Whether a first mail list should target small in-town lots or big rural tracts

Question

The first filter on a mail list is parcel size, and it is where a lot of new operators stall, because experienced people give opposite answers with the same confidence. Case for small infill lots, under an acre, inside a town or city limit: they are already served by water and sewer in many cases, zoning is written down and someone at the counter will explain it, and the buyer is a local builder doing the same thing over and over. Prices are low enough that a mistake costs hundreds rather than thousands. The usual objection is that fees are small, maybe a few thousand, and that other wholesalers already mail those parcels because they are easy to find. Case for rural acreage, 10 acres and up: fewer people mailing them, owners who genuinely forgot they own the land, and fees that can be five times bigger on one deal. The downsides are heavier. Access, water, septic suitability, and title that goes back further than anyone wants to read. Longer time to sell as well. The hard part is deciding which set of problems someone with no deals should be learning on. Small lots teach the process with cheap mistakes. Big tracts teach the actual hard parts, and learning process on parcels that have no hard parts may only delay the real education. Define beginner however you want when you vote. Assume someone 40 hours into county assessor sites with zero letters mailed.

raj_mehta14 · Accepted Answer

The distinction that makes this question answerable is that size isn't the real variable. Buyer depth is. A small infill lot in a town where three builders are actively putting up houses has a repeat buyer who prices in his sleep and closes on cash, so the job is finding a seller. Twenty rural acres has a scattered pool of individuals, a few splitters, and maybe a recreational buyer, so the job is finding a seller and then finding the one person who wants that exact tract. Two different jobs. So the real question is what buyer pool exists in the mailing area. Pull closed vacant land sales in the county if the state publishes sale prices, keeping in mind roughly a dozen states don't disclose them at all, in which case a land agent becomes the source instead. Compare how many small lot sales closed in the last 12 months against 10 plus acre sales. If the lots move and the acreage sits, mail lots. If the county has almost no in-town vacant lots left, the question answers itself. The cheap mistakes argument for infill holds up. Earnest money on a 12,000 dollar lot is a couple hundred dollars. But the title complications people warn about on acreage show up on old in-town lots too, and a smaller dollar amount is a reasonable place to learn to read a chain.

derekj19 · Answer

Not an investor, I look at this industry from the service side, and the thing that jumps out is that those are two different customers. The builder buying an infill lot calls you back the same afternoon because he needs inventory this quarter. The person buying 20 acres is buying a dream and takes four months. That difference alone would decide it for me.

dmitri_248 · Answer

@raj_mehta14's point about the chain is the one worth signing onto. Old town lots carry their own mess. Unpaid special assessments, a strip taken for road widening in the 1950s that nobody ever cleaned up in the description, sometimes a defunct plat. Small does not mean simple. Worth adding that whether a small lot is even buildable often comes down to a current setback and frontage ordinance rather than the zoning label, and that is a call to the county, not something filterable in a spreadsheet.

aliyah_b · Answer

Cost side, since nobody's said it. Mailing 1,500 pieces costs about the same whether the parcels are half an acre or 40 acres. If your fee on the small lots is 3k and on acreage it's 15k, you need five times the deals to pay for the same campaign. That math pushed me toward acreage and I'm still not sure it should have.

marcus_hale41 · Answer

Voting mixed, and my reason is diligence load rather than fee size. Every rural tract I've looked at needed access confirmed, a septic suitability question answered, and a chain read further back than I wanted. That's three separate people to call on one parcel. On a serviced in-town lot the utility question is usually one call. As a beginner you can only carry so many open questions before you start guessing, and guessing is what actually costs money.

jordan_ellis2 · Answer

I've been at this six months with no deals, so take my vote as a warning rather than a recommendation. I picked 20 plus acres because the fees looked better and I've spent the entire time learning about surveys instead of talking to sellers. If I started again I'd mail whatever gets me on the phone with the most owners fastest.

devon_pierce · Answer

@jordan_ellis2 that is the strongest argument in the thread and it is not really about acreage. A first campaign is for learning to have the conversation. Volume of seller calls is the goal, so mailing whichever pool has more absentee owners in the target county is the move, and in most places that is the small stuff because there is simply more of it.

Whether a first mail list should target small in-town lots or big rural tracts

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