Notes - Land Investors Playbook

September 15, 2024

Chapter 1: The Micro-Flip Play

Hitting Singles

• Play #1, called “the single,” focuses on "hitting singles" rather than taking risks and aiming for "home runs" (deeper, more sophisticated deals).
• The goal is to invest a small amount of money and double or triple it, aiming for a profit of $1,000–$5,000 per deal.
• This play typically requires self-closing and limits the ability to afford outside help or support, potentially leading to an experience resembling self-employment more than being a true business owner.

Advantages Of Play #1

• Greater margin of error in valuation or offer, allowing for mistakes of around 10% (e.g., offering $5,500 instead of $5,000 on a $20,000 property) without jeopardizing the deal.
• "Cookie cutter" aspect, making it easy to compare parcels of land due to their similarity.
• Desert properties exemplify this "cookie cutter" aspect, as many lots, often around one acre, are similar and located in "paper subdivisions" or "zombie subdivisions."
• These subdivisions, often created in the 1960s with promises of future development, remain largely undeveloped, with many lots still trading at prices similar to or only double or triple their original price.

Marketing, Offers, and Due Diligence

• Successful land investing, regardless of the play, requires a focus on sending a large volume of offers to reach a statistically significant number of people, often thousands per marketing campaign.
• The offer amount is the most impactful variable in determining the acceptance rate, even more so than marketing tactics like handwritten letters.
• The book focuses on "neutral offers," which allow for negotiation based on the seller's situation and property information.
• Due diligence for Play #1 involves researching the title chain, verifying ownership, ensuring all owners are alive and can sign, and checking for liens or back taxes.
• Using a title company is recommended for Play #1 closings to save time and stress, and potentially setting you up for self-closing in the future.

Dos and Don'ts for Play #1

• Don't charge zero percent interest on seller-financed deals, as it may limit the ability to sell the note portfolio later and may raise legal concerns.
• Charge market rates on interest, typically around 9–11%.
• Don't target counties with high parcels on the market and low sold-to-for-sale ratios (oversupply of land listings with low demand).
• Do target areas that are "cookie cutter" and "like kind, like size."
• Don't target areas with high variance in price, lot type, or size.
• Don't get trapped in making a career out of Play #1, as it may lead to a self-employment experience rather than a true business.

Executive Summary of Play #1: The Micro-Flip Play

Mindset

• Adopt a "take it or leave it" mindset, approaching sellers with the understanding they'll either accept the offer or not.
• This outlook facilitates efficient outreach and avoids deep negotiations, enabling a "wash-rinse-repeat" approach.

Skill Set

• Developing a "nose for deals" is crucial, enabling the identification of undervalued properties through readily available tools and resources.
• Negotiation skills are less critical in this play due to the "take it or leave it" approach.

Capital

• Minimal capital is required, although having enough for earnest money deposits, due diligence expenses, and closing costs is essential.

Connections

• A title company serves as the primary connection, assisting with closing on the acquisition side.
• Self-closing is an option, eliminating the need for a title company.

Tools

• A data source for identifying and researching properties is necessary.
• Marketing tools like direct mail software or a calling service are needed for outreach.
• A CRM (customer relationship management) software and follow-up system are also vital for capturing and converting leads.

Chapter 2: The B.O.S.S. Play

The B.O.S.S Method

This chapter introduces Play #2: The B.O.S.S. Play which encourages a shift in mindset from the previous play. The acronym B.O.S.S. helps investors to remember the key shifts in this play, and each letter will be explained throughout the chapter.

Bigger Deals

The "B" in B.O.S.S. stands for "Bigger Deals." Play #2 targets properties with higher market values than Play #1. While Play #1 focuses on "micro-flips," Play #2 aims for "bigger deals" to generate more significant profits.

This shift to larger deals is analogous to moving from the shallow "breaker waves" of Play #1 to the deeper ocean of Play #2, where investors can achieve greater financial success.

With Play #2, investors can expect to earn at least five figures per deal, with profits typically ranging from $10,000 to $50,000 minimum. In some cases, Play #2 deals may even yield six-figure profits.

Offer More

The "O" in B.O.S.S. stands for "Offer More," a phrase that carries multiple meanings crucial for success in Play #2.

• Volume: "Offer More" encourages investors to make a higher volume of offers to property owners. It suggests sending out 4,000+ offers per deal to increase the chances of finding motivated sellers.
• Offer Price Percentage: Play #2 necessitates increasing the percentage of market value offered. Investors should expect to offer between 40% and 60% of market value, compared to the 15%–35% range in Play #1.
• Shift in Mindset: The focus should shift from ROI (Return on Investment) to margin or net profit. Play #2 emphasizes maximizing profit rather than fixating on high ROI percentages. Offering higher percentages may result in lower ROI but significantly greater net profits.

Stop! Stop the DIY Madness

Both "S's" in B.O.S.S. represent the need to "Stop! Stop the DIY Madness." This emphasizes moving away from the "Do It Yourself" approach and leveraging the expertise of professionals.

• Stop Setting Blind Offers and Start Sending Letters of Interest: Play #2 encourages collaboration with real estate agents who have local market knowledge to avoid setting blind offers. Agents can assist with pricing and provide insights that help investors determine appropriate offer prices, allowing for a "give and take" approach to negotiations.
• Stop Self-Funding and Leverage Title Companies: Instead of handling all closing processes independently, investors should engage title companies on both the buying and selling sides of the transactions. This delegation streamlines the closing process and allows investors to focus on other aspects of their business.

Dos for Play #2

• Follow up: Track down every seller lead, regardless of its form (missed calls, text messages, voicemails, etc.). Diligent follow-up increases the chances of converting leads into successful deals.
• Understand and exploit market cycles: Recognize the different stages of the real estate market (buyer's market, seller's market, balanced market). Adapting strategies based on market conditions allows for optimized pricing and negotiation tactics.
• Maximize Profit: Aim to sell properties at or near full market value to maximize profit margins, especially considering the increased time and money invested in Play #2 deals.

Don'ts for Play #2

• Neglect Communication: Prioritize clear and transparent communication with all parties involved (sellers, buyers, title companies, etc.). Effective communication prevents misunderstandings, builds trust, and ensures smooth transactions.
• Cut Corners on Due Diligence: Never skip essential due diligence steps, even when pursuing promising deals. Neglecting due diligence can lead to unforeseen issues and financial losses. Always take the time to gather all necessary information.

Executive Summary of Play #2: The B.O.S.S. Play

The executive summary for Play #2 is organized around the five critical areas: Mindset, Skill Set, Capital, Connections, and Tools.

Mindset

Shifting from the "army of one" mentality to a "land commander" mindset involves viewing yourself as the leader of a team of professionals, including real estate agents, title company representatives, and others who support your land investing endeavors.

Skill Set

The skill set necessary for Play #2 includes the ability to identify promising markets, conduct thorough due diligence, negotiate effectively, and network with key professionals.

Capital

Play #2 emphasizes the importance of securing capital beforehand rather than scrambling for funds when closing a deal. Building relationships with potential investors or lenders ensures access to the necessary financial resources.

Connections

As a "land commander," investors must establish connections with essential professionals such as real estate agents, title companies, attorneys, land use consultants, and closing agents. These connections form a support network that facilitates smooth transactions and provides valuable insights.

Tools

The tools needed for Play #2 encompass those used for market analysis, property research, deal tracking, and communication. A CRM (customer relationship management) software and follow-up system are also critical for capturing and converting leads.

This chapter underscores the significance of transitioning from a DIY approach to collaborating with professionals, focusing on bigger deals, and offering more competitive prices to generate substantial profits in the land investing business.

Chapter 3: The Assignment Play

What is the Assignment Play?

The Assignment Play, also known as wholesaling, involves getting a property under contract and then assigning that contract to another land investor or builder for a fee. This strategy allows investors to profit without needing to purchase the property themselves.

Is It Cheating?

While it may seem like "cheating" to some, the Assignment Play is a legitimate and ethical strategy when executed properly. It benefits both the original buyer, who profits from the assignment fee, and the end buyer, who acquires a property below market value.

Speed and Money

The Assignment Play is attractive because it requires low capital and can be completed quickly. However, "fast" doesn't mean instant. The process typically takes 30–45 days due to the time required for title companies to conduct their due diligence and ensure clear title.

Role of the Title Company

In the Assignment Play, the title company plays a crucial role in providing escrow services. The buyer opens escrow with the title company and assigns the purchase agreement to the end buyer through escrow. The title company then disburses the funds to both the original seller and the assigning buyer.

"Meat on the Bone"

When assigning a contract, it is essential to leave enough "meat on the bone" for the end buyer. This means ensuring there is a sufficient profit margin for the investor taking over the deal. Offering deals with little profit margin can damage your reputation with other investors and limit future opportunities.

Assignment Fees

Assignment fees are typically based on a percentage of the property's planned sale price or full market value and can range from 5% to 15%. For example, a property worth $50,000 could yield an assignment fee of $2,500 to $7,500. Higher-value properties, like a $250,000 property, could result in assignment fees of $10,000 to $25,000.

Flexibility and Shifting Between Plays

Investors don't have to choose just one play. They can adapt and shift between different strategies depending on the deal and market conditions. Successful land investors recognize the importance of flexibility and adjust their game plan like coaches during halftime.

Prospecting for Deals

For the Assignment Play, prospecting methods like cold calling and text messaging are particularly effective because of their speed. These methods allow investors to quickly connect with potential sellers and get properties under contract.

Example Scenarios

• Example 1: An investor finds a property worth $10,000 and secures a contract for $5,000. They then assign the contract to another investor for a $2,500 assignment fee.
• Example 2: An investor gets a contract for a $250,000 property for $110,000. They assign this contract to another land investor for a $25,000 assignment fee.

Dos for Play #3:

• Follow up: Diligently track down every seller lead, from missed calls to signed purchase agreements.
• Familiarize yourself with legal documentation and requirements: Ensure you understand the legalities of property contracts and assignments. Consider seeking legal counsel for review and advice.
• Practice transparency and open communication: Maintain open communication with all parties involved to build trust and ensure everyone is on the same page.
• Set clear profit margins and stick to them: Establish your desired profit margins and avoid underselling to ensure consistent returns.

Don'ts for Play #3:

• Neglect communication: Failing to communicate effectively can lead to misunderstandings and jeopardize deals.
• Cut corners on due diligence: Thoroughly research properties to avoid potential legal or financial pitfalls.
• Get greedy: Ensure you leave enough profit margin for the end buyer to maintain good relationships and future opportunities.

Executive Summary of Play #3: The Assignment Play:

• Mindset: Adopt a "win-win" mindset, seeking to benefit both yourself and the end buyer.
• Skill Set: Develop strong communication, negotiation, and market analysis skills to identify and secure profitable deals.
• Capital: While the Assignment Play requires low capital, it's essential to have sufficient funds to cover earnest money deposits and potential holding costs.
• Connections: Build relationships with other investors, real estate agents, and title companies to facilitate deals and access opportunities.
• Tools: Utilize data sources, marketing tools (phone, direct mail, texting), and spreadsheets for lead generation, analysis, and deal management.

Phone as a Powerful Tool

The phone remains a timeless and powerful tool for the Assignment Play. Utilize it for cold calling, following up on leads, and building rapport with potential sellers.

Call to Action

The sources encourage readers to take action and implement the strategies discussed in the chapter, emphasizing the importance of going beyond just acquiring knowledge and putting it into practice. They also recommend exploring additional resources and joining communities for further guidance and support.

Chapter 4: The Seller Finance Play

Big-League Seller Financing

This chapter discusses the concept of "being the bank" through seller financing. The author clarifies that the focus is on "big-league seller financing," not small-scale arrangements.

Disclaimers are provided, stating that:

• State laws govern seller financing, and readers are responsible for understanding those laws.
• The author is not an attorney and cannot provide legal advice. Readers should consult with an attorney regarding seller financing and legal aspects of land deals.

Problems with "Minor-League" Seller Financing

The author argues against "minor-league" seller financing, focusing on properties with market values of $10,000 or less. The problems with this approach include:

• Lengthy time to reach financial goals: It takes a considerable time to originate enough notes to generate substantial monthly income.
• Short note durations: Notes on lower-value properties typically have durations of 2-4 years, leading to "note churn."
• "Note churn": As notes are paid off quickly, the investor needs to constantly generate new notes to maintain income, creating a plateau and potential decline.

Advantages of "Big-League" Seller Financing

The chapter advocates for "big-league" seller financing, targeting higher-value properties. The benefits include:

• Faster achievement of financial goals: Fewer deals are needed to reach a specific monthly income target.
• Longer note durations: Notes on higher-value properties tend to have longer durations, reducing note churn.
• Potential for note portfolio sales: High-quality notes with longer durations and attractive interest rates can be sold to other investors.

Qualities of "Quality" Notes

"Quality" notes are defined as those that are attractive to note buyers. They typically have:

• Duration of 5-15 years: This avoids note churn and provides consistent income for a longer period.
• Interest rates of 9-12.9%: Note buyers seek attractive returns.
• Down payments of 30-50%: Larger down payments reduce the risk of borrower default and allow the seller to recover a significant portion of their initial investment.
• Monthly payments of $250-$1,000: This range provides a balance between building a note portfolio quickly and attracting note buyers.

Seller Financing on the Buy Side

The author highlights the possibility of using seller financing as a buyer. This strategy involves:

• Purchasing a property with owner financing, typically at a discount and with a smaller down payment.
• Subdividing the property into smaller parcels.
• Using a partial release provision to sell the subdivided parcels individually without triggering the full payment of the original note.
• Potentially forcing appreciation through subdivision and generating profits.

Executive Summary of Play #4: The Seller Finance Play

Mindset

The ideal mindset for big-league seller financing is to:

• "Begin with the end in mind." Define your target monthly recurring revenue and use seller financing as a means to achieve it.
• Adopt a "big-league" mentality. Focus on higher-value properties and longer-term notes rather than small-scale arrangements.

Skill Set

Essential skills for seller financing include:

• Empathy: Understand the buyer/borrower's financial situation and motivations to structure deals that meet their needs and minimize the risk of default.
• Financial analysis: Calculate terms, interest rates, and payment schedules to ensure profitability and sustainability.

Capital

The required capital depends on your income goals. Larger income targets require more capital. The chapter emphasizes the potential for a "note rich, cash poor" scenario when down payments do not fully cover the initial purchase price. It advises having a strategic disposition plan that balances seller-financed and cash sales.

Connections

Crucial connections for seller financing include:

• Note servicing companies: They manage the collection of payments and handle administrative tasks related to the notes.
• Title companies: They can facilitate closings and often offer note servicing as well.
• Land agents: They can provide referrals to reputable note servicing companies and title companies.

Tools

Necessary tools for seller financing include:

• Financial calculators: To calculate loan terms, interest rates, and payment schedules.
• Spreadsheets: To track notes, payments, and overall portfolio performance.
• CRM (customer relationship management) software: To manage leads, track communication, and follow up with potential buyers.

Chapter 5: The Subdividing Play

This chapter of The Land Investor's Playbook challenges the common advice to avoid land investing because "they're not making any more of it". The author argues that subdividing, or splitting a single parcel of land into multiple smaller parcels, is akin to "making more land" and presents it as a highly profitable and overlooked strategy in the land investing world.

Types of Subdividing

The author distinguishes between two types of subdividing:

• Major subdividing: Involves large-scale land division and the development of infrastructure, utilities, and amenities. This type of subdividing is not covered in the book.
• Minor subdividing: Involves smaller projects that split land into five or fewer pieces. This type is cheaper and faster, typically requiring little-to-no improvements. This is the focus of the chapter and the author often refers to this strategy as "minor land divisions, major profits" because minor subdivides can force appreciation of 100%–200%.

Terminology

• Parent parcel: The original piece of land being subdivided.
• Child parcel: The smaller parcels created after subdividing the parent parcel.
• Road frontage: The length of a property that borders a road. This is crucial for subdividing as it dictates the number and size of child parcels that can be created. Having road frontage on multiple sides of a property offers greater flexibility in subdividing.

The "Why" of Subdividing: The Pizza Analogy

The author uses a pizza analogy to explain the profitability of subdividing. Just as a pizza place earns more by selling individual slices than whole pizzas, a land investor can realize greater profits by selling smaller parcels than a single large parcel.

Advantages of Subdividing

• Higher profits: Subdividing allows investors to sell multiple parcels, increasing overall profit compared to selling a single large parcel.
• Market adaptability: Subdividing helps investors navigate seller's markets, where inventory is scarce and prices are high. By creating more parcels, investors can multiply their returns in a competitive market.

Case Study: Johnny

The author presents a case study of a student named Johnny who successfully implemented the subdividing play. Johnny purchased a 14-acre property for $50,000 and subdivided it into four smaller parcels. This minor land division increased the property's value by $122,000, while the subdividing cost was only $14,000.

Reasons Why Subdividing Is Not More Popular

• Fear factor: Many investors perceive subdividing as complex and daunting, deterring them from trying it.
• Confusion over terminology: Many associate subdividing only with major subdivisions, unaware of the less intensive minor subdividing option.
• Lack of capital: Investors often assume that subdividing requires significant capital, failing to recognize the affordability of minor subdivisions.

Implementing the Subdividing Play

The author provides a step-by-step guide for implementing the subdividing play, which involves the following steps:

1. Prospecting for Properties to Subdivide

   • Identifying Subdivide-Friendly States: The author provides a list of states that are generally more receptive to subdividing and development, such as Idaho, Iowa, Wyoming, Nebraska, Arizona, the Carolinas, Tennessee, and Texas. Conversely, states like California, New York, Illinois, Connecticut, Washington, and Oregon tend to be less accommodating.
   • Analyzing Price-Per-Acre: This involves understanding how the price per acre changes as the parcel size decreases. The goal is to identify areas where subdividing would result in a significant price increase per acre for the child parcels, justifying the cost of subdividing.
   • Considering Proximity to Metro Areas: Properties located within a reasonable commute distance to major metro areas are generally more desirable. Proximity considerations can vary depending on the intended use of the subdivided lots.
   • Clarifying Subdividing Ordinances: Instead of avoiding areas due to confusing ordinances, investors should actively seek clarification from local authorities or land professionals.

2. Building Your Marketing List

   • Utilizing Data Sources: Various data sources can help investors locate potential subdivide candidates based on criteria like acreage, land use codes, and ownership.
   • Implementing Marketing Strategies: Similar to other plays, marketing for subdivide candidates involves strategies like direct mail, cold calling, and texting.

3. Making Offers:

   • Blind Offers: For hyper-targeted micro areas, the author suggests using blind offers, gradually increasing the offer percentage in subsequent campaigns.
   • Letters of Interest: For county-level marketing, letters of interest are recommended to gauge seller motivation before presenting an offer.
   • Offering More: When subdividing, investors can offer higher percentages of market value due to the value-add potential. Offers of up to 75% or more are not uncommon.

4. Qualifying Subdivide Candidates: This involves evaluating the property's features like improvements and road frontage, and examining surveys or plats for detailed information.

5. Platting Requirements and Exceptions: Understanding local platting requirements and exceptions is crucial for subdividing. The author highlights several key points regarding platting:

   • Not all states or counties have exceptions to platting requirements.
   • Exceptions can differ significantly, sometimes based on acreage, number of lots, or a combination of both.
   • Knowing the agency responsible for subdivision authority is key.
   • Platting exceptions can offer unique opportunities for minor land divisions. The author provides the example of Arizona, where divisions resulting in four or fewer parcels or those with all parcels exceeding ten acres are exempt from platting.

6. Working With a Land Agent: Consulting a specialized land agent is essential for subdividing. They can offer valuable insights into local regulations, market conditions, and potential pitfalls like flooding the market with too many similar parcels.

Dos and Don'ts for the Subdividing Play

• Dos:
  • Do the subdividing math to assess potential profits.
  • Engage a team of professionals, including a land agent, surveyor, attorney, and land use consultant.
  • Get multiple quotes from survey companies to ensure competitive pricing.
• Don'ts:
  • Don't obsess over city and county ordinances. Seek clarification instead.
  • Don't attempt to subdivide alone. Utilize the expertise of professionals.
  • Don't overpay, even though you are adding value.

Executive Summary

The executive summary outlines the essential elements for successful subdividing:

• Mindset: Embrace the idea of offering higher percentages of market value due to value-add potential.
• Skillset: Develop the ability to analyze properties, do the necessary calculations, and manage a subdividing project effectively.
• Capital: Consider self-funding, capital partners, or creative financing options like owner financing.
• Connections: Assemble a team of professionals, including a real estate agent, surveyor, attorney, and land use consultant.
• Tools: Utilize data sources, marketing tools, spreadsheets, and potentially a CRM for lead management.

Overall, this chapter positions subdividing as a powerful yet underutilized strategy for land investors to multiply their profits and navigate competitive market conditions. By following the author's guidance, investors can overcome their fear of subdividing and unlock its potential for generating substantial returns.

Chapter 6: The Portfolio Takedown Play

Introduction: Hidden in Plain Sight

This chapter focuses on The Portfolio Takedown Play, a land investing strategy that involves acquiring multiple properties from a single seller. Like a secret code hidden in plain sight, this strategy involves recognizing that owners with multiple properties are more valuable leads and require different marketing approaches than single property owners.

Identifying Portfolio Owners

Instead of targeting individual properties, focus on identifying owners who possess multiple properties. This strategy prioritizes quality leads over quantity, and requires a shift in marketing approach.

Example:

• One student successfully acquired 17 properties from a single seller.
• The total value of the properties was approximately $550,000.
• The student captured an estimated $332,000 in equity.

Prospecting for Portfolio Deals

Prospecting for portfolio deals differs from other land investing plays:

• Narrow your focus: Target owners with multiple properties.
• Broaden your reach: Expand your marketing campaigns across multiple counties and even states to ensure a sufficient number of target owners.
• Utilize data sources: Employ data sources that allow you to filter owners based on the number of properties they own.

Presenting Offers for Portfolios

Avoid immediately presenting a single, all-encompassing offer for the entire portfolio. Instead:

• Build rapport: Establish a relationship with the seller and understand their motivations for selling.
• Offer a ballpark range: Provide a price range instead of a fixed price to allow for negotiation and flexibility. The range should increase proportionally with the value of the properties.

Advantages of Portfolio Takedowns

• Reduced transaction costs: Closing on multiple properties simultaneously leads to significant savings on fees and expenses.
• Simplified execution: Title companies handle the majority of the acquisition and disposition processes, streamlining the workload for the investor.

Challenges and Considerations

• Due diligence complexity: Thoroughly evaluating multiple properties requires significant effort and expertise.
• Negotiation skills: Successfully negotiating with portfolio owners requires patience, rapport-building, and the ability to navigate complex transactions.

Working with Title Companies

Title companies play a crucial role in portfolio takedowns:

• Centralized closing process: They manage the acquisition and disposition of multiple properties, minimizing logistical challenges.
• Escrow services: They provide secure escrow services to protect both the buyer and seller throughout the transaction.

Dos and Don'ts for Portfolio Takedowns

• Do: Secure capital ahead of time to ensure confidence and strength in negotiations.
• Don't: Be intimidated by the complexity of the process. Seek guidance from experienced professionals and take a systematic approach.
• Do: Follow up consistently with sellers to build trust and maintain momentum in the negotiation process.
• Don't: Treat portfolio owners the same as single property owners. Tailor your marketing and communication strategies to their unique needs and motivations.

Executive Summary of The Portfolio Takedown Play

• Mindset: Prioritize relationship building and focus on understanding the seller's motivations.
• Skill set: Develop strong phone and negotiation skills, and become proficient in identifying and analyzing portfolio opportunities.
• Capital: Secure capital in advance to ensure confidence in negotiations and facilitate smooth transactions.
• Connections: Establish strong relationships with title companies, attorneys, and other professionals experienced in handling portfolio transactions.
• Tools: Utilize data sources that allow for filtering based on ownership of multiple properties, as well as tools for efficient communication and negotiation.

Chapter 7: The Trophy Hunting Play

Problem Properties

This chapter focuses on "problem properties" that present challenges for typical land investors, and how to leverage these challenges into profits by using "The Trophy Hunting Play." The author compares the strategy to uncovering a secret hidden in plain sight, similar to the code hidden within the Mona Lisa painting in Dan Brown's The Da Vinci Code. Many investors have encountered the components of this strategy, but they fail to recognize its full potential, just as viewers of the Mona Lisa overlook Da Vinci's code.

Defining Trophy Properties

"Trophy properties" are properties that have unique attributes and profit potential that set them apart from typical land investments. The author provides two reasons for using the term “trophy”:

• Uniqueness and Pride of Ownership: These properties are highly desirable and sought after, similar to trophies that people take pride in owning. They often possess unique characteristics, such as river frontage, which make them stand out.
• Literal Association with Trophy Hunting: Certain trophy properties, particularly those suitable for hunting, may have "trophy elk" on them.

Key Characteristics of Trophy Properties:

• Frontage: Often located on the waterfront of rivers or lakes.
• Profit Potential: High five-figure or even six-figure profit potential.

Challenges and Benefits of Trophy Hunting

Challenges:

• Manual Property Identification: There are no universal codes or databases to easily identify trophy properties, requiring manual effort to compile lists of potential targets.

Benefits:

• High-Profit Potential: A single trophy deal can generate earnings equivalent to an average land investor's annual income.
• Reduced Competition: The manual effort required deters many investors, creating less competition for those willing to put in the work.
• Wide Geographic Applicability: The strategy is effective across various counties and states.

Prospecting for Trophy Properties

The author recommends a three-campaign approach for prospecting trophy properties:

• Campaign 1: Identify Motivated Sellers: Send letters of interest, make cold calls, and send text messages to owners of potential trophy properties to gauge their motivation to sell.
• Campaign 2: Follow-Up and Valuation: After a 30-day waiting period, repeat the outreach methods from Campaign 1, framing the messaging as a follow-up to ensure the previous communication was received. During this waiting period, start estimating the full market value of each property on the list.
• Campaign 3: Hybrid Blind Offers: After another 30-day waiting period, send hybrid blind offers, acknowledging potential discrepancies in the desktop valuation and offering the seller an opportunity to counteroffer. This allows for flexibility in negotiations and ensures the seller feels heard.

Acquisition and Disposition

The author emphasizes the importance of thorough follow-up with prospective sellers in trophy property deals due to the substantial profit potential. Additionally, getting specialized land agent opinions of values is crucial for accurate pricing in trophy property deals, especially since the initial campaigns involve letters of interest rather than concrete offers. The author suggests obtaining two agent opinions of values, along with your own estimated value, to ensure accurate pricing.

Dos and Don'ts for Play #7

Dos:

• Identify Your Target Trophy Property: Define what constitutes a trophy property in your target areas. For riverfront properties, consider prospecting along the length of a river using data sources that allow for buffering or manual selection of waterfront parcels.
• Embrace the Extra Work: The Trophy Hunting Play requires manual effort and diligence, which can be a deterrent to other investors, giving you an advantage.
• Get a Survey: Invest in a survey to verify property boundaries, features, and potential issues.
• Consider Outsourcing List Creation: Delegate the task of compiling trophy property lists to virtual assistants to save time and effort.

Don'ts:

• Limit Your Thinking: Be open to variations in trophy property definitions based on the specific market you're targeting.
• Let Emotions Cloud Your Judgment: Avoid overpaying for trophy properties by maintaining emotional detachment and objectively evaluating their value.
• Assume a One-Time Success: Aim for multiple trophy deals by consistently applying the strategy.

Executive Summary of Play #7: The Trophy Hunting Play

Mindset:

• Shift from Volume to Value: Recognize that trophy deals are not about acquiring a large quantity of properties, but rather securing a few high-value assets.

Skill Set:

• Master Property Identification: Develop proficiency in using county GIS websites or other mapping programs to manually identify trophy properties based on specific criteria.

Capital:

• Secure Funding in Advance: "Dig your well before you're thirsty" by establishing funding sources well ahead of time, enabling confident negotiations and swift deal closures.
• Be Prepared to Pay More: Recognize that trophy properties often command higher prices due to their desirability and unique features.

Connections:

• Specialized Land Agents: Partner with agents who have deep knowledge of the local market and expertise in valuing trophy properties. Their insights are essential for accurate pricing and successful negotiations.

Tools:

• Data Sources and Mapping Programs: Utilize data sources and mapping tools to efficiently identify and analyze potential trophy properties.

This chapter provides a comprehensive overview of "The Trophy Hunting Play," a strategy for capitalizing on "problem properties" by identifying and acquiring high-value assets with unique attributes. The author emphasizes the importance of manual effort, specialized knowledge, and strategic partnerships in executing this play successfully.