Ep: 019 Aug 25, 2020
Why Wholesalers and Flippers Should Add Vacant Land to their Real Estate Mix
Are you a house wholesaler or flipper? If so, the last 10 years have been fantastic for you. But now, as COVID-19 and the global economic showdown has probably brought your business to a screeching halt. With 30 million people applying for unemployment benefits since February, many pundits believe that investing in single family homes is like catching a falling knife. What if there was a strategy that could deliver significant near-term returns? In This episode of The Land.MBA Podcast we discuss the opportunity that traditional real estate investors have been looking for.
Those of you who are experienced real estate investors understand cycles. This cycle is just at the start. And it looks like it’s going to be an extreme one. We haven't seen the full financial effects yet because people are just losing their jobs. They're just starting to run out of savings. Because we are just at the start of this cycle, flipping houses is going to be dead for a while. Real buying opportunities aren’t going to start until 2021. But that isn’t the case for all asset classes.
Today, we're talking about our favorite asset which is raw land. What’s great about land is that it is congruent to your business if you're already a flipper or a wholesaler. I made this transition during the 2008 downturn. I didn't have to go and learn something completely new. In land investing you can use a lot of your existing knowledge. And with that knowledge you will be able to quickly scale-up your land business.
Land investing is a lot less volatile than other asset classes because you don't have the cheap debt. That is what drives up prices very, very quickly. And then when we have a we have a bust, it really busts. You don't have that with land because it's either cash or seller financing. But many of the skills and techniques that you use wholesaling and flipping, can be applied into the land business.
You're going to be familiar with contracts, with option agreements, closing techniques and how to work with a title company. You're also going to be familiar with a lot of the marketing concepts like direct mail. Land investing offers the opportunity for a low point of entry and the ability to start quickly.
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