Anyone do Land Investing

[Eric Sulek]

I've been through a lot of area's and it can't find anyone who does land investing or land flipping.  Is it not worth the time or am I missing something?

[Don Konipol]

Quote from @Eric Sulek:

I've been through a lot of area's and it can't find anyone who does land investing or land flipping.  Is it not worth the time or am I missing something?

I do some on a limited basis.  The basic problem is you may have to wait a long time for a decent offer when you want to sell.  My experience has been that I end up holding the property for an average of 5 years.  Meanwhile, not only is my money tied up earning no cash flow, but I’m also paying property taxes.  So, for me the expected ROI has to be far superior to a cash flowing improved property investment.  As compared to an improved property a land deal is generally higher risk and less liquid.  

[Eric Sulek]

Quote from @Don Konipol:

Quote from @Eric Sulek:

I've been through a lot of area's and it can't find anyone who does land investing or land flipping.  Is it not worth the time or am I missing something?

I do some on a limited basis.  The basic problem is you may have to wait a long time for a decent offer when you want to sell.  My experience has been that I end up holding the property for an average of 5 years.  Meanwhile, not only is my money tied up earning no cash flow, but I’m also paying property taxes.  So, for me the expected ROI has to be far superior to a cash flowing improved property investment.  As compared to an improved property a land deal is generally higher risk and less liquid.  

 Thank you for your feedback.  Would you say whole selling properties is a better way to start getting into real-estate investing if you have very low funds. 

[Don Konipol]

Quote from @Eric Sulek:

Quote from @Don Konipol:

Quote from @Eric Sulek:

I've been through a lot of area's and it can't find anyone who does land investing or land flipping.  Is it not worth the time or am I missing something?

I do some on a limited basis.  The basic problem is you may have to wait a long time for a decent offer when you want to sell.  My experience has been that I end up holding the property for an average of 5 years.  Meanwhile, not only is my money tied up earning no cash flow, but I’m also paying property taxes.  So, for me the expected ROI has to be far superior to a cash flowing improved property investment.  As compared to an improved property a land deal is generally higher risk and less liquid.  

 Thank you for your feedback.  Would you say whole selling properties is a better way to start getting into real-estate investing if you have very low funds. 

In my experience wholesaling has a failure rate in excess of 90%.  A number of experienced investors on BP concur with my “guesstimate”.  Some say 98% LOL.  How’s someone with little or no real estate knowledge and experience going to be able to (1) IDENTIFY the one “hidden” great deal amongst the 3,000 others (2) compete against the large wholesale operators spending $10,000 to $15,000 EACH MONTH on marketing/advertising and (3) find the time necessary to follow up on the 100 possible deals it takes to POSSIBLY get 1 makeable deal?  

Second issue is that “wholesaling” as the term is used now is NOT investing; at the low level operation it’s a JOB as an unlicensed real estate broker; at the high level it running a FULL BUSINESS operation.  

Many states are now requiring that wholesalers comply with real estate licensing laws.  While there are way around this requirement, those ways require capital and operating in a much less than efficient manner.  

My suspicion is that the attraction of “wholesaling” is (1) it seems to be a simple independent one person business and (2) it appears to have a very small capital requirement.  Unfortunately this is only true for UNSUCCESSFUL operators.  

IMO a much better (read much higher percentage of success possibility) alternative would be to obtain a job in the real estate industry. The easiest entre would be as a residential real estate salesperson working for a brokerage or a residential property manager working for an apartment complex. For those serious about real estate, a better position would be commercial brokerage, commercial property management. The absolute best would be staff positions for a REIT or real estate operating company, but those entry level positions go to people graduating with an MBA in real estate or a specialized Masters in Real Estate degree.

If you have but few thousand dollars to invest and don’t want to or are unable to commit to the “apprenticeship” route, I would suggest either purchasing a small property with owner carryback financing (not easy) or studying the publicly traded real estate securities market (mainly REITs) and investing in some selected REITs then following all the information made available about the REITs operations, property acquistion and disposal, property leasing, debt financing, etc.  As you can tell by my post, I believe that the conventional and popular advice as to how to begin a real estate investing career is heavily flawed.  When you examine the people advising the popular course of action you see that are either people who are selling something such as mentorship programs in wholesaling properties, or people who have recently committed time and or money to this pursuit and have a almost fanatical need to convince everyone else that their course of action was correct.  

whatever you choose I wish you success.  

[Kevin DeBoer]

Eric,

What strategy do you have in mind in terms of flipping? I agree with Don, but if you're somehow adding value to land through improvements, re-zoning, developing, then there's definitely an opportunity in doing so. 

[Jay Johnson]

Quote from @Eric Sulek:

I've been through a lot of area's and it can't find anyone who does land investing or land flipping.  Is it not worth the time or am I missing something?

Just completed my first lanf flip. I bought Dec 19 2023 and sold Feb 1 2024 (It can take longer to sell. This one went under contract within a couple days. A buddy of mine in the group has had one for over 100 days so it can vary) With buy price, soil evaluation and having an improvement permit done for the buyer, I was all in at a little under $14k. Sold for $47k and after 10% commission for my realtor ( a land specialist from National Land Realty.Good realtors with local knowledge are worth their weight in gold!) and closung costd, I left closing with a check just under $42k. So, yes, it worth it.

Watch all the free videos from the Apke Brothers, Seth Williams, Jack and Jill and anyone else that seem legit. I eneded up joining the Apke brothers course and it was, definitely, worth it. They have a free Discord group and a members only one. Both are full of great peole from around the world who help you if you need it! Got that deal in a few months of joining. The keys are mail, cold call, or text for leads, constanlty and consistantly and answer the phone or get back sellers, quickly! Some people spend alot on mailing and are scared to answer the phone. Sellers will tell you others didn't answer them when they called. It will take a couple weeks for mail to hit, if you use a mail house like Rocket Print (we use them), so have mail ready to go every couple weeks or, at least, monthly.

I work a 50-60 hr/week job and work on my business 1-2 hrs every evening and alot on the weekends, so it can be done if you have a full time job.I could have done better. I slacked and didn't send mail consistantly and I didn't send alot when I did. The course teaches against that because that can make it take a long time to get a deal, but I still got one. I just could have done better in that time frame if I would have  consistanlty sent mail. Hope this helps.

[Stuart Udis]

Selling land can be profitable, but those who are most successful create real value through the entitlement process by seeking use or dimensional variances to develop something more than what the by-right zoning allows. I see many take control of land and merely obtain by-right permits and believe they can turn a large profit and fail because the end buyer doesn't see the value in the permits that were obtained. Land is also far more capital intensive. Lenders will lend at significantly lower LTV's, particularly for the unentitled land and the buyer of the land will usually have to front all of the design related fees (civil, architectural, structural, MEP). There are instances where you can locate a good deal on a piece of land and turn it for a quick profit or alternatively find a by-right subdivision opportunity but that's not as easy to find and it's usually the heavier lift entitlement opportunities that yield the best return.

[Edgar U.]

Hey Eric, been doing land flips for 5 years now. I do a bit of everything, I buy (close with own funds or partners) and resell at a discount. Things are taking a bit longer to sell especially with the way the market is. The most important thing is to build a great buyers list, offer creative financing on the back end, or buy the land at a great price that you could still resale at a discounted price to the end buyer.

Btw, I don't add any value to the land (i.e) improvements, or anything similar. If the land requires for improvements then I'll do it. I do spend some time on the marketing side and create AMAZING presentations when selling the land. I just bought a land and listed it with a realtor, she only put a sat image of the land. Keep in mind that the land has water front view, so I had my team create a beautiful image enhancing to showcase the land and more.

Others have mentioned some courses and channels to join, and I would advice to look into those.

In the land space you could do it so many ways:
- Land flips (st8 cash sales)

- Terms/Notes - Buy land and offer owner financing to the buyers. Great for cash flow

- Subdivides - Buying large tracts often times 10+ acres and subdiving them into smaller parcels.

-Entitlements - Adding or taking the land to a point where its' ready to build for developer.

-Infill lots - Selling land in more urban spaces.

- Building on the land - This has so many ways to about it, that it can get really fascinating. I think this is my fav part of whole land buying process.

- Buy/Hold - Buying land for long term. Land is so cheap that if you do end up buying a large tract taxes are really cheap and you could build your own portfolio of land in areas you desire.

- Double closings/Assignments - As the land market is getting saturated with other investors. More and more folks are doing this similar to the house folks. I personally don't like this strategy as I am getting more calls from sellers who have been done wrong. One thing I heard often in Bigger Pockets when I first started my R/E journey is that there is more money going around than deals. This is SO TRUE in the land space and many other r/e spaces for that matter.

[Jay Johnson]

Quote from @Edgar U.:

Hey Eric, been doing land flips for 5 years now. I do a bit of everything, I buy (close with own funds or partners) and resell at a discount. Things are taking a bit longer to sell especially with the way the market is. The most important thing is to build a great buyers list, offer creative financing on the back end, or buy the land at a great price that you could still resale at a discounted price to the end buyer.

Btw, I don't add any value to the land (i.e) improvements, or anything similar. If the land requires for improvements then I'll do it. I do spend some time on the marketing side and create AMAZING presentations when selling the land. I just bought a land and listed it with a realtor, she only put a sat image of the land. Keep in mind that the land has water front view, so I had my team create a beautiful image enhancing to showcase the land and more.

Others have mentioned some courses and channels to join, and I would advice to look into those.

In the land space you could do it so many ways:
- Land flips (st8 cash sales)

- Terms/Notes - Buy land and offer owner financing to the buyers. Great for cash flow

- Subdivides - Buying large tracts often times 10+ acres and subdiving them into smaller parcels.

-Entitlements - Adding or taking the land to a point where its' ready to build for developer.

-Infill lots - Selling land in more urban spaces.

- Building on the land - This has so many ways to about it, that it can get really fascinating. I think this is my fav part of whole land buying process.

- Buy/Hold - Buying land for long term. Land is so cheap that if you do end up buying a large tract taxes are really cheap and you could build your own portfolio of land in areas you desire.

- Double closings/Assignments - As the land market is getting saturated with other investors. More and more folks are doing this similar to the house folks. I personally don't like this strategy as I am getting more calls from sellers who have been done wrong. One thing I heard often in Bigger Pockets when I first started my R/E journey is that there is more money going around than deals. This is SO TRUE in the land space and many other r/e spaces for that matter.

 I agree 100%. 

[Eric Sulek]

Quote from @Jay Johnson:

Quote from @Eric Sulek:

I've been through a lot of area's and it can't find anyone who does land investing or land flipping.  Is it not worth the time or am I missing something?

Just completed my first lanf flip. I bought Dec 19 2023 and sold Feb 1 2024 (It can take longer to sell. This one went under contract within a couple days. A buddy of mine in the group has had one for over 100 days so it can vary) With buy price, soil evaluation and having an improvement permit done for the buyer, I was all in at a little under $14k. Sold for $47k and after 10% commission for my realtor ( a land specialist from National Land Realty.Good realtors with local knowledge are worth their weight in gold!) and closung costd, I left closing with a check just under $42k. So, yes, it worth it.

Watch all the free videos from the Apke Brothers, Seth Williams, Jack and Jill and anyone else that seem legit. I eneded up joining the Apke brothers course and it was, definitely, worth it. They have a free Discord group and a members only one. Both are full of great peole from around the world who help you if you need it! Got that deal in a few months of joining. The keys are mail, cold call, or text for leads, constanlty and consistantly and answer the phone or get back sellers, quickly! Some people spend alot on mailing and are scared to answer the phone. Sellers will tell you others didn't answer them when they called. It will take a couple weeks for mail to hit, if you use a mail house like Rocket Print (we use them), so have mail ready to go every couple weeks or, at least, monthly.

I work a 50-60 hr/week job and work on my business 1-2 hrs every evening and alot on the weekends, so it can be done if you have a full time job.I could have done better. I slacked and didn't send mail consistantly and I didn't send alot when I did. The course teaches against that because that can make it take a long time to get a deal, but I still got one. I just could have done better in that time frame if I would have  consistanlty sent mail. Hope this helps.

 Hey, 

Thank you for all the feedback this is great, and I will check them out.  I was reading the dirt rich book and thought that was an interesting investment strategy but wasn't sure.  Looked like a lower return but lower barrier of entry for someone like myself. 

[Eric Sulek]

Quote from @Kevin DeBoer:

Eric,

What strategy do you have in mind in terms of flipping? I agree with Don, but if you're somehow adding value to land through improvements, re-zoning, developing, then there's definitely an opportunity in doing so. 

 Hey,

I was reading the dirt rich book on buying lower cost land from owners who are behind on taxes and may be more motivated (had a 3%-5% response rate).  Seemed like a way to start if you are lower on funds to start with.  Them moving to buying dividing up plots and reselling.