Posted on: February 26, 2021
WI 633 | Piece Of Land

 

Few more days to the end of the nine-day do or die series, and now we are venturing into the wholesale of your first piece of land. This sixth day is absolute fire as Tracy will share her near-closing and new leads to spend on. As we know, Tracy is a teacher by profession who dreams big to have more time and money, hitting $10,000 monthly in the next nine months. Previously, she updated Brent on her mailing activities and her experience handling her first phone call using the script. She also shared the challenge of locating a lot online as the basis for having a fair offer. Tracy will also talk with Brent about marketing techniques to sell lots faster and start building a land-buying machine and land-selling machine to reach the goal of $10,000 per month in the next nine months. Let us join Tracy throughout her journey as she marches towards the finish line! Do not miss this episode.

Do or Die Series – Episode 06 – How to Wholesale Your First Piece of Land

Episode Transcription

This episode is absolute fire. If you’ve been following along so far, you know that Tracy is a teacher trying to escape the rat race, is trying to do her first land deal on the series and build a land wholesaling business. If you haven’t yet read any of these episodes before, I encourage you to stop, go back and start on episode one. I am super impressed with Tracy. She has come into her own here, stepped into this and has gone all in. Kudos to Tracy for taking massive action and doing the work, even when things got uncomfortable for her, which she’s going to talk about a little in this episode.

In this episode, we’re going to discover how close she is to landing that first land deal. Has she gotten a deal? If so, how is she going to sell that deal? Has she gotten maybe more than one? How is she going to structure the terms of the deal, calculating those monthly payments and what all that looks like? We’re going to learn all that and much more as they go deep on this episode. Continue marching toward the finish line. Enjoy.

How did it go with your seller?

It went well. We agreed to a lower price of $3,000. That’s good.

It started at $6,000 to $3,000. Nice negotiations. Good job, Tracy.

Thank you. The only hiccup is that he doesn’t have a fax or email that he was like, “Can you mail me another letter?” I said, “You can cross off the one.” He was like, “I don’t think I have it anymore. I can’t find it.” If he gets that signed so that I can market it is where I’m having a little bit of an issue.

There are some things we do. Here’s what I find a lot with our sellers. They’re not usually very organized people and there’s always a challenge because we’re problem-solvers. We’re not buying and selling land. We’re solving problems one way or another. Here’s what we’ve done in the past. Here’s what I recommend doing. Send a mobile notary there with all the paperwork. Have them take care of it. That way, it’s in the professionals’ hands. They’ve got the paperwork.

As soon as they get it signed by your seller and notarized, the mobile notary needs to also tell the seller the process, “Here’s the process.” You’ve already told them. You want to tell them again and then also have the notary say, “As soon as this is signed and notarized, I’m going to get it over to Tracy and then Tracy is going to present it to the county recorder. As soon as the county recorder approves this, meaning records it in your name, we are going to cut your check.”

We had the same thing happened with a seller. We told him multiple times. When the notary got there, he was like, “Where’s my check?” The notary was like, “Here’s how the process works. I’ve worked with these guys a couple of times.” He heard it from my acquisition manager and then he called my office manager. He heard it from her and then the mobile notary said the same thing. If everyone is all aligned, it’s a smooth process.

Make sure the seller knows the process and then tell the mobile notary, “Here’s how this is going to work because I need you to get this signed and notarized. If I don’t get this signed and notarized, I will not be paying you for your service.” Don’t come back without a signed and notarized deed because I see it all the time. They want to be paid still because the seller had cold feet or whatever. You name it. They know that they’ve got to come back with it signed. They’re going to email it to you. As soon as they have it, the notary is going to scan an email of that deed. They’re also going to put the original in the mail and send it to you.

WI 633 | Piece Of Land

Piece Of Land: Mobile notaries are very inexpensive. If you find a good one, hold on to them.

 

This is for the deed but I’m sending it from the original contract.

That’s a good point. I’ve had sellers lose these things all the time. You can call a mobile notary and they know they’re going to do the deed with you as well. It might be a $35 charge to courier for you and another $50 to notarize it. These mobile notaries are very inexpensive. If you find a good one, hold on to them. That’s what I would recommend doing rather than overnight it. Get it into the hands of the professional who is going to get it notarized. You can honestly kill two birds with one stone. Get the deed and the land offer letter signed all at the same time.

I want you to have a little bit of time to find your buyer at $3,000 down before you have to pull the money out of your pocket to payout. I love the fact of having your buyer in place. Start marketing this thing. If you told the seller like, “I’m going to resell this land. Is it okay if I find my buyer ahead of time?” I would start marketing this thing everywhere. Watch the modules on immediate profits. Get it on Facebook Marketplace and Facebook buy-and-sell groups.

You’re going to join the buy-and-sell groups of places in your area. You’re also going to check the assessor site. You want to look at the land listings and see who owns the vacant land in that subdivision. You want to check every single one of those. Some might be in Illinois, Wisconsin or New York. Those are the buy-and-sell groups I want you to join. Also, look into the neighbor letters. You probably have people close by in that neighborhood that would want to buy more land especially easy financing like you offer or an adjacent lot, one that’s touching your lot. How many acres is this lot?

It’s 0.35.

You might have a neighbor that owns a 0.35 next-door and they want to make 0.6 or 0.7. It’s almost an acre. Tell me about this land.

This land is in a community. There is an HOA. It was cool when I got this lead and I found where it was. I was pulling it up and I was like, “There are some properties on here going for $1 million.” It goes down. There are some properties going for $300,000. It’s a large community. There’s a waterfall and a lake right down the road. It’s desirable. There are already houses being built. There are tons of vacant, mixed with houses being built there already. There’s access to water and septic. On the lot that I have, it’s all trees so that would have to be cleared out before building but it seems pretty desirable.

You got a waterfall and a lake. You could put a septic system in there. You already have water access to be able to plug in. Tracy, if for some weird unknown or crazy reason that you can’t sell this land, would you be fine owning this land as an investment for later on in the future?

Yes, it’s a great piece of property so that’s pretty cool.

That’s why I love the land. In the beginning, I started in an area that I was passionate about. One because I was afraid and nervous. I was like, “What if I get stuck with this?” At least, I’ll have a piece of land that I like or I can build on one day, hunt on or build a cabin. You name it. I bought land in the beginning, which I was passionate about. Number two, it helped me to sell it because I was like, “It has got a waterfall. It’s within walking distance. You could take your kids to the lake. It’s so easy to build a house because you could connect right into the water.”

It was so easy to sell it. Use that passion that you have for this land when you’re going to sell it. You were telling me there are million-dollar houses in this neighborhood, all the way to $300,000 houses. What are you thinking as far as terms? What are you going to try and get for a down payment, monthly payment and total purchase price?

Use the passion you have for a piece of land when you’re selling it.

This is where I’m getting a little scared because I looked at it and there are properties going for $30,000 to $25,000 and then there are some that are going for $15,000. I know that I feel like I could get the $3,000 down and then do some type of financing but I don’t know like, “Do I market it for $15,000? Do I do $20,000?” For me, I feel like it’s a shot in the dark. How do you make that final decision like, “This land is going to be worth this much money?”

The answer is, “How fast do you want to sell it?” At the end of the day, it’s not always the actual purchase price. It’s the down payment and the monthly payment. Think about it. A lot of people are walking around with $997 down and $399 a month for the rest of eight years. A few people are walking around with $3,000 down or you might have someone that has been searching in this neighborhood for a lot for so long.

You put some signs out in that area and they’re like, “This is what we’ve been waiting for. $3,000 down? Is she only asking $24,000 for the land? Is she going to let me make $399 a month payments for 65 months? This is literally a dream come true.” That’s where I say play with it. Are you saying that the lowest piece of land you’ve seen for sale in that area is $15,000?

There is one piece of land for $9,000 and there’s a bunch for $15,000. There’s a bunch for $25,000 and then there’s $30,000. The ones that are higher are bigger lots but the ones that are comparable to the size that I have are around $15,000 to $25,000.

You said that the least expensive one that you have found was sold for $9,000. I assume that was probably all cash.

It’s for sale.

That’s a pretty good indication and they probably want cash. Are they trying to finance that? Do they want all cash?

This is through the actual HOA site. It’s being sold so I don’t know how they do there.

I see that a lot. The HOA is trying to sell it and they don’t put it out anywhere. It’s on their personal site. They never sell it because they don’t know how to market it. They’re not putting it on Facebook buy-and-sell groups, Facebook Marketplace, Craigslist, land signs and LandWatch. They’re not putting it all over the place. That’s why we find our buyers so fast because we’re putting it everywhere.

Let’s say that you could only get $9,000 for this piece of land. If you pay $3,000, you’re multiplying your investment times three. I have no doubt that you’ll be able to sell this thing no problem for $24,000 on financing if you were asking somewhere around $3,000 down and how many dollars a month. You could go on Calculator.net or Bankrate.com and figure out your payment.

WI 633 | Piece Of Land

Piece Of Land: Look into neighbor letters. You probably have people close by in your neighborhood who would want to buy more land.

 

If you’re going to do 0% interest and keep it simple math, $24,000 total minus $3,000, which would be the down payment that leaves a balance of $21,000 for you to makeover. Let’s say you’re going to hold the financing for 60 months at 0% interest. You would get a payment of $350 a month for 60 months with $3,000 down. With $350 a month, is that going to help out with anything?

Yes, I would love that. It sounds great.

Let’s talk about the game plan ahead. Are you pretty confident about what to do next?

I am. I feel like, the next steps, I got to get this mobile notary out there, get things signed, start marketing like crazy and get this property sold.

I want to change one little thing around. I want you to start marketing it. Tracy, let me tell you the confidence you will have when you’ve got a buyer ready to give you $3,000 down or you might have a buyer that says, “I don’t have $3,000 but I got $2,800. Would you take it?” I’m shaking my head. It doesn’t matter. It’s all about volume. You want to keep rolling to the next one. You’re building a land-buying machine and a land-selling machine and letting other people help you with the rest of the processes.

Start marketing it on Craigslist and Facebook buy-and-sell groups. Start joining all the buy-and-sell groups. Check out on the assessor site. See where people own the land in this neighborhood where they live. You want to look in this neighborhood on the assessor site and see their mailing address, “This one lives in Idaho. This one lives in Miami, Florida. This one lives in Chicago.” Start joining those buy-and-sell groups and advertise this land.

I want you to get some signs out. “Buildable lot. $3,000 down. Well-financed. Your phone number.” You’re going to get so many calls on this. It doesn’t have to be in the neighborhood. Walk out your front door and put it at a busy intersection. I’ve sold land in Colorado from Florida. I’ve sold Arizona land from Colorado just with signs. People think we’re crazy when I tell them that but it seriously works. People are always looking for a good land deal. Start marketing it. Get your mobile notary lined up. You got a solid deal here and got that thing sold.

I’m on it.

I saw an email that you had sent me. You had another lot that you possibly could get?

Yes. I had a realtor call me back and said one of his clients has a piece of land that he originally was trying to sell for $20,000 to $17,000 and then it went down to $16,000. It’s around $16,000 or $15,000 on MLS. He said that it’s a nice little acre of land but it’s up in a mountain area. It’s a cute area but it’s very sloped. Only a small section of it can you build on but he said it’s enough for a house. He has been having trouble selling it so he was going to be willing to take $5,000 for it.

What do you think you could sell it for on financing?

If you put out the land for sale everywhere, especially online, you can surely find buyers a lot faster.

It has been on the MLS for four years and it’s not sold. I’m thinking that might not be a good investment. Even if I got it down to a smaller, I don’t even know if it’s $2,000 or $3,000 I could get it for. Is it even worth it if it has been on the MLS for that long?

I see that a lot. If it has been on the MLS for that long, I will only pay very minimal for it. I’m confident that if you put it out there for $500 down at $500 a month, you would sell this land. Has the seller tried to sell or finance this or has he wanted pure cash?

It’s a realtor so he was like, “This is what it’s going for. I’ll take $5,000 for it.” I think I could talk him down from that but I don’t know how far.

Here’s the thing. You never want to pay too much for a piece of land. The less you pay, the easier it’s going to be to sell it. My gut reaction is to call this realtor back and say, “I’ll give you $900 for it.” Don’t be rude or insensitive about it but don’t care what the outcome is. You want to make so many offers on land, take it or leave it type thing. “I’ve got 15,000 other parcels to look at. Don’t waste my time.” Don’t say that. However, feel like that in your mind. You’re making offers all the time. It’s probably easier for me to say this than for you to do it.

Who reached out to who? They responded back to your land offer letter. There’s some serious motivation for them to reply to your land offer letter that cost you $1 and it’s one piece of paper in an envelope. For that realtor to pick up the phone, there must be some motivation there. That’s where I go back to it like, “Mr. Realtor, I know you’re not going to like this but I could do it somewhere around for $900.”

You don’t have to even state your case but you could say this at the beginning like, “The land is on the side of a mountain. It’s probably not even buildable, this, that and the other. It has been sitting on the MLS for four years. I would love to do you a favor and take it off your hands. I could do $900.” Don’t say anything else after that. Not when you’re talking to the realtor. Be quiet after that.

I do think that if it was financed, I could get a monthly payment for that. It’s supposedly in a cute, little area and there are houses built there. It’s just that big-ticket price that people are seeing on the MLS like, “I can’t afford that.”

Not everyone is walking around with $15,000 or $16,000 cash in their pocket but a lot of people could come up with $500, $600, $700, $800 and $300 a month. At the end of the day, I’ll say this, “My second parcel of land I purchased was completely inaccessible. It was 5 acres in the middle of nowhere. I couldn’t get to it. I sold it the next day on Craigslist for $500 down and $400 a month for the next twelve months is what it worked out to. It was a shot in the dark.” The seller was like, “I don’t know what you want with this godforsaken piece of land.” I was like, “I don’t know either.” I was so unsure of myself back then. It happens. You’ll sell it. Is there anything else? Any other sellers you’re working with?

I got a phone call. This guy has a very small piece of land that his mom left him. We were talking about it. He was like, “I don’t care as long as I don’t have to pay to pull the title or anything.” I offered him about $400 and he was like, “Whatever it is, I just don’t want to have to pay anything.” It’s not tax delinquent. It’s up to date with the taxes. He was like, “I never go there.” When we were getting off the phone, I didn’t even think to ask this question but he was like, “By the way, she also owned another piece of land you might be interested in.” He sent me that number. I got to look it up but there are two pieces of land from this one letter.

I love getting those 2-for-1. It was probably about the 5th or 6th parcel of land I purchased. It was from an LLC. These guys had purchased a bunch of lands and they were doing what I do or what we do, you and I. They bought land super cheap and then seller-financed it. They got so many parcels. One wanted to get out of the business so he was selling out to the other. The other one wanted to get into a tree farm business. I mailed them. They’ve been selling me properties as people default on them. They’re selling them to me for what they paid years ago for this land.

WI 633 | Piece Of Land

Piece Of Land: At the end of the day, it’s not always the actual purchase price. It’s the down payment and the monthly payment.

 

I love it because one mailer has gotten me almost sixteen parcels from these gentlemen. They’re so quick. They take care of everything because they’re professional land investors. I’m not worried about them. I’ve become friends with them. It has been an incredible time. That was one mailer. Look at the power of this. That’s a $400 lot. Let’s break it down a little bit and pull it apart. What do you think you could sell it for? Do you think you could get $400 down for it and $100 a month forever?

I do with the first one I looked at. I didn’t get a chance to look at the second one yet. It’s in a nice little neighborhood. It has water and has the same idea. It’s buildable. I see at least tripling my money on that.

What are the houses going for in that neighborhood? Do you know?

I don’t know. I just got this call. It has been an interesting balance where I got my day job and then I also have a tutoring company. I was taking this call and writing down things on a little piece of paper while I was trying to get somewhere. I did a little research but I have a call with the guy. I’m going to dig in and see more about this property.

You are working yourself like crazy. My hat is off to you. You got to make this happen so you could pull back a little bit and take some time for Tracy. What’s your plan with the tutoring business? Are you going to replace yourself and keep that going once this is making you $10,000 a month? What are your plans with the other business?

It’s a lot of work. I was doing it for the extra money. I’m hoping that in this land business, if I’m going to be making $10,000 a month then I don’t need to go tutor anymore. I want to focus on land. I love this process so far.

You’ll be making $10,000 a month before you know it. You’ve got 3 or 4 sellers you’re working with and you’ve been mailing for a solid month. That’s awesome. I’m excited to know that. Let’s go back to your buildable lot, the one you’re going to get for $400 and possibly a second one. This mother lent it to her son. He has no emotional ties to it. He just wants to get rid of it. It sounds like a perfect land deal to me. That’s like most of our transactions.

A general rule of thumb on a buildable lot and I’m going to use very easy round numbers. If the houses in that neighborhood are selling for $100,000, generally, a builder can pay anywhere from $0.20 to $0.25 on the dollar for what that house will sell for, for that lot. That’s a very low number, $100,000. He would probably be closer to the $0.20 on the dollar for that lot. Technically, that would be a $20,000 lot. Give or take, some areas are different.

If we’re talking about certain areas in California, a million-dollar house, the builder is paying $250,000 for the land. It’s $0.25 on the dollar for what he can sell the house for. That’s one way to figure out buildable lots. In Zillow, you can look at the solds, the actives and then LandWatch. I generally find that buildable infill lots are very easy to figure out on Zillow and by calling a local realtor in that neighborhood that lists land. I love to call the realtor that has the land listing because generally, they know more about the land.

If you’re looking at a piece of land that is connected, it’s not accessible. I’m not sure. I have to dig into this one. I was thinking too that it might be a land that people that live right there would want to take over for more space.

That’s what I call the neighbor letters. That’s where we send a letter to the neighbors, the adjoining and connecting properties and say, “We’ve got this amazing piece of land next door to you. We’re thinking about selling it. We would even hold the financing. Would you be interested in purchasing it?” They call and you can have a conversation. We find that neighbors loved it. They’ve always covered it.

You never want to pay too much for a piece of land. The less you pay, the easier it’s going to be sold.

We sold one to a neighbor that said, “I’ve been trying to figure out how to buy this for the last eight years and I never went into doing the work to figure out who owns it.” I said, “We own it. Do you want to buy it?” He said, “Yes.” He gave us a down payment and a monthly payment. We made it super easy. We’re still collecting a check from that very happy land buyer. It happens all the time.

Even if the land doesn’t connect, they could be a mile down the road and they’ll still purchase another lot. There’s something about when they go on their walks at night, they’re like, “We own that lot too. We own that land too.” I’ve had people say, “I want to build a community playground.” We call those neighbor letters.

You can also skip-trace them. We got that in the group if you’ve got access to on Land Sharks Course. He’ll skiptrace anything you need. Skiptrace is we’re figuring out the phone number, email and mailing address of the actual owner. Generally, you can find it with a name and a mailing address. We already got a mailing address. You can start sending them mail and then you can skip-trace, call and text them.

I’m excited. I did this big mailer. I got some angry people calling me that was getting in my head. With these leads that are going somewhere, I feel so much better about it because I can see that it’s working and it’s real. That’s the hardest part about getting started but I could see what’s out there and people are responding in a positive way.

What’s the negative been like? Are people are yelling at you and calling you names?

Yes. Some people aren’t that harsh. They just say like, “Your price is way too low. I’m not interested,” but then you get some angry people out there that are so insulted by the offer. They can’t help themselves but to follow-up, start yelling and calling you names. I got some angry ones out there.

Sometimes I feel like we’re like therapists. They need somebody to talk to, yell at and vent at. A little prayer for them, “I’m sorry I ruined your day. Thanks for calling. I appreciate you calling me. It lets me know my mail is working.” Could you tell me about the one that you had that they called you on, “You need to get an education,” or something like that?

I let him know that I’m a teacher and he was like, “My granddaughter is a teacher and she has more brains than you. You need to get an education.” I said, “Have a blessed day.” He goes, “You don’t know anything about blessings because you don’t know what you’re talking about.” I was like, “Have a good day. I’m going to get going now.” That was enough for me. That brought me down a little bit but an hour later, I got a phone call from one of my leads, from the realtor that I was talking about. I was like, “Is this another person calling to yell at me? Is this going to go somewhere?”

The fact that he was so pleasant and we’re having a great conversation, I learned all about this land. I have to take the good with the bad, not focus on the negative and be like, “There are people out there that I can help by picking up that land and taking it off their list of problems that they have.” Some of the sellers I’m working with, it’s like this is a burden on them. They don’t want to pay the taxes on land that they’re never going to use. I have to remind myself of that.

That is so true. You said it beautifully. There are people out there that will want my help. There are people out there that don’t need our help and that’s okay. You’ll have people out there that will cry because they’re so happy that you’re helping them and you’re trustworthy. They couldn’t have a better person sending them an offer letter. At the end of the day, we tell them exactly what we’re doing, “Here’s how we do it. Here’s how our process works.”

WI 633 | Piece Of Land

Piece Of Land: It’s all about volume. You want to keep rolling to the next one. You’re building a land-buying machine and a land-selling machine and letting other people help you with the rest of the processes.

 

I love this because you’re going to find some people out there that you’re going to help so much on buying their burden to get it off their shoulders. You’re going to turn around and find that person who’s been walking this neighborhood for years and can’t afford a piece of land in there. They might be a renter, tenant, living with their parents or in-laws because they can’t afford to build their own house. They come across this lot for $3,000 down that they can have their future family and white picket fence in this neighborhood that has got a lake and a waterfall. You’re going to help people tremendously. That’s awesome. Is there anything else? Any other questions?

No. I have a lot on my to-do list so I’m going to get cracking and make things happen. Thank you, Brent. This has been a pretty awesome day when it comes to getting in contact with those sellers and getting some positive energy from there.

Recap with me. What’s the plan of action? What’s the first step?

I’m going to hit the ground with marketing and line up a mobile notary to go out to meet with my seller and get some of those things done. I have some research to do on the guy that has two properties. I got to find out more about that land so that when I call him back, I know what I’m talking about and we can get an offer out there and signed. I have another one that I’m looking at. I want to call that realtor. I have a lot of things to do. I have my little list here and I’m going to get cracking.

I can only imagine the pile of Red Bulls underneath your desk. Start thinking about, “How can I replace myself?” Figure out the tasks that you hate the most whether it’d be people telling you, “You need an education.” Start thinking about the future. Plan and think about where you want to be. “I want to have someone else taking these acquisition phone calls or intake calls. That way, I’m not the one getting yelled at or having to listen to the angry voicemails.” Whatever it is that you like the least, let’s start thinking about how to get that off your plate. I know it’s probably daunting in your mind but it will be so much better when you’ve got $500, $600 or $700 a month coming in.

It’s okay. There are a lot of people out there that are looking to make an extra $50, $60 or $100 a week. There are people out there that want to team up with you. They’ll see your vision, Tracy. It’s because everyone thinks, “I don’t want to hire someone because I’ve got to pay them full-time and benefits, healthcare and all that,” there are so many people out there that an extra $50 a week will change their life. Start thinking about how to replace yourself very soon. This has been the highlight of my day. Call me if you need anything. Thanks for jumping on.

Thank you, Brent.

That concludes episode six of the Do or Die Series. Be sure to catch the next episode where we will know whether or not Tracy was able to close at least one of those deals and maybe two. See you on the next episode.

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About Brent Bowers

WI 623 | Wholesaling LandBrent Bowers is an investor and coach with a focus on buying and selling vacant land. As an Army Officer with over 8 years of service, Brent was spending a great deal of time away from his family, and he knew he needed to make some changes in order to be more present with his wife and children. In a short period of time, Brent was able to expand his business, hire a team, and (most importantly) spend quality time with his family while still working hard and helping others.

While Brent invests in many different types of real estate, his favorite investment strategy deals with buying and selling vacant land, and he enjoys sharing his expertise in this area with his coaching clients. Brent chooses to live his life based on Bob Burg’s quote, “Your influence is determined by how abundantly you place other people’s interests first.” He is passionate about helping other people find success in real estate investing, particularly in land investments.

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