Ep. #49 Land Investing: No Sexiness, Low Headaches, High Profits

by G. Brian Davis | Reviewed By: Denise Supplee | Last updated Dec 26, 2022 | Live Off Rents Podcast Videos | 0 comments

Why should real estate investors consider raw land over residential properties?

Deni and Brian talk over the advantages, including:

No renovations or contractors
No ongoing maintenance expenses
No tenant headaches
No pest control problems
Very little competition
No financing necessary, since you can buy plots for as little as $500

For a case study, read up on how one man replaced his 9-5 salary in 18 months through land investing.

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Live Off Rents Podcast · Ep. #49 Land Investing: No Sexiness, Low Headaches, High Profits

Denise Supplee: Hello, everybody, and welcome to Spark Rental’s podcast and Facebook Live. Hi, Brian.

Brian Davis: Hey, Deni. Happy Tuesday Everybody!!

Denise Supplee: So, let us know when you pop in. Let us know where you’re from. Any questions you have or a topic you might want to discuss. And as we go along, please feel free to ask questions and what-not, because we are definitely interactive. We’re not just sitting here talking to each other, which we do way too much of anyway. And if you joined us last week, Brian talked to Brian Thorp of Wealth Tender, and that was a really cool interview, Brian, I thought it was, Anyway, today we’re hosting an introduction to land investing. Just a little bit of a lightning and introduction. And land is a little bit different, right, Brian, then renting and investing in rentals,

Brian Davis: More than a little bit different, and Tara Says hi. Hi Tara. Yeah, so, I don’t think I’m the only landlord that feels this way, but I don’t feel comfortable with the increasing regulation in the residential rental industry. You know, every time I turn around, it feels like the laws get more tenant-friendly and less landlord-friendly. And the eviction moratorium is a perfect example of how these sorts of tenant-friendly policies can really disrupt your returns on your real estate investments. So, Deni and I want to talk today about land investing, and we’re going to give a kind of lightning overview of how land investing works today. And then on Thursday at two o’clock Eastern, we are hosting a live webinar with the land geek himself, Mark Podolsky, who is truly the top land investing authority in the United States. I mean, he’s basically synonymous with teaching land investing. So, we are super excited to host this live webinar with him. He’s going to walk you through exactly how he invests in land. He has made seven figures of income from land, and he’s created six figures, annual recurring income from land. So, it’s going to be super exciting. We’re really excited about it.

Denise Supplee: Yes, I was just saying that’s truly passive income. If you think about it, land.

Brian Davis: Yeah, well, you don’t have to worry about things like repairs, right?

Denise Supplee: You’re not going to fix your dirt. Yeah, you don’t have to evict people, so we don’t have to worry about an eviction moratorium on land. No repainting, no fixing up a rental unit, all that stuff is gone,

Brian Davis: Right, because if you think about the biggest headaches in residential real estate investing, They all have to do with the building itself or the tenants that live there or the laws that govern tenants that live there. So, things like contractors and renovations, things like dealing with city permit inspectors on those renovations. Right. Tenant turnover’s repainting the unit, new carpets, clean out, advertising vacant units, showing vacant units, signing leases with new tenants. The whole move-in process, collecting security deposits and maybe having to hold that security deposit in a specific interest-bearing account. I mean, all of these headaches come down to there being a building that tenants living tenants who may not pay, you know, having to chase down non-paying tenants or having to evict tenants. I’ve had an eviction take 11 months before, and then the tenants trashed the house when I finally got them out or even tenants that pay. You can have dirty tenants; You can have sneaky tenants who move in their drug-dealing boyfriend.

Denise Supplee: Noise issues, you know, having to get in between two tenants that are fighting.

Brian Davis: Right. So, all of the major headaches and hassles that come with real estate investing, it all has to do with people actually living in a building or maintaining that building itself with land. You don’t have any of those headaches. It’s just dirt. So, Deni how does land investing work exactly if you don’t have tenants who are paying you rent?

Denise Supplee: Well, in a nutshell, I mean, basically, you are buying land that somebody is desperate to get rid of. And there’s quite a bit of it actually out there. And because of that, you buy it fairly inexpensively. And then there are two things you can do. You can sell it outright for more money. So, you make your money quickly flipping it. Yeah, well, not that you’re going to flip it in the sense of flipping a home, but by flipping it and or the other one is actually becoming the financer of somebody who wants to purchase the land. So, then you make double duty at that point.

Brian Davis: Right, because you’re owning not just your profits on selling the property or the lot at a profit margin, but you’re also earning interest on the loan and the way this works, is. So, it’s typical seller financing, but you don’t have to actually change the property ownership until the person has paid you back either in full or reach some sort of milestone,

Denise Supplee: Which is a win-win, because if the person doesn’t pay you, you don’t have to go through the whole entire process of an eviction and all of that.

Brian Davis: Right. You don’t have the same regulations for land that you do in residential properties where people are actually living. And, you know, then you mentioned that it’s easy to get a good deal on land. And part of that is because people don’t have a good sense of what land is worth. Right. As opposed to a home that anyone can go on Zillow and get an estimate of the value pretty quickly and easily. Most people don’t have a good sense of what plots of raw land are worth. Even people who own that plot. Right, It might be an out-of-state investor, or it might be a neighbor who owns land that they’re not using. People don’t have a good sense of what it’s worth. So, you can score good deals easier than you think on raw land. And speaking of which, you know, Deni how much do land parcels cost? I mean, you know, where does this going to set investors back?

Denise Supplee: Well, I mean, as you can see, We are involved in this. We have been able to purchase parcels for as low as fifteen hundred bucks. Sometimes they can go even lower, but that’s about the average low and then they can go on up to about eight when they can go millions if you buy.

Brian Davis: Yeah, yeah. You could buy hundreds of acres for millions of dollars, but you can buy parcels of land for as little as 100 bucks, so. What that means for you, aside from being more affordable, it also means that financing is not necessary. You don’t have to mess around with banks and lenders. You know, you can pay with cash since we’re talking about relatively small sums of money here. And if you choose to invest in parcels that go for less money.

Denise Supplee: Tim Dooley says this sounds boring.

Brian Davis: Well, that’s the idea because it’s not sexy. Right? This is not something that they’re going to make TV shows about. Right. You’re not going to have flip this land. It is boring and it doesn’t. But boring is good when it comes to investments. It means you don’t have to worry about those headaches like it’s calling you at 3:00 a.m. and complaining that their light bulb burns out. So, yeah, but boring also keeps people away. You know, most people don’t consider land investing because it is boring and unsexy. You know, they can’t brag to all their friends about how they bought this cool vacation rental that they’re going to be able to use two weeks out of the year or whatever. The fact that land is boring is exactly why you can earn outstanding returns. Right. And when I say outstanding returns, what Mark will be teaching on Thursday at the two o’clock webinar will be how to earn 300 percent returns on a quick flip and up to 1000 percent returns when you seller finance lots over time,

Denise Supplee: Which is crazy, crazy. And Paul Beck says he’s bought land for under five hundred and established neighborhoods due to tax sales. And that is also something that we will be discussing.

Brian Davis: Yeah, that’s one of the primary strategies that Mark Podolsky will be teaching on Thursday at this webinar is how to buy lots that are in a tax sale to really get them at a deep discount. And in particular, you’re also working with a lot of sellers. You don’t necessarily want that land anymore if they let the taxes fall behind that.

Denise Supplee: A lot of times families don’t even realize like in the back of their mind, they forget about it.

Brian Davis: Right because land is boring. Right?

Denise Supplee: Right. Yeah.

Brian Davis: Yeah. Deni can you share that link in the comments for where people can register for the webinar on Thursday? I mean, Thursday, it’s 2:00 p.m. Eastern on Thursday is when we’re hosting the webinar with Mark Podolsky from the Land Geek. And it’s a 90-minute webinar. It is one hundred percent free. And he’s going to walk you through everything you need to know about the process of buying land, why you want to buy land in the first place, what kind of returns you can expect to be earning on land, the strategy behind investing in land. Um, so, yeah, I mean, I guess before we wrap things up, one of the other common questions that we hear about land is who actually buys land? So, you know, if you were to go out and invest in a parcel of land, who are you going to then turn around and sell it to? And there are a few answers to that question. Deni, you know, fill us in on who is actually buying these parcels of land from you when you buy a piece of land to turn around and flip it to sell it immediately.

Denise Supplee: Often it is people who live in that neighborhood or near that parcel of land. So, neighbors, campers are a big one, are people who like to do ATVs or stuff like that, and they want a big parcel of land. And some people who just want to build a, you know, custom home and buy a piece of land for that and other investors.

Brian Davis: Yeah, yeah. So, I mean, it’s a diverse group of people who are potential buyers for raw land. And it also depends on where you’re buying. You know, we have bought pieces of land that are in neighborhood developments in Florida, for example. The kind of people who buy those lots are people who plan to actually build a house on them and then move into it. Right. We also have bought a couple of pieces of land in Nevada, and those are more used by outdoor enthusiasts, you know, dirt bikers and hikers and campers and that sort of thing. You know, ranchers even you know, people might want to feed their cattle on the land or, you know, whatever. There are a lot of different potential buyers. And some of that depends on where you are investing in land. And on Thursday for this webinar at two p.m., Mark will talk about some of those strategies and how to pick areas to invest in land. So that is something that will go over on Thursday as well.

Denise Supplee: And Tara mentions that some people also have land that they don’t want because it was inherited and basically just hands it right off. So that’s definitely another one,

Speaker3: Because it’s boring,

Denise Supplee: It’s boring, but it makes money so boring can be good,

Brian Davis: Boring can be a competitive advantage as a real estate investor. And that is really the crux behind land investing, is that not that many people are doing it because it’s not exciting. They don’t know about it. They don’t understand how it works. I actually think that this is a perfect moment in history. You know, in the wake of an eviction moratorium that showcases just how much residential real estate regulation can hurt investors. I truly think this is the right moment to be investing in land.

Denise Supplee: And if nothing else, if you still have a lot of rentals, obviously, and you want to keep them, they’re doing well. But this is a great way to diversify.

Brian Davis: Diversification is the name of the game in any kind of investing. We’re talking about real estate stocks, you know, bonds, any type of investment. Diversification is key for risk management. And Paul Becks says often you can find the land on the tax assessor website and there is no family to worry about. Exactly. Paul you don’t worry about evictions or foreclosures or any of that. It’s basically an unregulated industry, which for someone who leans a little libertarian and distrusts the government, you know, no regulation is great and also says my situation is unique since the land was across from my home, which I now rent. Now, if I do sell the home, I can include the land with the selling point. You’ll have no neighbors. Yeah. Yeah.

Denise Supplee: Oh, that’s awesome.

Brian Davis: Yeah, yeah, exactly, and so there are always buyers for land, even though those buyers might have different motivations for it. And that’s a great point right there, Paul, that some people want as much space as possible with neighbors as far away as possible. So that’s what I’m curious as you can make such great profits easily. And it’s true. I mean because no one’s in the space, so. All right, Deni, Anything else that you want to bring up about land investing before we wrap it up and call it quits until our Thursday 2pm webinar?

Denise Supplee: Just come to the webinar because you’re going to get a lot of tips and free tips and little things to learn that. A lot of people don’t know, so tricks of the trade.

Brian Davis: Yeah, and, you know, Denny and I are not expert land investors. We are relatively new at land investing. Mark Podolski is the main investor in his Land Geek company is the oldest land investing education service in the United States. They’ve been doing this for a long time, and he is truly the land investing authority. So, we’re very glad and grateful to have him teaching this free 90-minute webinar for you guys once again Thursday, two o’clock Eastern. And there is a link in the comments where you can register for that webinar. We’re super excited to see you guys there.

Denise Supplee: Absolutely.

Brian Davis: All right. Well, on that note, we’re going to wrap things up and we will see you at two o’clock Eastern on Thursday for the joint webinar with Mark Podolsky of the Land Geek.

Denise Supplee: Absolutely. Any questions? Just reach out to us.

Brian Davis: That’s right. All right. We’ll see you then.

Denise Supplee: Bye-bye.

Brian Davis: Did you know we offer a free eight video course on how to reach financial independence with real estate? It’s super bendable with each video around 10 minutes long, but packed with information, visit Sparkrnetal.com/learn for instant access. And please don’t forget to rate and review our podcast on iTunes, Stitcher, or wherever you listen. Thanks for joining us. And we will catch you on the flip side.