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, 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!

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