Saturday, 20 June 2020

The reason some Klamath County landowners haven't paid their property taxes

It turns out that the reason is very simple:

That's right, they're dead!

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.

More next week ...
 

Sunday, 31 May 2020

Mail offers continuing to go out ...

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!

Sunday, 24 May 2020

A Pivot: Trying the "Dirt Rich" system

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!

Sunday, 22 March 2020

Working on getting bids from manufacturers for first product

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.



More next week ..


Sunday, 15 March 2020

Business Plan and First Steps

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!