no doubt the model works. One of $1,000 to $5,000 in your bank account is staring back at you as a direct result of your early land investing efforts. Apart from a desire for proof, you, me and others who get into the land are also drawn to play number one specifically for a different reason. This reason, reason number two, is affordability. Play number one can, in other words, we run with very little cash. You might for example spend $100 to buy a piece of land. Then running play number one, you could sell that land for $1,200. The result would be a profit of $1,100. From this simplified yet realistic example, $100 all you need in order to do a land deal with play number one. Seeing that low dollar amount leads to a new question. Can you find a hundred bucks? Most of us can't. And if we can't immediately do it, there are ways to get the money in a little time. Perhaps for example, we can engage in a little garage sale magic, clean out the garage, take items we no longer use, sell them on eBay. That could be all it takes to get a hundred dollars for play number one. Despite its affordability and the fact that it can yield immediate results, thereby proving that land investing works, play number one does have drawbacks. Drawbacks to play number one. Chief among the drawbacks to play number one is that profits are typically low. As evidence, just think back to our most recent example. There we saw that you'd spend $100 to earn $1,200 on a piece of land. Mathematically, these figures amount to an ROI of over 1,000%. Exciting? Sure. Until you think about how many of these kinds of deals you need to do in order to earn your annual salary. With play number one, the focus is on return on investment or ROI. I believe that to achieve a seven figure income as a land investor, the emphasis needs to be on measuring the outcome and not the activity. That is why I feel that ROI can be misleading because the focus is too much on the activity in the multiple and not on the desired outcome, which should be total profit. Now, I realize that attacking my first play of my own playbook may seem a little contradictory. In response, I'd remind you that there's a reason where referring to this as play number one and noting it's a pill to entry-level land investors. The implication is that play number one is a starting point, not in most cases, the end of the line. You dip your feet in the proverbial water and see that land investing isn't just an offbeat podcast topic and that you, yes, you personally, can make some money out of it. Then you figuratively dive in and continue toward land investing mastery. Once you decide to dive in with land investing, you'll need to swim for your life, at least in the metaphorical sense. This is because entry-level land investing in what's play number one is often a red ocean. Red ocean is a term used to refer to markets. There's fierce competition in. The term originates from a brilliant book entitled Blue Ocean Strategy. As the book explains, a market can be seen analogous to an ocean. In the case of a red ocean, the sea's color reflects the fact that it's inhabitants, sharks and fish, et cetera. Having gotten along too well, and there are too many of them sharing the same space. The inhabitants like businesses in a market have followed their competitive desires and this has brought them into conflict with one another. The ocean's red hue is a stark visible reminder of that conflict. Relating red oceans to land, we can now see another play, number one's drawbacks. This play can produce a red ocean because of the low barrier to entry. If you can find $100 as per our last example to run play number one, then what's to say other people can't do the same? Nothing, there's nothing preventing it. Well, almost nothing. Let's not dismiss motivation. It's not everyone who hears about play number one will be motivated to actually do it. But all the same, you don't need hundreds of competitors to find yourself swimming in a red ocean. A handful of competitors will do just fine in bloodying the waters. In its defense, play number one will not automatically put you in a red ocean. Depending on where you choose to run this play, there may be few, if any other land investors in that particular market, who are vying for deals. The trouble is that red ocean land investing is the model most widely taught by gurus because it appeals to the broadest audience. Anyone who can afford a $97 E course and has $100 in their pocket to buy a tax auction property with the goal of reselling it for a thousand. The risk of a red ocean does exist, however, no matter the market, and you should therefore be aware of it when you consider play number one. After red oceans, there's another drawback. The third main drawback, if you're keeping score of play number one. The third downside with play number one is that it requires considerable involvement on your part. You have to be involved with loads of time and mental energy because of the low profit margins in this play. Involvement, in this case, means self-closing the deals. White often when dealing with properties under $10,000 or even upward, the math doesn't pencil out to pay a title company to close on the acquisition, which is the buy side or disposition, which is the sales side of the deal. There isn't enough profit in the deal, which puts the land investor in the position to have to self-close each and every one of these red ocean deals. As much fun as pretending to be a title abstractor and escrow officer is, when my wife and I were running this play, I found stress and a kind of confinement when I was trapped working in the business versus on it. Self-closing a large number of transactions and then self-servicing the loans is the common practice taught by red ocean educators. In the best way, I can explain my experience with living it out. It's like getting pecked to death by 100 chickens or experiencing death by 1,000 paper cuts. You may be in for a similar experience. If you choose to start and then remain long-term was play number one, it's almost certain that'll happen because play number one usually doesn't leave you enough in profit on each deal to be able to afford outside help or support. Re-capping what I touched on earlier, you have to self-close, for example, because you can't afford to pay for a title company's services. Land agents are also out of the question because their fees would turn your chunk of change you'd earn from deal with play number one and a mere chunk change. Nonetheless, don't turn your back on play number one just yet. Even with all the negatives, this play does have its advantages. We've seen two of the main advantages so far. To balance out our coverage of the play, here are a few of its other advantages. I had advantages of play number one. First among play number one's other advantages, you have a greater margin of error. Margin of error is a sleek way of expressing the amount by which you can be wrong with your valuation or your offer and still be okay. With play number one, we see margin of error related to the deals we're doing. Since the sizes of those deals tend to be small, You're often left with a considerable amount of time. margin of error. It's all right then if you're a little off, meaning incorrect with your estimated market value of the property you're buying. The amount you offer property owners for the purchase of their land. You can afford to err a bit in your offer price because of how low the deal sizes. Usually an ideal offer price, when you're running play number one, will be in the range of about 15% to 35% of estimated full market value, which is the price that you would plan to list and resell the property for. Here's an example of what this might look like. Suppose a properties were $20,000, but you think it's worth $22,000. You decide to offer $5,500, which is an offer price that is 25% of market value. In a perfect world, you should actually be offering $5,000. Let me explain. Let's assume you had an appraiser evaluate the property and the land agent give you their opinion of its value. They both arrive in an estimated market value of $20,000. You then realize that you were off by as much as 10% with your estimate of the value of $22,000, because it was actually only worth $20,000. Although 10% sounds like a lot, in reality, you only miss the mark by $500 with your offer. What resulted in you paying $5,500 instead of $5,000? For a property that you thought was worth $22,000, but what turns out to be only worth $20,000? For example, here, being off by $500 from offering $5,500 instead of $5,000 is unlikely to be a fatal mistake. The dollar size is small enough that you can probably get out alive, even if the percentages you were off by sounds large. This works both ways. Sometimes you also underestimate the value of the property and offer too low or too little. Depending on the number of offers you sit in this case, you may still get people accepting the offers. Regardless of whether those offers came in 10% too high or 10% too low, those who accept will be comfortable overlooking your mistake or may not even be aware of it because the total dollar amount difference is so small. You'll also be able to live with your 10% plus or minus mistake because it's such a small dollar amount, even if the percentage you're off by sounds high. Yes, it's a numbers game, and with one set of numbers, number of offers sent, you can help to smooth out difficulties with another number, the number and your offer price. Important is direct mail or campaign volume is, our earlier premise about low offers given your breathing room still applies. Returning to that, in the accompanying example, we'd say you might be about $500 off in your offer price on a given marketing campaign. Some people who received your offers may still accept the offers because they're willing to overlook the mistake at just $500. In other instances, you yourself may be able to come back revising your offer by $500 to what the seller would want. For the latter situation, use the buyer, maybe okay with adding $500 or more on offer because there's still profit left in the deal for you. $500 may work as the amount in this example, but please don't read too much into that specific figure. In other words, the amount of $500 should not be seen as the be all and end all by which you can always err in your offers and still be okay. I realize it's tempting to reach a conclusion like that when going through educational materials. Having taken courses myself, too often my tendency early on was to see an example and then obsess over the exact amounts, percentages, dollars and other figures in it. I want these amounts to become iron clad and therefore give me lasting results to use in my own efforts, but time and again, that ends up being counterproductive. For instance, an example may simplify the figures it uses so the math is easier to do or the example may purposely leave out details that would otherwise confuse a reader or student. How much can you be wrong by? Well, inevitably very depending on your situation. What's more certain however is that you can't be off by $100,000 and your offer prices. Contrary to the forgiveness that Red Ocean Land Investing has with plain number one, Blue Ocean Land Investing, which I consider $40,000 to $400,000 market value as you are targeting, is not so forgiving with you being off by 10% or more. By targeting these market values of $40,000 to $400,000, you will elevate yourself above Red Ocean Land Investors, who generally target $40,000 or less market value properties. Unfortunately, as with any new innovative opportunity, it also presents new challenges. Imagine yourself being 10% off on a $300,000 property. That's a $30,000 mistake. That's right. Bigger rewards come with bigger risks. And that is also why most of the land investing industry stays plain in a crowded sandbox, duking it out with others for table scraps, because it's low risk and it's comfortable. Now to be sure, plain number one doesn't involve making a $100,000 K offers on $300,000 properties. Still, even if it did, there's a big difference in being $500 off and being $30,000 off. The former $500 is easier to fix or even ignore than the latter $30,000. Moreover, the fact that this margin of error is possible hints at another benefit of plain number one. This next benefit would be the cookie cutter aspect of plain number one. When we speak of plain number one, the micro flip play is being cookie cutter. We're referring to the ease with which you can often compare or comp in land investor slang, separate parcels of land, where possible the properties can be readily compared because of how similar they are. Such similarities may even in extreme cases prompt kind of a sense of profound déjà vu, or the feeling of looking like clone properties. This is exemplified and exploited by desert properties. Those lots often around one acre that sit mostly unused and unwanted throughout the southwest. The areas are subdivisions they are often located in, or what I will refer to as paper subdivisions or zombie subdivisions. These subdivisions often have homes built on only a small percentage of the lots. Now without going too far back, I'll just share that my research suggested that many of these were created in the 1960s and were positioned and sold by land developers with promises of utilities and infrastructure and in some cases even golf courses being developed in the future phase of the development process. The reality is that they over-promised, over-hyped and never delivered on the infrastructure. Who knows if they ever intended to or not? Fast forward to today and these lots are still being traded for market values that are often the same or only double or triple the price they originally sold for 50 or 60 years ago. In less extreme cases cookie cutter properties may not be clones of one another. The properties are however still similar enough that it's a simple matter to determine a common amount what you're willing to offer for such properties and this allows you to then make a blanket offer, meaning offering the same price for each and every parcel in that subdivision. So there's no confusion here. The last bit on blanket offers is why we care about the cookie cutter properties. Properties of that sort can greatly simplify our work as land investors running plain number one. We don't have to spend time individually pricing each property that we're hoping to purchase. This is beneficial since it frees up time and attention to tackle other aspects of running the land business or other priorities in life. Rounding out the benefits now of plain number one in the land investors playbook, here's another. The next benefit of plain number one is its virtuality. Virtuality? Never heard of that word? Well, you're not alone. Virtuality isn't a real word. I made it up. Combining the words virtual and ability. If you spell check it on the laptop, you're not likely to find the word. But you might because with virtuality, you can, I hope, get a sense of this next benefit of plain number one. With plain number one, you have the ability to work from virtually anywhere. Work from anywhere? Haven't we heard that before? Yes, back in 2020. 20 during the virus scare, that was the time when long distance remote work became the "new normal". Still, even before 2020, when Corona was only the name of a beer company, play number one of the land investors' playbook was still location independent, and hundreds, if not thousands, of land investors were already enjoying, the benefits before the world shut down and employers suddenly realized work could actually be accomplished even from home. You could run the play for properties located in, say, Texas, while you yourself thousands of miles away in New York. This location independence was and continues to be possible as play number one, and that's a tremendous advantage. On a quick side note here, while we're talking about location independence, let's address the beach chair delusion. It's the image frequently pushed by gurus of various investment and business opportunity courses. You know, they depict people working by the pool or at a beach somewhere in paradise. Well, it's certainly possible to work in such settings, I'm not eager to promote similar images to you. The reason is that I find the gurus images of working by the beach or pool all too frequently implied that little work is required. The gurus course will provide you with some money making formula that's so simple you can sit in a beach chair, do a few minutes of work on your laptop and rake in the big box. You and I both know that's not how it works in the real world. Any business undertaking requires time and effort. Sorry if that's obvious. I was just a little concerned about mentioning location independence around a strategy for making what truly can be life changing amounts of money. Do the strategy with play number one anywhere you want. Buy the pool, buy the beach, if you can get wifi. But wherever you do play number one, keep in mind you will have to work and work and work and work. You get the idea, right? Are you ready to start? Work in on play number one. Now picture yourself as the quarterback in a low stakes pickup game of football in the vacant field next to your neighborhood. When you hear yourself call to play, red ocean on three, red ocean on three, break. Then let's break down how to exactly run this play. Prospecting. Our examination of play number one begins with looking at prospecting. Prospecting is the starting point for this play and any other play that you're going to run is a land investor. Playing means identifying a set of individuals whom you're going to reach out to in order to run the play. How you approach these individuals, your goals in approaching them and much more will inevitably vary depending on the play that you're running. That's one of the things that differentiates play number one from others you'll be reading about in this book. Nonetheless, whether it's play number run right here now or a final play in the playbook, you'll be prospecting at the start. So is the first step of any land investing play? How do you go about prospecting? Ownership records. That's the critical element when prospecting. Ownership records are analogous to feel and that they'll ignite any play. Take ownership records figuratively, pour them on one of your land investing plays and with some kindling on your part, you'll soon be on track doing some deals and setting your small kindling fire ablaze. That's ownership records in a general sense. Putting them in context now for play number one specifically, here's what you'll be doing. In play number one, you'll obtain ownership records for those properties in an area you'd like to flip land. Which area is that? Firing up the laptop, visiting zillow.com and doing search by state for only land, not houses, with max values of 40,000, will point you to some potential pocket areas within a state. But I can't speak to where you personally want to flip land. For the simple reason that I don't know your background. What I can say is that if you're reading this book, you may already have a sense of some places where you could run play number one. Alternatively, if you don't have that sense yet, here are two nuggets of advice to help you pick a good market, not just a cheap market. In two critical ratios, those ratios would be a strong sold to fore sale ratio indicating a high demand coupled with a low parcels on market ratio indicating a low supply. Keep these ratios in mind and seek out counties where you can see them satisfied in the way just described. We've got low inventory and we've got high demand. When both ratios satisfy, matters because the true test of land flipping, especially in play number one, is how quickly you can resell the land. If you're in any doubt on the importance of both ratios, consider what it looks like when the ratios aren't satisfied. That would be the case with some of my coaching students who come to me after completing other courses or other programs. On coaching calls, these students will often explain how they succeeded on the acquisition side, meaning the buying of properties dirt cheap. Their victory, however, proves short-lived since the students are then unable to sell the land or unload it due to the market saturation on the sell side. If only they'd been more conscious of the two ratios when picking a county. Learn from their mistakes, please. Two. Go live with comps. Alongside ratios from number one above, it's also a good idea for you to look at live comps when selecting a market. Live comp should support your intended market range, being sub or below 40,000 in this play number one, the Micro Flip Play. In order to pull such comps, you can use any of a wide range of excellent tools, think websites, apps, databases, plugins, and so on. Since the list of tools is ever changing, it's likely that my current go-to list of tools will have changed by the time you're reading this book. Accordingly, I'll refrain from naming any particular tools here. In place of that, though, let me refer you to a page on the website that accompanies the book. Here's the link, theLANinvestorsplaybook.com, and then you just click on the Tools button, where type in theLANinvestorsplaybook.com/tools. As the name of this page implies, it's where I keep a list of my current favorite tools and resources. These are the ones I personally use. In addition, I'm regularly updating the list as I find new tools and resources, which I'm referred to by my coaching students. All this talk about tools and resources, by the way, was in the name of prospecting, in case you forgot. We were talking about prospecting in the context of play number one. Then within that subject, we covered two nuggets of advice to assist you with finding a market to prospect in. Picking it from there, let's now talk about execution. A look at execution. Chronologically, execution comes after prospecting in any LAN investing play. You'll run with execution were concerned about two distinct things. Acquisition and disposition. Acquisition and disposition fit together like Yen and Yang. You know those two half-circles. You may have seen an Eastern imagery or around the necks of Mulan and Shang when you're watching the Disney movie Mulan with your kids for the 100th time. No kids? Well, the idea of Yen and Yang is that two halves that complement each other. Each one is the other's opposite and better half. So that, when together, they create balance. So two with acquisition and disposition. Acquisition figuratively throws your land investing business off balance. I'll be it in a good way. That's because you now have a property in your inventory. The property is weighing down your business as well, whether it's in the sense of taxes that must be paid on it or simply the time and attention required to get it sold. Thankfully this weight can be lifted off your business restoring balance. The way you restore the balance is through disposition. Disposition is just a fancy way of saying sell. It's used whenever we talk about restoring balance in your business through selling a property. So are you clear on acquisition and disposition in a general sense? And here's how these two sides, land investing, Yen and Yang come together in this play number one. Acquisitions. The acquisition side of play number one begins with offers. Lots and lots of unsolicited offers. These offers are what you'll be sending property owners offering to purchase their off-market land. The reason you'll be sending so many offers in play number one, the Microfoot play, is that it often takes hundreds or even thousands of offers to get a single deal. Many of the offers you send won't reach folks willing to sell. their land. But occasionally you'll reach a motivated seller. Thus the more offers you send, at least in play number one, the more shots on goal or opportunities you're giving yourself to score. The shots on goal concept helps in explaining why we aren't worried about response rates in play number one. Response rates for this play are usually 1-3%. That makes play number one a numbers game. One we can win by taking a high number of shots. In addition the response rate becomes even less of an issue for our success is measured by the profit we make from the campaign. So even if a handful of sellers reply are earnings from the deals we do with the sellers more than make up for it. If you're reading this book I likely don't have to sell you or convince you on the validity of the land business model but I feel compelled to remind you on that regardless of the play you're running it's always a game of numbers meaning numbers of offers sent. To get statistically significant results from a marketing campaign any full-time land investor who's consistently earning six figures or more will in order to get deal flow end on a more fundamental level ensure that they're reaching enough people. Often that looks like sending thousands of offer letters per marketing campaign. This is the norm for those at the top of the land investing industry. Also on offers it's important to understand that we're not just referring to a single type of offer. Rather offer is a broad term for any kind of written proposal that you'll send to a property owner offering to buy their land. Within this definition there are a myriad of possibilities owing to variables around the offer. What I mean is that you'll end up with very different offers depending on how you vary the elements of an offer. Neutral offers. For the purpose of this book I'd like to focus on the variable which seems to be the biggest point of difference among offers and their subsequent success rates as well. The variable of which I speak is the intensity and directness of the conversation in your offer around purchasing a given property. The conversation in the offer could be one in which you're suggesting to a property owner that they could sell their land to you. You're therefore putting the idea of selling in their mind. This angle characterizes what's known in the land investing industry as a neutral offer or also known as the letter of interest. Offers along these lines are neutral in the sense that you haven't made a specific offer and a dollar terms to the owner. Neutral offers differ from the second type of offer you might send. The second type of offer cranks up the intensity of the conversation. The second offer type is the blind offer. Blind offers. Despite its name the blind offer allows a property owner to see what you'd be willing to pay for their property. You're providing an official dollar amount and writing on an actual purchase agreement that the owner will receive if they choose to sell you the land. What makes this type of offer blind is the fact that you and the owner have not spoken previously. You're going in blind with an offer based solely on what you've gleaned from reviewing ownership records and comp data, which is sold in for sale listings. Think of a blind offer as being synonymous with an unsolicited offer, meaning the seller never asked to be sent an offer. After blind offers, there's a third option for you in sending offers to property owners. The third option is called a range offer. Range offers. A range offers a hybrid between blind offers and neutral offers. It's as though you're turning the intensity of the conversation about purchasing a person's property to about half way. The intensity was at a low setting on the neutral offers. Then the intensity was raised to a high on blind offers. And now with range offers the intensity can be adjusted to a medium setting. On medium intensity, a range offer presents property owners with a price range at which you'd be willing to purchase their land. This can be advantageous since it provides you with a greater protection against incorrect pricing. You do not have to be perfect on pricing because you're not providing a single price and a take it or leave it blind offer. Instead, you're giving a price range and with it greater flexibility for the owner receiving the offer. And for you is the one making the offer. Neutral offers, blind offers, range offers, three types of offers, three intensities of conversations you're having with property owners around purchasing their land. And the winner for play number one, the micro flip play, this specific play is spoiler alert, blind offers. Yes, it's true for play number one, the micro flip play, blind offers tend to work the best of the three types of offers. The other offer types can be effective in this first land investing play. It's only that on the whole, the blind offer tends to be a much more effective and time efficient way of reaching owners and purchasing their land. I say that on account of both my own experience in land investing in those of my coaching students. You may have different results, though, depending on factors like where you send the offers and who exactly you send the offers to. Suffice to say there's an element of it depends with each type of offer is best. Yet when the proverbial push comes to shove, blind offers usually come out on top on play number one, the micro flip play. If blind offers do tend to carry the day is the most effective offer type than how exactly do you send them. If you're an advanced land investor, you may already know how to do it. Then again, you may also be completely new to the land investing business and sending blind offers. If so, here's a quick run through of the basics around sending blind offers. When doing a blind offer campaign, you begin by using property owner records to identify where to mail and who to mail to. After that, you create an offer price, which is the amount you'd be willing to purchase an owner's property for. Your offer price will be based on live comms, which you'll have obtained from property listing platforms like zillow.com, redfin.com, zome.com, realtor.com, landsearch.com, land.com, or landwatch.com. These platforms show you the full market prices for properties comparable to the ones in your offer. Drawing on that information, you proceed with sub $40,000 value properties in play number one to price your offers at 15% to 35% of the full market value from these comms. 15% to 35% is the percentage range that tends to work, at least for me and my students and the land investors I've talked to over the years. You can, however, try offering 10% or more staying outside this range and extending an offer that is sure to be above anything else that your competitors are sending. When you do, you'll probably see your rate of accepted offers goes up as your profits from the deals go down. This is important since it reveals a deeper principle around play number one. The principle is that offer prices primarily what gets you a deal. That's not, therefore, as much about the number of offers you send. Mail volume can make a difference. Still, of the two, volume and offer amount, the latter offer amount will play the bigger role in determining how many if any accepted offers you receive back in a campaign. This idea of offer amounts making the biggest difference in response rates may sound obvious. All the same, it's common for very high level investors to conduct extremely expensive direct mail campaigns with a large volume of letters in order to split test various mail tactics. Such investors will ignore the role of offer amount and look instead, for example, at whether a handwritten letter increases their acceptance rate. Whenever someone asks me how many letters they need to send to get a deal, I tell them the single most important variable is your offer price percentage. You see, most people, especially ones with marketing backgrounds, fall in love with the idea of the marketing piece itself and the artwork on the outer envelope. The reason they do this is they are convinced that this increases their open rate. This is assumed as we never know the actual open rates. I will tell you, though, that when you increase your offer price percentage, your acceptance rate goes through the roof, which supports what I already suspected. People are in fact opening your mail. They're just not responding or accepting to your low ball offers. I will save you the time, effort and expense by reinforcing that there is no more impactful variable to increasing acceptance rate. rates, then your offer price percentage, given as a percentage of market value. This is true for every play in the playbook and goes for play number one as well. Alright, so you create the blind offers and get them in the mail. Now what? Time for the fun part. The second part of the acquisition side in play number one. The first part of acquisitions in play number one involved creating and sending out the blind offers. If you're paying attention though, you may realize the word acquisition doesn't and itself have anything to do with sending mail or even contacting people. Why do we refer to this part of the play number one as the acquisition side? The answer is because of what comes next. The blind offers and sending of mail was the setup. It set us up to now and the second part of acquisitions officially get properties to acquire. Those properties come in as various property owners who we've reached out to with blind offers. Send those offers back signed and fully accepted. With their acceptances of the offers, we can then proceed towards acquiring the properties. Just like that, from a single accepted offer to fully owning a piece of land, well almost, there is due diligence and careful review of each property or deal to be done before we the land investor finally pull the trigger and actually acquire the property. In the interest of time, we won't go over the entire due diligence process here. What I will share though is an early step on that path. This is the part where we're qualifying properties. For qualifying properties, I have a method that enables you to do it faster than when using conventional approaches. My method is faster, both literally and figuratively. Literally, this is because of its name. The faster method. The faster method. Figuratively, the method is also faster because of how it approaches the task of initially qualifying properties. You can see that with a look at each of the letters and faster. F stands for floodplain and wetlands. A stands for access. Does the property have physical and legal road access? S stands for slope. This means how steep or how much change in elevation there is to the property. Is it too steep to be buildable, for example? T stands for two or more comps nearby. You want to check to make sure you can find some comps in the area not only to assist you with valuing the property, but to determine if there is demand in the area. You also want to check the treasure's website and make sure they're not significant back taxes that may be a deal killer, especially in these lower end cheap properties. E is for exit strategy. Is the property more likely to resell for cash or is it more likely to sell on payments? Who is the end buyer? Is it best suited as recreational or residential? Is there a market or avatar for this property? Finally, R. R is for resale. The idea is that you can hopefully resell the property for 3x your purchase price or more based on live comps. In this property value range, ROI is necessary. After qualifying the property using the faster method, you'll come to the due diligence phase and there should be a distinct line between the two. The reason this is important is you don't want to spend excessive time performing deep due diligence on the property prior to having qualified it. This is important, because I'm going to say this again. The reason this is important is you don't want to spend excessive time performing deep due diligence on a property prior to having qualified it. Due diligence for play number one, typically involves researching the chain of title, ensuring the seller you are speaking with is the owner of record, making sure that all owners on title are alive and able to sign, and checking to make sure there are no leans or significant back taxes on the property. This isn't meant to be a comprehensive due diligence checklist, just some tips to familiarize you with the process. It's starting to sound like a lot of work. Well, I encourage you to offload this work to a title company, but at a high level the process from sending offers to acquisition and land ownership really is as straightforward as we've just seen. Staying high level in the discussion, let's say a property looks good after due diligence and review of the proposed deal. At this point, you can complete the acquisition side of play number one, closing on the property. When closing land investors, especially those who are newer will often self-close. You know from earlier in the chapter how I feel about self-closing and how over time it created considerable and unnecessary stress in my working life. This is why I recommend to you and those I coach as well, that closing for play number one be handled through a title company. Using a title company will save you stress and time. Additionally, with a title company, you can actually set yourself up for self-closing later on the cell side should you want to. Self-closing later becomes possible because on the acquisition side, the title company will provide you with a guarantee that the property's chain of title is clean and clear. You're therefore in the clear on title searches when you turn around and resell the property. Speaking of selling, that brings us to dispositions, which is the other side of play number one. Dispositions. Dispositions kick off once we've acquired the property. On acquisition, we immediately relist the property for sale. This listing is done without a real estate agent, so it's what people in real estate refer to as a Fisbo or for sale by owner. Why no real estate agent? I have nothing against real estate agents, of course. It's only that in play number one, there's usually not enough profit in the deal to get help from other parties such as real estate agents. Allowing agents to take their cut when running play number one takes what was a moderate profit for you and makes it look downright anemic. In advising you to go the DIY or do it yourself, Fisbo route, I'm aware that this advice may seem at odds with previous suggestion to use the title company on the acquisition side. To clarify that, I would say if money is really, really tight for you in a deal on play number one, then you may need to skip using the title company itself close. If on the other hand, you can make it work, I would recommend closing with the title company on the acquisition side and viewing this as your one big inevitable expense. View it as a sunk cost for doing the deal and then plan around this expense. This view would treat the cost of the title company and the closing is comparable to fees in a local trade association, for example, when running a business. In each case, you just kind of accept it grudgingly that it's the cost of doing business and then you plan accordingly. Sure, in the case of trade associations, you may be able to get by and find clients or customers without being a member, but membership in the association, whatever happens to be. Just makes client and customer acquisition so much easier that you're willing to pay the association's membership fee. It's no different with title and closing on the acquisition side in play number one. Now let's refocus on dispositions, aka the sell side. You have two options for how your buyer, the one who ultimately buys the property you're flipping, will pay for it. Your two options on payment are cash and seller financing. Generally speaking, deals in play number one typically work well when selling with seller financing. This is because seller financing creates a larger buyer pool at the price point for deals in this first play. Now what price points are we talking about? Here's an example with actual numbers and illustrates what seller financing looks like in play number one. Suppose you buy a piece of land for $3,000, then you resell it for $9,000. This is a terms deal, aka a deal with seller financing. For the deal, you will be charging your borrower and interest rate of somewhere around 10%. After you collect a down payment of 10% to 20% of the sales price. The note length is based on the buyer's needs, so you're asking them what payment they can afford and for how long. Note length is usually measured in months since payments made by the borrower are made monthly, as they would be with a car loan or a mortgage. You do have or still have a minimum monthly payment amount. Most payments will be at $150-$300 per month, depending on the length of the note. Only $150-$300 per month are you surprised by the dollar amounts. Well these amounts reflect the buyer pool. The kind of person who's typically attracted to the deals in plane number one. Your buyer pool for this deal type will be less sophisticated. Less sophisticated doesn't mean this set of buyers has yet to experience the finer things in life like whiner impressionist paintings or quarter clothing, right? Personally I'm no expert in any of that stuff either. Less sophisticated just means that the buyers in plane number one generally put down a smaller down payment amount. Furthermore you can also expect 10 to 20% of these less sophisticated buyers to default on their monthly payments. Even if the buyers themselves have the money on time you may still run into issues with their payment methods. The credit cards you have on file for less sophisticated buyers often fail and these buyers may not always have checking accounts. Given those negatives why bother with less sophisticated buyers? Because they're an integral part of plane number one and plane number one is a very repeatable play. One which makes a good starting point for a lot of investors especially those who are self-funding their deals. Well we're on the subject of payments and notes let me offer you another piece of advice. This comes as one of my don'ts. A set of things I retunally advise my students against doing at least if they want to have any long term success in the land business. Do's and don'ts for plane number one. Here it is don't charge 0% interest. That's a mistake since you may decide to sell your note portfolio later on. If or when that day comes you'll need interest rates of 9 or 10% or higher to have any shot at selling your note portfolio without having to give a huge discount. I've also heard firsthand from an account that it's probably not cool from a legal standpoint to offer 0% interest. It turns out the US government and federal reserve are not big fans of private individuals lending out money at an interest rate below theirs. Make sure you're therefore charging market rates on interest which typically hover around 9 to 11%. I'm not saying it's illegal to charge 0% I'm just saying it can raise some eyebrows and why raise those eyebrows when we can just charge a market rate of 9 to 11% interest. One another don't. I've got plenty of them to share along with do's as well. To farther flesh out our discussion on plane number one the micro flip play here are a few quick ones. These should come as a review to you from reading the earlier sections of the chapter especially when we spoke on how to pick a market. The advice rings as true now as then so please take them to heart. Don't target counties with high parcels on market and low sold before sale ratios. Stayed it more simply don't target areas with an over-supply of land listings with long days on market which indicates a low demand. Do target areas that are cookie cutter and like kind like size properties. Three don't target areas with high variance in price or lot type or size. Four don't allow yourself to get trapped in making a career out of this play. Play number one the micro flip play. With the last don't above your advice against making a career out of play number one. Oftentimes land investors who focus exclusively on play number one the micro flip end up finding themselves on an endless treadmill to nowhere and their entrepreneurial experience looks a lot more like self employment than being a true business owner. In like manner we're not going to make a book out of play number one either there are six more plays to discuss all of which form collectively the essence of a successful land investing career. Before continuing to the next play play number two here's an executive summary around play number one. I call it an executive summary because it's a brief statement on the essentials for taking action and play number one. Executive summary of play number one the micro flip play. Your executive summary is organized around five essentials mindset skill set capital connections and tools. Let's start with mindset mindset. To take action and succeed in this play you need to have a take it or leave it mindset. This means approaching sellers with an attitude that they'll either take your offer or they won't. It's really that simple and adopting such an outlook allows you to be very efficient in your outreach. This in turn spares you from deep involved negotiations allowing for a wash rinse repeat play. It's the kind of play you can run many times per year especially given the lean net profits to be earned. Skill set. Those who succeed in play number one have the skill of being able to effectively process inbound leads and then qualify properties. Qualifying properties means these land investors can quickly efficiently and repeatedly determine which properties are worth acquiring flipping and which ones are not. Identifying new areas and being consistent with your marketing campaigns. Both the volume or the size of your campaign in the interval at which your market your list to. These are critical skills to focus on with this play. Capital. Play number one doesn't require substantial sums of money. Properties in some markets can for example be purchased for less than a thousand dollars. This indicates that the capital requirements for play number one are incredibly low. What's lower is the barrier for entry? It explains too why this play is often run by people who are just starting off in our self-funding. Also where capital is concerned there's typically not enough in the deals to leverage a capital partner. Most funders won't want a fund play number one type deals either because of both the seller financing aspect the funder wants to get paid immediately and the fact there just isn't enough meat on the bone. When I say there isn't just enough meat on the bone what I mean is that it's much easier to split a watermelon than a grape and in this case with a land deal of this insufficient size it's like you're trying to split a mustard seed. Connections. A title company is your main connection for successfully running play number one. The company via your rep working there will assist you in closing the deal on the acquisition side. You may choose to self-close though in which case a title company wouldn't be necessary. Due to slim margins on these deals most educators advise investors to self-close on the acquisitions. I disagree and I strongly recommend closing with title on the buy side. Self-close or not you definitely won't need connections with any real estate agents in order to succeed at play number one. The profit margins in this play don't allow you to use them. Therefore connections are not a critical part of running play number one. A third-party note servicer is highly recommended to although most land investors running this play typically self-service their loans. I would encourage you to engage and leverage a third-party note servicer to collect payments for you. Tools. A data source and a mailhouse those are the two essential tools you'll need when executing play number one. The data source will be your means of pulling a list to market or mail to. Then the mailhouse will enable you to send offers. Take it or leave it purchase agreements via direct mail to the landowners on these mailing lists. Depending on your budget you may also bring in a live answering service. This would be a third tool to employ in play number one. It's not a requirement however if you're looking to keep your costs down. Should that be the case you can always answer your own phones or send them to voice mail as sellers call in responding to your offers. Another non-essential tool a nice to have would be a land listing website such a site would allow you to post your properties when you're selling them. As with an answering service this too is not mandatory. In the case of a website you can just as easily sell your properties through social media or Fisbo listing sites like land.com or zillow.com. A CRM or customer relationship management software and a follow-up system is also a critical part of play number one for capturing and converting leads. Since tools are ever changing as new technologies and companies pop up in the real estate investing space the best way to see our currently recommended tools is to visit the companion website for this book the land investors playbook.com and click on it. the Tools button. That brings us to a close to Plane #1, the Micro Flip. If you're interested in learning more about this play, please visit theLANinvestorsPlaybook.com. Onward to Plane #2.