Today’s REI Classroom Lesson
Mark Podolsky elaborates on why land investors don’t necessarily have as much stress associated with their deals as they aren’t having to deal with tenants, rodents, Dodd Frank, Maintenance, etc.
REI Classroom Summary
With land, there’s low competition and you don’t have to worry about rehabbing it or finding a tenant! Land can be a passive investment that you don’t even have to seen before doing a deal.
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Announcer: Welcome back to the FlipNerd.com REI classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Mark: Hey, it’s Mark Podolsky the Land Geek with TheLandGeek.com, and I’m so happy to be back on REI Classroom talking about one of my favorite subjects in the entire world . . .
Announcer: This show is sponsored by PassiveRental.com.
Mark: . . . land investing. Why do land investors have such an easy road compared to every other real estate niche in the world? Well, we have a few built-in advantages. Number one, we don’t have to deal with renters, we don’t have to deal with rehabs, we don’t have to deal with renovations, and we don’t have to deal with rodents. So this is what we call the ultimate subscription model. It’s a one-time sale, right?
Let’s say, for example, Mike buys my property for $25,000, 40-acre parcel in Nevada, but Mike doesn’t have $25,000. But what if he has $2,500 to put down, and then he makes a payment, like a car payment, of $449 a month? And he just makes that payment every single month until he pays off his note.
So now I’m getting a monthly payment, like a rent payment, every single month, but again, because it’s raw land, I don’t have to deal with a renter. I don’t have to deal with rehabs. I don’t have to deal with renovations. I don’t have to deal with rodents. And so it’s very simple.
And because I use a land contract, there are no costs of foreclosure, so I don’t have to deal with lawyers. And because I’m not dealing with a tenant, I don’t have to look up the legislation on Dodd-Frank, RESPA, or the Safe Act because land investors are exempt. So this is the most stress-free way of doing real estate.
I remember when I first started investing in real estate, I was doing land investing, I thought, “Oh . . .” This was like 2005, and everybody’s house flipping. “I’m going to get into house flipping.” And so I went in with a buddy of mine, and we bought a house about 25 minutes away from where I live.
Next thing you know, I’m driving up there. I’m meeting the subcontractors. I don’t know anything about construction, by the way, so I don’t even know what the hell they’re doing. I’m watering plants. I’m checking this. I’m checking that. I’m in Phoenix, Arizona. It’s 120 degrees in the summer. I’m sweating. I’m miserable. Every time my partner said, “Did you go to the house today?” I was just absolutely miserable.
Did we make money on that deal? Of course. It was 2005. Anybody could have made money on that deal, but when I looked at my effective hourly rate, I actually feel like I broke even on that house flip compared to shuffling paper and making money with raw land.
Because with raw land, I never even have to go out and stomp on a property. I outsource my due diligence. I crowdsource it. I can use a program like WeGoLook.com or a local Craigslist gig, have somebody go out and take pictures, shoot video, fill out my property report. The next thing you know, I’ve done my due diligence. It’s fantastic. I don’t have to meet the sellers face-to-face. I can have a local notary meet them at their house, sign the deed over to me, and close directly, or I can use the title company. It doesn’t matter.
These are smaller deals. Much smaller deals. We’re not talking about a $500,000 house or a $200,000 house. We’re talking about maybe a $10,000 piece of raw land.
So this is why land investors don’t get ulcers. Because we have a one-time sale, we get recurring income, we don’t have to deal with tenants, toilets, termites, or trash. It’s really fantastic. We don’t have to worry about Dodd-Frank, the Safe Act, or RESPA.
So if you are tired of working in a competitive market, if it’s giving you ulcers to have to go meet another subcontractor at a house, getting another bid, if you’re tired of using hammers and nails and all these types of things with house flips or anything like that, save yourself the stress. Learn more. Go to TheLandGeek.com, and find out why I consider this the best passive income model.
Thanks again for joining me on REI Classroom, and I hope to see you on the other side.
Announcer: PassiveRental.com is your source for turnkey, done-for-you rental properties. If you’d like to be an investor and not a landlord, please visit PassiveRental.com to learn how to purchase cash flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today, and get started by visiting PassiveRental.com.
Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers, or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of FlipNerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds, and get access to hundreds of off-market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at FlipNerd.com.
Please check out the FlipNerd family of real estate investing shows, where you can access hundreds of expert interviews, quick tips, and lessons from leaders across the real estate investment industry. They’re available at FlipNerd.com/shows, or simply search for FlipNerd in the iTunes Store.
Mark: Hey, it’s Mark Podolsky the Land Geek with TheLandGeek.com, and I’m so happy to be back on REI Classroom talking about one of my favorite subjects in the entire world . . .
Announcer: This show is sponsored by PassiveRental.com.
Mark: . . . land investing. Why do land investors have such an easy road compared to every other real estate niche in the world? Well, we have a few built-in advantages. Number one, we don’t have to deal with renters, we don’t have to deal with rehabs, we don’t have to deal with renovations, and we don’t have to deal with rodents. So this is what we call the ultimate subscription model. It’s a one-time sale, right?
Let’s say, for example, Mike buys my property for $25,000, 40-acre parcel in Nevada, but Mike doesn’t have $25,000. But what if he has $2,500 to put down, and then he makes a payment, like a car payment, of $449 a month? And he just makes that payment every single month until he pays off his note.
So now I’m getting a monthly payment, like a rent payment, every single month, but again, because it’s raw land, I don’t have to deal with a renter. I don’t have to deal with rehabs. I don’t have to deal with renovations. I don’t have to deal with rodents. And so it’s very simple.
And because I use a land contract, there are no costs of foreclosure, so I don’t have to deal with lawyers. And because I’m not dealing with a tenant, I don’t have to look up the legislation on Dodd-Frank, RESPA, or the Safe Act because land investors are exempt. So this is the most stress-free way of doing real estate.
I remember when I first started investing in real estate, I was doing land investing, I thought, “Oh . . .” This was like 2005, and everybody’s house flipping. “I’m going to get into house flipping.” And so I went in with a buddy of mine, and we bought a house about 25 minutes away from where I live.
Next thing you know, I’m driving up there. I’m meeting the subcontractors. I don’t know anything about construction, by the way, so I don’t even know what the hell they’re doing. I’m watering plants. I’m checking this. I’m checking that. I’m in Phoenix, Arizona. It’s 120 degrees in the summer. I’m sweating. I’m miserable. Every time my partner said, “Did you go to the house today?” I was just absolutely miserable.
Did we make money on that deal? Of course. It was 2005. Anybody could have made money on that deal, but when I looked at my effective hourly rate, I actually feel like I broke even on that house flip compared to shuffling paper and making money with raw land.
Because with raw land, I never even have to go out and stomp on a property. I outsource my due diligence. I crowdsource it. I can use a program like WeGoLook.com or a local Craigslist gig, have somebody go out and take pictures, shoot video, fill out my property report. The next thing you know, I’ve done my due diligence. It’s fantastic. I don’t have to meet the sellers face-to-face. I can have a local notary meet them at their house, sign the deed over to me, and close directly, or I can use the title company. It doesn’t matter.
These are smaller deals. Much smaller deals. We’re not talking about a $500,000 house or a $200,000 house. We’re talking about maybe a $10,000 piece of raw land.
So this is why land investors don’t get ulcers. Because we have a one-time sale, we get recurring income, we don’t have to deal with tenants, toilets, termites, or trash. It’s really fantastic. We don’t have to worry about Dodd-Frank, the Safe Act, or RESPA.
So if you are tired of working in a competitive market, if it’s giving you ulcers to have to go meet another subcontractor at a house, getting another bid, if you’re tired of using hammers and nails and all these types of things with house flips or anything like that, save yourself the stress. Learn more. Go to TheLandGeek.com, and find out why I consider this the best passive income model.
Thanks again for joining me on REI Classroom, and I hope to see you on the other side.
Announcer: PassiveRental.com is your source for turnkey, done-for-you rental properties. If you’d like to be an investor and not a landlord, please visit PassiveRental.com to learn how to purchase cash flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today, and get started by visiting PassiveRental.com.
Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers, or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Are you a member yet of FlipNerd.com, the hottest real estate investing social community online? If not, you can join for free in less than 30 seconds, and get access to hundreds of off-market deals, vendors in your market to help you in your business, and you can start networking with thousands of other investors just like you. Get your free account now at FlipNerd.com.
Please check out the FlipNerd family of real estate investing shows, where you can access hundreds of expert interviews, quick tips, and lessons from leaders across the real estate investment industry. They’re available at FlipNerd.com/shows, or simply search for FlipNerd in the iTunes Store.
