Ditch the Tenants, Keep the Profits: Exploring Land Flips

[00:00:00] Are you interested in building wealth through real estate, but you don't want to flip homes.

[00:00:04] You don't want to clean toilets.

[00:00:05] You don't want to be responsible for tenants and property managers and all of that jazz.

[00:00:10] Well, if that's the case, then today on this episode, you need to listen.

[00:00:14] I interviewed Seth Williams who talks about land flipping and how he moved into the

[00:00:18] land business a number of years ago and how he's using technology to buy land and

[00:00:24] flip it nationally and driving a tremendous profits.

[00:00:27] And there are no tenants.

[00:00:29] There are no toilets.

[00:00:30] There are no management companies and there are a lot of benefits that are available in

[00:00:33] this opportunity.

[00:00:35] So stay tuned, plug in and let's dive in.

[00:00:40] Welcome to The Brick and Mortar Money Show.

[00:00:43] The podcast dedicated to helping business owners and professionals achieve wealth,

[00:00:48] autonomy and control through commercial property ownership.

[00:00:52] Join us as we unlock the power of real estate to transform your business and

[00:00:57] investment strategies.

[00:00:58] Whether you're seeking to expand, invest or gain more freedom in your entrepreneurial

[00:01:03] journey, this is your destination for insightful stories, expert advice and

[00:01:09] actionable strategies.

[00:01:11] Welcome.

[00:01:15] Hey, welcome listeners today.

[00:01:17] I have the distinct honor and privilege of having Seth Williams today on our show.

[00:01:22] He is the founder of RE Tipster and he's an expert in land investment and land

[00:01:29] investing and self storage.

[00:01:30] And I really want to pick his brain today.

[00:01:32] I know a lot of you guys out there are really into multifamily and single family

[00:01:36] doing a lot of that, but I get asked from time to time about land and all the

[00:01:40] time about self storage because it's nothing like owning a building and have

[00:01:46] people paying rent.

[00:01:46] You don't have to plunge toilets right every single month.

[00:01:49] So I want to dig into that as well.

[00:01:50] So Seth, welcome to the show today.

[00:01:52] Hey Paul, good to be here.

[00:01:53] Thanks for having me.

[00:01:55] Yeah, yeah, absolutely.

[00:01:57] Absolutely.

[00:01:57] So just to kind of start off, and I want to talk as we get through this about

[00:02:02] your business, RE Tipster and what it is and why you got there.

[00:02:07] But tell us a little bit about how you got into the land world and became an

[00:02:11] expert there.

[00:02:12] Sure.

[00:02:13] Well for me, I got into land, it was back in 2009 I think was the first

[00:02:18] deal I ever bought.

[00:02:19] So it's been a while now, but it all started back when I was in college

[00:02:24] trying to figure out what to do with my life.

[00:02:26] And this would have been back in like 2005, 2006.

[00:02:30] And I read the book Rich Dad Poor Dad as many of us have and kind of gave me

[00:02:36] this idea of real estate, like start buying houses and doing that kind of

[00:02:40] thing.

[00:02:41] So I spent a lot of time trying to buy houses that I could like use as

[00:02:45] rental properties or flip them.

[00:02:47] And I could not do it to save my life.

[00:02:50] Like I couldn't find deals anywhere at the time.

[00:02:52] The market was pretty hot.

[00:02:56] And I just spent tons of time, you know, visiting houses and foreclosures

[00:03:00] and stuff and nothing ever panned out.

[00:03:03] And honestly, like even if it had panned out, I probably still would

[00:03:06] have screwed it up because I would have had to take out a loan.

[00:03:09] And I just I don't know that I'm that skilled of a person to be able

[00:03:13] to go through a house flip and do it on time, on budget without

[00:03:18] messing anything up.

[00:03:19] And so it was just kind of a difficult season.

[00:03:24] I knew I was trying to do real estate, but I couldn't put the pieces

[00:03:26] together.

[00:03:27] Didn't know how to find the motivated sellers.

[00:03:30] And it was around 2008 when I discovered the land flipping business.

[00:03:34] And it was just a life changing thing.

[00:03:37] And it continues to be life changing to this day because not only did

[00:03:42] I learn how to find motivated sellers in the first place, which

[00:03:44] was a huge discovery, but also realizing that it doesn't have to be

[00:03:49] houses that I work with.

[00:03:50] It could be land.

[00:03:52] And when you can get land cheap enough, you can make lots of money.

[00:03:56] And it's actually quite a bit easier than houses is because there's

[00:03:59] nobody living there.

[00:04:00] There's nothing that gets broken or stolen or destroyed.

[00:04:03] You don't really have to think about it.

[00:04:04] It just sits there and it behaves itself.

[00:04:07] And when I first heard about land, I thought, you know, similar

[00:04:10] to what most people think, I was just like, what?

[00:04:14] Like, why would I do that?

[00:04:15] Where's the cash flow?

[00:04:16] Like, I don't get it.

[00:04:18] And what I didn't understand was the fact that when you buy land or any

[00:04:23] asset for that matter, and when you know it's worth a certain amount,

[00:04:27] but you get it for way down here, a lot cheaper, it's very hard

[00:04:31] to lose money on that.

[00:04:32] It's kind of like if you found a $50,000 car and if you could buy

[00:04:35] that thing for 10 or $15,000, it wouldn't be that hard to sell that

[00:04:40] thing, you know, a few days or a few weeks later and make a lot of

[00:04:44] money on that.

[00:04:45] And you didn't have to do anything to it because it was already worth

[00:04:47] a lot more than you paid for it on the closing day.

[00:04:50] So it was really a matter of discovering how to find deals in the

[00:04:54] first place, but specifically land deals and the fact that land was

[00:04:58] a much easier type of property to work with.

[00:05:00] And like on the due diligence side, like with a house, you have

[00:05:04] to like get in the house and inspect it and walk around it and

[00:05:07] smell all the smells and all that stuff.

[00:05:10] And with land, there is no house.

[00:05:12] So anything you need to know, you can find out remotely with

[00:05:15] Google Earth, with different software and services online.

[00:05:19] And most of the properties I buy these days are in states I've never

[00:05:22] been to or I absolutely don't go and see them with my own eyes

[00:05:26] before I buy them because it's pretty easy to find somebody

[00:05:28] locally who can go and do that for me.

[00:05:31] And that's kind of the land business in a nutshell.

[00:05:34] I glossed over about 90% of the other details, but it's mainly

[00:05:38] just being able to buy a very simple type of property at a

[00:05:41] deeply discounted price and knowing how to find those motivated

[00:05:44] sellers.

[00:05:45] And when I started doing this, I started with very, very cheap stuff.

[00:05:49] I mean, my first lot was 331 bucks that I paid for it.

[00:05:53] And then I sold it for $1,900 a couple of weeks later.

[00:05:57] And those are not huge numbers.

[00:05:59] But when I did that and I realized I didn't need a realtor

[00:06:03] or an agent to do this for me, like I could do it all myself.

[00:06:06] I listed the thing and sold it on Craigslist.

[00:06:09] And what if I did a lot more of these or bigger versions of these?

[00:06:14] And that's kind of what I ended up doing in the following years.

[00:06:17] And it's awesome.

[00:06:20] And that's land is probably the thing that I know the most about.

[00:06:24] I've had the most success in that.

[00:06:25] So that ends up being usually when I write stuff on our tips,

[00:06:28] your make videos, it has something to do with land.

[00:06:31] But I try to explain it in such a way that it's relevant

[00:06:34] and applicable to other real estate pitches as well.

[00:06:38] There you go.

[00:06:40] Well, OK, wow, there's a lot to unpack there.

[00:06:42] So yeah, I was making some notes here thinking about it.

[00:06:46] So certainly the idea, I don't think anybody would argue

[00:06:50] if you could buy an asset low and sell it high, right?

[00:06:53] The wisdom of the ages, right?

[00:06:55] Buy low, sell high works.

[00:06:58] The question, the biggest question comes to mind is,

[00:07:03] A, number one, how can you find a property that's so undervalued?

[00:07:07] B, what's your typical kind of hold time, what's involved?

[00:07:12] And if you can find a piece of property that's undervalued

[00:07:14] and then turn around and sell it, how come it's available?

[00:07:18] You know, and you use the term motivated seller.

[00:07:20] So they might all be sort of wrapped up in the same kind of question.

[00:07:27] So in terms of how you find them,

[00:07:29] I mean, there's many different ways to do it.

[00:07:31] When I got started, what I was using was the delinquent tax list.

[00:07:34] So I went to my county in several different counties

[00:07:37] and got the list from the treasurer or the tax collector

[00:07:40] of all the properties that are currently back due on their property taxes.

[00:07:44] And I found that a lot of those properties ended up being vacant land

[00:07:47] because with houses or any kind of building,

[00:07:50] when you have a mortgage on it,

[00:07:52] usually the bank or the mortgage lender is going to force you

[00:07:55] to have an escrow account to pay off those taxes.

[00:07:58] And with land, especially cheap residential lots,

[00:08:02] mortgage lenders want nothing to do with that.

[00:08:05] Unless you're planning to improve that lot or build something on it,

[00:08:08] they won't lend you the money on it.

[00:08:10] Now, if it's like a much more expensive or a big lot

[00:08:13] or if there's some way it makes income,

[00:08:14] that changes the discussion.

[00:08:16] But usually banks are not involved with those cheaper residential lots.

[00:08:19] And as a result, if people don't pay their taxes,

[00:08:22] it's very easy for them to either forget about it

[00:08:25] or one way or another, there's not an escrow fund

[00:08:29] forcing that tax bill to be curbed.

[00:08:33] So that's one way to do it.

[00:08:35] You could also just skip that delinquent taxes altogether

[00:08:38] because it's kind of a pain to get

[00:08:39] and just download lists of vacant landowners.

[00:08:41] That's what most people do.

[00:08:42] That's usually what I do these days.

[00:08:44] It's just simpler.

[00:08:46] Yeah.

[00:08:46] And when you send out direct mail

[00:08:48] or what other people are doing now is like texting

[00:08:50] or a cold calling or ringless voicemail,

[00:08:53] however you want to reach out to these people,

[00:08:55] you just say, hey, I see you own vacant land.

[00:08:58] I'm a land investor.

[00:08:59] I'm looking to buy land in your area.

[00:09:01] If you're interested in selling, give me a call.

[00:09:03] And when your list contains the right people,

[00:09:06] I don't mean to say that most people are going to respond with yes,

[00:09:09] because they won't,

[00:09:10] but you will certainly find a small segment that will respond.

[00:09:14] And they're apathetic.

[00:09:15] Like they don't care about their property.

[00:09:16] Maybe they inherited it.

[00:09:18] Maybe they bought it 20 years ago and their plans changed.

[00:09:21] A lot of times it's out of sight, out of mind.

[00:09:23] Like the vacant lot is in a different county or state

[00:09:26] than the one that they live in.

[00:09:28] So they just don't see it.

[00:09:30] What they do see is a annoying tax bill every year

[00:09:32] that they don't really want to pay.

[00:09:34] So it's just a matter of saying, hey, like you got a problem.

[00:09:38] I can eliminate that problem.

[00:09:40] I'll pay off your back to you taxes if you have any.

[00:09:43] And you can sell to me for this price.

[00:09:46] And that price is a big discount on its value.

[00:09:48] And we're never trying to hide this from people.

[00:09:50] We're not like trying to convince them it's worth less.

[00:09:53] We're just paying what we want to pay for,

[00:09:56] like what makes sense to me.

[00:09:58] And again, don't get me wrong, a lot of people say no,

[00:10:01] but some people say yes.

[00:10:03] And I think in the acquisition and the real key is just

[00:10:07] to make sure you're doing your homework on the property

[00:10:09] and understanding what is the highest

[00:10:12] and best use for this property?

[00:10:13] What can be done with it?

[00:10:14] Because that has everything to do

[00:10:15] with what that property is worth

[00:10:18] and how fast it's going to sell.

[00:10:20] And also just working in markets where land is selling faster

[00:10:24] in the first place.

[00:10:25] So you don't have to push it so hard

[00:10:26] to get these properties sold.

[00:10:27] That also helps a lot too.

[00:10:30] But that ends all your questions,

[00:10:32] talking about how we find them.

[00:10:34] What I think another thing is that,

[00:10:37] so when I first got into real estate,

[00:10:38] when I mentioned I've spent hundreds of hours

[00:10:40] wasting time not finding deals,

[00:10:42] the reason I was wasting so much time

[00:10:44] is because I was only looking for properties

[00:10:46] for sale on the MLS.

[00:10:48] And by nature of the fact of when you put a first sale sign

[00:10:52] in your front yard,

[00:10:53] that means you have some idea of what it's worth

[00:10:55] and you care about getting that number.

[00:10:58] Apathetic people don't put the first sale sign

[00:11:01] in their front yard.

[00:11:02] So like nobody even knows the deal exists

[00:11:04] unless you root it out and you find it

[00:11:06] by sending out this mail or reach out to them,

[00:11:09] however you want to do that.

[00:11:11] And that was a huge, huge light bulb moment for me,

[00:11:14] just realizing I mean,

[00:11:16] I'm not limited to just the people

[00:11:18] that are trying to sell their property.

[00:11:20] I can actually talk to anyone if I want to and you can.

[00:11:22] It's actually really easy when you know

[00:11:24] where to get these lists

[00:11:25] and how to start the conversation.

[00:11:28] Well, that does make a lot of sense.

[00:11:31] I mean, from a standpoint,

[00:11:33] I've worked with a lot of clients

[00:11:36] that do some property flipping

[00:11:38] and some at the sort of a high level,

[00:11:40] some just kind of on the lower ends,

[00:11:41] but one of the common themes,

[00:11:44] and I didn't realize this a few years ago,

[00:11:47] but I had the same question.

[00:11:48] How do you find these properties that are so undervalued?

[00:11:52] And it seems like the common answer was

[00:11:57] it's a seller, use the word apathetic,

[00:12:00] but it's either a crisis or an apathy.

[00:12:05] Someone inherited this property

[00:12:08] and I've seen my brother do it many times actually

[00:12:11] that someone, he has a very good network of people

[00:12:15] and then someone inherits land.

[00:12:18] They died, they're like,

[00:12:19] hey, we don't want this property

[00:12:20] and their parents were really old

[00:12:23] and they were hoarding or whatever.

[00:12:24] It was a mess.

[00:12:25] And so he can go in there like,

[00:12:26] hey, I'm gonna clean this place out for you

[00:12:29] and because they don't wanna go through

[00:12:30] all the hassle of doing that.

[00:12:32] They just wanna get it off of their plate,

[00:12:34] maybe get some money for it

[00:12:36] or the divorce situation or whatever.

[00:12:40] And having owned land myself

[00:12:42] in a different state at one time,

[00:12:45] yeah, the tax bills come, I mean all the time.

[00:12:47] And it's like, okay, what are we gonna do with this?

[00:12:51] So it seems like to me,

[00:12:52] maybe it's a timing thing as well, right?

[00:12:54] I mean, you could talk to the same person

[00:12:58] over the course of two years

[00:13:00] and upfront they may not be interested

[00:13:02] because they have these plans that we're gonna do

[00:13:03] but life happens to everybody,

[00:13:05] plans change maybe and now they're like,

[00:13:07] ah, you hit them at the right place at the right time.

[00:13:11] And an opportunity shows up.

[00:13:12] Yeah, yeah, for sure.

[00:13:15] And so this is something Seth that you've done,

[00:13:18] you came out of college.

[00:13:19] I appreciate the fact that you said

[00:13:20] that you weren't good at the flipping thing

[00:13:26] because obviously it's one of these things

[00:13:28] that everyone thinks is it's made to sound so easy.

[00:13:32] And of course, when you turn on HGTV,

[00:13:35] I always get a kick out of it

[00:13:36] because they buy this $50,000 bungalow

[00:13:40] and they decide they wanna put a new mantle place

[00:13:43] over the fire and now it's worth $250,000

[00:13:46] and I'm like, wow, that's pretty good.

[00:13:48] And it sells for over asking price

[00:13:52] and of course it's all in California.

[00:13:54] I'm like, all right, well,

[00:13:56] and of course, all the hosts and everything

[00:13:58] and there's lots of plastic surgery

[00:14:00] and they're like, okay,

[00:14:01] well this is unreality TV, right?

[00:14:05] Having known a lot again,

[00:14:07] and I've seen people in the business,

[00:14:08] it's like, yeah, that's not reality.

[00:14:08] Go ahead.

[00:14:09] Yeah, well, that's interesting

[00:14:10] because I've actually had people reach out to me

[00:14:14] on a couple of occasions about trying to do a reality show

[00:14:16] for vacant land investing

[00:14:18] and whenever they do,

[00:14:20] I kind of know where the conversation is gonna go

[00:14:23] before we even started

[00:14:24] because I understand the reason a land flipping show

[00:14:29] is so popular on something like,

[00:14:30] I'm sorry, a house flipping show

[00:14:32] is popular on something like HGTV

[00:14:34] because there's kind of a lot of drama

[00:14:36] and there's a lot of like,

[00:14:38] there's like a before and after reveal and all this stuff

[00:14:40] and I find that stuff really entertaining too.

[00:14:43] With land, that stuff isn't there.

[00:14:45] It's kind of a boring business in a lot of ways

[00:14:47] and there isn't that drama

[00:14:49] and that's a great thing for land investors.

[00:14:51] It doesn't make for a great TV show

[00:14:53] and that's probably why I don't think

[00:14:55] there's ever gonna be one

[00:14:56] unless they find a really creative way

[00:14:57] to make it more dramatic than it really is

[00:14:59] but you're talking to people

[00:15:00] that just don't care about their land

[00:15:02] and the way I like to do deals is when I buy it,

[00:15:05] I don't do anything to it.

[00:15:07] So like I'm not changing anything.

[00:15:08] It's just automatically worth more when I buy it

[00:15:11] so it doesn't require a whole lot of sweat equity.

[00:15:13] You can do that if you want

[00:15:14] and sometimes, in the past,

[00:15:16] I've changed the zoning before.

[00:15:18] I've built stuff on land before.

[00:15:19] Some people will do what's called brush hogging

[00:15:21] where you basically like cut all the weeds and stuff out

[00:15:23] so you can actually see into the property

[00:15:26] so you can do that kind of stuff

[00:15:27] but usually if the fundamentals are sound,

[00:15:30] if you just buy the right property in the first place,

[00:15:32] you shouldn't really have to do anything.

[00:15:36] So that's a great question.

[00:15:38] So what are the fundamentals?

[00:15:40] I mean, what are you looking for in land?

[00:15:41] Yeah, well it starts with understanding

[00:15:44] what the property is worth

[00:15:46] and this is one of the trickiest things

[00:15:48] about the land business that doesn't apply

[00:15:50] to houses and buildings

[00:15:52] because if you understand how an appraisal works

[00:15:54] for a house, there's usually three different approaches

[00:15:57] that the appraiser can choose from.

[00:15:59] They can do the income approach

[00:16:00] and figure out how much is this property making?

[00:16:02] We're going to come up with a value based on that

[00:16:04] or the cost comparison, I'm sorry,

[00:16:07] the sales comparison approach

[00:16:09] where you look at what did other similar houses sell for

[00:16:12] or the cost approach where you figure out

[00:16:14] if we had to rebuild this house from scratch today,

[00:16:17] what would that cost to rebuild this?

[00:16:19] Usually appraisers will look at one or two

[00:16:21] of those three options, maybe all three.

[00:16:23] With land though, the cost approach doesn't work

[00:16:26] because there's nothing on it

[00:16:27] so there's no cost to rebuild anything.

[00:16:30] The income approach usually doesn't work

[00:16:32] because usually the vacant residential lot

[00:16:34] is not making money.

[00:16:36] So all you have to go by

[00:16:37] is the sales comparison approach

[00:16:38] by figuring out what did other similar vacant lots

[00:16:41] sell for in the area.

[00:16:43] Sometimes that's easy to do

[00:16:44] if it's like a residential infill lot

[00:16:46] and it's surrounded by a hundred other

[00:16:48] similar infill lots, that's not that hard.

[00:16:51] But a lot of times the vacant lot

[00:16:53] will be one of a kind.

[00:16:55] There's literally nothing else like it in the area

[00:16:58] like a five acre lot with rolling hills

[00:17:00] and a stream going through it

[00:17:02] and road frontage on one side.

[00:17:04] There just isn't anything else like that out there.

[00:17:06] So that leads you to wonder

[00:17:09] how do I come up with this number now?

[00:17:11] And there are certainly ways to try to

[00:17:14] get a ballpark valuation by looking at

[00:17:17] the closest comparables you can find

[00:17:19] that might be a different size

[00:17:20] but maybe dividing them up

[00:17:21] on like a per acre value basis.

[00:17:24] But a lot of times it's just an imperfect situation

[00:17:27] and the best you can do is kind of guess at it.

[00:17:29] Even licensed appraisers will tell you

[00:17:31] like we don't really know what we're doing here.

[00:17:34] This is the best we can come up with.

[00:17:36] So the reason I'm talking so much about the value

[00:17:40] is because that determines

[00:17:42] what your offer price is ultimately gonna be.

[00:17:46] And depending on the value of that property,

[00:17:48] your offer price might be anywhere from like

[00:17:50] these days 30 to 50% maybe higher

[00:17:54] if it's a super valuable property

[00:17:56] if you're really confident you can sell the thing quickly

[00:17:59] or if you're gonna like subdivide the property

[00:18:00] and make it worth a lot more

[00:18:02] then you could maybe even offer 90 or 100%.

[00:18:05] And that's okay because it's gonna be worth a lot more

[00:18:07] when you subdivide it and resell the thing.

[00:18:09] So it's kind of just understanding first of all,

[00:18:11] how do you find that value?

[00:18:13] And then once you have that number,

[00:18:15] how do you come up with an appropriate offer price

[00:18:17] based on what that value is?

[00:18:18] And the objective is your offer should be

[00:18:21] way lower than the full market value

[00:18:23] so that you have enough margin in there

[00:18:25] so that if you end up being wrong,

[00:18:27] say if you overestimated how much the thing was worth,

[00:18:30] it's still okay because you put a super low offer in there

[00:18:33] and you basically walked into it

[00:18:35] with a ton of equity on closing day.

[00:18:39] That make sense?

[00:18:40] Okay, so you build that margin upfront.

[00:18:42] I think the word that comes to mind

[00:18:45] when you're talking about that is

[00:18:46] the market's sort of inefficient, right?

[00:18:49] So whereas the stock market,

[00:18:54] even the real estate market with the,

[00:18:56] you look at the single family

[00:18:58] and you talk about appraisal,

[00:18:59] it's really pretty easy to do valuations of comparables.

[00:19:04] It becomes more difficult when you get out

[00:19:06] in more rural areas for some of the same reasons

[00:19:08] you're talking about,

[00:19:09] but the more efficient a market is,

[00:19:12] the easier it is for technology and big players

[00:19:16] to kind of come in and take the profit out,

[00:19:19] the opportunity out, right?

[00:19:20] But the more inefficient a market is,

[00:19:23] the more opportunity there is

[00:19:26] for the solo entrepreneur, right?

[00:19:30] Or the free agent to get in there

[00:19:32] and figure out how they can take advantage of that

[00:19:34] because it's not hard,

[00:19:35] it's not easy to do at scale.

[00:19:37] They'd rather, the big money

[00:19:39] would rather go somewhere else where it's easier to,

[00:19:41] not that you can't do it at scale,

[00:19:42] but you know what I mean,

[00:19:43] it's just, it's harder.

[00:19:45] Yeah, I will say-

[00:19:46] Would you agree that that's-

[00:19:47] Yeah, I think historically

[00:19:49] that's definitely been true

[00:19:50] and that's kind of where the opportunity lives,

[00:19:52] but I will say, I think the land market

[00:19:54] is about as efficient now as I've ever seen it.

[00:19:57] It is probably harder today than it ever has been

[00:20:00] to find these deals easily.

[00:20:02] It used to be I could send out a few hundred postcards

[00:20:05] and expect to walk away with at least one deal from that.

[00:20:08] Now it's more like a few thousand of those

[00:20:10] and you might get a deal.

[00:20:12] And I think what's going on is,

[00:20:15] first of all, there's a lot more people doing this today

[00:20:17] than there were, what was it?

[00:20:19] 15 years ago when I first started doing this.

[00:20:22] So that's a big part of it,

[00:20:23] but also where the market is at right now,

[00:20:26] I mean as you know, housing prices are way high,

[00:20:29] like double what they were a few years ago

[00:20:31] and that's applying to land as well.

[00:20:33] And it's also, people are kind of, they're onto it.

[00:20:38] Like they understand that their land is not worthless

[00:20:40] and it kind of depends on what markets you're in

[00:20:44] or what kind of motivated seller you're talking to,

[00:20:45] but some markets are really hard to find

[00:20:47] these super cheap properties these days.

[00:20:49] Others you can definitely find them,

[00:20:50] but then you'll have to wait a little bit longer

[00:20:52] to sell them.

[00:20:53] So we're kind of in this world now

[00:20:54] where people are having to use different marketing mediums.

[00:20:57] It used to be every land investor

[00:20:59] just used direct mail and that's it.

[00:21:01] And now people are trying to hit motivated sellers

[00:21:03] from all these different angles.

[00:21:05] And I think the people that I see

[00:21:06] that are really doing well these days,

[00:21:08] even in the midst of this higher competition is,

[00:21:11] they're changing up the recipe in some way.

[00:21:13] Like they're not just doing the same old thing

[00:21:15] that worked 10 years ago.

[00:21:17] They're coming to the table

[00:21:18] with some kind of different value proposition.

[00:21:20] Maybe they're willing to offer more

[00:21:21] because they're planning to improve it in some way,

[00:21:24] or maybe they're gonna buy up 20 properties

[00:21:26] from the seller at once and get a good deal that way.

[00:21:29] So I think if anybody's getting into this now,

[00:21:31] it's just worth being aware.

[00:21:33] It's harder than it used to be,

[00:21:34] but it's still doable as long as you're willing

[00:21:36] to come to the table and be creative

[00:21:37] and have some different solutions

[00:21:40] than the average land a flipper is gonna have.

[00:21:44] Okay.

[00:21:45] Yeah, well I think that's pretty much true

[00:21:46] with anything across the board.

[00:21:48] As time goes on, let me talk about efficiency and inefficiency.

[00:21:52] The internet and technology and information

[00:21:54] has made things much more readily available as well.

[00:21:57] And you talk about most of your deals

[00:22:00] aren't even in your backyard, right?

[00:22:01] They're across the country.

[00:22:03] So that might not have been possible years and years ago.

[00:22:09] Talk about financing on that

[00:22:10] because being in the finance world,

[00:22:14] people ask me periodically, hey can we finance land?

[00:22:16] And you made a comment earlier.

[00:22:18] Generally, the answer is yes

[00:22:20] if you're gonna build something on it

[00:22:21] and we have a timeline.

[00:22:23] But if you just wanna buy land and hold onto it,

[00:22:27] nobody really wants to finance that, generally speaking.

[00:22:30] Yeah, yeah.

[00:22:31] And I think the reason for that,

[00:22:34] it comes back to this trickiness of valuing land.

[00:22:37] The fact that appraisers hardly even understand

[00:22:40] what they're doing with it.

[00:22:41] And when you look at a bank's perspective,

[00:22:43] it matters a lot, the value of their collateral

[00:22:47] and that they understand what that's worth.

[00:22:48] And if they don't really understand what it's worth,

[00:22:50] it just kind of puts a lot of question marks

[00:22:52] in the equation that they don't like to see.

[00:22:54] And as someone who used to work in the banking industry,

[00:22:56] you're like, I get it.

[00:22:58] I wouldn't really want to either

[00:23:00] unless I was a land specialist

[00:23:01] and I understood land really well

[00:23:03] and most banks are not that.

[00:23:06] So because of that, there's actually

[00:23:07] this new little sub industry

[00:23:10] that's been created in the land flipping space

[00:23:13] where there's probably like 20 or 30 land funders out there now

[00:23:17] who say if you want to buy a piece of land

[00:23:19] and you want to flip it

[00:23:20] and a bank won't finance it, which is very common.

[00:23:23] These funders will come in and they'll pay for everything.

[00:23:25] They'll buy the whole thing for you.

[00:23:27] They'll put the title in their name usually.

[00:23:29] And then when the thing sells,

[00:23:31] they will split the profits 50-50.

[00:23:33] So the funder gets half the profit

[00:23:35] and the operator, the person that found the deal,

[00:23:37] they get the other half of the profit.

[00:23:39] And that is something that did not exist

[00:23:42] when I got into this.

[00:23:43] And it's kind of interesting.

[00:23:46] I actually think it's pretty fascinating.

[00:23:48] I'm trying to do some of these deals myself as a funder

[00:23:51] because when you think about the uncertainty

[00:23:53] of a land deal and that difficulty

[00:23:55] and understanding the value,

[00:23:57] it helps to have more than one person looking at it,

[00:24:00] not just the operator, the funder too,

[00:24:03] or maybe even a couple different funders.

[00:24:05] And that way, like everybody can kind of get

[00:24:07] on the same page.

[00:24:08] They can help support each other's assumptions

[00:24:10] and that kind of thing.

[00:24:11] Even if everybody ends up being wrong

[00:24:13] about what they thought the value was,

[00:24:14] at least they were working together on that.

[00:24:17] They weren't just being foolish

[00:24:18] and just going at it alone.

[00:24:19] So that's kind of an interesting thing

[00:24:22] that's been happening in the financing space

[00:24:24] for land in terms of buying it.

[00:24:27] Another thing people are doing

[00:24:28] is they're buying land with seller financing.

[00:24:31] So the seller will just agree to accept payments

[00:24:35] over the course of a year or a few years.

[00:24:37] And that ends up being fine

[00:24:38] because the land flipper is just trying

[00:24:39] to flip the thing fast anyway.

[00:24:41] Like their plan is to have the thing sold

[00:24:43] in three to six months.

[00:24:44] So it's not really a big deal to them.

[00:24:46] And there are some banks that will finance this stuff,

[00:24:49] but it's usually gonna be the smaller community banks.

[00:24:52] And again, they're gonna wanna see some kind of plan

[00:24:55] whether you're planning to subdivide it or something.

[00:24:57] Like it's gonna be worth a lot more

[00:24:59] when you're done with it.

[00:24:59] And they'll be able to understand that valuation

[00:25:03] with some actual clear data.

[00:25:06] Right, right.

[00:25:07] Yeah, for sure.

[00:25:08] I would imagine that the seller financing option

[00:25:13] is probably fairly popular too

[00:25:14] because if you have some of that owns land

[00:25:17] and you can find a buyer and they're paying you,

[00:25:20] you still have a lien on the land

[00:25:22] until it's sold essentially.

[00:25:24] And so you're getting cashflow

[00:25:25] and if it's paid off

[00:25:26] then you're getting free cashflow essentially.

[00:25:28] So why wouldn't you at the end of the day?

[00:25:31] Yeah, it's actually-

[00:25:32] And now Kirk in New Mexico or something.

[00:25:34] Yeah.

[00:25:35] I feel like it's actually a newer thing

[00:25:38] where people are buying with seller financing.

[00:25:40] What is not a new thing

[00:25:41] is when these land flippers will sell with seller financing.

[00:25:44] That's a very common strategy.

[00:25:46] It does introduce some complexities to your business

[00:25:49] if you get on that road,

[00:25:50] but if you're willing to deal with those complexities,

[00:25:53] it is a huge help in selling your properties faster

[00:25:56] because of this whole financing obstacle

[00:25:58] that most buyers are gonna have.

[00:25:59] You can also make a lot more money over the long term

[00:26:02] by charging 10% interest on each deal.

[00:26:06] The only real drawback is that it takes longer

[00:26:08] to get your money.

[00:26:09] So you gotta wait three to five years

[00:26:11] till the thing pays off or maybe sell that note

[00:26:14] and then take a little haircut when you sell that.

[00:26:16] So it's not like all unicorns and rainbows,

[00:26:19] but for some people seller financing is a huge deal

[00:26:22] when they sell their land

[00:26:23] because it's kind of like what allows them

[00:26:27] to dispose of their land

[00:26:29] and make the money a lot faster

[00:26:31] than they otherwise would be able to

[00:26:32] if they're only selling for cash.

[00:26:33] That makes sense.

[00:26:35] Yeah, yeah, absolutely.

[00:26:37] And the tax implications are different.

[00:26:39] So there's some great opportunity there.

[00:26:43] The idea of these land funder groups

[00:26:47] is pretty interesting too

[00:26:48] that somebody would be willing to partner 50-50.

[00:26:51] I do like the idea,

[00:26:52] particularly as you're learning in a space like that

[00:26:55] to have a backstop and someone to say,

[00:26:57] well, I'm gonna pony up half the money

[00:26:59] or all the money basically, right?

[00:27:01] So I'm gonna make sure this deal passes the sniff test

[00:27:05] because ultimately the one

[00:27:06] that's putting the money on the table

[00:27:08] is the one that's generally most interested

[00:27:09] in getting their money back,

[00:27:11] as Will Rogers said, right?

[00:27:13] For sure.

[00:27:14] So that's a pretty fascinating concept.

[00:27:16] Yeah.

[00:27:18] Okay.

[00:27:19] So what else?

[00:27:21] Is there anything else

[00:27:22] that we haven't really talked about

[00:27:23] around the land investing side?

[00:27:27] Technology.

[00:27:28] How are you using technology today differently maybe

[00:27:34] or how would someone consider that?

[00:27:35] Yeah.

[00:27:36] Does that, certainly that has,

[00:27:38] gives you an advantage that you didn't have 10 years ago.

[00:27:41] Sure.

[00:27:43] Yeah, so that's a huge question.

[00:27:45] We've talked about that for a long time.

[00:27:46] I will say just really quickly,

[00:27:48] if you ever wanna see all the different technology

[00:27:50] that I use,

[00:27:51] if you go to retipster.com forward slash resources,

[00:27:55] you'll basically see all the stuff I use for the most part.

[00:27:59] Some of it's free, some of it's paid,

[00:28:00] but there's a ton of tools out there

[00:28:03] that are super helpful.

[00:28:04] A lot of the stuff did not exist when I got started.

[00:28:06] One of them is called a land ID.

[00:28:08] It's a very helpful research tool

[00:28:11] where you can look at any parcel of land

[00:28:12] of the country and get all kinds of information about it

[00:28:14] like is it in a flood zone?

[00:28:16] Are the wetlands on or near it?

[00:28:19] Who owns the thing?

[00:28:20] Lots of information there.

[00:28:21] Even Google Earth is a hugely helpful free tool

[00:28:24] that you can use.

[00:28:25] I've used that for a long time.

[00:28:27] Data Tree, there's tons of different data services

[00:28:30] you can use to research these properties,

[00:28:33] figure out who owns them, when did they buy them,

[00:28:35] what did they pay for them,

[00:28:36] what's the size of the property,

[00:28:38] who's on title, do a title search through the service,

[00:28:40] all this stuff.

[00:28:42] Again, if you go to retipster.com forward slash

[00:28:44] resources, you'll see all the stuff I use

[00:28:46] along with explanations of why I use them

[00:28:49] and why they're helpful.

[00:28:51] But yeah, technology is a huge deal for a land investor

[00:28:54] because a lot of this is done remotely,

[00:28:56] all of it really in my case.

[00:28:58] So if that technology isn't there,

[00:29:00] you're in trouble because you gotta get these answers

[00:29:02] somehow.

[00:29:03] Right.

[00:29:06] Okay, so then a thought that comes to mind as well

[00:29:10] is let's say you have a lot of our listeners

[00:29:12] own businesses right now

[00:29:13] and so they have successful businesses

[00:29:15] but they're looking to diversify,

[00:29:17] set up multiple streams of income

[00:29:18] or invest in real estate.

[00:29:20] Is this something that you can do sort of on the side

[00:29:23] or is this something that requires

[00:29:24] you gotta be in this thing full time,

[00:29:26] particularly with today's world

[00:29:28] but the competition and that sort of thing.

[00:29:30] Yeah, I've actually always done this on the side.

[00:29:32] I've never done this full time.

[00:29:33] It's always been a part-time gig for me.

[00:29:35] When I started it, I basically just spent my nights

[00:29:37] and weekends doing this

[00:29:38] and I was able to make a full-time income

[00:29:41] more than my job was making

[00:29:42] just doing this on the side.

[00:29:44] That's what a lot of people do

[00:29:45] and that's where a lot of people start.

[00:29:47] And a lot of people stay there.

[00:29:49] They don't want this to be their life.

[00:29:50] They just kind of want a way to pay

[00:29:52] their kids college on the side

[00:29:53] or buy the new car, pay off their loans

[00:29:55] or whatever it might be.

[00:29:57] But people that do want to take it full time, absolutely.

[00:30:00] Those are the people that make millions a year doing this

[00:30:02] and it's a very full, active business.

[00:30:05] It's not passive at all really.

[00:30:07] It's kind of like peddling on the bike.

[00:30:09] If you don't keep peddling,

[00:30:10] the money's gonna stop coming in.

[00:30:12] But yeah, certainly.

[00:30:14] If you wanna make tons of money,

[00:30:16] that opportunity is there.

[00:30:18] Yeah, because you've got to continue the pipeline.

[00:30:23] You're up at the very top

[00:30:24] trying to start with all these potential properties

[00:30:26] and narrowing it down to candidates

[00:30:27] and then offers.

[00:30:29] And then ultimately you have a portfolio you're selling.

[00:30:32] So you gotta get that off the books

[00:30:34] to recycle your money

[00:30:35] or depending on how you're doing the money thing.

[00:30:39] Man, Seth, this has been great.

[00:30:40] Is there anything I haven't asked you about this?

[00:30:42] We're pretty much at the end of our time.

[00:30:44] I'm definitely gonna check out retipster.com

[00:30:48] slash resources to dig in a little bit

[00:30:51] because it's fascinating.

[00:30:52] But is there anything else that we didn't cover?

[00:30:56] Yeah, I mean if you're interested in learning more,

[00:30:58] I've got a free,

[00:31:00] it's kind of like a little free course I guess.

[00:31:02] If you go to landflippinglifecycle.com,

[00:31:05] it'll forward you to a blog post I wrote

[00:31:07] that basically explains this whole business

[00:31:10] in a nutshell and includes links

[00:31:12] to a lot of other helpful resources on retipster

[00:31:14] that will explain step by step

[00:31:16] how to actually implement each one of these things.

[00:31:18] You're looking for an actual full-blown A to Z course

[00:31:21] that shows you everything that I know,

[00:31:23] everything you need to know

[00:31:25] that's at landinvestingmasterclass.com,

[00:31:28] the course that I came out with back in 2015

[00:31:31] and I continually keep it updated every year.

[00:31:34] I'm probably in there adding new content

[00:31:35] every month or so.

[00:31:37] And that's kind of like my baby.

[00:31:39] Like if somebody really wants to know this business,

[00:31:41] that's where I explain everything.

[00:31:42] And yeah, so I check those things out if you're interested.

[00:31:45] Otherwise just retipster.com,

[00:31:46] there's a ton of free content there.

[00:31:49] You don't have to pay a cent for anything.

[00:31:51] I've put thousands of hours

[00:31:52] into putting the best information out there.

[00:31:54] So for sure, check that out.

[00:31:56] That's great.

[00:31:57] Well, we appreciate that.

[00:31:58] It sounds like an amazing resource to dig in

[00:32:00] for someone who's interested in

[00:32:01] and looking at land as an alternative.

[00:32:03] It sounds like there's a lot of advantages to it

[00:32:05] in terms of again, it's kind of boring,

[00:32:07] kind of slow in a sense that

[00:32:09] you don't have a lot of drama,

[00:32:11] but a lot of us like that.

[00:32:13] Predictability and boring is not a bad place to be.

[00:32:17] Yeah, I love it.

[00:32:18] My favorite thing.

[00:32:21] Yeah, awesome.

[00:32:21] We can get our excitement somewhere else, right?

[00:32:23] In life. Yep, exactly.

[00:32:25] Beautiful.

[00:32:26] Well, man, thanks for being on the show today.

[00:32:28] I really appreciate it.

[00:32:29] I think it was super valuable

[00:32:30] and very different and interesting.

[00:32:32] Something different than we've had.

[00:32:33] Awesome, man.

[00:32:34] I'm glad I could help.

[00:32:35] Thanks for having me on.

[00:32:36] It's great to talk to you.

[00:32:36] Hey gang, just winding down here today.

[00:32:38] Thanks for listening to the show.

[00:32:39] And as always, if you need capital

[00:32:42] to grow your business,

[00:32:44] you're looking to purchase commercial real estate

[00:32:48] or build a building

[00:32:49] or invest in commercial real estate

[00:32:51] or looking to acquire a business

[00:32:53] or a competitor or just need growth capital,

[00:32:56] we'd love to talk to you.

[00:32:56] We fund businesses all day long.

[00:32:58] Our mission is to help entrepreneurs win

[00:33:01] and to fund their businesses

[00:33:02] and fund their dreams

[00:33:04] so that they can make an impact in their community.

[00:33:06] Reach out to me today.

[00:33:07] Go to our website,

[00:33:08] click the button to schedule

[00:33:09] a 20 minute conversation discovery call.

[00:33:12] We'll have a quick conversation,

[00:33:13] see if there's a need,

[00:33:14] see if there's a fit

[00:33:15] and we can take it from there.

[00:33:17] The website is VPC,

[00:33:20] Victor Paul Charlie dot capital.

[00:33:24] That's VPC dot capital.

[00:33:27] All right, there's no dot com on that.

[00:33:29] It's VPC dot capital.

[00:33:31] As always keep crushing it

[00:33:33] and hope to see you soon around here.

[00:33:35] Take care.