Ideal Millenial Entrepreneur Podcast

122: Unlocking Success with Real Estate Investing and Integrity $10,000 First Land Deal

• Amir Estimo • Season 6 • Episode 122

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Today, we explore the rewarding yet challenging world of land investment through the story of my first property purchase, revealing invaluable lessons learned along the way. From understanding the emotional aspects of real estate to assessing true profitability, the journey outlines critical tips for prospective land investors.

• Buying land offers unique advantages over traditional home investments 
• Emotional attachment plays a significant role in house transactions 
• Distinguishing between active and passive investment strategies 
• My personal journey with a challenging 7.54-acre property 
• Marketing strategies and pricing adjustments over time 
• Tax implications and management costs of land investments 
• Importance of perseverance and adapting to market conditions 
• Future insights into additional land investment experiences

This podcast is sponsored by Starvelle Talent Group. Our goal is to help the culture build Wealth Assets Prosperity. We appreciate you taking the time to listen to this episode and share the content if you find value.

Speaker 1:

Welcome to the Thank Generation of Wealth podcast, and this is episode number 122. I am your host, amir Estimo. Thank you for tuning in to today's podcast episode because you know you could be doing anything in this world. The fact that you're listening to this podcast episode is much appreciated, and I hope today's episode is much value to you, because we're going to talk about land and I'm going to actually walk you through a case study of my first property that I bought a land property that I bought. So if anybody's ever interested that listens to this podcast not sure wherever you are, but if you are here in the States, you are interested in buying land this could be something you can look into, so let's get started. Anyway. So today's podcast, again, we're going to talk about land. Now let's get started. So now, if any of you guys know about land or anybody know about real estate real estate there's different types of assets in real estate. There's obviously home, there's multifamily, there's land, there's self storage, etc. Etc. Etc. So land I mean not like, but real estate is has made more millionaires than we can even count and it's a very good niche to get into. But you have to know what you're doing. Now.

Speaker 1:

The reason I chose land was I started off in housing. I was. I bought a course, looked into it was a camera, the company it was Tom Coral Coral I hope I said his name right but wholesaling for houses. I think I bought the course it's. It was okay, it was nothing that you probably couldn't see on the internet, that it did some research. But with with, uh, houses, what I came to find out is I didn't, because houses has a emotional attachment to it. When you sell someone, when you're trying to buy a property from someone, especially when it's a house, the thing is is is that there could have been. They could have raised their kids in that home, they could have that could have been their first home, et cetera. So now, when they have to eventually sell this home for whatever reason, there's an emotional attachment to it. And then the fact that it depends on what process did you want to go, with an active or passive investor?

Speaker 1:

Now, the difference between the two is, if you're active meaning that, to use an example, that means with houses, right, you would you are known as a flipper. A flipper would buy the home very cheap, needs a lot of work, I wouldn't say very cheap. Cheap to a certain degree, depending on market Meaning. They would buy that below market value because the home may need a lot of work depending on bathroom et cetera done. Then you take that, you remodel it, you put whatever money it takes to remodel a home to bring it up to market value, and then you turn around and sell it. So that's considered an active investor, meaning that you have all your money is pretty much transactional, whereas if you buy a home, you can do the same thing remodel it but you may turn around and rent it out to someone else.

Speaker 1:

The thing about it, though unless you buy the home cash, most investors in this space use a bank financing to close on the deal. Now, if they're using a bank financing, you're going to have a mortgage on the property. So that means you can probably charge someone. You can probably, let's say, have a mortgage of $1,000, then you charge rent $1,500. But what you have to consider is, if you are not self-managing the property itself, you're probably using a property management company which is going to charge you a fee every month. So let's say that fee is, example, a hundred bucks, especially in today's economy.

Speaker 1:

Then you have to take an account If you're not the one who's coming in again cutting the grass. That could be another 20 or 30 bucks, whatever that is. So you can end up 50 bucks. That $500 that you would have made probably can end up being like 350 a month extra for you. And then you have to take an account. You have to put that money into a reserve account, because if anything breaks down at that home depending on what state you are, if anything breaks down and also how did you have it set up when you initially, when you initially rented the home to the person then what's going to happen is you have that comes out of your cost. So if you don't have a reserve account, then people are just going to. You know this stuff is going to have to come out of your pocket to fix. So you got to keep that in mind too. But but you know every month you're going to get $350, whatever that is.

Speaker 1:

Now, with land it works the same way, but the difference with land is you can be known as a flipper. So if you are known as a flipper at land, that means you buy the property again at you buy it at a discount. Then you really don't. There's really not much value add, unless you're going in there. Depending on where the property is located, do you buy it? Do you maybe clear it? Do some clearing on the property? Maybe let's say the property may have some title issues, maybe I actually get a survey done on the property.

Speaker 1:

So there's those type of value ads you can do with Lend. Then you can turn around and sell it to an end buyer, whereas with Lend you can also be known as a passive investor. I mean you can buy the property outright. Maybe let's say two $3,000 and let's say one acre I'm just throwing numbers out, this is not actual numbers and then you can charge 40, 50 bucks a month, a hundred bucks a month, and then you know every single month you're going to get a hundred bucks a month. The drawback with that is, since it's not really a big expense if someone turns around and says, hey, I don't want to get on, pay whatever. You don't have a system set up unless that person doesn't pay. Now you know, ok, you lose that hundred bucks, but the good thing about it because, depending on how you set the deal, you may say, ok, such and such, you haven't paid. When you pay, finish, pay for this property. Then I'll give you the deed and if you have it set up like that and let's say you were doing some type of setup to that extent, to that, to that setup, then what you can do is foreclose on the property and take your property back. So there's. I don't want to get too much into that part of it, but I'm just giving you a gist of what's an active versus passive investor and how it works in land also.

Speaker 1:

Now, this property I bought was 7.54 acres. The property was located in Yancey County, north Carolina. So I'm not sure who, sure how many people are familiar with North Carolina, but it was in Yancey County, north Carolina. I got this property through mailers, so what I would use is a mail house company, the company. What I would do is I'll buy a data from some company it could be like DataTree Price these are the popular ones and then scrub the list. Obviously do not mail, so I remove everybody who doesn't want to be mailed. Sit out a mass mail in that particular area and then see if anybody's interested in selling their property.

Speaker 1:

The thing about mailers is especially back in the days when I did it. Now is very expensive. I haven't mailed almost a year. It's been a while. Last time I mailed, I did a test for like a thousand. I spent like a thousand bucks and then I didn't get barely any response, barely any response. And then what was happening too, was people were actually. People were oh man, this property is not worth. You know, back in the days someone okay, yeah, you know, I'll sell a property. Now people has actually gotten smarter. So what's happening? Especially in this space, a lot of people are mass mailing and they're just buying data and just sending it and they're sending offers and they're really below market value. So people are coming in and saying, ok, well, you may send a mailer for one acre, four thousand dollars. Someone's coming back and saying, oh no, this, I want 20K for it. And oh, I was getting barely any response. So I actually shut down the whole mailing completely. And now I'm pivoting to someone else, which I was something else which I'll share with you guys on a later podcast.

Speaker 1:

Now I bought this property 7.45 acres. I bought it for actually 18 to 18,200. Now, when I first initially bought the property, I didn't buy the property until six months later, and the reason I was doing that was because I when I got it under contract. So you do what they call a purchase agreement, meaning that between you and the seller, on this date you are going to execute. Let's say, six months from now you're going to execute. It could be three months, it depends however you want it set up. You're going to execute on this deal and you're going to buy this property.

Speaker 1:

I put it out in the market originally and I got a lot of feedback. Some people like this, some people don't. The issue with the property was it was number one. The property was steep, so in this area, most of the properties in this area OK. So going back to the seller who sold it to me. Eventually they sold it to me and the reason they sell it because the wife needs extra money, because the husband actually own more acres in that area and just was kind of selling off his assets. He's getting old, so he just needed some of the money the again going back. So I had the property and then I bought the property but it was six months later.

Speaker 1:

So I and the reason I actually ended up closing on this property, because I wanted to keep my word. I didn't want to be a wholesaler, I wanted to actually be an investor. So I got some feedback. Some people said it was good, some people said it wasn't. But I knew in my heart, I knew the property can sell. I know I can sell the property because I remember listening to a gentleman on a Tik TOK and he says all properties, all land, sells, which is true, because I'm going to do three more case studies of properties I sold and I will give you guys and actually might do a YouTube video too, so you can actually see a visualization for some of you guys who may be visual learners like me. Now the property again. I bought it for 18 to so after taxes and all closing costs it was probably like another 1500. So basically I was all in for 19, 7. I bought the property it was actually a property I own in North Carolina and I was thinking I was like man, should I kept it or not? I wasn't real sure, but I was like you know what, at least let me close the deal with the sellers because I want to execute. I didn't want to wholesale.

Speaker 1:

So if any of you guys don't know what wholesaling is, wholesaling is when you buy a, let's say again in real estate, you get a, you find a discount, you find a property, buy a. Let's say again in real estate. You get a, you find a discount, you find a property, but you actually may not have the money to close on the property. So what you do is you find an end buyer and you assign them a fee because as a wholesaler, you probably the one who did all the brunt work, and then you send it to an end buyer. The end buyer then buys it for you. They are actually the one who closed on the deal, not you, but they send you a fee. The issue now with wholesaling is that a lot of people have done it so wrong and unethical that now most states, or some states, are starting to require that you actually have a license to facilitate a real estate transaction. So now that's the issue now with wholesaling, and now it gets a bad name because you have a lot of unethical people who are doing it and on top of that they may say I'm gonna buy the property and they never do. And if the property, if it's a bad deal, they just walk away and then they leave the seller hanging. So some states in the US are requiring you to actually have a license to actually facilitate a real estate transaction.

Speaker 1:

But what I did with this deal. I was not a wholesaler. I did not want to go wholesaling route. If I closed on a deal, I would actually double close, meaning that I would still buy the property. But I will align the seller in buyer transaction one day, so I would buy the. Let's say, in the morning I buy the property from the seller, the property, the deed, gets transferred in my company's name, the LLC, then the LLC owns the property. Then we turn around the same day and sell it to an end buyer. So there's never there's no fee involved. I'm actually the one closing on the deal. And if you ever decide you want to get into real estate, get away from wholesaling, look at doing a private like. Maybe find a private lender, transactional funding. There's other ways you can do it than just being unethical.

Speaker 1:

Now, when I, when I went about this deal, I bought it in May of 22. I actually it took me over a year. Now the property the property was steep. The. The good thing about the property was it was not in wetlands. The it was not in wetlands, it was actually a nice quiet area which was a getaway area, and the only reason I knew about that because there was a realtor I actually asked this information to and the realtor said, yeah, it's, it's a, it's a getaway area. So if you wanted to just go out in the country wanting to put a cabin on this property, and you can actually do, it's a good, nice little getaway. The drawback of the property was there was actually kind of a Creek in front of the property, a small little Creek, and the access it was accessible but it was kind of difficult at the same time to get to the property so a lot of people kind of turned that turned a lot of people off.

Speaker 1:

But with the thing about with land versus houses houses four, four bath, four bathroom, I mean sorry, a four bedroom, three bathroom house it is you put on the market there's not really a specific buyer needed for it, for a, for a someone like with land, you need it has to be a specific buyer, not everyone that buys. Some people may buy land, vacant land, inside the city. Some people may buy property outside the city. Some people may buy properties that are landlocked. Some people may buy property outside the city. Some people may buy properties that are landlocked. Some people may buy properties that are wetlands. So you have to find a specific buyer With this property. I had to find a specific buyer.

Speaker 1:

So from the time I bought it in May of 22nd of 22, what I did was I waited about because the property was on the market and I actually did what they call broker listing. So if, as long as you have a purchase agreement between you and the seller, you can find a company that can actually put it on the MLS, you pay them a fee, they can actually put the property on the mls for you. The property was on there for six months. Again I started. I listed the property for 75k. That was the beginning. I think that was that's what it was maybe like. Every two months I kept lowering the price, lowering the price, lowering the price again. It was barely any transaction, um, any, not to say there was not no looks. It's just that it was. It was just taking longer than expected to find the right buyer. So I ended up closing on a property. Then I took the property off the um MLS for a while and then I waited about. Maybe I would say I would say I waited about five to six months and then I put it back on the MLS again. But since I knew this was a property I was I owned. I didn't have a problem really waiting. Once I put it back on there and it was like later in the year.

Speaker 1:

From that time what people don't tell you is if they said, well, I made $30,000. Well, you have to ask well, what was your marketing costs, how much you it took, how much time it take you to market on this property. Because you got to consider you're talking to buyers and you can have a conversation with a buyer 10 minutes, two to three buyers a day, and each conversation could be, let's say, 10 minutes and that's 30 minutes. You got to count that now, minus the weekends. I never took calls on the weekends, but it could be somebody texting you. You got to consider that. You got to consider, but it could be somebody texting you. You got to consider that, uh, you got to consider. I don't know how many times I've listed on the Facebook marketplace. Uh, I listed it in this.

Speaker 1:

I used to use a website called land landcom. I did a subscription through that company. So you got to understand how much marketing costs it took for you to sell this property, much marketing costs it took for you to sell this property, and then, on top of the taxes. So if you pay in this case, since I already owned the property, I didn't have to. I didn't well, not have to, but I already owned the property, so my tax was very minimal. So all in all, I made like 10K At the end of the day. I made 10K on the property After taxes. Considering you got to consider the taxes you paid for to buy the property and then maybe the small taxes on the other end and then the marketing costs.

Speaker 1:

So I ended up making $10,000 on this deal. It took me a year and I think the return on investment was like 30% or something like that. I don't remember. But again, I ended up selling it for $32,000. But again, the issue actually sorry, $30,000. The issue was it was very steep, so not all of the property was buildable. Again, you had to find a specific buyer for this property, so a 7.45 acre property may have actually end up being really it could have been like, if you don't have a lot of buildable areas to it, it probably was like two to three acres of it that was buildable and the access was an issue. It was steep. So those were the two things that turned people off on this property. So that's why it took me so long to sell it.

Speaker 1:

But because it was my first transaction and I really wanted to learn. I wanted to take a property from A to Z. I wanted to take it from start to beginning Because if this was something I was going to build, a business you got to know how it works. So I ended up making $10,000 at the end of the day. The buyer ended up finding was he just wanted to own some. He had some extra cash and he knew about the area. So he was okay with that and he just basically wanted to park his money there and he knew that maybe it's an area that's going to eventually grow. So this was a long term hold. This was a buy and hold for him.

Speaker 1:

The thing about taxes on land it's not really that expensive for the most part a couple of hundred bucks a year and if you wanted to, you can do some value add to the property. Again, like I stated before, maybe add a survey, get a survey done. So there's actually boundary lines to see how much of the property you can do. You can clear the property. So if the property let's say there's trees and stuff on the property you can pay a company to go out there and clear it out. So you do some value ads that actually, um, that actually that can. So if an end buyer buys it, they will pay more for it because those things already done.

Speaker 1:

Now the good thing too with the property was there was actually electricity in the area, so they had. So someone bought, they had access to electricity. So if they wanted to build, it was not like they have to get it installed If you and another value add could be that you add a septic tank. So let's say you want to add as well a septic tank. Let's say you get the soil tested to see where you can you know if can it take us well, or septic tank. So those things you can do as a value add for land. But, like I said, I ended up making 10 K off this property because the property had some issues. But the fact that you have to find a specific buyer that knows, ok, hey, this is my objective, this is what I'm going to do and I end up closing on the property. So I wanted to share with that, with you guys, in case anybody ever decides they want to get into land.

Speaker 1:

This is a. It's a good space to get into, but right now it's oversaturated. And if you do get into it, don't go in it without not knowing what to do, because land, the thing about land, is there. You, when you buy a property, you got to know why you buy it, for. Is there restrictions on the property? What type of can you build on the property? What you, what can you and cannot do on the property? So they are things you would have to look into to ensure. And then, is it an area? Is it a good area? Is it a getaway area? Is it an area that there's a lot of traffic in the area? So these are things you want to consider if you ever buy land and maybe not buy land to really as a business, maybe you just want to own some land. But again, these are things you have to look into before you do it. Okay, hopefully that helps.

Speaker 1:

This was my first deal. I'm going to walk you through another deal. I actually sold a property that was landlocked wetlands and I actually sold another property. So, like in 2024, this deal, that deal, the first deal 22, I bought it. I ended up selling it at the end of 23 and then in 24, I ended up buying and selling like five to six properties that I saw. I ended business. I end up selling. So this year I actually had to pivot. I haven't sold any land or bought any this year because I really had to pivot this year. And what I really wanted to do because I didn't want to keep on mailing I really don't have time to cold call because there's different ways you can do.

Speaker 1:

You can cold call, you can text, you can do ringless voicemails. I would not suggest doing that. Mailing is probably going to be your best bet because you want to be careful, but mailers is very expensive too. If you have time, maybe look into cold calling. But at the same time, the thing about cold calling is you're going to run these people.

Speaker 1:

Generally, you're calling someone out the blue and they may not even really be, they may not really have an urgency to really sell the property to you and when you do it's a lot of tire kickers. You're just throwing numbers out there just to get you off the phone. So those are things you want to consider if you want to be active, if you want to be a land investor, you actually want to do it right, to be an active. If you want to be a land investor. You actually want to do it right, you actually want to know what you're doing and you actually want to make sure that you are going to perform. Don't be a wholesaler, be an investor. Okay, thank you for tuning in today's podcast episode. I hope you listen to this all the way to the end and my name is Amir Estimo and see you next week, peace no-transcript.