I recently had a guy write in asking for a refund on the Land Flipper Course.
I was surprised because he was the first out of many students to ask this question. But, as I pressed him as to why he was unsatisfied, his attitude became obvious.
“I thought this was like the other guy’s course where you just have some system to send out letters to Montana or something and buy delinquent tax properties for cheap.”
I gave him his money back and wished him luck.
Because that is definitely not what I sell.
These days, everyone is looking for a get rich quick idea. The more you start talking about hard work and persistence, the less you seem to hold the interest of a large swath of the population. It’s all about the “hacks” and “systems” that supposedly jimmy open the door to success.
Fine by me. To each their own. But I prefer to do what I do with my work gloves on. To clear brush and build fires. To meet with surveyors, loggers, and linemen in the field. To greet the customers face to face, shake hands, and walk them across a property I know intimately. I believe in getting my hands dirty, in being on the ground.
I believe in hard work creating luck and opportunity, and that there are no reliable shortcuts or systems leading to success— other than intensity, attention to detail, and years of experience of the kind I share in my course.
It’s the way my family and I have always done it, and we wouldn’t trade our craft for any system.
Because for every wild story of someone who got rich in real estate doing next to nothing, there are a thousand stories you don’t hear about people who grind it out properly, and are able to elevate themselves and their economic position in a reliable way through grit, hard work, and hands on know-how.
And so, the point of this article is to prevent the situation with this unhappy student from happening again— to dispel a few misconceptions about what I actually do and what my methods are. To start, I thought it would be most entertaining to look at what I certainly don’t do in my business.
The Lehigh story
The story of Lehigh Acres is an epic one, and it is the type of adventurous, footloose romp through American entrepreneurship that every red-blooded capitalist should be familiar with.
To summarize, a guy owned a few thousand acres of swampy land in south-central Florida. Most of it was landlocked flood land, the type of which really isn’t worth anything. But, refusing to accept his dirt as useless hunting grounds, our ambitious land owner decides he will slice it up into 1000, 1-acre lots (this was before a lot of subdivision regulations, and is part of the reason WHY the rest of us now have to play by a rather thick rule-book).
Then he (get this) goes door to door up in the North, selling the promise of land to city slickers who never even got a look at what they were buying, and had likely never stepped foot in a Florida swamp.
And it is sort of understandable right? If you are a city person who knows nothing about land, and someone shows up with title in hand to an acre or two, all for the low low price of $500, wouldn’t you at least be tempted?
The issue started when people from up north actually began to show up in Florida, asking where their land was.
Our sly businessman now felt compelled to build, you know, actual roads and amenities and stuff.
If this summary has left you wanting more, you can regale yourself with a more in-depth piece here.
But don’t read it as ancient history, there are still flippers who do this kind of thing today. They buy 2000 acres of Arizona desert, and then offer people the opportunity to buy Parcel A23 for a small, introductory price of 25 payments of $59.95!
We don’t do that. I imagine you could have some success. But I prefer to sleep at night.
Land is a prestige item, I get it. But I’m of the opinion that selling people stuff that they don’t really need and can’t really use is not a solid, long-term business plan.
I think of it like the guy who created the pet rock. It was a ridiculous, outside of the box concept that made the creator an inexplicable million or two. But when he tried to build on the business he had created, by expanding it to similar novelty items, he soon found that the concept had no legs, and his success lasted only about six months.
Just like with the Lehigh guy, people will eventually turn up and want to see their land, or wonder why the hell they paid good money for a rock that doesn’t even fetch.
I, personally, wouldn’t feel very happy with myself explaining to people that the land they had paid for is unusable.
But, maybe if you are up front about it, the novelty of owning land might be enough, I don’t know. Novel ideas like this sometimes equate to a quick cash grab, so I’m not going to discount them entirely.
Suffice to say I prefer to do the hard work of actually providing people with value. I take pride in my land and prefer to think of the dirt I sell as a high-end specialty item rather than a plastic arcade novelty from China.
Ah, the good old story of the 200k property selling for 10k at a tax sale. As a land flipper, I get these stories from people all the time.
And they do happen.
But to be 100% honest, I personally would never buy something at tax sale unless it was a particular piece I had already been trying to get my hand on, which by some inconceivable set of circumstances I could not buy outright, and instead found months later being sold off for late taxes.
In 30 years, this has never taken place, aside from one very specific situation.
First of all, buying something at tax sale doesn’t mean you own it. It means you will own it, after the real owner has had another year or two to make up his or her delinquent taxes. That’s right. What you are buying is the possibility of something at a later date.
For me, the game is all about speed. We do our flip deals in 3 to 6 months on average. We have no time to sit around on a property, twiddling our thumbs and hoping that maybe, one day, we will own it.
This is not to mention the difficulty in researching the property properly before it goes to tax sale. A lot of flippers who swear by this method end up just buying random parcels that they have no idea about. This can lead to all sorts of title, environmental, and lien problems. You can read more here.
Again, that isn’t to say it never works out. It is just that, in my mind, there are way too many good deals out there to research and buy outright. It wouldn’t make sense for me to hang out at tax sales waiting for some big fish to come along.
To continue the metaphor: I prefer to go out and club the fish, instead of tying a string around my toe and falling asleep in the shade.
And just to drive home the point, my philosophy has always been that one absolutely must thoroughly research a piece of property before one buys it.
Yes, at any price.
I’d rather own nothing than own a piece of real estate with a bunch of issues, but that’s just me.
The Distant/Hands-off investor
Many people have approached us over the years, peddling a great opportunity 1000 miles away. We always politely pass, though we often offer a bit of free consultation if we have time (so keep the emails coming).
There are certainly land flipping courses out there that teach you how to buy acres off a spreadsheet. Land that you’ve never seen or felt under your boots.
And it is certainly possible to scale your business in such a way, up to the point where you are buying and selling properties all over the country.
But we don’t approach land flipping this way. We also don’t recommend it for people just starting out in real estate, and here is why.
First, everything about real-estate (and land in particular) is local. The rules are local. The market is local. The surveyor and dirt man you hire are going to be local. As my method involves improving and subdividing property, being on the ground becomes sort of a necessity.
Otherwise, I just plain worry too much. Being a hands-off investor can mean you don’t know if the land you are buying is on an old bombing range, is dotted with buried toxic waste, or is next door to that weird “farm” where the people drank poisoned cool-aid twenty years ago and the schoolchildren now avoid.
In short, you don’t know much about the lay of the land if you aren’t physically present. You probably have no local connections that can be used to push your project forward. You’ll find more it more difficult to sell your property because you aren’t involved in the local market for real estate.
After all that, it still may be a viable to way to scale your business, and I know there are people out there doing it successfully. But it isn’t what we do, and I would always give the advice to budding flippers that they focus all their attention in their own back yard, at least at first.
Because at the end of the day I’m just not comfortable having land I can’t keep an eye on. Sure, I’m paranoid, but I’ve been doing this long enough to where my paranoia has been seasoned with liberal doses of harsh reality. People love to dump trash on vacant land, to hunt illegally and then sue you when they break a leg, to take down your “for sale” sign 100 times because they prefer to live next to woods.
That’s not to say it can’t work out in your favor, just to explain why we don’t do it.
It is harder to run a business from across the country, at least not unless you have plenty of money, experience, and/or a bevy of trusted agents.
For these reasons, it is my personal philosophy that If you try to start land flipping remotely, you are putting the cart way before the horse, and trying to scale your business to epic proportions before you have even gotten your feet wet.
However, the benefit is a much larger playing field, so remote flipping is something to keep in mind. But it is not what my course is specifically about. Suffice to say you can take the knowledge in my course and apply it anywhere in the world where private land ownership is a straightforward institution. But I do recommend you live within driving distance.
Mass cold mail out on delinquents
There are other land gurus that have systems set up for cold-contacting people late on their taxes, lowballing them, and then profiting on the rare cases that they desperately cave in.
We have, on occasion, used the assessors’ records to cold-contact land owners in our area, just to see if they had any interest in parting with their land. However, we don’t have any system for offering delinquents low-ball offers, and here is why.
As I mentioned before, I consider myself to be a local developer. Therefore, a lot of what I do is based on the steady buildup of connections, reputation, and word of mouth. When the local people think of buying or selling land, they will often come to me first because I have long cultivated a reputation as a straightforward, fair dealing individual who specializes in dirt. Now, If I were to begin insulting land owners in my area with low offers because I knew they were in dire straits, that reputation would soon suffer, as would my ability to do business.
For me, I approach this business as a very personal, human, and strategic endeavor. Sure, numbers matter to me, but getting an extra five percent RoI in exchange for insulting and offending someone who lives in my area is just not worth it long term. I try to look at the big picture of what I do, and when I look at it soberly I can see that the human connections I’ve developed, and the reputation I have grown, have made me more money over the years than any one particular deal.
But to each his own. If you are willing to play the hands off game, and don’t mind giving offense, I have heard that some of these systems can actually work.
Just remember that people get mighty personal when it comes to their land. To the people you contact, their 40 acres isn’t just some spreadsheet item, it is where they shot their first deer, learned to ride a horse, planted that poplar tree when they were a kid. Etc. etc. etc.
Your lowball offer can seem like a slap in the face, so prepare to get some angry letters and grow thick skin.
Now, that is not to mean that cold mail outs won’t work sometimes. It’s just not the way I do things personally.
I imagine the benefit would be immense when a good deal does comes through, and as long as you research it thoroughly, it might be a tenable business practice.
But my course isn’t about that at all. It is about buying land for a fair price by negotiating hard, and then selling it for a fair price to people who view the land as more valuable.
Chasing the foreclosure
While there are definitely profitable foreclosure properties out there, I find that many gurus place way too much emphasis on chasing them, at least for my tastes.
Firstly, there are plenty of good deals out there which have not been foreclosed on, if you know where to look, and just having the word “foreclosure” attached to a piece of property does not suddenly make it a good deal. Often, these foreclosures involve a lot more work for not that much more profit, and also carry some additional risks.
First, ask yourself soberly, “why did the person who owned this allow it to be foreclosed on?”
There could be mundane reasons, like the loss of a job, but there could be more insidious things at work. Environmental problems, issues with the neighbors, a depreciating local market. The foreclosure could be a foreclosure for a reason, is all I am saying.
Secondly, when you buy a foreclosure you have to deal with a bank’s REO department.
Good luck with that.
Banks are notoriously hard to work with, and if you can even get in touch with a large national bank’s REO department you are likely going to be talking to some pencil pusher in Iowa who probably has no vested interest in getting this land sold, or making any concessions or disclosures to you. Why would he? He’s never even seen the land. It is just an item in a spreadsheet to him.
Lastly, because of the “foreclosure craze”, there is a lot of competition for these properties. People really think that the word foreclosure is synonymous with a good deal, and so, when you do finally get the REO guy on the phone, you’ll be just one among a dozen hopefuls calling him on any given day.
It just isn’t worth it for us, particularly when there are so many awesome, straightforward land deals out there where you can deal directly with the owner. And that is what my course focuses on.
What I Do
So, now that I’ve sufficiently ranted about all the things I do not do, the question might remain for some of you what it is that my process actually entails.
And that is the good news. My process is a straightforward, hands on, respectable way to make a living. It is a way to work for yourself, and has the potential to make you rich over time if you work hard and smart enough.
A quick summary would be as follows:
I find raw land an hour out of the city with road frontage, using various methods.
I negotiate to buy it for a decent price, often with owner financing.
I improve the land, sort out any issues it has.
I legally survey and subdivide the land.
I sell the tracts to people for usually about twice per acre what I bought it for.
If you are interested in learning more about my process, drop me a line at email@example.com, and I’ll shoot you a free E-copy of my book, The Land Flipper. It is a great starting point. From there, if you are still interested and are seriously thinking of trying your hand at this business, you can learn about what I do in great detail in the course.
If you are looking for a third party opinion, there was recently a rave review of my course on wealthanize.