Do you want a simple, sideline job that can earn you $10k per month? Check out Daniel Watson‘s success story! Daniel is a US Army captain, an athlete, and a father of two, who started his real estate business as a sideline. And now, just five months in the business, he earns $6,000-$12,000 deals a month! In this episode, Daniel talks about his interest in real estate investing and why land selling is the best market. He also tackles the strategies he used to gain better profit margins. Tune in!
How a Busy US Army Captain Makes $10k Per Month Wholesaling Land
I’ve got an amazing guest, a friend of mine from my old Army days. My friend’s name is Daniel Watson. He is a Captain in the United States Army. This guy is an incredible stud. He is an athlete, a father of two and an amazing husband. He got back from an extremely long deployment in Korea. I’ve got him here to talk about land. I’m excited. Daniel, what’s happening?
How is it going? I’m excited to be here. Thanks for having me on.
It’s great to have you. I’m going to ask you a ton of questions about what you’re doing in land and how you do it as a father, as a husband and a guy. You’re always at the military’s beck and call. How in the world are you doing it? I’m intrigued by this. I know we talk about it a couple of times a month and you always inspire me with what you’re doing. I’m always pushing my team like, “Do you hear what Daniel is doing over here? Let’s go.” Why land? You’re an Army officer. You don’t need the extra pay. What are you doing this for?
Thanks for all that. I appreciate it. This started out as a hobby. I was deployed in South Korea for all of 2018. You inspired me. I saw what you were doing with your house flipping and wholesaling, and then you got into land. You told me about that. I spent that whole time away from my family studying and researching. I kept coming back to land for a few reasons. Everybody sees HGTV and they want to flip houses, wholesale or, do some buy and hold, rentals, and all of those things. Those are all great. I do those things, but there are a few things about land that intrigued me.
One is something I’ve heard you talked about before. That’s the pee-smelling houses that you always have to deal with and these renos that are always done. Contractor issues and repairs on buy and holds can eat up your entire profit margin for an entire year on one repair, and then the competition was certainly one. It’s all of those things. For instance, I have a house that I had to replace the AC unit on. It was $3,600. I’m only making a $250 a month profit on that house. My profit for the whole year would have been $3,000 and I lost all of that on one repair on a house that I had to do two months after buying it. That’s why it’s land for me.
I’ve been there with these houses. I had one that I bought in 2007. I was getting $150 a month net income after all expenses as if nothing broke. I feel like every six months something major would break, whether it be the water heater, septic system, roof or well pump. I did some math. You were getting $200 a month net income after all expenses and you had a $3,600 air conditioner. For about eighteen months, you’re not going to break even on that house or get any net profit on it. That’s pretty wild.
We can dig into that even further a little bit. I went a conventional route on this mortgage. I have $18,000 tied up in that house also. You think about dollars invested for your return in any of your cashflow. Think about it. It took me $18,000 to get into an asset that’s going to bring me $250 a month. With land, I can invest $1,000. I can buy a property for $1,000, and then I can turn around and sell it for $6,000. If I do it on terms, I can get $250 a month from that. On one hand, I’m risking $18,000 keeping that tied up. With the land, I only have $1,000 tied up and I’m making the same amount of money each month.
The only money you’ll lose selling land is the properties you never bought.
It’s less risk and you get your money out faster. How is it finding these buyers for the $6,000 and being able to pay payments? How hard is it to find that buyer? I get a lot of questions like, “Where do you find the buyers for these types of things? How do you find them? How hard is it? How long does it take to sell?” Those are some of the questions I get asked all the time.
I can tell you that one of the counties that I’m doing my smaller dollar amount properties are on the desert squares that everybody talks about. It’s maybe Arizona and Nevada or places like that. I’ve been doing a lot more cash sales and I’ve been buying properties for $1,500. I’ve figured out this area after a few months. I know that I can get a property for $1,500 or less and I can sell it for $4,500 to $5,000. I’ve been selling between 3 and 4 of that cash every month. I’m making between $4,000 and $10,000 a month cash profit steadily. I know that I can do that for the foreseeable future.
That’s $10,000 a month. It sounds like you’re barely getting by.
This whole thing for me is a hobby. I have my other job and everything that I do. This is something that I enjoy doing. It so happens that for most people, including myself in a lot of ways, making $6,000 to $12,000 every month is a success story. That’s perfect, powerful and life-changing for a lot of people out there. That would be enough for the majority of people out there who wanted to do this. They would call that success.
For some people, an extra $300 a month will be life-changing and you’re talking $6,000 to $12,000 a month. Let’s talk about how long it takes you to get there. You must have been doing this for years. You got a crazy business built up and all this cash. How long did it take you to get to $6,000 to $12,000 a month consistently? This is what I’m excited to know because a lot of people are probably wondering, “This had to have taken this guy years to do this.”
I’ve consistently done that for five months total. For five months, I’ve made between $6,000 and $12,000 a month on those desert square properties. I sent out my first mailer ever for land in May of 2020. It took me two months to build that consistency.
Roughly, what are we looking at?
For a few months now, I’ve been doing land. Every month, it has been getting better and easier. We’ll talk about how I’ve changed my whole game plan with all this since it has been going well so quickly.
What do your offers look like? How many offers are you having to send out each month to get deal flow like you’re doing? A lot of people realize the actual demand of being a military officer. First off, what do your workdays look like in the military? I know you got back from Korea. What does your average workday look like?
I wake up at 5:00 AM every morning. I go to PT, which goes from 6:30 in the morning until 8:00. I go home, hang out with the kids for a while, make them breakfast to eat and go back to work. I have to be there at 9:00 to 9:30. I typically work until about 6:00 every evening. I’m doing this at night for maybe an hour a night and a couple of hours on the weekend. More or less, I’m still answering the phones and things like that. I don’t have PATLive, Airtable, and all of these things that people use. I keep track of things on sometimes my green notebook that the Army gives me and an Excel spreadsheet. That’s pretty much it.
You are at work by 6:00 AM, leaving at 6:00 PM. That’s only a half-day. We’ve got 24 hours a day. You’re only working half-day.
We all need to sleep. I have two kids at home and my wife as well. I certainly make sure that I don’t neglect any of them.
I’m sure your wife wants to see you from time to time. I know those kids will see you because they want to see you. I have three of them running around, stomping above my head, and waiting for me to get done with this show to play. When the kids come home, my job is no longer buying and selling land. It’s playing daddy’s playtime. That’s amazing. I love that you’re doing this one hour a day and a few hours on the weekend. It’s not like you’re putting in a 40-hour week. That’s crushing many misconceptions that people think about business people, “To start a business, I got to do tens of thousands of hours, bootstrap everything, work nonstop, and stop sleeping.” You still get time. You’re doing an hour a day. It’s possible to do this and you’re living proof of it. How many offer letters a month or a week are you having to send out to do a deal flow like this?
This is funny too because I do send out a lot now. The funny thing about it is the initial properties that I got and a lot of them that I sold throughout this whole five months were off of my first mailer. I sent out 2,000 pieces and I stumbled across one guy. I sent him an offer on one property and he was like, “Dan, I see you want to buy this property. I have ten more. If you want to buy those too, I would be happy to sell them to you.” I was like, “Yes, sir. I would be happy to buy this from you.”
Prove to yourself your strategies work before investing too much money.
The funny thing is I only bought five of them at first. For me, I had to prove to myself that it worked first before I invested too much money into it. I sold those first five in a month and a half. I called him back. I was like, “Can I buy those other five?” I bought those other five from him and sold all of those. It’s one of those things that happened so quick. I’m still calling people that I didn’t buy land off of that I had accepted offers for them.
I’m having to go back now and contact these people because I saved their phone numbers and email addresses. I try and get them to sell to me again because I know now that they will sell. People ask me all the time, “How much money have you lost selling land, Daniel?” My answer to them is that the only money that I’ve lost selling land are the properties that I’ve never bought. That’s essentially it. Any property that I didn’t have the money at that time to purchase, it’s potential earnings that I’ve lost.
“The only money that I’ve ever lost selling land are the deals I haven’t purchased,” that’s a quote from a board right there. You said 2,000 letters and you did ten deals. That’s a 0.5% closing rate.
It goes against everything you hear too because you’re like, “If you get more than 2.5% or so response rate, maybe you priced too high.” For whatever reason, they all accepted them at $1,500 or less. I sold all of them for $5,500 or $4,500.
The response rate doesn’t matter. It’s all about the conversion rate. I know you bought houses as well. How many house mailers did you have to send out to buy one house?
That’s why I stopped sending out house mailers. You know this too. That’s why you’re asking this question. I spent all this money and I sent out 4,000 mailers on houses. I spent $2,500 on that mailing campaign. I got two responses back, nothing was under contract. It’s the competition. There are so many people that when you talk and hear about real estate, it’s, “I have to buy houses.” You know as well as I do that people are trying to wholesale properties that are junk and there’s no spread. There’s no way that the investor who is buying off this wholesaler can make any money off of this. The profit margins on land are exponentially better. It’s a game-changer.
If you’re selling it in a month and a half of buying five parcels of land and selling all five of them in a month and a half, you’re getting all your money plus profit in a month and a half. I know why you didn’t buy any houses. You got to send out 4,000 letters a month and it’s a minimum of at least three months of doing that. You’re at 4,000, 8,000, or 12,000 before you finally convert one of them. It takes a ton more mailers. I love that. I appreciate you answering that question. I did that a little tongue in cheek. I know you’re doing that and I’ve been there as well. What are some of the learning lessons that you’ve come across with buying land? I know it hasn’t all been perfect roses type thing and easy transactions. What did the learning lessons look like?
I wasted some money on trying to make sure everything was absolutely perfect before I even send out my first mailer like paying people to create a website. Don’t pay somebody a crazy amount of money to create a website for you. There are places like Fiverr that you can go on and have a WordPress site created for you for very little. To me, the website is mainly credibility for you. I haven’t sold a whole lot of land off my personal website, but on my mailer that I send out, I have that website on there with the address so they can go back and see that this is legit. I’m a real person that’s doing this. It’s not a scam.
If you’re starting with desert square properties as a lot of people do when starting out with this, if you have $5,000, don’t go out and buy a $5,000 property that you want to sell for $10,000. If you have $5,000, buy five $1,000 properties that you can sell for $4,000 or $5,000 a piece. Have a little bit of an inventory rather than just having one property that you’re advertising to be able to advertise multiple properties for yourself.
Once you get the properties, go ahead and pull the trigger on getting on Lands of America. I know it’s $250 a month to list your properties on LandWatch, Land and Farm, and I believe something else. That is what changed everything. Almost all my leads are off of LandWatch and the whole Lands of America site. Don’t send test mailers. Don’t send 500 mailers at a time thinking, “This place might work.” Any successful mailing campaign is going to need at least 1,500 mailers in it to test the area.
Don’t get hung up on pricing. That’s another great one in my mind. One of the podcasts that I watch regularly talks about over-analysis paralysis. You’re analyzing it, getting your pricing together, testing it, looking into this area, and then you never get any mail out. Don’t get stuck in that boat either. Those are a lot of good lessons learned and ways to go into this in being more successful right from the start.
Everything is never going to be perfect. Launch the mail. I love that you launched 2,000 mailers at once. You got to get to around 1,500. I always say it’s like priming that pump. You got to prime that old pump, keep cranking that handle and eventually, water will start to come out. You got to keep going. Don’t stop. Eventually, once you get a good flow of water, deal flow, land flow, or whatever it is, you could slow down a little bit, but you got to keep pumping it.
I remember talking to you a while back ago about your website and everything you’re doing. A website is a great thing to have, but don’t spend much time on it. You can get a carrot site by going to LandSalesWebsite.com. It’s a good site to go to. You can get a free trial with that. It’s a 30-day free trial and you can start tomorrow. It’s about $50 a month. It’s a good way to get started.
Don’t spend time on your website. Spend time getting that mail out. I love that you say you spend money on advertising like Lands of America, Land.com or LandWatch. They’re great sites. You get your stuff out there in front of people that are looking to buy land. Don’t get hung up on pricing. That’s a lot of fear for people.
Don’t get hung up on pricing.
That makes me think of one more thing. What made you pick your area? I have a lot of people who come to me who are like, “What’s a good area? How do I choose an area?” You don’t have to give your special secret sauce. I remember you picked an area very quickly. That was what I was so impressed with. I did too and we both do deals. I know there are people out there who are like, “I don’t know what area to pick.” They’re not doing deals yet. How did you pull the trigger on that?
It came from me wanting to get away from the desert squares. I talked to a guy for half an hour on this property that I was going to try and sell to him where I would make $3,000. The next day, he never called me back, so I never sold that property and I spent all that time doing that. I thought, “I’m going to get into infill lots. I’m going to try and get this, spend a little more on each one of these properties, and bump up that profit margin to scale up.”
That’s what I did. I started doing that. I sent out my first mailer for that. The way I found my area was I went to the state that I wanted to do business in. I went to Zillow, pulled up the map, and filtered the houses off. I took all the houses off and everything, and put lots. I hit for sale and then I hit sale. I started seeing all the yellow and red dots pop up in the state that I was looking in.
I started zooming into different areas on that map and seeing, “What’s the reason that people are buying land in that area? What’s the attribute of that area? Is it a hill? Is it water?” In my case, it was water. I started seeing all of these dots all around these bodies of water where everybody was interested in living. These are high-dollar neighborhoods. The houses are $500,000 minimum built in these neighborhoods.
I started looking at the ZIP codes and mailing them to those ZIP codes based on what houses go for in that area. I thought, “This is probably what a contractor would pay me to buy this lot in that area so he could build a house on it.” As you and I both know, houses are hard to come by, so new builds are very popular. I thought, “Maybe I’ll start trying to advertise and market to contractors.” That’s what I did. I did exactly what I said not to do right here. I sent out a 500-piece mailer, came back, and priced it completely wrong.
This lady called me back and she was like, “I have this purchase agreement from you. I have this property. However, I have two of these. You offered me $5,000 for one, but I’m going to have to have $10,000 for each.” I went back. I looked at that neighborhood and saw that these houses were million-dollar houses in that area. I was like, “Absolutely.” I got them under contract and paid it all in. I was $24,000 all in on both of these properties. I closed and 48 hours later after I put them on Zillow myself, I had an offer that I accepted for $90,000.
Let’s do some quick math. You paid $24,000 for it. That’s a $66,000 profit in 48 hours on 500 mailers that you priced wrong. This is amazing.
It goes even further than that. There were other properties in there that I told you about that were from that same 500-piece mailer that I have started calling back and getting new up-to-date purchase agreements on and sent the title. There are three of them. I was like, “If I make $10,000 on each one of these, I’ll be happy. It’s a $30,000 profit on these three properties.”
I started calling realtors. I got a realtor that has been in the area for twenty years. He started running numbers for me since I have him under contract. He came back and said, “The first property, it looks like I’ll be able to get probably about $45,000 for it. The other one I’ll be able to get $55,000 and the other one I’ll be able to get $10,000.” I’m all-in on these properties for $26,000. It looks like I’ll be able to sell them for $110,000.
That’s all on a 500-piece mailer. You’re going to do five deals that are going to make you $66,000 on one. What’s the other one?
$91,200 is what they think.
$91,000 plus the $66,000?
Yes, it’s $150,000.
You must be good at picking an area. Think about it. I heard this quote. I heard Joe McCall say this. He was on a podcast and he gave credit to Kent Clothier. He said, “It’s much easier to sell people what they want rather than what you have.” You found the area of demand and bought the land there. People want it and they’re buying it from you. That’s incredible. My hats off to you. Why the heck wouldn’t these sellers take the easy route and put it on Zillow or list it with a realtor? I know you’re a good-looking guy. What is so good about you? Why would they sell it to you?
That is the biggest question that people ask when I tell them about this type of stuff, in particular, my father-in-law. My father-in-law was like, “Do you know Big Loo?” He asks me that all the time and I tell him what I’m going to sell this property for. I don’t think he ever believes me until I show him the HUD at the end like, “This is what I sold it for.” I stopped asking this question, but this is what I think it is. Let’s say you own an old classic car and it’s in your garage. You know it’s worth something. It has been sitting under a bunch of tools and old wood and stuff like that.
You have every intention of selling that someday, but you just never get around to it. You have a guy like me that sends you a letter, saying, “I’ll pay you this much money for that car in your garage.” What are the odds that you’ll go ahead and take that offer? Let’s take this a step further. Let’s say that you have an old car in a garage in Texas. You live in Colorado and I found out that you have it. What are the odds that you would sell me that car that you never get to enjoy, use and have fun with? It’s just sitting there collecting dust.
There are pretty darn good odds, especially if my wife has been telling me to sell it.
Let’s say you had to pay taxes on it every year. That’s exactly what it is. People inherit things sometimes and know that it’s probably worth something. They’re busy with day-to-day life. They don’t get around to selling it. An offer from somebody like you or I falls in their lap and they’re like, “This is awesome. I had to do no work for this whatsoever. I’m just collecting money.”
I get to get my garage space back. Now, I can buy a motorcycle because I’ve got room for three motorcycles in there. That’s a perfect example. I remember you told me this example and I forgot all about it, but now that you said it again, it’s so true. I find that most of these land sellers that are selling this land are not desperate for money. They don’t care. There’s no emotional tie to it. There’s not a lot of back and forth.
We’re not sitting on their stinky cat-pee house, negotiating for three and a half hours. I’m late for dinner. My kids are tired and they want to see dad. No, it’s a phone call and we’re not having to go through the land. It’s so much easier. Everybody is going after the ugly and nasty foundation problem of the roof caving in houses. That one house we did together a few years ago, we’ve had to fix the foundation. The house was splitting in half. That was a nut job.
It’s much easier to sell people what they want rather than what you have.
I’m excited. This has been a great episode. It’s going to provide a lot of value for the readers. The last thing I’ll ask is for someone thinking about getting started with land investing to create passive income. We didn’t even talk about your passive income. For someone that either get out of the job they hate or get started in this and start crushing it like you, what would you recommend how to get started?
Educate yourself on everything as you’re doing it. On my commute to and from work every single day, I’m listening to a podcast on land sales. There’s so much free information out there also, but there’s going to come a point where the free information is going to only take you so far. All these people on these podcasts on the free ones are giving you just enough to get by. Being part of a group and a team makes all the difference. Once you learned everything you can from the podcasts and all of that stuff, become part of a community. That community is powerful. They can give you a lot of tips. They can even become partners for you too that you can do joint ventures and different things like that and scale up on what you’re doing for sure.
That’s such great advice. If you’re interested in getting started on your way to generating a massive passive income through lands, head over to WholesalingInc.com/land and schedule a call. My team will hop on a short call with you and discuss your investing goals. If it sounds like we’re a good fit together. I would be honored to help you on your land investing journey. Daniel, thanks so much.
Thanks for having me, Brent. Take care.
I’ll see you next time, land sharks.
- Land and Farm
- Lands of America
About Brent Bowers
Brent Bowers, is an investor and coach with a focus on buying and selling vacant land. As an Army Officer 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.