How Luke Smith Uses Data to Find High Traffic Retail Land Deals

Luke Smith (00:00)
Today’s technology has moved forward in a huge way.

We’ve got cell phone traffic. cell phone traffic. You’re carrying you probably have your phone within reach. I got my phone within reach. You go to the store, you probably got your phone in your pocket. You go to a McDonald’s or something, you you probably got your phone in your pocket. Maybe it’s in your hand. And that is phone is being tracked.

Dylan Silver (01:53)
Hey folks, welcome back to the show. Today we’re joined by Luke Smith, founder of ruralvacantland.com, and has closed more than 2,000 rural land transactions across the United States. After building a successful land business, he shifted his focus toward high traffic retail development opportunities where he leverages data.

Strategic site selection and investor partnerships to create high upside commercial real estate deals. Luke, thanks for joining us here today.

Luke Smith (02:23)
Thank you. Thanks for having me, Dylan.

Dylan Silver (02:24)
Now, rural land investing is something that a lot of people I think now are becoming more interested in. It’s in the, you know, cultural lexicon of real estate investors, so to speak, these days. But what was it like when you were just getting started in the space?

Luke Smith (02:42)
Beautiful question. The I started buying houses in Detroit in two thousand eight because it was cheap and easy and there’s nice spreads they paid beautiful rent. And over time the bank stopped puking those houses up and it was harder to buy And I thought there would be different ways to buy like buying them straight from the the owners. And I started researching different ways to do it. And the vacant land guys were doing the trades without all the middlemen the best. They

They were starting to promote, and one of them in particular was Jack Butala, Land Academy. In twenty fifteen, I saw some of his articles and he was talking about his education program. And I fell for it. And ⁓ I signed up. And they gave me a free piece of land for signing up, like 10 acres in Elko, Nevada, right? I put that on eBay for a dollar, sold it for three thousand three hundred and fifty-three dollars a

33 cents. I thought that was that was like more than double what it cost for the course. And their idea was to send letters, send letters to the property owners. And at that time, the data was just becoming available. Nothing like today, but it was just becoming algamated so you could see who the property owners are county by county, from one data source in multiple different parts of the country. And that was the novelty of the time.

That was that was high technologies, nothing like today. ⁓ but we could take that data and we could make offers. And so I started making offers and I was making, he said, you know, $100 an acre. So I’m like, okay, it’s one and a quarter acres. I’m gonna offer 125 bucks, right? Yeah, that didn’t work. you know, everyone yells at me. But what I learned is I I didn’t have any fancy printing or specialty ways of doing it.

I figured out how to mail merge the letters on my home printer and I couldn’t figure out how to get the envelopes to print. So I wrote them by hand. I did like a hundred of them. And I sent them out and I kept track of every, you know, a lot of data, how many responses, what they say, and everything. And in that first mailer of a hundred different letters that I sent out as stupid horrible pricing, I had over 40 people get back to me as a greater than 40% reply rate.

They yelled, they hated, they didn’t like what I sent, but they replied. And I said, There’s something to this. This is awesome. I didn’t buy any land on that mailer, but I got a really good response rate. And so I learned more, I asked more questions, I iterated, I started answering a lot of the their questions in the letter, and I started sending more letters. Before you know it, I got a guy from and the the caller ID said 90210.

That’s Beverly Hills. That’s the show I used to watch as a kid, you know, like high school show. It’s like Beverly Hills is calling, money’s calling, right? Go to answer my phone. It’s like it’s a different phone tablet. You know, like ducking to answer the phone because I’m so used to getting yelled at by the other letters. And the guy said, Okay, he would sell the property to me. This was five acres, twenty nine palms, California for five hundred bucks.

And five hundred bucks is a lot better than 125 bucks. I was sending out right. So he said yes. But I was waiting for the butt. And he said, but like, no. Well, here’s the story. He said, but you gotta buy the other one too. Like the other one too. It’s down the street. Like, there’s a street and it’s got a power line and it’s got a cement pad where the house used to be. Like, ooh, ooh, there’s something there. And I’m like, five hundred dollars. He said, Yeah, five hundred dollars. And

So it was a thousand dollars for two five acre properties and twenty-nine palms. I was sweating, you know, like I gotta send this guy. I’ve never done the paperwork before, a thousand dollars. I’m gonna send him a thousand dollars in the mail. I hired a notary. Notary took a cashier’s check over there. She charged me two hundred and fifty dollars for the notary, and which I th you know, it turns out was way too much after other trades I did. I got them for a lot less. But

I sold that first property for forty five hundred dollars on Craigslist. That was sweet. That was like no cost advertising. I paid for some mail and I was hooked. That was twenty fifteen, fall of twenty fifteen. And I never I’ll never forget that trade. The guy that bought the land called me on the phone. He’s like, I’m looking at your land, and you know, we started instantly the

He told me where he was from and the conversation just turned around to fishing. So I’ve been fishing in the lake right by his house where he grew up and everything. We started talking fishing and he sent me a check for the land. And I did the paperwork, sold the land, and the business started. I was like, How many times can I do that? Can I do it a hundred times? Can I do it five hundred times? Can I do it a thousand times? And then it went from five hundred dollars to seven to a thousand dollars, fifteen hundred dollars, two thousand, five thousand on up dollar properties from there.

Eventually I started getting into properties that are front and center, Main Street, Main Street. Like lots of cars. There should be a business there, not a house. And I didn’t buy them on purpose. I bought them on mistake because I was trying to buy better properties to put a house on, do the same kind of trade. And turns out some of those properties people don’t know how to sell them, they don’t know how to work with them, they don’t know what to do.

And they get a letter from me and they say, Yeah, we’ll sell this thing to you. And I scratch my head and it like it I can see data that it’s worth a lot more, but what do I do with this? And I got stuck with some of those properties because I couldn’t figure them out either. And it wasn’t until I could find a tenant for those properties that I could get them to dance. And when you get an awesome tenant for the property, the value of the property goes up based on the tenant, how much they’re willing to pay rent or how much they’re willing to do. And that’s how I got started into.

High traffic retail properties. The market has changed dramatically from 2015 to 2026, where we’re at now. A lot of other people have come into the vacant land space. have the technology’s gotten a lot better, a lot more efficient. The market has gotten more efficient. The spreads have narrowed, in my opinion, and experience. It’s harder to buy the properties at ridiculously low prices. It’s hard to sell them as fast at at at good.

Prices, it’s harder to get the spread. You can still do it. The people that are doing it a lot more are getting more creative. They’re splitting, they’re being more direct, a lot more levels of data and analysis to get into the properties. So there’s still a market there, but there’s a lot less competition in high traffic retail properties. And so that’s where I’ve shifted my focus and my passion. And I

Teach and I tell and I do lots of deals and high traffic retail properties. We go find tenants. And when you find a good tenant for that property, mysterious money bags shows up. You know, they’re other partners, their other friends, their other landlords, and they want to buy that property. They cash you out and you take off with it. and it’s I think that’s a beautiful thing that solves a lot of the disposition side of rural vacant land and waiting and takes out the speculation of what price and when and how and

It just solves it, makes a f turns them into a financial financial transaction or financial instrument, if you will, financial asset that you can sell like a bond. And

Dylan Silver (11:13)
pivot that you made, going from vacant land into commercial, right? lot of people right now are finding themselves maybe with a business model that has worked for a while and is slowly stopping functioning, right? Or is becoming more and more challenging. And we see this across asset classes, and then there’s also more competition within each

transaction type, right? As you were making that pivot, did it become something very intentional or was or was this something that you saw as an opportunity and said, you know, let’s see how this works before diving, you know, full headfirst into it.

Luke Smith (11:52)
I love your questions. This is that’s a good question. It was not intentional. I bought some of these properties as an opportunistic buy, you know, buy it for twenty-five cents on the dollar kind of thing and try to go sell it for fifty cents or seventy-five cents on the dollar real quick. and it’s

You see it in the data. I see it in the data when I pull up the similar kinds of properties, same kind of attribute, same kind of traffic, the same kind of size, same kind of access, same kind of view, the same kind of zoning, the same kind of demographics, population, like all these different attributes. If you stack them all on top of each other when you’re looking at data for for land, and you say, There’s my property. There’s my property. There’s my property. There’s my property. Here’s one percent of them out of the whole marketplace that traded.

in the last five years or something. And you can see what they traded for. There’s some of them that are down in the toilet and there’s some of them that are much higher prices. And when you dive into those higher price ones and you follow through what happened to the property later or you talk to the people involved in the trade, they turned it into something. They turned it into a Chick-fil-A. They turned it into a McDonald’s. They turned it into a Starbucks. They turned it into some brand that you’ve heard of.

And it went from vacant land to something or it’s on the path of going to something. That’s how they got the price difference to change from way down here to something. And

Dylan Silver (13:13)
Let’s get little granular if we can and and talk about finding those tenants, right? Because that that’s a specific skill itself, right? Because if you have the opportunity, in many cases you would think, well, if I’m finding this and there’s got to be so many other people who’ve also looked at it, and if they’re not already out here, how do I get them out here? How does that process work, you know, attracting a corporate tenant? You mentioned a couple.

Luke Smith (14:20)
Yeah. So it is it’s a different dance of its of its own, right? the beauty of it is you start getting into bed with one or two of them and you can do it again and again and again. But that shotgun approach out of the gate to find those one or two or half dozen that you get involved with is it’s a bigger marketing. It’s a it’s a reach, it’s a networking. I didn’t know any better, so I started sending mailers. I sent mailers to

the owners of the properties, the like kind properties, the same kinds of properties that I was into. And I thought they would be the ones that would know and hook me up. Yeah, right. They don’t get back. They don’t reply. That’s a different kind of investor personnel together. I started sending mailers to the tenants of the properties and they got back. There’s a high response there. They say, yeah, of course we want more locations. Those are the franchisees for the brand. They’re always trying to grow their business.

And so you start talking to those franchisees. I started figuring out that I could figure out all the locations for that brand in an ever increasing circle away from my property and call them. Just call And you get minimum wage NIMWIT on the phone at each one of those locations. And they say, No, so so and so is not here today, they’ll be in here Thursday. And you call the next location, they’re like, yeah, the manager’s not here, he’ll be here next week, Tuesday.

And you keep calling, calling, and all of a sudden one of says, and you do it all in the same day, one of says, it’s a it’s it’s a you called the perfect time. Our manager person is here today. Let me hand the phone over to him. And it’s it’s not a perfect find, it’s statistics. The guy’s always in one of those shops around the region, right? It’s his region. And then you get him on the phone.

And then he says, I think I I know where you’re I know that intersection. I know I drive by there when I’m going from shop eleven to shop thirteen. You know, I’ll stop by there next time. And they’ll stop by and call you back, like I love it or I hate it. And they’ll you know, you there’s a stupid hill right here, it makes the view really hard, or this is really great. What’s the price? and you can do that with multiple brands and you start getting in with them. Then

Technology gets better than that. Now we’ve got AI coming out our ears, right? And so AI can dance a lot of these data sets. Who belongs here with all these different information, bits of information that we have? Who are the broker reps for those franchisees? We can just call the brokers and start talking to them and they’ll go sell the franchisees on it. we can call the franchisees or we can reach out to them lots of different ways and offer to add on. And then the finance starts chiming in as you start getting into these deals.

And then you can offer ground leases, you can offer build the suits. And this industry, because the exit is so liquid and so defined and calculated, because you’re selling like a financial asset instead of a speculative piece of land, the finance becomes a lot easier to finance these projects. It’s like a hundred percent kind of finance and offered in lots of different ways. And so you can finance out.

Purchase of the land, you can finance out the build of the land, the ground lease, the build to suit, whatever the tenant might want, or you could just flip it the land to them if you’re trying to go faster, not make as much. And it’s just a such a sweeter space. And the people, all those people involved are there to help you. They’re trying to help you. Whereas in vacant land or house or they seem to be fighting over the last dollar of value.

And the commercial ones, they’re trying to help you solve that same problem. It’s a really hard problem for them to solve too. And so we all help each other. It’s a totally different

way of looking at it, if you will. So it’s collaborative. And how do you find them? Yeah, it’s collaborative. You start asking around, you use data, to figure out who to ask and you ask and they help you put it together.

Dylan Silver (18:02)
Now when you’re evaluating these deals and and these opportunities where you know a franchise could come in and be a tenant, do you prefer looking in the urban sprawl of major cities, or do you like looking at, you know, maybe some tertiary markets where there may be you know less dense population and maybe less net

migration, but where rents and where acquisitions cost may be a little bit lower.

Luke Smith (18:34)
Good question. It’s you can do both. the competition is generally less in the tertiary markets. it’s usually less rent you can get out of the properties in the tertiary markets, but you can get the properties for you know lower lower prices or easier terms. And lots of the case you don’t have to buy the property. You’re getting the property under contract and talking to tenants to go make it happen.

So if and there’s a hundred percent finance available to knock the deal over. So does the price matter? If it’s easier in the more urban markets to attract an awesome brand that can pay amazing rent, the spreads bigger, and the finance is infinite, why not go for it? Right. In that same concept, these smaller deals that I work on learning curve. They’re the

in rural vacant land you call them the desert squares, the the little stuff in commercial real estate. I’m just the little guy in the little stuff. The smarter guys, the smarter people, they grow up to this. They start figuring out that same concept. The finance is infinite. the demand is higher over there. The the numbers are bigger over there. They migrate to that pretty fast and they work their way up through the space. I’m still maybe I don’t have the nerve to go bigger and bigger all the time. I’m

usually pushing myself, think I need to do more deals in this space to get the nerve to go and bigger. it’s

Dylan Silver (19:58)
What do you see as as something that investors may be missing when when it comes to evaluating these opportunities in the the retail space?

Luke Smith (20:10)
Yeah. So like your question before of what was vacant land like in twenty fifteen when I started, the technology then was you could see who owns the property across multiple counties. Like you don’t have to call a county and get a CD or get a printout or something. You can look it up on your computer from home with the internet and you can look at a map and say that property, or you could do it across the bunch.

Today’s technology has moved forward in a huge way.

We’ve got cell phone traffic. cell phone traffic. You’re carrying you probably have your phone within reach. I got my phone within reach. You go to the store, you probably got your phone in your pocket. You go to a McDonald’s or something, you you probably got your phone in your pocket. Maybe it’s in your hand. And that is phone is being tracked.

You probably have Google Maps on there or TikTok or something like that that has mapping features and they

They track your data and they sell it to data brokers. And the data brokers sell it to different software companies or guys like me that buy the data in lots of different ways to study it. And when you study that data, you can see how many people are going to that restaurant or to that shop. And when you can see that, you can see where business is happening. Some places, like if you just study Walmarts, for example, which Walmarts are doing awesome.

What’s the land like in front of that awesome Walmart? Why am I shopping land way over there? Why don’t I just start with the most awesome Walmarts and go down the list and shop land in front of awesome Walmarts? Because if I buy land in front of awesome Walmarts, these other shops are gonna eat, you know, live off of that traffic. It’s somebody else is figuring out the markets. We can use beautiful data that’s available to us in today’s markets to look at those kinds of opportunities.

That’s just some examples. We could start saying, Okay, what shop goes really well next to this shop? We got land next to this shop. Who goes next to that shop that does really well? We can pull up data and see like statistically who’s going to be really awesome next to that shop. We should be reaching out to them and telling them about the data we just looked up and say, This is where you should be. This is this is your next place to do business because this data, this data, this data, these neighbors, those neighbors, like

That’s where data technology has progressed in the last eleven years since I started doing this from my gosh, we can figure out who the owner is to my gosh, we can figure out how much business the neighbors are doing. And because of that, we can deduce who the next tenant should be for this property. Like it’s the technology is somersalted. Then you could go AI with that and take it even further. Go ahead.

Dylan Silver (22:55)
Yeah,

it’s it’s pretty remarkable where people are able to go. You mean you mentioned phone tracking, right? I’ve even heard guests talk about how, you know, you could identify someone’s information as an investor based on information tied to their you know unique identifier from their phone, which is nuts. So someone could just be browsing your website, next thing you know, you’ve got, you know, their contact information, so forth.

We are coming up on time here, Luke. Any new projects that you’re working on? And then also anything you’d like to mention directly to our audience.

Luke Smith (23:26)
Yeah, it’s I I love working on these kinds of these companies. And it’s always the next brand and trying to find more sites for the next brand. If you’re interested in working on those kinds of deals or you’ve got a specific commercial high traffic property that you want help with, feel free to reach out to me. Look me up. on YouTube, Luke Smith or Rural Vacant Land or Reverse Deal Finder. And it’s

There’s there’s links there. You can get in touch with me multiple different ways. Contact information is there. And let’s see if we can if I can help you make your property happen. If you’re stuck with some commercial properties like I was in the past, I’d like to help you out. So feel free to look me up there and ask and let me know if I can help.