All Forum Posts by: Matthew Bailey

@Keong Kam just curious what you ended up doing.  I've had the same thought.  I ran the numbers about 6 months ago and I'm remembering off the top of my head but I found something like the following: A turn key 2M quadplex in Sunnyvale, with 400k down, would give me 35k/year in equity generated, I'd pay (myself) ~35k/year in rent (all numbers ran with appropriate taxes etc on the BP calculator), and the tax depreciation could be written off against my real estate investing profit from my land flipping business to the amount of an extra 17k/year.  So like everyone has acknowledged, this isn't a "house hack and make $100/month cash flow and live for free" this is an "I'm paying 30k/year in rent already, I'd like to not see that thrown into the abyss but rather into my own equity" play.  So that would be a ~50k swing for me every year to my net worth.

I do a ton of direct mail marketing for my land flipping business and am confident I could get a significant discount on that 2M quadplex if I find one off market, that needs a little work (mostly cosmetic to avoid permits and such), using a very personalized letter.

@Jonathan Duong I have good systems and outsourcing but there's still a lot of decision making you'll need to make and things to juggle.  I have fully outsourced my seller communication, I just call the shots on offer prices and have an assistant do the negotiation and seller facing conversations.  I've also outsourced due diligence and property posting for the most part.

I'd recommend the (free) book "Work the System", it's like E-Myth but I found it to be more actionable.  Combine that with google docs and you're off to the races.

I have a self made podio CRM that works well.  There are land specific CRMs that you can look into that come with a monthly fee as well. I like the control I have using my own system.

As for my biggest hurdle I think it's definitely pricing, it just takes a lot of reps to understand valuation of vacant land.  I think Seth did some pricing videos that he's added to his course which help a lot.  Other than that you just have to rep it out.

Hope that helps!

I have done REtipster and LandAcademy, been investing in land for 3 years now.  I really liked Seth's course, it was my favorite of the two that I've taken, I can't speak to the rest.  I really like the business focus and data-centric focus that the LandAcademy community leans towards.  They're both good and you'll have success with either.  See what who's style speaks to you.  Listen to both of their podcasts for a while and you'll lean one way or another.  LandAcademy may be "capped" at 500, so you may need to go with Seth's but you won't be disappointed by the educational material, it's all there, no doubt about it, you'll be up and running in no time.

As for my experience land investing.  In my experience it is definitely a job more than passive income (yes you can create owner finance notes for "cash flow" but you need to constantly be buying more as those dry up in 3-5 years typically), you need to constantly be sending direct mail campaigns, talking to buyers and sellers, posting property ads, etc.  I have ~10 properties in inventory at any time and buy sell 2-3 per month.  There's a lot of paperwork and you'll want a good CRM.  That being said I like the business and am using it to generate capital for other long term buy and hold "passive" income models.

Best of luck out there!

@Kristina Sparrow I agree to a certain extent, in that I'm not going to get burned too badly by my inventory from a property tax perspective.  I do however have some overhead that gets chewed up each month paying for things like my CRM/Automation/Subscription to data providers, mailer, etc.  I do try to focus on cash flips and velocity of money.  So I'd rather sell (even if I had to drop prices) so I could get out there, buy more land, and keep it going.  I think that the penalty of short term capital gains is negated by the potential to turn that money multiple times within a year.

I'm hoping that this post will find some folks interested in Land Banking since I know that economic downturns are their season.  And it would be great to learn what matters to them.

@Daniel Whitmore I've been investing in land for 3+ years now.  The consensus in the land community is that our goal is to buy below market value and sell for more, still below market value.  Like @Greg Dickerson said, I am checking my inventory prices vs the "for sale" markets monthly, a lot closer than I had prior to the virus.  I have margin in my deals and if I have to drop prices to stay competitive and make sure mine is the next to sell then so be it.  I just don't want to miss the wave.  I doubt I'll "lose money" and any of my properties because I buy conservatively.  

I am still doing direct mail marketing and my prices got about 20-30% lower than they already were, and I'm going to be very conservative on my acquisitions.

I think it's a great idea to get educated while you have the free time now.  I took the REtipster course as well as the LandAcademy course and got good nuggets out of each.  The JB course you're taking is the third of four major land investing courses and I think you'll do fine with it.  Welcome to the community :)

Sounds like you have a lot of margin in the deal.  My gut is to not be too worried, I would hope the value of homes doesn't drop by 300k like you're saying.  I do know, as a land investor, that more of us who buy and sell vacant land are avoiding "buildable lots" or "infill" lots because new construction generally decreases in a downturn, and therefore the demand for land which can only be used for a spec home decreases and is hard to sell.  If you are going to develop it then you may be ok.  The lot value may decrease, but if you build and had a 300+K spread, I feel like you can't get burned that bad.  

You can try to contact the bank that holds the mortgage and see if they'll separate the land from the home.  Selling the land could trigger a clause in the mortgage causing the seller to have pay the full mortgage (due upon sale clause I think?).  Either way you need to get it out of the mortgage.  The seller may just be required to pay any proceeds to the bank/lien holder.

You really need to read the mortgage to find out what clauses it has.  You likely won't be able to take title to the land with a lien on it unless you did some kind of "subject to" deal, but I don't think that's even feasible.

My opinion, see if you can get it separated from the rest of the mortgage, if you can't then just go find more land.

@James Hellie glad to hear it's all working out for you!  @Po Ng is right, I never buy land without getting eyes on it.  Typically that involves a photograph or a drone pilot for me, and all of the land I sell has current photos.  I can't speak to how Land Equities buys their land, I buy direct from property owners via direct mail marketing.  If you are buying your property and it is was acquired by an investor from a tax sale then you should read up on the tax foreclosure laws in your state.  Different states have different redemption periods where the prior owner could contest the tax sale and it gets hairy.  I don't know much about it.

I definitely suggest going to get eyes on the property to avoid the situation Po Ng could have ended up in.  And when in doubt, just use a title company to close the sale.  Title companies are very conservative and will let you know if there are issues with the tax foreclosure etc.

@Matt R. the information you're looking for can be found using DataTree, AgentPro247, or RealQuestPro.  These companies aggregate the county assessor data and you can pull custom lists based on vacant land parameters (0% improvement, vacant land county codes, etc).  If you know where you're looking then you can consider NeighborScoop.com 

Neighborscoop is a brand new product from the LandAcademy folks.  I have been told that you can draw an outline and pull that data.  Neighborscoop pairs county data with skip traced data so you should be able to get phone numbers as well. I haven't used it but will probably upgrade from their old product, ParcelFact, which was very good

@Jay Hinrichs holy cow that's quite the operation!  Yea the tax stuff is a lot easier to access these days.  Most land investors do direct mail nowadays.  I didn't read too much into the timber conversation on this thread to be honest.  There was a lot of info in there.  I feel as though it's best to start small then work your way into that niche within the land niche.