Close to 100% Closing Rates During the Real Estate Collapse?

We discovered this vista during a routine scouting trip. These views are not uncommon, and it’s one of the reasons we love what looking for remote, raw land to invest in.

Let me ask you a question.

What if you knew beyond a shadow of a doubt that a market exists for a piece of property…

And you knew that market exists because you had statistical evidence wrapped up in a database you’ve been amassing over five years…

But not only that a market exists, but you could invest in that that property at such steep discounts where risk approaches zero and the price you’ll sell at exceeds returns of 100%…

AND you knew with almost one hundred percent certainty you could sell that property…

Would you invest?

If you said yes, keep reading, because I’m going to show you how it’s not only possible (because I have a feeling you may doubt me) but also how you can profit off of it.

How Gmail Beat Entrenched Competitors

On April 1, 2004, the search company Google invited a limited number of people to use a new product they were testing.

That product was Gmail, an email service to compete against entrenched giants like Hotmail and Yahoo.

No it wasn’t a joke. They were serious.

Google offered users one gigabyte of space and the ability to receive up to 10 megabytes in a single e-mail—more than the free services of Yahoo! and Microsoft’s Hotmail allow for storage in an entire mailbox.

In addition, users could search emails by sender, topic or other keywords and organize them according to conversational threads.

This was a first. And would prove a winner.

How Google came to this decision is instructive: Google co-founder Larry Page said the idea to launch a service had emerged from a complaint lodged by a user of the search engine who was frustrated by her email service.

They were listening to their customers. And building and delivering the products they wanted.

But Google didn’t stop there. Gmail remained in beta for the next three years. Why? They were watching to see how people used Gmail and listening to their suggestions. Based on these observations and suggestions, Google tweaked Gmail.
The product only got better. And more appealing to the public.

On July 2009 Google upgraded Gmail from beta. It proved to be the superior product and it was pretty much near perfection because of Google’s use of the beta paradigm.

That paradigm—launching an imperfect product early and tweaking it often based on user behavior and suggestions—gives companies the ability to build a superior product based upon the needs and wants of customers unlike the old paradigm—developing and building a product based upon assumptions and opinions of what customers want.

And it’s that paradigm, along with another Silicon Valley innovation, that allowed us to succeed in the collapsing global economy when the old paradigms weren’t. Let me explain.

Do Not Trust the Real Estate Brokerage Model—Ever

A couple of investors sit back and reflect in one of our cabanas during an investment expedition.

Go back about six years with me to the real estate boom. Anybody who was in that business during that time knew you never had to sell a piece of property…it simply sold itself.

But those days are gone.

And so is the brick-and-mortar broker model that operates on driving clients around to view 10-15 properties, and praying they come across one the client will buy.

Our model, on the other hand, worked ridiculously well during the meltdown while our competition collapsed.

For example, before the bust there were 17 brokerage offices in the town that Park lives in. After the bust, there were four. And because Park personally knows all those brokers, he can tell you that they are struggling to keep afloat.

Why did they fail? Horrible closing rates.

In the boom times, horrible closing rates got the job done. Not now.

And when these brokers spent all their money on advertising to drive a prospect around whom never bought—business got expensive and frustrating in a hurry.

What You Need to Do to Get High-Closing Rates

How did we manage to succeed when so many other people were failing? When the market crashed, we understood three obvious, immediate things:

  1. We needed to sell the property we invested in
  2. We needed to do it with minimal additional investment into the property
  3. And we needed to do it quickly

Before I tell you our secrets let me say this: when we opened up our Playa Burica property for sale, everybody who came down to Central America already made up their mind on the property they wanted.

When we went to sell Phase 1 of Playa Burica, we quickly sold out. But it wasn’t easy. We were still learning the needs of the buyers and refining the product positioning.

As the supply of property dwindled and the better properties were picked over, selling property became a little more difficult, but we still managed an 85% closing rate, which is still good.

So what’s the secret to our success? For one thing, we have tremendous focus.

For each piece of property we would build a niche website targeted to specific lots. When the target audience arrives at the property, our only task was to get them to decide when they were going to buy because at that point we’ve already groomed them for this particular property…without them actually even knowing it.

That means we don’t have to show them 10-15 different lots. They’ve already picked the one they want. In fact, they’ve put down $1,000 to have an option to choose that particular property.

But that’s not all.

The Unusual Source of Our Closing Rate Secret

Park and a client determining the location of a planned building.

Park and I aren’t shy about it: we are geeks. We are technology geeks. We are marketing geeks. AND we are business geeks. That’s why we like to follow what’s happening in Silicon Valley.

As you know lots of technology innovation comes out of Silicon Valley [Google, for example]. But did you know there’s also lots of business practice innovation coming out, too?

One particular business practice is in the arena of customer development. It’s called the “product-market fit” and because of technology like the Internet, the cost of testing the so-called “product market fit” is approaching zero.

All “product market fit” means is creating a product for a segment of customers who want that product badly—and getting it in front of them. Think Gmail. You have product-market fit when you have people giving your money for your product. That’s validation.

The core takeaway is that most startups fail not because they don’t manage to develop and deliver a product to the market. They fail because they develop and deliver a product that no customers want or need.

Google developed a product customers wanted and succeeded with Gmail.

Now, think about the broker model versus or model. Think of their results in this catastrophic market collapse and ours…
Need I say more? But how did we get there? Here’s how.

The Nitty-Gritty of Product-Market Fit

Like in almost all other areas, we are relentless and meticulous about our research and our data. We measure every significant point of the sales funnel to make it the most efficient and profitable funnel out there.

We test a “Minimum Viable Product” by putting it in the market place…having a mechanism in place for getting feedback from real live customers…modifying that product based upon user behavior and suggestions…and repeating the process until we have that product/market fit.

It’s almost as if we’ve eliminated people who don’t qualify up front and our sales funnel only attracts the right person for the product.

We’ve learned where to find our customer, what that person likes and how they like their products packaged. We know this because we watched and listened to him. And we are constantly tweaking their profile and refining the sales funnel based upon their feedback.

That made us agile and allowed us to survive the economic downturn. It’s also what’s helped us build a database that tells us that a market exists for the property we are investing in and selling. And it’s why I can make the strong promise I did in the introduction.

Think about This Before You Invest in Raw Land

I understand there is probably a few of you who are out there investing in Central America property without us. If that’s the case, I hope you’ve considered how you’re actually going to sell your investment property.

Anybody with money can invest. Selling it is a different story.

Sadly, brokers do not have the same investment goals as you do. In fact, once you invest in the property, more than likely your relationship with them is over.

Not so with us.

Our needs are in line with your investment needs because our profit is tied up in the liquidation of the property. How about that for motivation to figure out the best way to sell property quickly and efficiently?

For each lot we would build a landing page. And then for the mini-website for each lot we would add videos, articles and blog posts, building a virtual wiki-page for that lot. In time it becomes an entertainment channel that pulls buyers in—and keeps them there.

One of the ways we know this is that buyers will come out to visit the property and know it better than we will. That’s because they’ve watched the videos, read the articles and followed the blog posts so closely they’ve become, in a sense, masters of that lot.

It’s this kind of information that allows us to achieve 100% closing rates with property buyers. We know the market better than the market knows itself.

The beautiful part? From knowing the true prices of property to knowing who will buy that property and when, we’ve carved out a competitive edge over our competitors in Central America that will never lead to trouble. Only profit.

So, if you’re interested in more information—especially about investing in our newest project—give me a call at 888-436-7198. Call me with questions or comments. Looking forward to hearing from you.

Until then, I’m heading out to look at properties,

Josh Linnes
Emerging Terrains

P.S. If you haven’t already done so, get a copy of our Playa Burica case study to see how our projects work. You’ll get the nuts-and-bolts on the property, situation, our strategy and the results. Get a copy now.