ROUND TABLE—Buy Side Slowdown—Keeping The Intake Of Property Steady

Hey, it's Mark Podolski, the Land Geek for this week's roundtable podcast. By the way, I'm doing this completely wrong because I'm completely flustered for our opening and I'm jumping off in four minutes, and Tate is hosting this because I've got to jump off in four minutes. So in case you don't know who I am, it's Mark podolski, the land geeklandgeek.com, your favorite niche real estate website. On today's roundtable, which I'm jumping off, we've got Mimi Schmidt. Mimi, how are you?

I'm doing great today. How are you, Mark?

I'm great, I'm great. We've got the irascible Eric Peterson. Eric, how are you?

I'm doing great.

Great. And then I love it when you call me Big Papa. Tate Litchfield. How's it going, Tate?

I can't complain. Everything, you know, dog days of summer, hot. That's the only thing I can complain about.

It's hot. It's so dog days that Bear land, Aaron Scott, Todd, Jeannie, Warm Zaino cannot make the roundtable, so. And I've got to jump off to go on a podcast with Matt Theria. So I'm going to leave it to the three of you to delight and entertain and inform our roundtable listeners. So without further ado, have a great roundtable, you three. And actually, we'll see everybody next week. Happy July 4th.

All right, thanks, Mark. You will be missed. But who knows? It might be one of our most listened episode ever. I don't know, who knows? What do you think? But so we got some interesting topics that we're going to do today. We were discussing the podcast. Mimi and Eric and I decided we were going to take a little bit of a different approach, and we wanted to go over some recent deals that we've all had recently. But before we jump into the good stuff, Mimi brought up kind of a concern that a lot of people are having in this business. Go ahead, Mimi. What was that concern that people are feeling?

We talk fairly frequently about summer, about sales getting slow and how we deal with that. But I've heard people mention slow buy side, and so what can we do that we have a slow buy side inventory?

This is a good question. I mean, Eric, what about you? Have you seen a slowdown in the amount of properties you're able to acquire on a monthly basis?

I guess, I mean, yes, there has been a slowdown, definitely in response to the letters that go out. I'm seeing A smaller percentage of those come back either signed or as a counteroff or what have you. So I'm definitely seeing a slowdown there. However, I'm still, you know, buying pretty steadily. I'm not. I'm not really feeling it in terms of what I'm actually buying. So even though I think the response rate is lower, I'm still sending lots and lots of offers. I have raised prices in some areas to try and acquire more property. And, yeah, that's kind of where I'm at.

Okay, so let me ask you this, Mimi. Why do you think there's a slowdown in properties that are being purchased right now? I mean, are you seeing a slowdown.

In one of my markets? I actually have been considering getting out of it. I got a report from Zillow this past week, too, that said that its strength, market strength, is 9.4 out of 10. It's a sell market that kind of surprised me. But it's just a super hot market. Lots of competition. The prices are going up. What I found is that while my prices are going up, the people who are buying from me previously don't want me to charge them more. Right. So my margin is getting squeezed a little bit. But, you know, I should find new buyers, right, that will be willing to pay the higher price. But for my particular county, I think that's part of it, but I'm not sure that's it for everyone's county.

So why does this happen? I mean, I have my theory here on this, and, you know, I think it goes back to the fact that maybe a thousand or two thousand dollars, depending on what your offer is, doesn't mean as much nowadays as it did two years ago. The economy's booming. People are employed. They don't care about paying those. Those annoying property taxes. What else could it be? Eric, what are your thoughts? Why would there be a slowdown in the number of people selling property?

Well, I think it could be a couple things. And of course, I mean, this is just assumption, but I think during the summertime, people get busy. Vacation time is upon them. If they've got children, you know, they're home, they're just more busy. So I think there's a lot more distractions in the summertime, you know, so it's easier to ignore those things that come in the mail. And I also think that in general, the. The economy seems to be doing better, and therefore maybe people just aren't as concerned about getting some extra money right now. You know, they're doing all right otherwise.

Okay, that Makes sense. Mimi, what are your thoughts on that? Anything different?

I mean, no, I think it's a strong economy. That and competition.

Okay, so what do we do to combat this issue? Because, let's face it, if you don't have inventory, you're not making money. Right. So this is a problem that I recently experienced. Every land investor is going to have a carrying capacity of how many properties they want to have an inventory. And once you dip below that number, if you're me, you start to get a little panicked. You start to look around, and you go, I got to own land. Itis again, I'm falling into the trap of. Of paying whatever I have to to get more property. So the question is, what do we do when we run into a situation where we don't have enough inventory? How can you get that phone ringing again and accepted offers happening, Eric? I mean, you mentioned it earlier. You said you raised prices a little bit.

Mm.

How much did you raise them? I mean, is this. Did you. Was it a 40% price increase or about 10%? 10%? Yeah. Mimi, you said one of your areas, you're getting squeezed out, basically. How much have you.

My cost double. Wow. Right. So I was buying them for, like, 2200, and they want me to pay, like, four, six thousand dollars now. So, you know, if I can even get them for, like, 3,500, if I have to pay some taxes. So I do have to raise my prices, my sale prices. Instead of like, 65, 75 hundred, I need to be selling them for 10 grand, 12 grand, on terms higher downs, higher monthlies, so I can get my payback sooner.

Yeah.

And you know what? I'm prospecting in other counties, more so than I was before. It's forcing me to have more counties, which is what I need to be doing anyway. I just hadn't. So now it's kind of giving me that kick I needed.

Fair enough. Yeah. I mean, another thing that I'm doing is we're increasing the total number of offers that we're making. And I figure, hey, if I can get this adjusted acceptance rate due to the current state of the economy, well, if I need to get back to around a 3 to 5%, I need to increase my. The amount of offers I'm mailing by 30% or something. So that's one thing that we're doing. We're increasing offer amounts. We're. We're trying new areas. I mean, we're always trying to stay ahead of it, but sometimes these markets, they come in waves, Right? And at one Point, it might not be the right time to buy. And one of my areas that I work in regularly, I've been completely priced out of. I'm not buying land there at all because, like you said, the return's just not there anymore. So I'm not going to overpay for property. That's. I mean, that's a problem when she starts.

I'm really glad that you said that that happened to you, because sometimes you feel these things as an investor and you think it's just you. So if I see this happening to someone who's experienced as you, that makes me feel okay. It's not that I'm doing something wrong, does actually happen.

And here's the thing, Mimi. You and I, we're in this for the long run. So if you don't buy any property in this county for a year, 18 months, who cares, right? You can come back in mail and in two years and pick up right where you left off after a correction has been made. So that's my philosophy. I mean, the people that get into issues are the ones that overpay for properties. Then they start getting desperate, and I don't know. Then you lose control of the deal, in my opinion.

So I agree.

I don't know if any of our listeners are out there. Go ahead, Eric.

I just wanted to add. I mean, the other source for property that we haven't mentioned is, of course, wholesale, right? So many of us offer wholesale properties. And, you know, getting on those wholesale buyers lists, watching Facebook for those wholesale deals can be a good source of property. Now, obviously, you're going to pay more, but if you're running out of inventory because your offers aren't getting accepted, you know, it might be a good opportunity to bring your inventory back to comfortable.

Levels, which is kind of confusing because how come I can't get an accepted offer, but Mike can get, like, 30 of them, right? Is he just that much more charismatic than me? What's the deal? I mean, I'm a nice guy, but Mike Zaino, that guy's. He's always got inventory. I call him up, and it's like, hey, Tate, what's going on, buddy? I'm like, mike, I need some lens. Like, how much you want? Where do you want it? I'll get you anything you want, my bud. And it's like, what? I have mailed 5,000 offers there, and within 30 days, he's got inventory for me. I don't know.

Wow. Yeah. Hit him up for an answer on that.

Yeah, I don't know. I mean, he might make you buy him a couple drinks first, but that guy think it goes into his fault. Like, number one, his personality is contagious. Right? You get Mike on the phone and he wants to know about your kids, the sports they're in. And at the end of all of that, I was listening to him one time at a boot camp or a boot camp, and he was talking to this guy and he spent like 15 minutes with him, and at the end of it, he said, I'm sorry, so are you interested in selling your property or not? Like, he talked to the guy for 15 minutes without even bringing up the property. The guy was like, oh, yeah, I'll sell it to you.

Wow.

Mike Zano, for you, it speaks to.

Relationships, how important the relationships are. That's for sure.

No kidding. Well, if any of our listeners are out there and they're experiencing the same heartaches that we are, let us know what you're doing to adjust this to boost your inventory, because we're curious and if it's working for you, you know, share the wealth. But the next thing that we kind of want to discuss is something I enjoy doing. I think it's, it can be very motivating. And I'm still seeing. And a ton of sales happen, despite it being the dog days of summer, despite it being hot. And so I always kind of like to pick everybody's brains, especially on the round table, on a recent deal. So, Eric, in the last week or 10 days, what's been the best deal that you've had? What were the numbers? Where did it come from? Walk us through it. Because nothing will get you more motivated to sell land. And listening to Eric Peterson do it, I mean, if that guy can do it.

So I'm gonna go back a little bit further just because it's a little bit more of a unique sale. All right, so back probably a couple years ago now, I. I bought a property in a given county. I sold it for cash for about 260% return. Shortly thereafter, maybe, I don't know, six to 12 months later, the guy that I sold it to came back to me and said, I don't want this property anymore. I just got something else from my family, another property, and I don't need this one. So I said, okay, well, I'll buy it back, but I'm only gonna pay you half of what you paid me. And he sold it to me. So then I guess it was about three weeks ago now I resold that property on terms this time for about 330% profit. So I mean, give it up for Eric.

I wish I had like a soundboard here because that's the one thing we need to take this podcast to the next level. I need to have buttons, right? Like audience and like maybe like a car crash noise and like a cat or something like that, like meow every once in a while. Yeah, yeah. Wah, wah. But if I had a button, I'd be pushing the audience approval. Clapping, cheering. Because that's amazing.

Yeah, I mean that's a fun one.

Even if you held it sounds like you held it a little bit between the time he came back and the time you sold.

I did.

I had it for a couple months at least.

Yeah, congrats.

I'll take that deal all day long. That's kind of fun because that means you've sold the same property for cash twice or I guess cash once in terms another time. Right.

But nonetheless, I have no money in it. I mean really, because.

Yeah.

So you've made money both times. Yes. Love it. All right, Mimi, top that. Good luck.

Well, I can go with a more recent one, but it won't top that. All right, so I'm getting out of this one county I was talking about had the very first property I bought. Headlanditis, right? What? Land ownership items, whatever you call it. So over a little overpaid for it. And then I had a property in that area that was defaulted upon that came back to me and I had a woman called say, hey, I'm going down there this weekend, you have some property. And I sent her those too. And she called me up, she said, okay, I'm gonna buy them. So I paid, I probably paid 7 and I'm selling them for 12. But getting them out of the inventory. Right. The one that had been defaulted on, I already have some money on that. And this first one that I've been hanging on to forever, it's area that location wasn't as good as I've refined my subdivisions too. So I'm really happy to be done with them. And she gave me a fifteen hundred dollar down payment, which is biggest down payment I've ever gotten. So I was happy about that. And, and she's doing this. But then I've got a bunch of people right now that all want to start paying their loans off. So I was looking at my balance in my account this morning showing my husband, I don't know what it is this time of year. I've got a lot of people that are saying, I want to get this thing paid off and they're making double and large payments. So she's. And she has like a 32 month note. She's gonna pay it. She's paying it off this. So this week she'll make her first monthly payment on the first, it'll be the second. Right. Pay me $2,000. So I already sent her the invoice, so.

And it's bittersweet, isn't it though? Like when somebody goes and they say to you, you get that dreaded email, I want to pay my note off. And you're happy, but at the same point it's bittersweet, right?

Oh yeah.

There goes that passive income potentially. But you know, you can't. It's hard to turn away from that or be upset when somebody wants to pay. Cash.

Deposit a $600 check today. That's on a $282 note. Right. That wants to pay it. So yeah, I don't know what it is.

Love it. All right, well, I don't think I can top Eric's either. But a recent deal I had this last this week was we bought this property is a beautiful property in a new county. Actually we paid $3,500 for the property. I threw it up on Land Moto and I generated probably six or seven leads in the first 24 hours of it going out. It was insane. And from that one listing on Land Moto, I probably got 15 to 20 responses. And it had all these people telling me, yes, we want it, we want it, I'm going to make the payment, give me to the next day. And so I kind of created a little bit of a, you know, bidding more for it. I said, alright, well, you know, first person to make the down payment wins, basically. And I sent everybody a mass email and on that I included the terms, all the information and I sent it out. And within maybe five minutes of blasting that email out with a link via Geek, pay to make the down payment. I had $650 down payment plus a $250 doc fee. So it ended up being a pretty sweet deal. Plus it's going to be $325 a month for, get this, the next hundred months. So pretty awesome. It was a good deal. I mean, the best part about it is obviously it sold fast, but I did own the property for like maybe 45 or 50 days. So a little bit longer than I like typically. But I've got 19 backup buyers in case this guy defaults.

Gotta go get more of those properties.

I know. So I'm on the Hunt. But I thought, geez, thank you, Scott. Man, I don't know if I should be giving him a cut or something or what, because I got 19 people begging me for money. It was funny because after the one guy made the down payment, I had four people email me saying, hey, the links not working. It's like, you missed it, man. It was single use. And I responded to him, the guy who made the down payment, probably within 15 minutes. But I checked my email, I gave him a call, and I explained the process after he made the down payment. And I checked my email afterwards, and he sent me probably four or five emails saying, hey, did I get it? What's the deal? I made the payment. Did I get it? Did somebody else buy it? So he seems like he's going to be a good buyer. That was kind of, you know, my most recent win on the sales side, so kind of fun. But anyways, yeah, thank you. Well, I feel like, you know, it's been a short and sweet podcast, but I feel like we've covered a lot of info. Hopefully our audience will like it. It wouldn't be a good podcast without some sort of plug, right? I think that's what Mark typically does at this point. And what better plug than boot camp? I mean, boot camps coming up. Scottsdale, August 3rd through the 5th. If you're interested in taking this to the next level, you better be there. This is Mimi.

What?

This is number eight for you.

This is gonna be number eight. I'm so excited. And I love the Scottsdale boot camp. That resort is so beautiful. I remember sitting out at the bar, we were all, you know, networking, hanging out, and you could see the little hummingbirds coming and. And out in the sun. It was beautiful.

Yeah, it's a nice area. I mean, last year when I got in, it's right up in the. In the foothills there, and there's some pretty famous hikes that you can do in the area. And I remember there was a helicopter as I drove in. I guess some hiker thought it would be a good idea to go climb one of the peaks at midday and had to get helicoptered off the mountain, so. Wouldn't recommend that. I'd recommend you stay at the hotel, Sit by the pool, network. Enjoy it.

Didn't Mike Zaino go hiking? He went hiking and talked about being bitten by a javelina. Remember that? He wasn't. It was a joke. He wasn't.

But I was gonna say we need to just do, like, a podcast solely on Mike Zano. Like, the life of Mike. Right? Just have him talk because when he gets on this, it's hilarious. When he gets on, what is it called? The nightcap. He's hilarious. That guy's got more stories than anyone I know.

Yeah, he does.

So get to boot camp if you're thinking about, you know, whether or not you should go. The resorts beautiful. Mimi's gonna be there, Eric's there, I'm there, obviously Mark and Scott Zaino's there. You can probably get some good jokes and stories out of him. So it's fun. We have a blast. You're gonna learn a lot. You're gonna make some great friends. I think that's one of the best things about boot camp is I've made some really long, long lasting relationships and I'm really grateful for those people because they've really motivated me during times when I've struggled. So come to boot camp. Our community's amazing and hopefully we'll see you there. You guys ready for this?

Ready.

One, two, three. Let freedom ring. Oh, geez.

Yay.

I mean, it was all right, It's. I feel like we should do a redo just because this is coming out on the 4th of July, but you know, maybe we'll have Eric add some like firework noises again. This is the soundboard scene.

Yeah, right, right.

I'm talking to mark.

Happy 4th of July. Independence Day, everyone.

Yeah. Well, that was fun. Great podcast, guys.

Yeah, thanks. That was excellent.

So what's the plans for lunch, Eric? You sticking around today?

I already ate.

Oh yeah, you guys are all out of the country.

We gotta be talking about dinner out here.

Yeah, well, for me it's lunchtime and it's Tuesday so we'll probably go for some tacos. We got a great Taco street taco spot right up the street from me and they do 99 cent tacos on Tuesday and they are ridiculous. They're so good.

Excellent.

I love that place.

Just beef tacos or stuff.

They do like carnitas and chicken steak.

I had carnitas tacos for lunch.

That's my weakness. Carnitas, anything pork, like pork products, pork accessories. Bring it on, man. I love it.

We're all kind of meat minimalist. My daughter's even a vegetarian. Except for bacon and pulled pork.

I guess she's cutting out. She's leaving like the good stuff, so good for her. Alright guys, well, thanks for joining me today. Thanks to our audience. Please. Is it review rate and subscribe. Is that the right order there? Our podcast?

I think so.

All right, well do that. Do those three things in whatever order it is, because it really helps us. Great review.

Subscribe maybe.

Okay, well, do those things for us because it helps us. And if you're enjoying the podcast, let us know. We really appreciate those positive comments that we get and the feedback helps us keep going and, you know, hopefully we're bringing you some value. And thanks for listening. Talk to you guys later.