Flipping land is one of the lucrative realms of real estate investment, often misunderstood and overlooked, though. Interested to earn huge money, investing little? Well, land flipping is the absolute choice. However, to make good profits in this arena, you need to adhere to some guidelines.
In this blog, we delve into what flipping land is, its benefits, and the steps you need to follow for a profit-making venture.
If you are one who flips land, read through to make sure you stick to all these and are not missing anything critical, that’s stopping you from earning profits. For those of you new to the land flipping game, this is a must-read.
Let’s dive in.
What is flipping land?
The land flipping concept is simple.
At its most basic, one who flips land buys a parcel at a lower percentage of the market value, say 5%-35%, and sells it off at significantly high prices, generally 50% and more of market value.
As with any job, it is easier said than done. It’s crucial that one who flips land has good knowledge of the sale and purchase procedures. Additionally, they must be able to spot perfect deals and calculate ROIs.
Benefits to someone who flips land
Well, flipping land offers more benefits than any other real estate business model. Let’s get in.
– Enjoy great returns
One who flips land enjoys impressive returns, as compared to those flipping houses. You don’t need much investment as there’s no renovation or refurbishing involved, unlike houses. On top of that, you get more than double the investment when you sell land.
– Finding deals easily
In any real estate business, the herculean task is to find the right deals. That said, land flippers mostly don’t spend anything more than $2000 on a single direct mail campaign. Besides, they manage to find 1-2 deals per every thousand letters sent.
This implies finding deals consistently is much easier for one who flips land than for someone in any other realty business.
You can look up deals online, search through your desired neighborhoods or check out available land auctions.
– Ongoing income probability
By opting for seller financing, land flippers can turn it into an ongoing stream of income. They can buy land with cash and sell it with terms to earn monthly rent or mortgage payments after the sale.
– Low competition
Compared to other forms of business, land flipping poses lesser competition. One who flips land doesn’t have to be restricted to a certain geography and enjoys the numerous choices to look for potential buyers and sellers anywhere. Additionally, with the land segmented into parcels, you have still greater options to sell.
Steps to follow for anyone who flips land
Here are the main steps you must go through to make sure you reap the benefits of flipping land. Let’s get started.
– Do your homework
If you are someone trying to find your feet on this ground, you must study and explore various types of land for sale. They vary in prices, local laws, zoning, and such. Take time to understand the nuances before you move ahead. Set your budget accordingly.
– Select an option
You have a variety of land options to choose from. First, the areas where the land is around paths of growth. As congestion increases in cities, people start looking for land in the outskirts. However, to identify growth paths, one interested in land flipping must study demographics, population dynamics, and market trends.
Yet another option is recreational land. Open, rural land that hasn’t been developed offers great scope to buyers for recreation purposes like fishing, hiking, and more. These lands can be amazing options to flip.
– Get in touch with the owner
Once you finalized the piece of land, the next step is to contact the owner, to get it under a contract. Mostly, the state websites could get you the details of the owner such as an address, phone number, etc. There may be some owners who already listed their property and are awaiting to make the deal. In some other cases, you may need to prepare the pitch.
There are many ways one who flips land can contact the owner. You can run a mass mail campaign, call up the prospective party, or make a direct visit to their home.
– Get your property under contract
To ensure you flip the land profitably, spend some time on number crunching. Check if your math is working properly and you would make worthwhile profits, yet expenses remain within your budget.
The objective is to buy the land for less than the actual market value. That said, arriving at the true market value of a piece of land is not so easy. You can take the help of various websites available in this regard.
Once you make the owner agree on the price, you can get the contract ready. In most cases, you don’t actually buy the land. The seller prepares a contract authorizing you, a wholesaler to sell the land to another buyer. Similar to the case of house flipping, one who flips land needs to make some payments on the land for a few months or a year until it gets flipped.
On the contrary, if you plan to fully buy the land, as in, build a house or so, you need to close on the property.
– Find a buyer
Now that you have bought the land that you have to flip, it’s time to find the right buyer and sell it to earn a profit. How fast your property sells off would depend largely on how you list it and your marketing efforts.
Create a high-quality property listing. Highlight the key aspects including photos, or any features that may attract buyers. Write a great listing of the property describing its uses, surroundings, etc. Make sure to inform the neighbors. You can also create videos to showcase the property.
Use social media like Facebook to post the listing. Reach out to real estate agents and work out the best way to find buyers. However, remember, they charge a commission.
Once an interested buyer arrives and an agreed price is reached, it’s time to close the deal. Based on the deal’s complexity, you can seek the help of a real estate agency or attorney, particularly, if you are the wholesaler.
Flipping land can be an extremely gainful experience, provided it’s carried out strategically. If you are someone who flips land, do have a look at these steps to achieve success. We, at Auction Flippers, offer world-class land flipping services. For any assistance on land flipping, reach us here.