All Forum Posts by: Seth Williams

Hey @Jason Horton - I don't know all the specifics of your situation, but based on what you posted above, it sounds like you need to get very specific about a few things:

• Which strategy you're going to use (buying rentals? flipping houses? wholesaling houses? something else?)
• Which markets and neighborhoods you're going to pursue (your hometown or someplace else? Class A, B, C or D neighborhoods?)
• Which acquisition method(s) you're going to employ (direct mail? driving for dollars? buying from wholesalers?)
• What parts of that process you're going to become an expert at (finding deals? due diligence? solving complicated problems? networking and connecting buyers and sellers?).

I'll use myself as an example.

I wouldn't call myself a master salesman (not in-person, anyway) - but I am pretty good at finding properties at a very, very low price. Since I'm able to find deals that have such a big, obvious value and profit margin built into them, I'm able to list and sell them for a very cheap price and still make a good profit (and the properties basically sell themselves). i.e. - My shortcomings in salesmanship are easily overcomeable because I've mastered a different part of the acquisition process - one that mostly negates the need for me to be a master salesman... does that make sense?

My point is - there is a lot to learn, but you don't have to be an expert at everything. Decide which areas you DO want to master, focus most of your energy there, and try to find ways that these strengths can overcome your weaknesses (or make them irrelevant altogether).

Hi @Carl Hammill - welcome to BP!

- Easements: In my opinion - these are important when you encounter a landlocked property (which isn't necessarily a common thing, but it does come up from time to time) and/or if your intent is to somehow develop or subdivide the property yourself (which isn't something I typically do, and 95% of the land flippers I know don't get into this in a big way). It's great to understand how these work and how to identify them, but I wouldn't say it's a necessity in order to get started. I wouldn't feel like you need to be an expert at these before you start making progress.

- LLC: If your intent is to be in the land business long-term, it's a great practice to have one of these in place... but again, I wouldn't say it's an absolute necessity (and frankly, it can add a lot of complications and confusion, especially when you're just getting started and trying to figure out what you're doing). I've seen a lot of people start out buying and selling properties in their personal name, and after they've done a few deals and proven the business model to themselves, THEN they form an LLC (note: this is not legal advice - just an example of what I've seen some people do). In terms of forming one in each state - honestly, I think it's best to get really familiar and find success in one state and then branch out and deal with the added complications of working in multiple states (a lot of laws can change from state-to-state, so again, it'll just add to the confusion if you choose to work all over the country from the very beginning). It's certainly doable, but also a bit harder.

- Seller Financing: It's an awesome way to create monthly cash flow and add financial stability to your operation, but once you decide to get into this realm, you'll have to learn quite a bit about documentation, how the laws work in your state when (not if) people stop paying, how to manage loans and collect payments (among other things). I think it's definitely worth learning about and pursuing if you want more of a "passive" (if you can call it that) income from the business, but it's also one of those things that has some wrinkles to iron out once you get into it.

- Closing In-House: It's definitely possible to close in-house (and when the deals are cheap enough, it may be the only economical way to do it), but it also takes quite a bit of time and work to learn how to do it correctly, to make sure the paperwork is prepared correctly, and then to actually execute it. Again, I think it's definitely worth learning and understanding how it works, but you should also be prepared to go slowly and make sure you're doing everything correctly (and if you're not willing to do this, make sure the deals you pursue have enough value to justify paying a title company to close on your behalf). 

- Mail Copy: You don't need a full-blown course to figure out what to say in your mail pieces. I've got several examples I can show you (PM me and I'll send you a few links). There are a thousand different ways to write your mail pieces, and many of them can work just fine.

Hi @Jeremy Resmer - in the few conversations I've had with people in SC, I've been told the same thing. 

This is an issue in several states (mostly on the east coast), where it's basically not legal to do your own closings. An attorney MUST be involved in some critical aspects of the process (which I think is a little crazy... but I don't make the laws there).

For instance, according to their logic, if you create your own deed, they've determined that this is synonymous with "practicing law", which you can only do if you're an attorney.

I believe some states require that the ENTIRE process be handled by an attorney, and some states only require that certain aspects be handled by an attorney (as long as an attorney creates the deed, you can do everything else).

I actually spent a ton of time back in 2016 trying to figure out which states require what, and based on what I could find (with hundreds of phone conversations with attorneys and title companies), I came up with the map I outlined in this blog post: https://retipster.com/real-estate-closing-agents - essentially, the states that are dark blue are the most restrictive in terms of who can conduct closings (and as it seems, the further west you go, the easier it is to close deals yourself). I hope it helps!

@Dror R. - before you put any money into a property like this, you'll want to talk with a wetland consultant (you should be able to find several with a simple google search - look for something like "New Jersey wetland consultant"). There are many different types of wetlands, and determining whether or not an affected property is buildable depends on the type AND what the local municipality will allow (among other things). A professional consultant can help you get a solid answer as to what (if anything) you can do with a property like this in your area.

Whoa! That's incredible @Christopher Brooks! Way to identify the opportunity and put the wheels in motion! Keep me posted on how it's going for you, sounds like you're off to a great start.

Hi @Teren Cooley - are there any specific questions or issues you're trying to figure out at this stage of the game? If you're feeling stuck on anything in particular, perhaps one of us can help point you in the right direction.

When I see a creek running through a property of that size (i.e. - a property that is most ideally used for building some type of home), it's usually an automatic "no" for me. Why?

Because running water through a property is usually a sign of at least one of the following issues:

1. Seasonal flooding - Aside from the obvious issue of having a flooded house, even if it doesn't ever flood there, you'll most likely have to pay some very high annual costs for flood insurance.

2. Difficulty with passing a perc test - If you don't have access to a municipal sewer system, your only option for handling sewage is to install a septic system. However, if your property can't pass its perc test, you won't be able to install a conventional septic system (which essentially means you won't be able to build there).

3. Wetlands - These areas are also very difficult (if not impossible) to develop in any way. Wetlands aren't always connected to bodies of running water, but they can be... so if there's anything of the sort on/near the property, you'll definitely want to be aware of this before you buy.

Of course, if you don't plan to build anything on the land, then these issues may be completely irrelevant - but usually, with a property of that size, building would be one of the more common uses.

Due diligence is always a good conversation to have in the land business. Looks like your list is off to a good start. Some other things I would add (which may be less of an issue, depending on what part of the world you're in), would be...

• Are there any wetlands on the property? If so, and if you intend to build on it, try to figure this out before you buy. Unless you're able to get the local authorities to issue you the proper permits, it will be very difficult (if not impossible) to build anything in those areas.
• Will the soil on the property pass a "perc test"? If you intend to build, and if the property doesn't have access to a municipal sewer, you'll want to be reasonably confident that the soil can drain water at a fast enough rate to support a septic system. In most areas, perc tests are handled by the local county and/or health department - but the process can vary depending on where you're at.
• What is the topography of the property? Whether your property is located on a perfectly flat plane, on a steep hillside, or on a cliff, you'll want to figure out what the slope of the land is, especially if you plan to build anything on it. Even if you never plan to visit the property in-person, this is fairly easy to figure out with free resources like Google Earth and Earthpoint.us.
• Is the property in a flood zone? If so, this may cause issues, depending on your intended use of the property. If you plan to build anything there, this could result in some fairly high annual flood insurance costs and/or if flooding is a regular occurrence, it could get in the way of whatever other activity you plan to do on the property.
• What are the required building setbacks for the property? If you're looking at a lot that is small (i.e. - less than a quarter of an acre) and if you plan to build anything on it, you may want to verify how far back the structure needs to be built from the road. In some cases, if the property is unusually small and if the setbacks are far, the setbacks can potentially eliminate any buildable space from the property.

One of the tricky things about vacant land is that some of the biggest issues aren't easy to spot at first glance, you have to do some digging. For example - if you find a vacant lot in an area that is densely populated (with houses all around it), it may not be any coincidence that this one single lot hasn't been developed yet... because when a property has one or more of these pre-existing issues, you literally can't do anything on it (other than maybe grow grass).

Thanks for sharing your thoughts @Mike H. I hear you - some people are fortunate enough to pick the right market on their first attempt AND nail every other step along the way (i.e. - they work with a good, well-sorted list, a solid direct mail piece, they follow up with prospects well, make appropriate offers, pursue the right properties, and then market them in all the right places with the right information, etc).

There's a lot that needs to be done right, and it's pretty unusual for a beginner to do it all perfectly on their first attempt. Usually there are at least a few things that need to be tweaked and improved on the second, third and fourth try... but the only way to figure out what isn't working is to start going through the process.

Most people need a pretty decent runway to get things figured out before they can really go crazy doing deals (that is, if they ever decide to ramp up their business to that point - like you said, many just treat it like a side gig, which is still a totally valid way to run the business).

Hey @Adam Hensel - great question. It's still pretty viable in the markets where I'm working (and from the ongoing conversations I have with others, it's working pretty well in their markets too). I think it is important to pick the right kind of county though, because the effectiveness of your marketing can vary quite a bit depending on a number of factors that pertain to the areas where you're working (e.g. - population, property types, property values, proximity of the nearest big city, state laws, etc).