Michael turned $100 into $1000 with his first land flip, and after 30 years in the house flipping business, only flips land now to keep his profit high and his life simple. Learn the basics of flipping land and how it compares to flipping (wholesaling) houses.
Key Talking Points of the Episode
00:00 Introduction
00:44 How did Michael find his first land wholesale deal?
02:05 How did Michael find the seller of the property?
03:04 Why did Michael switch to doing land from appraising and flipping houses?
04:26 What was Michael’s second land deal like?
05:19 What kind of land deals is Michael doing today?
07:26 Why is it important to prioritize your buyers before your deals?
08:49 How does Michael find buyers for his land deals?
10:49 What is it like to work with Habitat for Humanity on land deals?
11:54 What marketing channels does Michael use to market to land sellers?
12:38 What are the benefits of building niche lists to market to?
13:15 How is Michael’s business structured today?
14:04 How does the Unlimited Information feature on Deal Machine help wholesalers?
15:39 Where can you join Michael to learn more about land flipping?
17:07 What is Michael’s advice for investors who are looking for their first deal?
Links
Website: Deal Machine Unveiled
https://www.dealmachine.com/unveiled
Facebook Group: Land Flipping 4 Real Estate Professionals
https://www.facebook.com/groups/landflipping4realestateprofessionals
David's Social: @dlecko
https://www.dealmachine.com/pod
Ryan's Social: @heritage_home_investments
https://www.heritagehomeinvestments.com/
Hey everyone, thanks for following the Deal Machine Real Estate Investing podcast. Today's episode is going to be great. You're going to hear from a person who has been in the wholesaling game for a long time and has focused on his most effective form of marketing. My name is Ryan Haywood. Back in 2019, I started a 30-day wholesaling challenge. I went on and got my first deal on 14 days since then I've gone on to do over 400 transactions. My name is David Leko. Eight years ago, I created a tool that's helped people now close 10,000 of their very first wholesale deals with the software platform called Deal Machine. So Michael, I'm curious how much did you make on your first wholesale deal that was just land, not even a house on it? Yeah, the first one and I just put my toe in the water and I got it for $100 and turned around and sold it for $1,000 three hours later. That's pretty good ratio. 10 to 1. So it was just kind of testing the concept. Okay. Got it. How do you have to have a cross? $100, though. That's insane. Well, I probably didn't know the, I knew the numbers, but I wanted to be conservative. The property was landlocked and it was an absentee owner. Okay. Well, he locked all the land I'm talking and seeing his landlocked. What do you mean? Well, you could not access the property without going through another person's property. Got it. That makes more sense. So what did you think the buyer of that property was going to do with it if they couldn't get to it? Um, it turned out they were an elderly couple and they'd bought other landlocked properties before and I put an out on Craigslist and met them at the local bank three hours later and we transferred the property right there and they still own it. Okay. Just what did it buy it? See if it goes up in value, I guess? I think, I think is a long-term investment. Subsequently, I sold them other properties. All right. Well, how did you find the owner of the land in the first place if it was landlocked? Did you have to trespass to get to it? I did. Oh, no, I just, you know, the property in front have road access. This one did not. So, you know, you walked about 30 yards through it to kind of, you know, inspect the property and what have you. Well, I mean, how did you find the seller in the first place? Okay. You could just pull the list of absentee owners that it owned property, bake it land for an extended period of time that lived out of the area. Hmm. Got it. You said of a postcard? Yeah. First batch was 500 postcards and bought two properties. Wow. Okay. So, see, one thing I noticed is you sent like 500 right away. That's great. Some people want to do one or two and then they don't get any response. They get discouraged. Well, I think with the background of doing houses as well and the appraisal business I became very comfortable and knowledgeable about the data. Okay. Why did you switch over from appraising and flipping homes to just doing land? When we were doing houses, you know, and I'm not handy, but we had a group of employees. And so we're managing them. The numbers were a lot higher. The process took a lot longer and obviously it was more capital intensive. And with the land, the sellers are extremely motivated. We don't do anything to it. I don't see many of the properties that we go ahead and wholesale or flip and the process is just much easier and less competitive. Got it. Were you frustrated at some point that really drove you to try something new? Um, well, after 2008 and being in real estate for a long time, I just needed to break and uh, you know, I got the bug back. And I just started thinking, uh, no employees, you know, just a much easier process. Got it. So then in 2008, what, I mean, what happened? I know the market had crashed, but did you, did you own a lot of projects like in a lot of renovation projects? Uh, no, not, not then we didn't, you know, we, we would turn them around very quick, but the market had just changed quite a bit and, uh, I'd been in it for almost 30 years at that point. And frankly, I just needed to break from real estate. Got it. I understand that. So what did you do on your next deal? You know, you said you got one for a hundred dollars and you should work for a thousand. So how did they, how did the second one go? Yeah, the next one, uh, we got for 3000 and it was an area that wasn't extremely populated. So I mailed out some neighbor letters and the guy that lived by it, bought it for 6,000. So we just, you know, doubled the money from three to six. And you knew those sold because you could just look it up. You knew what the prices of similar pieces of land sold for because you could just look it up. Yeah. Well, my background's appraisal. So I'm pretty good at nailing the property values and, and familiar with most of the tools that are available and a benefit to that is I know the values better than the sellers. And I know the values most had signed better than the buyers and better at the information. And so just being better at the information is really the advantage. Okay. Got it. The appraisers come into play at all and the transactions he do now, I guess not because they're just cash deals and there's no, yeah, there's no need. Well, one, one thing that I find is with land, there typically aren't any mortgages involved. I have not bought a wholesale parcel where there's a mortgage at all. So we're not dealing with mortgages or banks or any of that. It's just such a clean process. And many times since they own it free and clear, they're willing to sell or finance. Hmm, and do you still make a wholesale fee if they sell or finance it? I haven't done much, uh, seller financing, but, uh, I continue, uh, taking courses as I go forward. You know, I'm taking one with Eddie speed right now that's great with creative financing and notes. Well, what it can allow you to do if you put the seller financing in place, you can go after much, uh, more expensive properties because you're not burning that cash got it. Cause it, if you, all right, well, if you're wholesaling the land, you're not really putting your cash into the deal in the first place though, right? Yeah. All right. We, you could get it under contract with seller financing say with, uh, $5,000 down and $100 a month payments and you could wholesale that contract to someone else for $15,000 down and $200 month payments. So what you're really getting is that spread of $5,000 or $10,000 up front plus, uh, recurring monthly payment. Okay. Got it. So this is something you're learning about, but you haven't done a lot of, yeah. Yeah. I haven't done a lot of that. Uh, got it. So the, so the deals that you do, you, you're not buying yourself, right? You're just getting in under contract and then selling it to someone else. It's a combination, many of them are wholesale, but, uh, I work with many of the local builders. I work with habitat for humanity. And many times it's just one call and I'll, I'll call David at habitat and say, David, I've got this parcel. Uh, are you interested and he says, y'all give you 28,000 and I said, well, how about 29? He goes, okay, done deal. So many times it's just, it's just one call. Nice. Yeah. A lot of times you said you've got buyers ready to buy them before you even finish getting them under contract. Right? Yeah. Typically, I think many people are focused on getting the deal. But I put a lot of energy and focus on who's my end buyer, who the end buyer is. So we've done a good job at building a substantial list of buyers. I just do a very small market. I have 3000 properties that I target, but I have 600 people that are looking to purchase property from me. Deal is she listeners. I'm wearing my turtleneck, not because it's Steve Jobs birthday, not because Apple just announced they're integrating AI into their phones. Nope. None of that. We're coming up on deal machine unveiled, which is our special live presentation where we're unveiling the latest innovation in real estate technology. Last November, we had an unveiled event and we broke down the house with unlimited skip tracing, which also improved with our private investigator tool, the accuracy of your skip tracing results by 50%, meaning if you don't get data, you can actually see every person with that homeowner's name all in one spot in one place. There's no other place. You can get that. Come July 1st, reserve your spot. Get notified. Be among the first to see what's coming next for the real estate industry. The URL, by the way, is deal machine dot com slash unveiled. So here's a question. Well, I've got how do you find like what? How do you find people that buy land? I'm intrigued by my life in foremost, but I'm right and coordinated. Yeah, I use four techniques. I go to the National Association of Home Builders and see if there's a local chapter. There's 91 builders that are building in my market area. I use some other tools and I'll, you know, prop streamer, data tree, other tools. And what I'll do, I'll put in the zip code where I have a parcel. And what I'll do is say, show me everyone that's bought similar land in that zip code within the last two years and say it's 90 people and that out of that 90, I say, show me out of those 90, which people own five or more properties. So now it narrows it down to 40. So I have a list of investors that are buying similar properties in my zip code. And I already know what they're paying for it because I can look up their previous transactions. Neighbor letters. Sometimes if I do buy it, I'll list it with a realtor, but we'll put it on Facebook marketplace. And I just put one on there and we got 1,052 hits of people that were interested. Do you have any buyers that are not local to that area, like any nationwide buyers? Not necessarily nationwide, but we do have some people, Pensacola is kind of a destination for some people, or vacation or what have you. So some remote. But one thing I like about doing the same market area, I have repeat buyers, I've done 11 transactions with Habitat and many other builders. We have many repeat transactions. So many times it's just a phone call where I know what they're looking for. We did a project with Habitat for Humanity in Indianapolis. And I was surprised when they said, we actually buy a lot from wholesalers. They didn't use you, but now they do. So I was curious, do they typically, how do they compare to your other buyers in terms with things you'd want to know as a wholesaler, right? Like, is it an easy transaction? Are they typically paying as much as other buyers, you know, that type of thing? Yeah. Yeah. So I started the relationship just with the cold call and I told them I get property substantiated to low market and I'd like to pass on the savings to my end buyer. And now David that works here is my buddy and we socialize and what have you, but the price is a little bit lower, but I'm not always interested in squeezing every dollar out of every deal. You know, sometimes I'll just call David up and I say, I've got this lot. I've got one right now and he would pay 14 for it and the margin was too small for me. So we're just marketing it, you know, in a different way. Okay. Got it. But it sounds like he's pretty easy to work with if you're hanging out. Yeah. It's very, you know, we go to lunch about every two months or so and it's a, it's a very easy process and really it's just a phone call. So I'll call him up and say, I've got this or I'm getting this under contract and he'll go ahead and do the due diligence and he'll just give me an off. Got it. So I noticed he said he sent postcards. Is there anything else you've ever tried like cold calling? Yeah. A combination. We've done SMS and that's worked very well. We've slowed it down a little bit for right now. We do some cold calling. Direct mail has been very successful for us and the best campaign that I've done. I sent out 3000 letters. So they would arrive in Florida the same day they got their tax bill. So now they get this, they get the tax bill or they can get a solicitation to sell their lot. And out of the 3000, we bought 11 properties, one out of every 272 pieces of mail. Yeah, that's actually really good. So it must have something to do with your timing of the tax bill. Part of part of it's the timing, but part of it is I really focused on building a list that a lot of people aren't mailing to. And I call it our 13 niche list. And some people mail to some of the same niches, but many times they don't. But as a result, we save money on marketing costs and we get a pretty good response rate. Got it. Well, where do you think that you'll end up going from here? I know you said you do not want any type of employees or anything like that. So do you feel like you're maxed out or is this like part time or how does, you know, what I mean? How's the capacity? Yeah, I do it full time. It's my wife and I. I've got two VAs in the Philippines. We could scale it if we wanted to. I had 65 employees before. I have no interest in that. And then, you know, if we can do three deals a month plus or minus right in there, they are still, you know, buy it for 10, sell it for 20, buy it for six, sell it for 30 kind of a range. And it's very comfortable and with family, I think time is probably the most valuable asset and being able to visit family in various other states. Yeah, that's awesome. I'm glad you're able to take some time and do that. So okay. All right. Have you tried any of the new skip tracing data in deal machine, by the way, I haven't and I have a small group of about a hundred, I call them teammates, not students that I just share techniques of what I do. And I was networking with many of them yesterday and they were just raving about your product. You know, and I would like to be able to share that with the whole group that we have. And just I was watching sis Williams review and just raving about it and you just real with me. And I want more. Okay. Well, yeah, no, I'm glad to hear that. And a huge reason why we've grown like 40% this year so far is we came out with that unlimited contact info. So everybody is saving a lot of money and actually closing the gap on data that wasn't coming back accurate before because if we don't have a hundred percent match, we'll show you everybody's name who's who's got that owner name in the country, right? So you can just look through the whole list, see their addresses at phone number so you could see everybody. I mean, there's not there's not a place where you wouldn't find the owner using those that strategy and not I'm saying so it's it's really powerful. Yeah. That would be wonderful. You know, I've used you can use all the tools that are available. I tried many of them. I do have a few teammates that do 600 deals a year, you know, much more than I do. And I think many of the solutions that you have would be very appealing to us. Cool. What's that group? He said they're not teammates and it's not mentors, but you just found a hundred people do it all same. And so I actually I have a small course, you know, and it's got about a hundred and thirty lessons in there. And it's just like they're sitting next to me and I show them exactly what I do from here's the tools I use, how do you pick a market area, how do you build a list, how do you contact the people, how do you do your due diligence, how do you make your offers, and then when you get the property, how do you move it as quick as possible. So I share that with them and would love to have you guys on. Okay. Well, love to be on what what the court calls for anyone who's wanting to know more. Yeah, it I have a public Facebook group, man flipping number four real estate professionals. I think we have about thirty eight thirty eight hundred people in the group. And the course is actually land flipping for for real estate professionals. And so we've had it for about two years, you know, just like anything where we find we're refining and what have you. And I think the thing that they like the most is I don't have thousands of students or teammates. It's very small. And then I'm very accessible. Got it. That's awesome, man. Everybody listening, I know they're they're going to be curious about land flipping for real estate professionals. I guess the best way they could go look for that is to go on the Facebook group. Yeah. Yeah. Yeah. Facebook group would be perfect. Okay. Got it. Cool. Anything else you'd like to add or advice you'd give somebody who's hoping to get their first deal. The first thing is probably education and not to push a course, you know, whether you do it on YouTube or podcast or what have you and I did a lot of that. One thing that a course does, and I suggest people check out all the courses, it accelerates your timeline. So you know, whether you have a mentor or not, and you know, check out all the niches. Land has just been a great fit for us. And I've tried most of the other niches. And again, as I said, the cost is pretty low. The sellers are motivated. You don't have to have any employees. You don't have to see it. No appointments to see it. No appointments to sell it. And that bundle was just very appealing. Yeah. That's awesome. All right. Well, thank you so much. I appreciate your time. And I'm sure you'll get some people checking out land flipping for real estate professionals. I appreciate you guys very much and, again, appreciate the opportunity. Thanks Ben. Thank you Ben. Thanks for listening to the deal machine real estate investing podcast. Please leave us a review and follow along wherever you're listening to your podcast. Thanks for listening. Bye. . [BLANK_AUDIO]
Michael turned $100 into $1000 with his first land flip, and after 30 years in the house flipping business, only flips land now to keep his profit high and his life simple. Learn the basics of flipping land and how it compares to flipping (wholesaling) houses.
Key Talking Points of the Episode
00:00 Introduction
00:44 How did Michael find his first land wholesale deal?
02:05 How did Michael find the seller of the property?
03:04 Why did Michael switch to doing land from appraising and flipping houses?
04:26 What was Michael’s second land deal like?
05:19 What kind of land deals is Michael doing today?
07:26 Why is it important to prioritize your buyers before your deals?
08:49 How does Michael find buyers for his land deals?
10:49 What is it like to work with Habitat for Humanity on land deals?
11:54 What marketing channels does Michael use to market to land sellers?
12:38 What are the benefits of building niche lists to market to?
13:15 How is Michael’s business structured today?
14:04 How does the Unlimited Information feature on Deal Machine help wholesalers?
15:39 Where can you join Michael to learn more about land flipping?
17:07 What is Michael’s advice for investors who are looking for their first deal?
Links
Website: Deal Machine Unveiled
https://www.dealmachine.com/unveiled
Facebook Group: Land Flipping 4 Real Estate Professionals
https://www.facebook.com/groups/landflipping4realestateprofessionals
David's Social: @dlecko
https://www.dealmachine.com/pod
Ryan's Social: @heritage_home_investments
https://www.heritagehomeinvestments.com/
