All Forum Posts by: Victor Noriega

My wife and I are also land investors. We created an LLC this past December after getting our first flip under contract. I think we could have held off a bit longer, but creating the LLC made this "Hobby" an official business and is treated as a business. Since it is my wife and I that are the owners/members of the business, the IRS sees us as a disregard LLC. Please meet with an accountant to understand how your profits will be taxed and how to properly file your taxes. On another note, We also started with $3k-$5k lots, and quickly realized that they had limited, if any, profit. Fixed costs such as closing costs can quickly eat up your profit.

thanks everyone for the responses!  And Seth thanks for the blog. 

Mason, I've had 5 mailing campaigns to 5 different counties and an average response rate of 5%. For this individual deal, I had only sent them one mail piece. I've picked up two other lots and am working in the third. The other properties will take more work to market and sell, but the profit margins should be the same. 

Wayne and Guy, thank you for the responses!

Hi BiggerPockets,

My wife and I would like to share our first successful land flip.  

The deal:

Purchased the property for $3000 paid the back taxes of $2200 and the closing costs were ~$700, so total investment was $5900.  I closed on the property on October 30, 2014.  Sold the property on January 6, 2015 for $15,000.  After closing costs, we made a profit of $7,600.

How we got this deal:

We used the method learned from Seth William's website, which we found after hearing the biggerpockets podcast.  The direct mail campaign targeted tax delinquent property owners.  The owner had purchased the property from a county auction.  I believe he broke even on the deal.  We sold the property to a neighbor adjacent to the property.  The negotiation was easy on both ends, and it was a cash deal so our closings were quick.  

We are reinvesting our profits into our business, and are looking for more deals.  We have purchased two more properties since this deal.

Hi, I have a motivated seller for a vacant lot who contacted me yesterday.  He was the step-son of the property owner.  He found me after one of my direct mail campaigns.  He mentioned his step-father was deceased and he was now the owner of the property.  This is a going to be a cash deal, and I am still new to land buying, so I am using a title company for all my closings.  Before I send out the contract to purchase, what documentation should I request from the seller to verify they are the owners?  The individual I spoke with mentioned that his attorney said he was the owner, so I'm sure there is some type of documentation.  I will contact the title company to verify the cost out of pocket in case the person I am in contact with is not the actual owner.  

My direct marketing campaigns are working. I am getting a good response rate. There is one deal I need advice on. The property is a residential lot in spicewood Tx. The seller is asking $20k and owes back taxes and HOA fees in the sum for $2400. I checked with a realtor and the market value is $28k. The deal has $ to be made but I don't want to tie up $20k. What are other options I can consider? The seller lives in California and wants to be out of Texas. So he is motivated. But he is also a seasoned investor and will not budge anymore on price.

I have had 5 calls from my first direct mail campaign.  I am targeting vacant land.  Two of the 5 sellers where not interested in selling below market value.  And I have a 6th caller as I write this.

The other three each have are different situations and I need help navigating each one.

Seller 1 is an older woman, she is under the care of her grandson.  She was not aware that the property I found was under her name.  Well according to county records it is in a living trust under her name.  The lot is very small, and the taxes owed is more than have the value of the land.  She says she will sell it to me IF she is the rightful owner.  Well after doing more due diligence, this property will not be favorable for me to buy, unless the neighbor (who is on my direct marketing mailing list) also sells.  I'm thinking I let this woman and her grandson know what I found on the county records, and tell them I cannot buy unless the adjacent property also sells.  

Seller 2 is an out of state owner.  He has two vacant lots next to each other.  Together they make a decent lot.  He wants $20k for both.  After some initial research, I can't even get close to that number.  I still have a couple of phone calls to make and find out what the true market value is.  I will then offer 20% market value.  

Seller 3 I feel is my best chance at actually making a deal.  I was targeting vacant land, but the owner calls and tells me about a small commercial/residential property he is trying to sell.  I looked up the address on Google maps and found that this is a small store, in a residential area.  I have to confirm with zoning, but from the report I received this property was considered commercial.  Seller says the property was appraised for $50k and he did some recent renovations, duh, I should ask for the appraisal report and a copy of the permit.  He is a motivated seller, as he called left a voicemail, then called again before I could respond.   was upfront with the seller, I told him that I would have to find an investor to review the property before I could make an offer.  Problem I have, is that I don't know what to do with a commercial/residential property.  I don't have time to complete a flip, as I currently have a full time job.  So I'm thinking I wholesale the property, and even the seller said he would be ok with it.  I talked to one person I know who does buy and hold investing.  I forwarded him the information, he has not gotten back to me on it.  I know of a couple more people who might be interested.  The tax appraisal is $36k.  I need advice on how to follow through on this, and get this property under contract with the intent on wholesaling.  

My wife and I are fairly new to real estate investing. We have one SFR in Austin. We just started our first direct mailing campaign and are targeting vacant land. This strategy was inspired by the podcast with Seth William's.

I wanted to jump right in, spend money on different subscriptions, buy a guru course. My wife is more conservative than I am and is always asking those very important questions. "How do you know it is a good investment?" "How are you going to sell the properties?"  "Where are you going to get the money to finance the deals?"  This led me to do more research in land buying strategies. I made a deal with myself to not start spending money until I could answer her questions comfortably.  This made sure we could be on the same page when investing.  

By researching through bigger pockets and a few bloggers that specialize in land.  I was able to map out the process. I broke down each step and was able to answer the questions.  I created a basic business plan and created processes for the business. I was able to make informed decisions on what to spend money on. And we skipped the guru course, for now. 

I still have more to learn, but as most guests on the podcast say, don't wait until you know everything.  Thanks Bigger Pockets and members - Victor and Cynthia. 

Thanks for the replies. The geotechnical report provided the information for what type of foundation is best suited for the lot. It is 5 months old and still a valid report. I had a survey of the lot done and provided that information to the buyer. I will provide the geotechnical report to the potential buyer, as it is a sunk cost. I will however add that the report is for reference only. With the sale of this lot, I plan to use the $ for another rental. So I guess it is in my best interest to be upfront and get it sold.

My wife and I are new real estate investors. In less than a year we ended up with three properties. We were planning to move from our home in Austin to an area with acreage lots. We found a sub-division in Hutto that met most of our criteria. It was not our ideal location, but interest rates were low and this was our opportunity to buy our house of our dreams. The subdivision we found has great homes and plenty of empty lots. We purchased one of the lots, best one available. We hired a general contractor and started the build process. We have no complaints with the GC, but it seemed that the project was very slow. We had selected our floor plan, interior selections, and received a price. We negotiated the price down and even gave up some options, but we were still committed to building the home. Then our GC went on vacation. This is when we decided to see if any existing home out there would meet our needs. And we went to our ideal location and found a perfect home that was recently renovated on a large lot for less than the price of new construction. So we jumped on it, canceled out contract with the GC.

We turned our home in Austin to a rental. We used Bigger Pockets as a resource. And we have good tenants.

So now we have a 1.4 acre lot. A buyer approached me before I listed the lot up for sale. We have communicated back and forth through email, but there has been no contract drafted. The buyer has asked for the soil report on the lot. I don't have anything to hide, but the geotechnical soil report cost me $1500. I am reluctant to just share that, but I am also afraid to turn off potential buyers, as it may look like I am hiding something. How should I handle this? Should I tell them I will provide the report when are under contract. Should the sale price include the soil report cost? Any advice would be appreciated.