A Note from Seth (E.B. Farmer): This week, we’ve got a student of mine who has been kind and diligent enough to share his story with our community. There is plenty to be learned here, and it is quite an interesting story. If you or someone you know has had success land flipping (particularly if you’ve used ‘The Land Flipper” method), we would love to hear your story as well! Contact me at firstname.lastname@example.org, and you’ll receive a free hour long consultation with me for your trouble. Enjoy! And be sure to thank Philip Duke personally in the Facebook group.
Let me introduce myself: my name is Philip and I am 30 years old, single and I live out east. I believe it is important to highlight my prior income generating history as it has served a major role as to how I have prepared to become a full time land investor. In my prior life, I was a Nursing Assistant on a surgical floor. I have always had an innate desire to help folks. In my early 20s, my goal was to become a Registered Nurse, but I struggled with school.
Grinding out 60-hour-plus weeks for 12 dollars an hour, neck deep in all sorts of bodily fluids, started to put a strain on me after 8 years. I have always had an entrepreneurial spirit, and decided that change was needed in order for me to be happy. I relocated from the city back to a the rural setting of my hometown, switched to a higher paying (but still blue collar) job, and proceeded to work as much overtime as I could. Over the next 3 years, my bank account went from 3K in savings to 37K. During those years, I devised a way to listen to lectures, podcasts and books while working, through a Bluetooth system that I wired into a baseball cap.
The content I consumed was mostly financial and business related material along with some regarding health and well-being. I turned my manual labor job into an education and a workout. In my opinion, I learned more from consuming content while loading trucks than any college course had ever taught me. In the course of my audio-education, I stumbled upon a land investing model. I was immediately floored with how simple the idea was.
Buy undervalued land and sell it for more.
I started to relish the idea of making a living doing something I was in charge of. And yet, I hesitated and continued to plug away at my job. On November 8th of last year my hand was finally forced. That day was one was one of the worst in my life, but has since turned out to be a huge blessing. I was fired for a safety violation (my jerry-rigged bluetooth set was discovered in the process). With no job and with 37K in the bank, I decided I wanted to pursue this land investing idea. I reckoned that if I didn’t make the leap then, in that moment, then I would likely never do it.
It was at this time that I read “The Land Flipper” By E.B Farmer, as well as similar how to books. Starting off, I attempted to emulate some of the prominent gurus in the field and became familiar with sending postcards to tax delinquent folks. I initially started with states on the west coast and felt extremely uncomfortable and unversed in what I was actually asking to buy. With no success, I eventually decided to instead pursue local deals in my own backyard. I targeted bigger parcels with an offer per acre that was low enough that I wouldn’t feel stuck. With over 1000 hand addressed letters sent, I succeeded in getting 5 purchase agreements 2 of which I could actually close on. I still had no idea what I was doing, but I bought both with plenty of profit margin, if my calculations were correct.
So I ended up purchasing two properties. One of which was 30 acres, for which I paid $18,000. A real steal, I thought.
However, those were scary days. With a fair chunk of funds tied to real estate, living expenses and title searches that did not pan out, I became worried about my financial wellbeing, and I decided to take yet another full time job.
Wasn’t I pleasantly surprised when I was able to sell that 30 acres for a 30K profit quite easily.
This inspired me to quit my new job in August. With my recent success, I was no longer willing to accept the boredom and pessimism of taking orders from others. Not anymore.
I could finally see that land flipping could be my ticket to financial independence. I decided to get a bit more serious about the business.
Finding and Researching Deals:
Within a week of quitting my job, I was anxious to put my new cash to work making me even more money.
I continued to hand write letters to folks in the areas that I thought were promising by researching them on the county website. This effort was also coupled with diligently looking at all of the pieces for sale on Zillow, Craigslist, and Facebook. I was especially keyed into the online ads that sounded like they did not know what they were doing— red flags like not having pictures, ads with very little descriptions. Land FSBO, or in large acreage, low-priced chunks were all a plus to me. One evening while going through the online rounds and emailing folks about their properties marketed online, I stumbled upon a craigslist ad with just a plat map for a picture. The listing read “40 acres, 2 parcels, 28 acres and 12 acres….lots of road frontage 2 ponds. Recent survey and perc tests, land lays well…… 50K cash”
The ad had only been up for one day. In the next 30 minutes, spent scrambling through the interweb, I surmised that this area was a hot one for the timber game. I know nothing about timber, but was intrigued none the less. 3 fairly populated cities were within a 2 hour drive from the land. The road frontage to the property was quite plentiful and was state maintained. Recent comparable pieces in the area were on average around $2000 an acre. This was also one county over from my first successful deal and the land looked much more attractive on paper than the prior one I had just sold. I felt prepared enough to give the number on the craigslist ad a call.
I was answered by a gruff sounding individual who told me I had to call a different number to discuss. I called that number and quickly realized that I was talking to a land agent and the prior caller was, in fact, the owner. I stated that I was an investor and I would be a potential cash buyer. Boy did that perk the land agent up! I then informed him that all I could spend on the property was 42K. This was contingent on me seeing it of course. The agent then related to me that there were two potential buyers coming to look at it over the weekend. It was a Thursday evening. I asked him what he was doing tomorrow and then restated that all I could afford was 42K and it would be cash. There was a pause on the other line and he said that he would present this to the owner and that he would call me the following morning at 9 am. I had a good feeling from the little bit of research I’d done on this piece. I knew that I would be getting any sleep that night.
I stayed up all night going over everything I could possibly research online about the county, nearby town and comparables. When the agent called, I had my notebook with prepared lines and a few notes from the several YouTube videos I had watched on negotiation tactics. I was primed and ready, if a little on the nervous side.
The agent relayed to me that the owner would be willing to part with the property for 45K and the additional 5k I could finance. I had a line prepared for countering this offer: I stated he could bring a copy of the purchase agreement and I would sign it if I liked it. I emphasized that I have bought land before for cash and I knew the process but that I only had 42K to offer. I further informed him that I “have a rule against debt”.
I was informed that the owner and agent needed to talk and that they would call back in 15 minutes. 5 Minutes later, I was offered the option to buy for 45K cash. I again stated that all I had was 42K. They countered with 43K and I jumped at it. My game plan was to go there and find out if there was anything wrong with it and see if I could further negotiate for a lower price. I was in for an event-filled day with a new county and new people. There was a lot to learn and I was eager for the hands-on education. I felt like an active land investor. My drone, a six pack of Gatorade, cell phone batteries, and boots were packed and ready to go for a preliminary scouting trip.
2 hours later, I arrived and cruised through local town. I liked it….it was quiet and quaint. There were grocery stores and a couple of banks, a hardware store. The downtown area was visually appealing and it appeared that it had gone through a facelift over the last couple of years. A huge river was nearby as well. A half hour later, I met up with the agent at the local dollar general in town. He was friendly and seemed very interested in what I was trying to do. It was also exciting to hear that he had no concept of advertising on Facebook or using drones. He said he has been a local in the area for 30 years and had been a land agent for the last 25.
Ten minutes later, we arrived at the 40 acres. The first thing I noticed was that it had a power line right across the street and I asked if it would be difficult to run it to the property. The agent said that this would not be an issue and that the local energy company is very friendly to new development. There was ample road frontage and a dirt road that divided the two parcels.
We then started to walk the property lines. The front side of the parcels looked to be in decent shape and there was grass planted. The back two thirds were a tad on the rough side as it appeared to be mature timber that was just chopped down. I asked when the trees were cut and he stated that they were clear cut last year. It was at this point I felt a little in over my head. The agent was very knowledgeable about land and one could tell that he was passionate about his work. He truly loved being outside and walking the land. This was the first time I had even ever heard the term “clear cut.” I made a mental note to use this as a negotiation chip in the future.
We then arrived at the back corner and I saw the first pond. It was roughly an acre in size and I was shown the property lines that extended into it. We tromped down the back lines. I could see the agent was getting exhausted – boy was it a hot one. We emerged by the pond.
The little lake was beautiful and deep with enormous trees around its shores. It appeared to be spring fed, as a creek flowed from it. I was also informed that the water was stocked the previous year but I didn’t manage to eyeball any fish.
By this time, I found myself already getting a tad emotional about the place. Compared to the last deal, this piece had many more positive attributes, including ample state maintained road frontage, clearly marked boundary lines, plenty of buildable areas in addition to a whole pond! On the walk back I told the agent I would take it. We then went to a local restaurant and we looked over the contract and talked a bit more about the land and county. I made a bit of a silly mistake when I tried to write the agent a check for the full amount right then and there. He, of course, only wanted the deposit!
We agreed to meet at the title company to sign all the papers on Tuesday. After we parted ways I went back to the land and immediately went to the neighboring parcel where I went up and knocked on the neighbor’s door. He had a decent looking camper and there was groundwork in place for the home he was building. I found out from him that I got a hell of a price in comparison to what he paid as it was the same timber company. He also stated that he found out that the prior owner of the timber company was going through a nasty divorce and he needed to raise funds quick. This was very reassuring to me.
I fired up the drone and took some pictures of his land and emailed them to him, noticing that I got great cell phone service at this location (a big plus!). The neighbor asked if he could hunt on the land until I found a buyer and I agreed. I then proceeded to hang around till sunset and took more photos. I am no expert at photography, but I firmly believe having a drone and taking multiple shots during the “golden hours” of sunrise and sunset is vital to making an attention-grabbing listing. After the photo session, I took the long drive home and passed out. I knew I took a big risk by putting all my chips in one pot on this property, but I strongly believe I bought something undervalued. Now onto the sale!
FINDING A BUYER
With my newly acquired 40 acres and those photos, I proceeded to try to make a profitable sale. After sitting on it for two weeks, my first step was to create ads internet ads – specifically ads that could be placed for free. The first place I set up was Craigslist and I included four of the nearby areas. Next came a Zillow FSBO, and Facebook. Facebook takes quite a bit of work to get optimized, but I requested to join every swap group and yard sale group in the area around my land. It took a week or so to get into these groups (you often need permission from an admin, that can take a while).
Using Facebook, one can market what they have for sale in a maximum of 10 local groups. With all the group numbers combined, it had the capacity to reach out to around 100,000 users. I planned to launch it on a Thursday afternoon. I made an enormous, very wordy listing with everything I knew about the land and explained all the info I had on the parcels. I was shocked at the response, and just how the internet had effected communication – within my first few days of listing the property with some decent photos, I had 48 likes on my ad and 38 comments asking if the land was available and if the price was negotiable.
I had the land listed at 69K and stated that I was not a fan of owner financing. Not one of the Facebook commenters was a serious buyer. I learned firsthand to not put too much stock in the quality of Facebook inquiries. It was at this point that signed up for Seth/E.B. Farmer’s Land Flipper Course, and I attempted to learn as much as I could that would be applicable to this piece. After a couple weeks with the first wave of marketing not producing a worthwhile buyer, I changed my ad to only list the bare essentials, stating that I would only respond to a phone call or a detailed message. Over the next couple of weeks, I recieved an occasional call or text about the land.
I allowed a couple of folks to go look at it and they all said that it was just a bit too much for them to handle. It was at this point that I was considering sinking some of the little funds I had into clearing some of the deadwood out and possibly trying to sell each parcel separately. If I had been in a more secure position, I would definitely have subdivided, but I was more interested in getting out quickly.
When the hurricane season hit, I received very little response over the next 3 weeks. I began to doubt myself and my purchase. A couple weeks later I received a call from an individual who asked if he could look at the property. He said that he saw it on Facebook and Craigslist.
We chatted and he explained that he could put 20K down and pay the rest off over the next few years. I responded that I appreciated the call but that I was terrified of owner financing and was going to wait and see if I could get a cash buyer. The next week I received a call from an individual who lived 10 hours away and said that he had a relative of his in the area go look at the land. He said that he was a cash buyer. He had a plan to meet with me at the land for the next weekend but again, weather came in and made it impossible to properly show it. He then stated that he was still interested but would not have the time to come to see it until the end of November.
The very next day, I received a call back from the individual that said he could finance. I agreed to 25K down and $650 a month for 60 months. For as good a negotiator as I think I am at the buying side, I lack confidence when it comes to selling. I did not do any interest and said that I would split closing costs, minus title insurance, which he would pay for.
We are to be meeting at the land next week and he said he would like to have the purchase agreement signed. He promised to make a good will deposit of 1K the day we meet. This deal will total 64K realized over 5 years with an option for the buyer to purchase outright at any time. I will make 21K profit from this deal but be down 18K in terms of cash.
WHAT I HAVE LEARNED
I know that I have made some good decisions along with some questionable ones. With some added education and partnering with a few folks for funds, I feel confident that I can double my progress next year and my goal is to buy and sell 10 parcels for a minimum of 10K in profit per parcel. I will be diving into learning how to set up this business officially and attempt to learn about all the tax implications involved. The Land Flipper Course has definitely added a whole wealth of information that I can add to my arsenal and I look forward to implementing them into my future deals. Even though I am strapped for cash at the moment, I have never felt freer. Freedom coupled with the desire to improve each day! I hope to set myself up for success in the upcoming year and be even more hands on and active. I would appreciate any feedback on this deal (positive or negative). Also feel free to reach out at email@example.com, on Facebook or through the Land Flipper Course. All the best!