• John Frezza

5 Tips to Avoid Failure When Acquiring Land

Updated: Oct 12, 2021

5 Tips to Avoid Failure When Acquiring Land


5 Tips to Avoid Failure When Acquiring Land

Land acquisition is a necessary evil.


For the many 10+ hour days that I have spent cold calling sellers and researching land, I can tell you there are moments where you are full of motivation. You’re intentional with every minute of the day and it feels like seller’s almost enjoy receiving your calls.


Then there are moments where you get into the “why am I even doing this?” mindset. It’s hard to stay focused and you are more sensitive to rejection.


It happens to everyone.


Even top land acquisitions guy/gals in the country battle the same loop because they’re human.


But guess what, they pull through.


And although this post is technically about land acquisition, it starts with sales. One way or another, you have to convince the landowner that you are the right person to sell their land to. This may seem counterintuitive or backwards but in a seller’s market landowners have the power and that’s the world we currently live in.


  • It takes an average of 8 cold call attempts to reach a prospect.


So, what’s one tool you can use to propel your land acquisition efforts so that buying land is not like finding a needle in a needle stack?


Grit


5 Tips to Avoid Failure When Acquiring Land | Real Estate Rooky

Everything in this post boils down to consistently putting in effort over an extended period of time and pushing through rejection.


I’ve picked up some things along the way that have made me much more efficient. But land acquisition, like most sales, is a numbers and relationships game.


The five tips we’ll cover are:


1. Send More LOI’s

2. Don’t Talk to Seller’s

3. Everyone Has a Price

4. Follow Up

5. Hidden Value


1. Send More LOI’s


Every seasoned real estate guy that I’ve ever talked to says the same thing, “I could have bought xyz property back in 1000 years ago for 1 dollar.” Or “I remember when xyz property sold for 1 dollar back in 1000 years ago and today its worth a billion.”


Yeah, we get it.


The point is over a long period of time property tends to appreciate in value.


5 Tips to Avoid Failure When Acquiring Land

Don’t get me wrong, there are cyclical moments where we experience booms or corrections.

But over the long haul, property is steady. Most of the time, these seasoned guys say things like this because they passed on the opportunity.


Before moving forward, I want to be very clear in saying that I am not an attorney, nor will I ever give legal advice.


But simply put, if you want to be in a position where you don’t regret passing on great opportunities, send more LOI’s.


Have an attorney assist you in drafting a non-binding LOI so you can send them out when you are serious about a property.


You don’t want to be the guy/gal that gets the reputation for shooting blanks.


You do want to be the guy/gal that gets the reputation for pulling the trigger when they’re serious.


Word of mouth travels fast and your reputation is everything.


2. Don’t Talk to Seller’s


Now what does this idiot mean?


I mean put in the effort to find off market properties and don’t target properties already listed for sale.


Look, there is nothing wrong with setting a daily alert on all the big listing sites like Loopnet, Crexi, Zillow, Etc. for new properties that fit your criteria. But if you rely on these as your only source, then you’ll be paying top dollar for mediocre deals.


Every acquisition and investment guy/gal in the country has alerts set for the same properties. But they work for companies that have more money than they know what to do with and competing with them is a losing formula.


5 Tips to Avoid Failure When Acquiring Land | Real Estate Rooky

Properties that aren’t listed take a lot more work to buy but tend to have less competition. Owners of these properties need more convincing since they usually hadn’t thought about selling.


  • 91.5 million acres of farmland (or about 10 percent) are slated for ownership transfer in next 5 years. Only 21 million of these acres are expected to be sold to a non-relative.


Massive companies with tons of money have a lot of moving parts. It’s easy for them to get caught up in the day-to-day operations of a winning strategy.


We can capitalize on this by building real relationships with landowners in our target markets. Get to know them and be top of mind when they think about selling the perfect piece of property.


3. Follow Up


This seems obvious, right?


Every sales guru will say how follow up is extremely important, but still, no one does it.


  • 80% of sales require 5 follow-up calls after the first meeting. 44% of sales reps give up after 1 follow-up.


Following up with prospects or leads is much easier when you use a CRM or Customer Relationship Management software to input contact information and track conversations.

There are tons of CRM’s out there and each one has its pros and cons. Right now, I’m using Zoho CRM and it is mostly user friendly, but like any software it has its quirks. If you want to hear my 2 cents on the best real estate CRM’s, check this out.


Each time you converse with a lead or prospect it’s important to enter information about the property but It’s more important to enter information about seller and their possible motivations for selling.


Motivations for selling can be used as leverage in later negotiation.


4. Everyone Has a Price


“Price” doesn’t necessarily mean money.


When a person, couple, or family sells their property it’s a big decision.


Maybe the family has had the land passed down for several generations and it holds real sentimental value. Maybe this is the family’s primary residence and they would have to find a new home. Maybe the family buried loved ones on the property and by selling they risk destruction of the grave site or non-visitation.


Recently, I stumbled upon a beautiful tract of land in Central Texas that fit our company’s criteria perfectly for a new subdivision. The whole property had a gradual slope, was lightly wooded, located in a decent school district, and happened to be in a city where I knew they had capacity for water/sewer.


Naturally, I did some digging and found the sellers name with a couple of phone numbers.

On the first call, he answered, and we talked about his property. He was hesitant to sell, but it was a start.


We talked a second time, each call about a week apart, but it seemed odd because he didn’t remember much from the prior conversation. This didn’t raise too much of a red flag at the time because I’m a random person trying to buy the man’s land, maybe he did forget…


On the third call, a lady answered so I introduced myself. She explained how she was the man’s caretaker and he had recently been diagnosed with Alzheimer’s.


I was taken aback and probably apologized 5 times during that short call but by the end of it she still mentioned how they would be interested in selling at a more painless time.


These are real scenarios that can be overcome but must be approached empathetically.


When we’re buying land or property, it can be easy to forget that we’re dealing with people. The best thing we can do is be intentional when listening to sellers because identifying their pain point is half the battle.


5. Hidden Value


5 Tips to Avoid Failure When Acquiring Land | Real Estate Rooky

Finding hidden value in real estate is magical.


It can turn undesirable properties or land into cash cows.


Below is a short list of examples for where hidden value can be found in real estate:


· Adjacent Land

· Mixing Uses

· Change of Zoning

· Temporary Uses

· Adding Density

· Tax Credits

· Creative Financing

· Self-Storage


But the funny thing about finding hidden value is it often can’t be taught and it’s not intuitive. Sometimes it even comes spontaneously after a deal has been made.


So why mention it at all?


Some people in this world are born with an ability to vividly imagine the best that something could be when they are seeing it at it’s absolute worst for the first time.


If you are not one of these talented individuals, find one and make them your partner.


Several of the most successful people in real estate with this ability that I know also happen to be dyslexic. It might be coincidence, but maybe there’s a connection…


In his book David and Goliath, Malcolm Gladwell mentions “The Theory of Desirable Difficulty” where Gladwell points to the stories one of the most famous trial attorneys in the world, David Boies. David Boies Has dyslexia which has always been seen as a disadvantage making it difficult to read. But dyslexia turned David into an extraordinary listener helping him win major cases like Brady v. NFL and United States v. Microsoft Corp.


5 Tips to Avoid Failure When Acquiring Land | Real Estate Rooky

If you can train yourself to think creatively or have a creative partner, you’re 10 steps ahead on finding hidden value.


Conclusion


Land acquisition is not for the faint of heart.


It is filled with daily rejection and humbling experiences.


But if you want to build a lasting real estate business, acquisition is an important tool. Keeping active deals in the funnel through good and bad times will help you weather any storm. Real estate businesses that fail or stop growing forget to nurture the deal pipeline when times are good and have nothing to harvest when things slow down.


5 Tips to Avoid Failure When Acquiring Land | Real Estate Rooky

The easiest way to stay motivated is by doing a little each day and celebrating the small wins. I like to make calls, go to meetings, and send LOI’s for a few hours each day. If you sign a deal, there’s nothing wrong with going to the bar with your team!


What are your acquisition goals this year?

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