Join Australia's most dynamic and respected property investment community

Cold calling landowners

Discussion in 'Development' started by benofbrisbane, 2nd Mar, 2016.

  1. benofbrisbane

    benofbrisbane Member

    Joined:
    25th Jun, 2015
    Posts:
    16
    Location:
    Brisbane
    Hi

    Does anyone have any tips on getting into contact with landholders re potentially buying their site.

    I have tried writing letters and have not had much success. Perhaps my letter isn't catchy enough? Any tips here appreciated. I have heard hand written letters have more success but have not yet tried it.

    Is it best to phone or turn up on their door step?

    Is there any angles or approaches that have worked for people in getting people to sell off market?

    Any tips greatly appreciated.

    Best of luck everyone with their developments.

    Cheers

    Ben
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,588
    Location:
    Sydney or NSW or Australia
    Buy the houses next door, be the worst owner/tenant, make the place less attractive for them to want to stay in the area. They will be glad to receive an offer.
     
  3. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Is that how Lakemba started off?
     
    ej89 likes this.
  4. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,946
    Location:
    Sydney
    Hand written letters are the key! My aunty bought her place that way in the early 80's.
     
    Leo2413 and Colin Rice like this.
  5. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    Change the wording.

    I have a template letter I can post up once Im in front of a non mobile computer :)

    Also got a great pdf property investment book that gives examples of how to attain off market sites amongst other practical info.
     
  6. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    I have not personally used these but a friend has with success.

    Sample 1:

    Dear

    I am sending you this letter in the hope that you might have been contemplating selling your property in the future.

    I am very keen to negotiate with you, without engaging real estate agents and their hefty commissions. As a sign of goodwill I will also incur all legal costs for the sale of the property should we come to an agreement.

    This is a serious and legitimate offer as I believe it will be a win / win for both of us. Please feel free to call me on my mobile number 0405 000 000 at anytime.

    Kind Regards



    Mobile Number xxx xxx xxxx

    Sample 2:


    Dear Sir/ Madam,


    My name is Joe Pro and I am writing to you about your property at 128 Perth Rd, Perthville WA.

    I will be frank; I am quite interested in discussing the sale and your future plans of your property with you as it may be of interest to us as a potential development site.

    I offer you this without even looking inside the home, so you don’t have the associated headaches of strangers walking through your home or preparing your home for valuations and inspections etc.

    Realistically, I can save you thousands of dollars in real estate commissions, marketing fees and renovations and will take the property as it stands today!

    I am a very motivated local developer and I’m searching for properties such as yours. If you wish to discuss this opportunity further please don’t hesitate to call me on my private mobile number at any time – 0410 000 000

    Sincerely,


    Joe Pro



    Mobile Number - 0410 000 000


    Property Developer
     
    Xenia, PacMan, thydzik and 1 other person like this.
  7. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    If anyone wants a copy of the property development eBook/course email me @ crice@cdrfinance.com.au and I will send you a copy;

    Residential Real Estate Development
    Made Easy
    Second Edition
    A Comprehensive Instructional Course For
    Individuals Who Want To Become Residential Developers
    Colm K Dillon
    Developer & Author
     
    elhnim and Xenia like this.
  8. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,596
    Location:
    Adelaide, SA
    I like the first one but not the 2nd. That would put dollar signs in vendors eyes.
     
  9. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    Most peeps will still get a few agents around to make sure they are not getting "duped". REA will probably say "I can get you way more" and then price condition the seller down 2 weeks later.

    Mitigant is to set up a meeting with REA and seller (without REA knowing) and set the record straight :) .......armed with a couple of bank valuations.
     
    legallyblonde and wombat777 like this.
  10. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    I guess this example would be better for a bulk letterbox drop.
     
    Leo2413 likes this.
  11. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    The typical response rate is very low with letterbox drops. I trialed it once for finance deals in my neighborhood as I did my daily walk.

    1500 dropped = 1 deal and that generated 1 referral to a neighbour a year or so later.

    So 1500 flyers dropped and 2 x 500k deals.

    Worth the effort imo but needs to be done in bulk.
     
    Leo2413 likes this.
  12. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    That would do me.
    If 1500 people responded I'd be screwed ;)
     
  13. thydzik

    thydzik Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    113
    Location:
    Perth
    what are peoples thoughts on putting hard figures in the letters.
    I would imagine people don't want to negotiate, seeing hard figures is a simple yes/no decision.
     
  14. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    The average Joe doesnt understand the hard figures and will add to the confusion me thinks.

    If you genuinely make it "all about them" and what they want out of the deal you will fair well, not loosing site that you need to make 20%+ profit as well.
     
    Leo2413 likes this.
  15. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,083
    Location:
    Perth
    Best to garner interest and then show them the figures in a face to face meeting.
     
    Leo2413 likes this.
  16. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Me: Gday Dulcie, I just wanted to catch up for a cuppa and some nice scones - and also KABLAMMO, presentation, $$$!
    Dulcie: You had me at scones darl.
     
    Bran, JacM, Hanison and 2 others like this.
  17. Rayan

    Rayan Active Member

    Joined:
    15th Dec, 2015
    Posts:
    37
    Location:
    Sydney
    Another option I am contemplating right now is to offer the owner a registered valuation of the property at your own cost.

    The valuation can then be used towards negotiating a realistic (i.e. non-RE agent inflated) price with the owner.

    Plus; for people who are not in the mind to sell initially, they may want to see what their property is REALLY worth and be encouraged to sell by the valuation versus your offer.
     
  18. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,841
    Location:
    Sydney
    @Azazel I reckon you just sweet talk your way into a sweet deal ;)
     
    Azazel likes this.
  19. ottg

    ottg Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    60
    Location:
    Perth
    I have tried cold calling on property owner before and what I found were:
    a. Often houses are tenanted
    b. If you find a willing owner/seller and start talking figures the next things is they are off to the nearest RE agent to confirm prices. The RE agent always say they can get a better price for them
    c. Ensure you know the historical sales prices for similar houses in the same area. Reports are available from RPData but also do your own homework.
    d. Now the best approach is to see the prospective seller then together with their local RE agent and ask to substantiate their so-called higher prices.
    e. However if you dont have a track-record/reputation or trusting relationship in the community you are going to battle to achieve this. Especially if the RE agent has been around in the area for a long time, which is often the case. Why would the owner/seller believe you and arrange such a meeting - this is the key.

    While it may work for some, my conclusion after wasting a substantial amount of time to attempt this, is to either use a buyer agent (which I havent tried yet) or go on adverts (because you then have a motivated seller) and pay a small premium. In the end its a numbers game and your due diligence & feasibility must show that you can make a profit based on your predicted capital cost or move on.
     
  20. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    I guess you just gotta think what you would do if someone knocked on your door.
    My 1st instinct would be to get rid of them as quickly as possible.
     
    Leo2413 likes this.