Find out the different ways how to flip land for profit. If you want to learn how to make money with land, there are a few things you need to know first before you buy those parcels.
Is there profit in flipping land? There are many ways to make money with land. This question is really broad and could include many different avenues for the investor. Seriously, dozens of answers.
I think it was someone famous like Will Rogers who said, “buy land, they are not making any more of it.”
At the time, the United States was suffering through a depressed economic cycle.
I believe the point of Will Rogers’ quote is that you’ll have wealth and retention of value if you purchase land, especially when it was compared to the rollercoaster hot and cold stock market of the day.
I’m Ted Thomas, and I’ve been involved in real estate for decades. For the last 30 years, I’ve specialized in tax liens and tax deeds. Today I’ll answer your question at least partially about how to flip land for profit.
Want to learn how you can make big profits from deep discount real estate? Would you like to buy homes for pennies on the dollar? Or earn double-digit interest rates? Learn how to secure your financial future with this FREE mini class today!
LAND USES
Is buying and selling land profitable? How do you make money buying land? The overly simplified answer is buy the land for a good price and sell it for a better price.
The truth is people think of many things to do with land. Obviously, agriculture, or maybe it’s a subdivision; maybe they will plant trees. The answers are infinite.
For example, ranchers use the land to graze cattle. Open land close to a city could be developed as an industrial park. With the rising population, subdivisions are filled with houses.
Here’s what I know for sure. The United States is filled with land. Everybody wants a piece of it. In our lifetime it’s not going to fill up, unless you are close to a big city or municipality.
WHAT ARE THE RISKS?
Flipping or quickly reselling land or houses has been a business for a number of years.
Many like to buy and sell quickly for a profit. You might say it’s a dream, and it’s highly promoted in hotel seminars and on late night television.
The story is appealing and exciting. The reality is it’s all high risk, and that’s verified by most banks that will reject loan applications on open land.
KNOW YOUR EXIT STRATEGY
There’s nothing wrong with risk if you know and understand how to mitigate those risks. That’s a fancy way of saying, what’s your exit strategy?
Flipping land is not for amateurs or newcomers.
How do you profit from vacant land? At tax defaulted auctions, the easiest flip is to acquire a vacant residential property, which is purchased for very close to the back taxes, and sell it at a profit to one of the neighbors of the property you purchased.
Lots of margin, great story, but what will you do if the neighbors don’t want it?
If you want to know how to do land flipping successfully, my experience in real estate has taught me that if you’re in this for the money, and you’re not just acquiring more and more land, you need rules to follow and methods to reduce risk.
The best risk is no risk. The next best step is to have multiple exit strategies.
FLIP LAND THROUGH TAX DEFAULTED PROPERTY
Local county governments hold tax defaulted auctions on a regular basis and will have defaulted land parcels, some open land and some in residential neighborhoods.
In many instances, these vacant properties will be sold for 10 or 20 cents on the dollar.
It’s only a good deal if you have an exit strategy.
MORTGAGE-FREE PROPERTY
The big plus of buying from the local government is that the tax collector, county treasurer official of the local government, will wipe out, that is, they will delete the mortgage from the county records if there is a loan.
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SELLING PROPERTY QUICKLY
If you want to know how to buy and sell land for profit, the strategy is buy low, sell low, and do so quickly. Flippers, those who try to sell quickly, are using small margins.
Over the years, I’ve worked with and taught hundreds of student investors. Many have become savvy investors. They purchase land at auctions, and they purchase residential homes at substantial discounts.
Almost anyone can purchase real estate. The key to success is exit strategy and selling.
Most flippers prefer single family homes. After all, many of those investors were conceived in a house and grew up in a house, so at auctions, they want to buy houses.
INVESTING IN LAND
I have a number of savvy land investors who know values and understand there is a large market for people who want to own a piece of the rock.
In other words, they want to get started, and they are willing to do so with land.
My experience spreads over more than 30 years, and I prefer to purchase at tax defaulted auctions.
ADVERTISING LAND FOR SALE
My clients have purchased small residential lots for 20 and 30 cents on the dollar. They immediately write letters to the neighbors and attempt to sell the property.
Most flippers try to wholesale their property to someone who wants to fix it up. There are many good sources to sell.
Flippers want fast profits. They use Craigslist, Facebook Marketplace, Zillow, local newspapers and real estate clubs.
SELLER FINANCING
The ultimate buyer of the flipper must have financing available, not just for buying but also for selling.
To the flipper or the ultimate buyer, there is a pool, a large body that is interested in contracts. For example, a land contract or contract for deed. Call them what you like, they’re installment contracts.
Tax auction buyers will improve their success at making a sale by offering installment sales and spreading out the payments.
It’s not unusual for a seller doing an installment sale to make more money selling on a contract than on the sales price. My point is seller financing is definitely important.
PROFIT MARGIN
In summary, most flippers are purchasing slightly below the market price and trying to sell at a profit.
Here’s how to flip land for profit. The margin is the key to the land flipping business, and having multiple strategies for purchasing makes sense.
CONCLUSION
We hope you enjoyed Ted’s lesson, “How to Flip Land for Profit”
Is land investing profitable? Yes, it can be very profitable if you buy the land at a price that gives you a substantial profit margin.
A little-known way to pick up land for pennies on the dollar is at a tax defaulted auction, where the starting bids begin around the amount of the delinquent property taxes.
A vacant residential lot purchased at a 60%, 70% or 80% discount at a tax defaulted auction and sold to one of the neighbors is the easiest way to flip land.
Another profitable strategy is to tap into the large pool of credit-challenged buyers by offering owner financing.
A lot of buyers are attracted to installment plans, and it’s a great way for you to generate an income stream. Since the process is repeatable, you could do this over and over again to generate multiple income streams!
If you’d like to know more about how to get the best bargains in real estate, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.
Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal one-on-one coaching.
Get started today at no cost with Ted’s FREE Master Class, that reveals the incredible opportunities available in tax defaulted real estate. The class is only about 1 hour of streaming video and contains life-changing information! You can’t afford to miss it!
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