This episode documents the first week of a three-week absolute Tennessee auction for a problematic 25-acre property purchased at $90K, currently sitting at $10K with two bids and nine registered bidders, where 80-90% of bidding activity concentrates in the final 48 hours creating extreme outcome uncertainty.
Key Takeaways:
- Absolute auctions concentrate 80-90% of bids in final 48 hours Game theory dictates bidders wait until the last moment to reveal their hand, making week-one activity meaningless for outcome prediction.
- $75K exit equals damage mitigation, not success Breaking even at $90K is the goal, but $75K represents acceptable loss territory versus catastrophic sub-$50K outcomes.
- Spam every Facebook land group during auctions Approved posts across 20+ Tennessee groups plus organic engagement boosting maximizes eyeballs when marketing budget is zero.
Listen to the full episode for real-time auction strategy and the psychological toll of watching potential six-figure losses unfold.
(Podcast transcript below)
Hi, Chris over at Serious Land Capital, Vacant Land Funding Partner. Wanted to give you all an update on that absolute auction we’re running in Tennessee and the inherent uncertainty that process brings. So to catch you all up if you weren’t familiar or had heard me talk about this over the past few weeks, we had bought a
25 acre property that was actually split into three different Tax IDs One was roughly 16 acre that was the most premium piece from a characteristics perspective and then the other two pieces yeah, roughly four to five and a half acres each But they were all contiguous and
Had a couple inferior characteristics. The slope wasn’t the best. There is a power line going through a decent chunk of it, even near the road frontage. But we thought we were getting it at a good enough price to have a lot of margin baked in. This was also during more of a bull market time earlier in the year when we were considering investing in this.
Property obviously regret it now and we did not catch That the previous owner had tried listing this property twice within the past Year or maybe two years. I forget either way. It was recent without success At like just above the price that we had purchased it at so huge
issue there that did not come up. can hear in my previous podcast on how we would avoid that mistake in the future. I also wrote about it on my Sirius News newsletter. So ultimately, since we weren’t having luck listing it, we decided to go an absolute auction route, which as the name implies, there is an auction period for the property and
whatever bid is the last one remaining, that is the price that gets sold at. No reserve price. So, you we bought this property at, you know, 90K. So net of, you know, initial closing costs plus some, I don’t know, mailing fees and so forth that we had to do, you know, we’re probably in just shy of 95K. That would be our absolute break even. Plus if we account for allocable overhead, it’s even closer to probably 98K roughly.
to truly net break even on the property. And if only one person bid, luckily the first 50K of bids, you have to go by 5K increments. So like the lowest could be 5K, that’s still like a nearly 100K loss. it would be a catastrophic outcome if only one person bid. So the structure is that it’s a three week online auction and
The auctioneer running this, they’re one of the premier brokerages in central Tennessee. They’ve had a high degree of success. Like we would have to be their worst performing auction by quite a long shot to not at least break even on this property. And so far we are just over a week into the process. like a little less than two weeks to go.
And currently there are two bids. So we’re at $10,000 at the moment. Again, like I mentioned before, the bid increments, while they don’t necessarily force a floor, there’s an implied floor because you have to bid by 5K increments up to 50K and then 2K increments up to 75K and beyond that it’s $1,000 increments. So…
you know, if we really had to exit at 75K, yeah, it would be a loss for us, but I would consider this like, you know, it would not be a good outcome, but it would be better than a disastrous outcome. So it’s more about damage mitigation. So that’s really kind of the number I would love to at least break even on this, obviously. But if we had to eat a loss, like I’m glad they kind of picked 75K and we had indicated that.
Prior to starting the auction. It’s like hey if you can get us to that mitigate our loss as much as possible We should orient around that and Talking with the auctioneer. I mean it’s kind of similar to eBay right you when you think of Game theory and if you’re a bidder in any type of auction Especially if there is a lengthy auction period most people are gonna hold back on their bids because
you might have a number in mind, but if you’re just kind of monitoring the auction, you see, okay, if there’s no one else bidding, even if you’re really hot on the deal, you want to see if you can get it for the lowest price possible. So the auctioneer is really explaining, yeah, you know, pretty much every single auction, 80, 90 % of bids are only going to be coming in like the last 48 hours, maybe even the last 24 hours of the auction process. So, you know, we’re kind of sitting
With bated breath here Wondering. Okay. What type of results are we going to? Possibly get but it’s for the most part gonna come down to the wire to know whether we’re gonna eat a disgusting loss on this Moderate loss a minor loss or you know, potentially break even or even get a little bit of profit on it. We don’t know So, know in the meantime, I’ve been pleased the auctioneer he’s been doing a lot of boots on the ground just
canvassing local folks in the area to say, you know, we got an auction going, passing out flyers and so forth. Like doing, you know, he’s incentivized to get a 10 % commission out of this. Obviously the more he’s gonna, and that’s from a buyer commission too. So, you know, whatever that final bid price is, the buyer has to pay 10 % on top of that, which.
can naturally push down total outcome to the seller because the buyers will understand they’re paying an extra premium on it. But at least we’re not paying for it out of our own side anyway. yeah, mean, incentives are aligned from that perspective, but there’s only so much the optioneer can control there.
You know, his team has been pushing out various Instagram ads, Facebook ads. They’ve been pushing it on their respective handles on those sites. And fortunately they have like quite a lot. think they have close to 50,000 followers on Instagram. So, and the marketing has been beautiful. Very, very solid photos, advertising. know, it’s definitely more of a shoddy property.
But, you know, the marketing photos they took really show the bright spots that are part of this property. Plus there’s a confirmed sewer. you know, 25 acres that’s, you know, right within a smaller town, but has sewer access. Like that’s a huge, huge plus that beats out a lot of other rural properties. Very, very rare you have acreage that of that size that actually has direct sewer line access. So it possibly even has like development potential.
be a weird development, you know, there is the option for somebody who wants to take that pathway if they so desired. Um, and so, you know, those posts were getting a lot of attention and likes and, know, we’re not trying to sit on our hands either. So I had my assistant like, is my number one thing. I need to get a good result on this auction here. So.
Let’s take all their copy. Let’s take, know, share the post as necessary, engage with it, comment, whatever, who cares? know, these people know where they own it or not. I don’t think so. I just want to boost this stuff as much as possible. Let’s get on every single Tennessee land Facebook group, post the copy everywhere. A ton of those are just like filled with spam, but you know, you have to get approved for the posts and everything.
So we’re monitoring that within a spreadsheet just trying to keep like updates See which ones are getting the most engagement so we can try to bump them back up. Maybe even boost organically It could be worth it. Just get as many eyeballs as possible And in the meantime, know, I’m talking with the auctioneer every few days or so and He can monitor on the back end for the auction site. Okay, there’s only two confirmed bids so far, but nine people have actually registered
to bid, meaning again, it’s game theory, they’re anticipating bidding later in the process. He said usually he would like to see like double that within the first week, but it was also understood this is a parcel that is a bit further out of the way. Like it’s just not in the most active area, so we’re not super surprised about that. And I guess he was just speaking to somebody locally who was actually trying to buy this property.
previous to us purchasing it. So there’s an actual hot lead. I mean, he, I guess he could have bought it when it was listed for whatever reason, maybe it wasn’t paying attention. But supposedly that guy’s going to register a bid. So, you know, we’ll see if you could be a solid end buyer. And apparently most of those registered bidders so far out of state and you know, sometimes in the land business, like you just got to move things as fast as possible.
Whoever your buyers are, know, it’s buyer beware, like figure out your own due diligence here. Most of them probably are not going to be visiting rural Tennessee prior to this auction being over. And, you know, there’s definitely, some questionable visual characteristics, especially like the power line going through it. So if they’re potentially going to be buying sight unseen, I mean, that works out for us. I mean, we’re not lying about anything on the, on the listing and
You know, if you look at any aerial imagery, even Google Maps, Street View, you can see all of it just fine. But, you know, if they still want to buy it, that’s great for us. You know, without doing a site visit. And he already has some other routine bidders just that pay attention to the auction process that, you know, typically don’t register until a couple days before the end of the auction.
So, you know, they’re heavily incentivized they’re moving trying to keep things going they have a whole marketing plan Okay, you know, there’s a couple days left before the auction ends like, you know build up the urgency as it comes up But at least from like a views of the auction site. We’re doing pretty well I think only a couple days ago was that just less than a hundred now today It was like 300 the social posts are going. It’s like yeah, this activity is very solid from that perspective
So, you know, all of this in mind, like there’s only so much we can control, right? Like it’s just the outcomes, the outcome, it’s gonna come down to the wire. And yeah, even talking through this podcast here, it’s like trying to just download my various rationalizations and uncertainties about this. But like these next couple of weeks are just absolutely critical for our business here. And then that other.
I think I talked about earlier in this week that 50 acre property south of Dallas, we’re still waiting to see whether our current buyers under contract are still going to move forward or not or need to renegotiate. So yeah, I’ve just been waking up in the middle of the night thinking about both of those properties all this week and I probably am going to be doing the same thing, not going to be sleeping very well the next couple of weeks as I wait for more clarity.
on these properties and control as much as we can. But you know, that’s kind of the life of an entrepreneur. Sometimes you’re you’re going to be in some shakier areas and you do as much as you can mitigate damage where possible. And sometimes you just have to eat it. I hope I don’t need to eat it that much on this. But yeah, it’s definitely making me anxious. Not my favorite time at
the moment, but at the same time, like I can’t just sit here and wring my hands all day. Like it’s still gotta be productive. So it’s all about balancing that. So I just wanted to share with you all like key tangible updates on how this auction process is going. I still wish I was more informed before I signed the documents. Certainly is probably a little bit more of rush decision. but at the end of the day, this is probably our best chance to get a favorable result.
higher risk, higher reward. Ultimately, this will fall on me regardless of what the outcome is. So I am really hoping for the best and I will let you know as soon as we have additional updates there with that serious land dot capital for any of your funding needs. Land Daily Diligence Facebook group for zero cost review your land deals and landpricer dot AI.
for the most simple and accurate way to price land. And our prompts keep getting better. Ran another image analysis test earlier today and we are just really rock solid there. Couldn’t be more excited from that side versus a couple of these difficult portfolio deals. With that, subscribe and share. Talk to you next time. Bye.
