I had sent this old friend the previous post I made on the opportunity ... it turns out there are a lot of sources of money in the community. I rather bumbled around for the first 18 months I was working on this but now am hooked up with three different ones, and one other guy who emails me twice per week looking for deals.
The deal structures (all funders putting up 100% of capital in the deals; I just pay some ancillary expenses).
Funder A: 60% to her, 40% to me if she sells; 60% to me, 40% to her if I sell
Funder B: 50%/50% profit split
Funder C: 20%/80% her/me but I have to do all the selling
And a guy I started with that I got 40% of the deal ... that one just closed (the buyer paid off the note) and my final take was $1500. Before that I got $58 per month for several months.
I have two accepted offers (with buyers waiting) through funder B:
one bought for $2750, selling for $6750
one bought for $2000, selling for $6000
I get half of both of these, sometime in the next month, so that's another $4000 total later this month.
As I've been describing here, I'm trying the Dirt Rich system promoted by Mark Podolsky ...
To reiterate:
Send out direct mail to out-of-state property owners (i.e. don't mail to Colorado owners of Colorado land)
Offer 1/4 of the retail price
On responses at that price, list for retail price and offer payment over time
rinse and repeat
I just took the "Flight School" class where they give you an inside look at one of their guys who's apparently making $6 million per year doing this.
Some of the people doing this -- check Roberto. If he can do it, I can do it!
Unfortunately, I lost my computer job that I was using for startup capital for this, so currently a bit stalled on generating big profits.
For example, I "overpaid" slightly on some Colorado land: $2250 each for 5 acre parcels. (I mistakenly thought I saw a listing for $8800 or so; actually the more typical retail price is $5000 to $6000.) So: 120% and up profit!
I don't have the cash to buy these myself; I have one sold as "wholesale" where I made about $500 on the transaction. But this guy trusted me and just sent me the money up front and is waiting for the rest of the transaction on down, and most of the other land investors in the Facebook group won't do this.
That's where you come in! If you're looking to diversify out of the wild and crazy stock market:
I'm looking to raise up to $50000 (not all from one place, necessarily) to jump-start my results. I can offer any investor 50% of any profits I make using his or her capital. I have accounting set up on Wave Accounting and I can send you a report on this regularly ...
Interested? Leave a comment below with your contact info, or contact me however you'd like:
I have been doing "skip tracing" on bounced (invalid address) mailings I have sent. On one of these the new mail came back marked
DECEASED 5 years ago
So I started looking for more of these in the data and the records seem to have plenty, including one guy that I found this evening that died in 2014!
So I've started writing to these addressed to "Estate/Next of Kin of [the non-taxpayer]."
I just have sent out 4 of these the past few days, but I envision that this should return more like a 20% or better response rather than 3-5% for the normal "alive" contingent ...
We'll see!
By the way, my skip tracing tool is Whitepages.com, which works well and is only $5 per month for up to 20 searches.
I still have name/address/property records in the LGPASS queue, and so the mail continues to go out:
I haven't gotten any responses yet, though I'm told that 3 weeks is typical for the first response and I'm just coming up on the end of week 2.
Mark Podolsky and his Landgeek friends continued to do their daily Youtube chats and answered questions thrown at them, which is where I got this 3 weeks notion.
The other question I had for them was advice on starting to collect a buyer's list. I asked if I should mention my presumed upcoming properties from Klamath County to the Facebook Group that Landgeek has put together (and invites us customers to join) ... they said "go for it" ... and I did ..
And that part worked beautifully ... got 6 responses so far, all saying they're interested in my list of properties.
Other than that, I have my ducks pretty much in a row:
An LLC: Land Ho LLC, registered in WA
An Internet domain: landhowa.com (feel free to email me: mark@landhowa.com)
A minimal website: www.landhowa.com to be more fully featured next month when I can move my DNS service for this domain to Wix, which is what this service requires
Just one thing I'm missing: a business bank account for this LLC. But I have the forms to get this going:
So will do this tomorrow ... And report back next on any responses I get to this mail blitz that's going out!
When startups have trouble getting their first idea to work, often they "pivot" ... so since the economy has been shut down enough that I have yet to get a response from the cream manufacturer I was last speaking to and in the interim I read this book:
The idea (proven by Podolsky and this community he's brought into being doing the same thing):
Get the delinquent property tax list from a U.S. county (there are 3007 counties in the U.S. and all of them have this
"scrub" the list by removing all but raw land and then by getting the list into a certain format with certain fields and in "windows CSV" form.
this formatting step is only required if you want to avoid doing the key step yourself: mail out 15 or 20 offers per day to the out-of-state owners of these pieces of raw land!
the key to pricing the offers correctly: you offer 1/4 of the comparable sale value. So if the lot next door sold for $6000, you offer $1500
I bought Podolosky's "Investor's Toolkit", which is a ton of information on how to work his idea. The last 5 years he and colleagues have built tools that are essential (IMHO) for doing this ton of mailing. The most essential one is called LGPASS.
You get your "scrubbed" list into Windows CSV format, upload it to LGPASS and that's it! You have to set up an account with the company that actually sends the mail, Lob.com. Then it automatically goes out with preformatted letters and forms with my information merged into it ... for every record I upload at a rate I specify. The rate I chose was 15 per day, and since this is a 7-day-a-week process, I have 90 out so far:
And 105 by tomorrow, week's end.
Lob cost per item is something like 82 cents per item, so $86.10 per week. LGPASS is $197 per month. (Hard to even imagine printing and stuffing all those envelopes.)
The group has found that there's a pretty consistent response of 3 to 5 per cent acceptance on these offers going out; if you get > 5 per cent your price is too high and < 3 per cent price is too low. So if I am right in the sweet spot, in the next couple of weeks I should have 4 accepted offers from this week's mailing.
I bought lists from two counties, Klamath OR and Brazoria TX. They were poles apart:
Brazoria was $28.50 and very poor quality; looked like it was done by a poor high school student
Klamath was much better, but $200 for the privilege
So I picked Klamath, but it was still missing key information:
Legal description of the property
GPS coordinates
Fortunately Klamath has a GIS site that I learned how to "scrape" with Python and the Selenium package. This was a couple of days' work then had to run for several days to scrape down 1533 of the 14700+ that met my initial criteria: KLAMATH FALLS FOREST ESTATES HWY 66 ...
Finally about the community ... Podolsky has attracted a group that appears with him to discuss the business regularly (these days on Youtube and Facebook Live), for example:
Podolsky says "you don't have to invent anything; just do what we're doing." I'm trying a version of that, fingers crossed!
Our first product is antiviral "Thieve's Oil Cream" that we are working on getting bids for.
We've tried three manufacturers so far:
Formula Corp (local in our area!) ... but doesn't handle cream only liquid stuff more like shampoo
Vitelle Labs in British Columbia: too expensive if we are talking the same units ... there was some confusion in 'fluid oz' and liters and so forth.
Pure Source out of Miami ... need more detail on our formula for these folks to give us a bid.
I'll have the details that Pure Source wants by tomorrow, with any luck.
Finally, I'm working on a little online store that will be up within a few days at our existing domain www.healingbees.com ... If we can show sizzling sales from this it can help attract investors for the Amazon FBA project when we get to that step.
My wife and I are setting up an Amazon FBA (Fulfilled by Amazon) business. The products we plan to sell are:
Miscellaneous flavors of beeswax skin cream, the first of which is antiviral
One or more T-shirts
One or more polo shirts
Anything else we can think of that looks profitable
I came across this idea originally through a Youtuber named Shelby Church:
The person she interviews, Kevin David, is supposedly buying stuff from China and marking it up seriously; for example, buy a ceramic cup for $1 and sell for $20. (He also has some detractors on YouTube, but I wouldn't necessarily discount the idea just from that.)
In our case we have products that the market clearly demands; my Lovely Wife has been making this stuff in our kitchen for years and it sells quickly. One product, Thieve's Oil Cream, is specifically antiviral and should sell almost instantly in our current coronavirus-obsessed culture ...
(The New York Times just published an article on some "retail arbitrageurs" marking up masks and hand sanitizer hugely ... )
We have three possible ways of funding this business:
Bootstrapping: make enough cream in the kitchen, saving profits from that until we have enough to buy an industrially-made batch
Debt: borrowing the money we need to get a third party to make the products
Equity: giving a stake in the business in exchange for working capital for the first batch or two
The problem with the bootstrap approach is that it's probably too hard on my wife. It's completely on her with just a little tech support doing labeling and accounting and so forth.
Debt would be OK with us, but my credit score recently has been around 640, which is too low for some funding agents.
Equity: seems feasible if I can get someone to take a deal that seems reasonable to us.
An Example Equity Deal
We currently have a sole proprietorship called Healing Bees Company. For this new business, we would change it to "Healing Bees LLC" with some structure like:
Mark McWiggins 40% managing member, CTO
Kate McWiggins 40% chief scientist
Intrepid Investor 20% Your Name here ... working capital
Our Next Steps
We have just started to look for a manufacturer to make Thieve's Oil Cream and probably ruled one out (too expensive) and waiting to hear back from another one. We can probably sell a 150ml jar of this cream for $30, so we probably need a manufacturer to be able to produce them for $10 or less apiece.
A Sketch of Our Business Plan and Exit Strategy
When we get the two items mentioned above (manufacturing and funding) handled, we should be able to sell 1000 units per month pretty quickly and ramp up from there. With Amazon FBA, it's a "passive" investment that as long as we have a manufacturing contract and shipping set up to Amazon ... then we should be able to scale it to any level.
I've seen a couple of mentions of this company Viral Launch and as their beginners pricing seems doable we'll probably try that ...
The exit strategy: sell for $5 million or more within 5-7 years. (Intrepid investor: your $100,000 or less investment becomes $1 million, on top of the 20% profit you've been getting all along.)
Interested? Contact me at mark <at> healingbees.com ... Thanks!
