Posted on: July 23, 2021
WI 738 | Wholesaling Land

 

Wholesaling houses can be an excellent opportunity to increase your profit margin—but let’s be honest. Nobody wants to deal with stressful homeowners, tenants, or hoarder houses that smell everyday. So if you’re interested in expanding your niche, you’re in luck.

Rhino Tribe member Michael Ireland Castonon joins the podcast today. He used to sell medical devices, but now, he wholesales real estate full-time. He closed his first deal in 30 days, and his biggest land deal to date gave him $41,000 in 2 months on an $8,000 purchase.

You’ll learn more about Michael and his land investing journey in this episode so don’t miss it!

4285% ROI! – Spending $3500 to Generate a Mind-blowing $150k in NET PROFIT with Land

I’ve got an amazing guest, a good friend of mine. His name is Michael Ireland. He’s a rock star and a silent killer. He lives out in the great state of Texas. Michael, how are you?

I’m good, Brent. Thanks for having me. I appreciate it.

Thank you. I’ve wanted to get you on here for months. We started talking about land months ago. Before we get into that, tell us a little bit about yourself, what you do, your real estate company and how you got started in land.

I started in real estate as an agent back in 2015. I saw how much work that involved for a little return and how many things can go wrong and right in a transaction. It was a lot of work with that. I wanted something a little bit more streamlined to where I had a lot of control and get results quicker. I got into wholesaling at the end of 2017. I’m still wholesaling houses.

Back then in 2015, I also had a 9:00 to 5:00. I don’t have a 9:00 to 5:00 anymore. I wholesale houses full-time. Things have been going great with that. We’ve had some struggles and some big wins. I remember meeting you in Utah. I know that you had a successful house company but also you were in land. I’ve always been interested in that. I’m glad that we were able to talk about that earlier in 2021. We do and host houses. We’re getting into land investing as well. I’m excited about that.

What did you do for a 9:00 to 5:00?

I sold medical devices. I would go to different surgeons and doctors to sell them a device or product that we had. Not only what I sell them but I would also be in the operating room standing on the sidelines as a support system for the staff in there. I would teach them different things pertaining to the product. If they had any specific questions on there, I was there as a resource.

You see the action in the operating room as well. You’re a natural-born salesman is what it sounds like.

I want to say natural born but a lot of work was put into it. Luckily, I had the resources from those companies that taught me to lead into the success that I have.

You piqued my interest that you’re also wholesaling houses full-time. I know you’re crushing it. You have an amazing operation. The first question I have is how was the transition into land? Was it a shiny object that it took your eye off the ball in wholesaling? I experienced the same thing. I started my land almost at the same time I started my wholesaling. It was pretty seamless for me but I’m curious, how did that go for you? Were you able to use the same systems? Was it an easy transition or was it hard to implement while wholesaling?

If you have a deal and something that’s worth looking at, people will buy it.

It was pretty simple because we already had our wholesaling house operation. I saw this as another branch of wholesaling real estate. With that come new learning experiences and some new challenges that we have to overcome. The way I saw it was, “Let’s treat this as a nether list. Let’s stick with the same marketing channel that we’re doing now and try to measure it and see how it goes.” I’m blown away with the results looking back at how much less effort it took compared to wholesaling a house.

That’s why I love land. It’s less effort. It’s the easier path. It’s the path of least resistance, which is probably not the best mentality all the time. My team likes it because when I make something easier for their lives, they appreciate it. At the end of the day, it’s like, “I don’t care if it’s real estate or if you’re making widgets on the side of the road. If you show me a struggling business person, I’ll show you someone without a team.” That’s my little plug. Always be building a team. What would you say was the biggest challenge implementing this strategy as well, including land in your already existing business?

The biggest challenges that we faced were learning about land itself. Acquiring land was not that difficult but every land parcel in every single county is going to be different. You’re going to start getting these questions from buyers who you’re trying to sell this to about utilities, easement and access. Those are things that you’re starting to learn by not only doing your own research but reaching out to other people who know this and are willing to give you a breakdown.

In the beginning, you try to do everything yourself. I did because I wanted to know the ins and outs and have as much control as possible but things didn’t start getting easier until I found a third party to do the research themselves and give me the information I needed. That’s when I took a breath of fresh air, saying, “We’re learning and getting the hang of it.”

I want to almost reiterate. I was the same way in the beginning. I was almost best friends with the county planning and zoning department. I would call and be like, “Is there an easement? Is this land billable?” Then I call the electric company. “How much is it going to cost to get electric?” One day, I found a gentleman named Dilac. I pay him $40 to do all the title search and due diligence. He sends me the answers to the fifteen frequently asked questions. He gives it to my poster, the girl that posts all the properties for me. I don’t even see that process anymore but that was a headache in the beginning. After I learned the county and did probably two properties, I stopped doing that. I have to introduce you to Dilac if you aren’t happy with the guy you have that’s doing it for you but it sounds like it’s working out pretty well.

I would love the introduction. It’s always good to have multiple team members that can pull those resources for you. That’d be great.

How long have you been in land? When did you implement this? How long have you been doing this?

I would say the beginning of June 2021 and maybe the second week of June is when I sent out my first marketing campaign.

How long did it take you to get that first deal?

It took me less than a month. I was blown away with how fast it happened. In the beginning, it was quiet and then all of a sudden, you get one call. The qualifying aspect of the call and everything was much different than qualifying someone who you send a postcard for wanting to buy their house. It was much easier. We got straight to the point. We came up with the number that worked out for both of us.

WI 738 | Wholesaling Land

Wholesaling Land: When you’re wholesaling, there’s definitely more attachment there and that can lead the conversation to a difficult spot. But with land, the conversations are much easier and friendly.

 

Tell me if you have this experience or not. Land sellers call us or send the offer letter back signed whether they fax it, email it or mail it to us. I call it the LOL, the Land Offer Letter because every time I get one back signed, I laugh out loud. Sometimes, the landowners laughed out loud as well because they were offended by my massive lead discounted offer for their land. I almost found that it’s a way to make the letter a cheery type of thing.

What I’m getting at is I always find that the sellers are not attached 90% of the time. There’s not an emotional attachment. They never lived there. They either inherited that land or their husband or their wife bought it years ago and they’ve been paying the taxes. Is that the experience you’re having, Mike or you’re dealing with sellers that are attached to the land? They want all the money they can get out of it. They’re not willing to part with it unless you meet their terms. How’s your experience been with the sellers?

It’s been eye-opening. The majority of the time, we get calls back. The sellers say, “I didn’t even know I own this land. We’ve had it for a long time. I didn’t know what to do with it. I pay the taxes.” You’re right. There’s less attachment. They’re not giving you stories of their grandparents living there. These conversations are different than you were to wholesale a house or talk to a homeowner. There’s more attachment there that can lead the conversation to either a great conversation or a difficult conversation. With land, the conversations we have as sellers are day and night. They’re much easier and much friendlier, in my opinion.

With my acquisition manager, we’re bringing on a second one to take care of workload but she would rather buy land than a house because she doesn’t have to go to the parcel of land. She doesn’t have to go to some stinky, smelly cat pee house where the dogs are jumping on her and spend two and a half hours with a seller in a hoarder house. She would rather buy land all day long. It’s been such an incredible experience.

You did your first deal in 30 days. That is incredible. Most guys getting started in real estate don’t do a deal for the first year so kudos to you because you took action right away. That says a lot about who you are. That’s amazing. You took action immediately. How did you get this first deal? How did you find the seller? Tell us about that.

We got a list from the county. It was a tax delinquent list that we normally pull for marketing to homeowners. I removed all single-family homes and multifamily homes from that list and narrowed it down to vacant land, residential land. For that first deal, we sent out the LOL op that you coach us on. We got it signed back and got it in my email. At that point, I was like, “Here’s the proof. Let’s go ahead, increase our marketing efforts and keep going.”

How many LOLs did you have to send out to get that first signed LOL back in your email?

The first one was about 400 to 500.

Is that less than a half percent acceptance rate? How many land deals have you done so far?

We’ve done six land deals. Two of those, we’re looking to finance to an end buyer. The other four, we’ve wholesaled those pieces of property.

If you show me a struggling business person. I’ll show you, someone without a team.

Let’s unpack a couple of those. On the phone, you were telling me that you had the two that you’re going to finance. What does that look like? What is that going to earn you per month? Are you already collecting a payment per month on those two? Are you almost there? Where are you at in that process?

One of them, we’re still marketing but approximately, we’ll get about $100 a month. The second one, we’re close where we’ll be getting about $205 a month for that piece of property.

Between the two of them, you’ll have about $305 a month. That’s awesome. That excites me even more than what you’re probably going to tell us about your wholesaling. You peeled the curtain back a little bit for me, which you made some massive money on those wholesales. I’m always looking for how do we add another $100 a month, another $205 a month to our passive income with each deal we do because every single deal adds to the monthly income that we earn. Let me know if I can help any at all with the marketing on those. Let’s talk about those big whales that you did. Tell us about those.

The first one I want to talk about didn’t come from a marketing campaign at all. The beauty about this one was ever since I started with your coaching program, my mind shifted. You got to start telling everybody that you’re a land investor. You got to believe it because you’re doing it. Anybody you talk to whether it’d be people who are in the industry or friends, tell them, “I’m investing in land. If you know anybody selling, let me know.” That’s exactly where that first big deal came from.

It was from another wholesaler here in the Houston area who said, “I was talking to a homeowner who didn’t want to sell his house but he said he got 5 acres for sale. Do you want to take a look at it?” I said, “Sure.” He sent it to me. It was 5 acres, 5 minutes to Downtown Conroe, Texas. He wanted $8,000 for that piece of property.

My acquisitions manager and my business partner ran the numbers real quick. It was a no-brainer. We called the owner of that property. We pretty much gave him what he wanted because we knew what the upside of that was going to be. We had a few challenges with that one but we got it under contract. We sold that one and made a profit of $41,000 in a matter of two months.

That was your third land deal?

Yes. I paid the other investor a referral fee for that as well. The owner was happy. We were happy. It was a win for everybody all around.

I am blown away by what you said about the mindset shift, telling people you are a land investor. I’ve been doing land since 2016. I don’t think I tell enough people what I do but what you said about people bringing you deals. I’ve been calling those referrals with our KPIs. That is our number one key performance indicator. That is how we have the absolute best. It’s an infinite return on investment because it doesn’t cost us any marketing dollars to get someone to bring us a deal. It happens all the time. I kid you not. I feel like I’m the only land buyer in Colorado. People are always bringing us deals. I love that. That is so amazing. Tell us about that second one. With that one, I’m almost like standing on the edge of the carpet here.

In all honesty, it has been difficult for us with our wholesaling business for houses. We’ve had a lot of ups and downs, some big wins in the pipeline that all of a sudden don’t go through. My business partner, Steve, was also in charge of the acquisition. We were talking like, “We need a home run.” It seemed like that $41,000 deal was a home run but there were lots of issues with that one as well that we overcame. We wanted something to go as planned. “Let’s get something under contract. Let’s close on time without any title issues, issues with the buyer or seller or anything.”

WI 738 | Wholesaling Land

Wholesaling Land: Once you go into land, your mind shifts. You have to start telling everybody that you’re a land investor now. You have to believe it because you’re doing it.

 

That’s the prayer of all real estate investors, I believe.

We’ve worked so hard. We need something to go as planned and closed on the contract at the closing date. My acquisitions manager got a call. It’s a simple white handwritten postcard that we sent that says, “I want to buy your property at the legal description of the land. If you’re looking for a fair, quick, no-hassle offer, give me a call.” That’s what was on the postcard. He got that phone call from a gentleman who said, “I thought I sold this land a long time ago. I didn’t even know I still owned it but apparently, I do. I do want to sell it.”

He had a number in mind. He wanted $15,000. We looked at the property and noticed that part of the property has a frontage road to a developing freeway over here in a developing area. We were like, “This is a no-brainer.” We’ll negotiate with him to see if we can get him down a little bit lower but at least, if he wants $15,000, we’ll give it to him to make it seem like he won.

Negotiation is a dance. It’s all it is. Both sides want to get a great deal but if you are aiming to make the other person feel good about the transaction that they won because everyone wants to win in life, you’re going to do so well in negotiations.

The last thing you want to do is say, “We’ll give you what you want.” It’s a done deal on the first go around. All of a sudden, you have seller’s remorse and they start thinking, “Maybe I sold that too quickly. Maybe I sold that not as much as I thought. Maybe I can get a little bit more.” When you started negotiating, they felt like they won, which they did because you gave them the offer of what they wanted. Eventually, it makes the transaction go a little bit more smoothly. A little bit more about that, we got it under contract. This one, we sent it to a title company.

I knew there was potential here. I wanted to make sure that even though this was listed as a residential lot, the fact that I have frontage road, I wanted to see if there are any restrictions. If not then maybe we could turn this into a commercial lot. We reached out to a third-party to do the land due diligence. Let us know about easements, utilities and the restriction. It turned out that there were no restrictions.

You hit the jackpot with that part of the land.

As soon as we got that report back, we knew we were onto something. As soon as we got those answers back, I blasted it out to my buyers. It’s the same buyers that I grew and created for wholesaling houses.

You already tapped into something you had already built. I want to break that down. No restrictions. That means you could pretty much build anything you want to on the side of this frontage highway.

It was situated right behind a post office in that area with access to the freeway. The results came back that there’s no restriction. You can pretty much build anything commercial there.

Negotiation is just a dance. You want to make the other person feel like they won the negotiation.

As soon as we blasted it out to our buyers, we had multiple people call us on this. The feedback that we got was pretty amazing, which solidifies that you’re onto something and you got something good under contract. We got multiple offers and we ended up working with an agent who was on my buyers’ list who said, “I have a client who’s been looking for something like this. We want to make you an offer.” They’re over-asking what we’re asking. Ultimately in less than 30 days, we profited a net of $97,000.

Mike, did you realize that you had so many land buyers on your house buying lists and your cash buyers list?

I didn’t but I knew that if you have a deal if you have something that’s worth looking at, people will buy it. Even though these buyers were on my house buying lists, that didn’t mean that they wouldn’t buy land either. That’s something that I learned throughout this process.

We do the same thing. My bread and butter is recreational land. I buy land at massive discounts, turn around and sell it to recreational land buyers. They want to build a cabin one day, go tent camp or have a place to ride their dirt bikes and four-wheelers. I’m building the list opposite of that. There are times where we get these commercial lots or these lots in the city, which I call infill lots.

It’s amazing that our house cash buyers will make us offers. It’s a quick way to make fast cash but I’m always looking for that monthly passive income. That makes me think. Maybe I should start talking more to my house cash buyers. My wheels are turning a lot on this episode. Maybe they’d be interested in financing as well but most of the time, we call them cash buyers because they have lots of cash.

Going back to what you said, which is focusing on monthly cashflow, that’s not to say we didn’t get offers for financing. That first large deal where we met in $41,000, we got multiple offers to finance, $10,000 down, $15,000 down at $1,000 a month. That’s 4% to 6% interest. We did get those offers. With our goals for the business, we wanted to cash in and cash out quickly for that one.

There’s nothing wrong with that. You were praying about it like, “Dear Lord, send us a deal that we can close quickly, no back and forth, no title issues. Let’s get it done.” Here it is, $97,000 in 30 days. That is amazing. Those two deals, one for $41,000 net profit and one for $97,000 net profit. Let’s do some math. It’s $138,000 on two deals. Mike, I’m blown away. That’s incredible. I appreciate you peeling back the curtain and sharing all that. I thank you so much for that.

What blew me away was we spent about $3,500 in marketing and we profited $150,000 in total.

You spent $3,500 in sending out land offer letters and postcards to net how much profit?

$150,000.

WI 738 | Wholesaling Land

Wholesaling Land: A referral is the number one key performance indicator. It’s an infinite return on investment because it doesn’t cost you any marketing dollars to get someone to bring you a deal.

 

You’re not even saying gross numbers. You’re telling us net profit. That’s what I see with a lot of business owners. They tell us the whole revenue like, “We made $400,000.” What did you get to keep? What’s the net number? You netted $150,000. I’m pulling out a calculator. I took $150,000 divided it by $3,500 and then multiplied that by 100, which comes out to a 4,285% return on your $3,500. That’s crazy.

I’ve never seen anything like it. We’re starting to think a little differently based on those results. Hopefully, instead of just focusing on one county, we can see us going into multiple counties.

We both have the book, you and I. That’s where we met without a scale. I love the fact that you’re thinking about that. Going back to this 4,200% return on investment of $3,500, I’m not going to drop names but I’m pretty sure people go to prison offering our returns on investments such as that. Be careful when you tell other investors your ROI. You were thinking about doing bigger deals and getting some private lending. Do you think that if you showed a private lender the numbers on your land deals, like the return on your investment that you’ll have any problem getting financing for these bigger land deals?

Not at all. There’s proof of concept. We have the numbers and the proof. Not only that but these results coming in such a short amount of time are truly amazing.

Not everyone’s going to have these types of results. You have to take action. You took punches in the face. This was not easy at all but you went out and did the work so kudos to you. I want to explain that to the readers. This does take work. The last question I’ll ask you, Mike, is what advice would you give to the person thinking about getting started in land?

Get a mentor that’s already doing this and has the results. That’s a big part of my success. You started coaching me and you gave me the things that worked well and didn’t work well for you. That shortened the learning process for me in order to take imperfect action right away. That’s going to be my main point. Find a mentor that’s already doing this. Try to offer them some value and see if you can help each other out to try to speed up your process.

I will be honest, Mike. You are the model student. You disappeared on me. I was a little worried about you because we were going back and forth on some stuff with Texas. I was like, “I don’t know if Mike is still doing land.” I had a couple of sleepless nights. You called telling me you did six amazing deals in six months. I couldn’t be more proud. I’m so thankful. I love seeing the action that you’ve taken so thanks. Thanks for joining me, Mike.

If you’re interested in getting started generating passive income through land, head over to WholesalingInc.com/land. Schedule a call with me. We’ll hop on a short call and discuss your real estate investing goals. If it sounds like we’re a good fit, I’d be honored to help you in your land investing journey. I’ll see you next time, land sharks.

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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 inland investments.

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