How I made 1k-5k a month dividing land.

[Adrian G.]

Ok first off I would like to say that I am not a land dividing professional nor do I claim to be, I am simply posting what I have learned on my own and done myself. For all of you who try this please make sure to due your due diligence before purchasing land and BEFORE you try to divide it. Certain cities do not like this but it’s your obligation to research this….again. (Common sense here). This is only a brief overview and I will not be going over every detail in depth so please keep everything positive or at least constructive. Some of you might have even seen me asking questions recently in regards to the subject but its only for my researching to see what other creative investors thought and to see how NEGATIVE comments could affect your thinking.
After years of rehabbing properties and becoming incredibly lazy, I find myself wanting to start investing in land but I figured that I never had enough cash or credit to be investing in huge deals in major cities where I would be happy with the kills (its not always about money). So I came up with another plan that has worked for me…….Purchasing land with the plan to divide them in to smaller sizes.

How I started:
RESEARCH RESEARCH RESEARCH

Apparently, when you own a property you can sign it over to anyone, this even works in percentages of ownership …..3%.....5%.....25%...85%.....etc etc. I used this to my benefit by doing the following (for example) I purchased a 5 acre parcel that was only used for hunting and camping for $4,000k. I took my 5 acre property and turned them into lots sizes of .10. Now 5 acres divided by .10 leaves me with 50 lots. Now Im sure your asking how I turned them into .10 which is how WE MAKE MONEY, I sell them as undivided interest.

What is undivided interest?
Selling land as “Undivided Interest†is when you sell or trade or issue a lot that is not a parcel on its own, it has been issued from the owner who purchased it as a hole. You can also look at it as someone who DID NOT go through the city, zoning, surveyor, etc to actually subdivide your large parcel, acres, land/lots. You DO NOT GET YOUR OWN PARCEL NUMBER OR TAX ID. What you do get is your very own DEED stating you are the owner and the approx size of your lot…..WHICH HAS NO SPECIFIC DEFINITE LOCATION.

Back to the 5 acres example: So I am turning my 5acres into 50 lots sized .10 each undivided interest..
Which means who ever purchases a .10 lot becomes an owner of a .10 lot but has no specific location so they have access to ALL 5 ACRES.

I had a lawyer write up a deed which I copied 50 times haha and pretty much filled them in one by one (again, I am skipping a lot of technical details so don’t take me words for being easy). Anyways, Im in the hole $4k right now and with 50 lots that are being sold “undivided interestâ€. We are not done…lets talk about how I sell these.

How I use ebay to make MONEY MONEY MONEY.
For some reasons there are a lot of guru’s out there that make money on ebay because they say EVERYBODY will buy ANYTHING on ebay, so I put this to the test on a larger scale.
There is an UNWRITTEN rule for selling (land) on ebay, its that the average closing costs are about $195-$300. This is where you have the potential to make money on top of your auction, The fees that certain states/counties charge are minimal (at least the ones I prefer to do business with). 90% of the time I charge 300.00 for closings costs minus ebay fees for selling is 70 bucks, This leaves me with approx 230 dollars for me.

Ok now Im still in the out the $4k and have 50 lots BUT the potential to make $11,500 in profit from CLOSING COSTS ALONE. (230 X 50=$11,500). I have had some auctions sell for 5 dollars and some sell for 250 but over all your still seeing a higher profit then the original $11k that your expecting. (auction winning bid +closing costs difference=YOUR PROFIT)

Questions about buying before or after the sale….
Well this is the most difficult part that people don’t seem to understand, they become your co-owner or tenants in common. The easiest way I find to sell these lots undivided interest is to be COMPLETELY HONEST AND UPFRONT ABOUT EVERYTHING. I tell them that sometimes I make the lots so small that its no longer buildable, or that they are not the only owner, etc. Most of them just buy the lot to keep in there portfolio or to resell at a later date or to just have something they can go camping on or hunting etc.

Now you want to know how much much I have actually made doing this...??
Well my first month actually putting this plan into action (I own other lots that I have done this with some making more money and some making less) But Already Im seeing a massive profit.

Actual deal:
-Feb: 5acre parcel for 4k……50 lots at .10
-As of 06/08 I have sold 26 lots
-26 lots x $230= $5,980
-26 lot auction prices ranged from $3 to $260= $2,900

$5,980 + $2900 = 8,880 (approx)
$8,880-$4,000= $4,880 (PROFIT)

This one deal brought me in $4,880 in profit (approx) and I have about 8-9 deals going on right now, This just goes to show you with enough researching and motivation that anything is possible.