Ep 549: What Size Land Deals To Target

Chapter 1: Small Lot Investments.)
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happy Tuesday thanks for coming to the call before we start you're coming to the event our event is in two weeks in
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corpor ch Texas come check it out we're excited to have you if you coming if you can't make it let's go we happy to see
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you there but we'll jump right right back into the [Music]
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business but I want to start off today we're going to cover different deal
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sizes and different deal sizes and different deal structures so I don't have anything scripted or anything I'm
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kind of get a free flow but I kind of want to talk about different size lots and their values and maybe where you're
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at in your business and maybe where you want to be in your business I think it's a little it's little cool topic we can
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talk about today Anthony's unavailable today but we do have Michael Flores and Mr Alan
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ketto so we're gonna talk we're talk some stuff if you guys have any questions put in the chat but I'll start
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off with small Lots people are still joining the room they're welcome welcome all right so I want to start off with uh
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small Lots so I started on small Lots it's not it's not it's something to look
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down on you can do a lot of volume doing small Lots usually an acre or less what
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comes to mind is Florida Florida you hear about people moving Florida Lots all over the place if you're looking for
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to do deals per month Florida's a place to go the thing is is you have to the
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limitations is you're going to have to find a price Arbitrage there is no other way to make
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make money doing small Lots unless you have a price Arbitrage terms don't help you seller financing ain't going to help
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you very much you're going have to find a good price and that's it that's pretty much it so small lots are kind of
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limited on what you can and can do on your exit and acquisition but there's plenty of them and you're gonna you can
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do a lot of deals a lot of small deals over and over again and it's very repeatable business if you're looking
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for consistency now I'm let's jump a little bit up bigger to one to five acre lots
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one to five acre lots are they're usually at a great price point the one
Chapter 2: Medium-Sized Parcels.)
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acre lots and less they're they're us going to be pretty cheap you can find stuff for five grand to 100 Grand
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depending on where you're at but once you go to one to five acres you can you can really level up and go after a little bit more priced properties
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there's a price point that varies across different markets too as well that you're going to hit that maybe variance
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point so the reason biggest reasons why I I don't like doing houses and if you come from that space
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it's very limited on what you can make it's very hard to squeeze $20,000 or more consistently out of
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houses because there's just not margins for it depending on your market and it's very hard to squeeze that but we start
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getting bigger bigger and mediumsized land deals it's very easy to do that the small the smaller Lots you can probably
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get10 to $20,000 fees or uh profits on those
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pretty pretty 20,000 is going to be probably your your peak of the market
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but you're usually going to be around 10,000 or less repeat but it's repeatable now when you get a little bit
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bigger 1 to five acres and this might be one to five acres and Houston might be half a million dollars so it's going to
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vary on price point too so one to five acres you have a little bit let's say
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one to 10 acres you have a little bit more flexibility to make more profit but it's especially in Texas it's harder to
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sub toide that down into smaller loss but there's plenty of opportunity there
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so we've gotten a 10 acre lot we cut that into 11 Lots we've gotten a 5 and a half acre lot we've Cutten that into 11
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Lots you can do I think we uh Mike is he still here Flores yeah how big is aranas river
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that's like Oh you mean Oris pass R's pass yeah that one yeah 4.5 Acres we
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split it into four Lots four and a half acres splitting into four Lots so this this is where I think you're going to
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hit a sweet spot of the the one the five the 1 to 10 acres I think there's
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there's a sweet spot there if you can create inventory now creating inventory at that at that level it takes a little
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bit longer depending on the on the county but you're gonna there's plenty of money there plenty of money and no
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one's even looking at it so if you have the time to wait and if you ask for long due diligence process you can you can
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get that those deals pretty easily and readily available you can find a good 10 acre lot with off rage you can find a
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good 4 acre lot with off rage 5 acre lot with off rage and you can cut those up in the in the parcels and make a lot of
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money numbers wise uh we bought 10 acres for 225 we turn that into 11 Lots I
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think we're selling for 60,000 a lot one of those one of those a year will make you a lot of money the other one we
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bought the five and a half acres for 225 and I think we're looking to sell
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each lot for 90 I think we're we're building on them but I think they'd go for like 80
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grand or so if we sold them as Lots Alan but they're they're really good numbers and then what's the other one ranis
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River I don't I can't remember what we got it for I can't I know what we're selling it for maybe M can jump in we got it we got it for two million and
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probably end up selling it probably like 3.6 is somewhere
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around pass the ranis pass not the r when you say ranis Ranch okay yeah yeah yeah wellis pass uh we bought it
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for give me a second here 150 I believe oh gosh I don't remember
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now and we're selling the lots for a 100 each well yeah 100 each uh Asis Asis so
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150 Grand just on doing a 4 acre subdivide great numbers and ask are you touching anything in flood zones yes we
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will touch stuff in flood zones and this is where I'm glad you mentioned this flood zones are going to matter a lot
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more on your info Lots your smaller lots are going to matter a lot more we had a deal we're looking at it was like 25
Chapter 3: Larger Tracts and Subdividing.)
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acres or something like that and there was literally five acres outside the flood zone what the idea we had is we're
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going to cut it it's 10 acres or more we can cut that into two 12 acre lots and now we have two 12 acre lots with 10
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acres of flood zone each and they each have two and a half of usable Lots usable unflood Zone which is still good
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that's still a great subdivide so you have to measure where the flood zone is
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and where it where it isn't type on on whenever you're doing smaller Lots they
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they're going to affect your uh price point and exit a lot more just to answer that question so I
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there's money in flood zones and trash me and Anthony did a video last week
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that we're talking about there's money in trash properties a lot of the land we buy they're just trashed there's debris
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in them the people start dumping on them my first deal trashed so you can find really great opportunities in trash and
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floods on property so don't sleep on those that's where that's where you're going to get paid now 10 acres or more I
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think there's a there's a little buffer like 10 to 20 acres but 20 acres 20 acres and 50 acres is
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where I I love I love that game 20 acres to 100 acres is is is a fun game to play
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in now the price points are going to vary across the board depending on your
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on where you're getting deals but we have 29 acre deal in Maha for
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285 we're s we're cutting up into three lots no it's like it's 36 Acres my bad
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36 Acres so it's 312s 312s 285 purchase
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we're selling it for I think 180 each and somebody on the sales team
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might have a buyer for two lots so sell two lots for 400 we haven't even closed on it all we did was put up we earn US
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money in it on surveys and we're already up 100 Grand with a lot it's crazy so
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there there's there's money in like that 20 acres plus I love I love 20 ACR plus
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this is where Allan you you want to talk about this for a little bit because we
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talked about this on July 4th Al Allen was doing like not necessarily size Lots but it was more price point and you can
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you can kind of go after different size stuff but I think Allen was doing like 50,000 or less properties and then he
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jumped up to 250 or less y when I started I mean we we were doing
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more like Circle prospecting right so we would find neighborhoods that had a lot land activity and then we would just
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create a bunch of inventory there you know we were buying for maybe Seven Grand and the property was worth maybe
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25 Grand 30 grand so still pretty decent margin's better than it was for like wholesaling houses at the time and then
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you know that whole year just focusing doing that model we probably did about 70 deals but it took a lot of work to
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get there right like you know you can imagine how many you know all the all the stuff that we did you guys could do
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on one deal with the big tracks right so we start started to then focus on properties after we did you know a
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handful of those we started to like notice okay well our biggest spreads or best deals are coming from you know buy
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for 70 sell for 150 you know buy for 90 sell for 160 so properties you know in
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that 100 to 200 range so we just started to go after properties valued at 250 or
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less the one thing that we needed to do was lock up properties for longer amounts of time and then we didn't
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really sell to Builder we were selling to in users so yeah so doing that I mean we
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definitely increased our margins we started to see more $50,000 deals $100,000 deals 90,000 and stuff like
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that just by doing that smallart tweet no it's great it's really really great I I'm glad you mentioned you mentioned
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something that I didn't mention but the smaller deals there's a whole strategy targeting Builders as you go up in
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sizing we're selling to retail and buyers on every on all our stuff there there there's buyers ready to do it and
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you can Finance them usually the Builder is going to want to pay cash and you have to buy cash as far as your
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negotiates with sellers with the bigger the transaction you can ask for 90 days
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you can ask for 120 days you can ask for six months and people are going to give it to you when you when you start asking when you go after bigger property so you
Chapter 4: Seller Financing and Negotiation Strategies.)
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have a lot more flexibility on your time frames and you get more flexibility on
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your price points and you get more flexibility on your terms the doors start opening up for you when you start
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messing with 20 acres up it's my opinion I'm completely biased just from my
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experience so there's a threshold where
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the bigger price point and bigger acreage you get to the less people are playing at that level your competition
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thins out significantly significantly there's not there's not very many people
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playing at like that 400 like 350,000 and up price point there's not a lot of
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people I mean there's not a lot of people even at 100,000 and up that that play at that level one of the things
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that we we try and do is we're trying to exit all of our Lots
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under like 300 350 Grand we try not to create inventory under that price point
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because it gets unaffordable to the end user so that's kind of like our little barrier of thumb but it gets it gets
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even sweeter when you get to bigger stuff the bigger stuff is is is crazy so bigger stuff we're getting there's like
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a half a million dollar price point and that can vary in acreage half a million dollar price point we're getting like
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six months of closing extensions option money like you you get to ask for a lot
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of different type of stuff and you have a lot more opportunity to sell inventory
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under that property so our bit the reason why we're going further faster
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than a lot of people in our Niche I talked to Allan about this last week is there's people that or yesterday I
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talked to Alan yesterday about this there's people that they buy cash sell cash and it's it works well
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but when you have the ability to get some type of due due diligence long
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escrow period or seller financing for 12 months or 24 months or plus you get you
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get to maximize your Roi significantly crazy crazy to the
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point where we're doing a lot of deals now where all we have out is earnest money surveys and some marketing dollars
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and we're paying off the property which is crazy Roi we're $50,000 or less and
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we're making multiple six figures so now we're talking about hundreds of percent ROI on without even bringing cash to the
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tape and all we're doing is bringing sales so that you get a lot of Leverage with bigger properties and you can ask for longer due diligence periods let's
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talk about this Ryan you want to talk about aranas River this is a bigger property he kind
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of spilled the beans literally but now we're here at this point go ahead Ryan yeah so Aris River um was a deal that
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was brought through a friend of mine it's 200 Acres they wanted 2.2 long
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story short we'll end up after the the price adjustment uh purchasing at about
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1.8 and on all of these properties that I work we always try to get seller finance terms so basically six-month
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close with a six-month option actually our option is 10 days longer than our close date so you know we're supposed to
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close in September 2nd and our our option ends September 12th and so and then they wanted a million up from and
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then another the rest would be you know 800,000 over the next course of three years at interest only payments so we'll
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acquire around 1.8 after the price adjustment and right now with where we're selling price breaker we should we
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should be around three so after the sales team everything's paid we're probably looking at about a million or
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so in uh spread yeah great great numbers so bigger bigger bigger opportunities
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you can ask for three year three to five years financing you can get you can still ask for people ask I want 50% down
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well if you give me 6 months to give you 50% it's a different conversation if you can you go want it in 90 days or less I
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don't know I can't do it so the biggest thing is is asking for extended escros
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at bigger price points this is the biggest thing the bigger the price point the longer escrow period and the more
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opportunity get to move the inventory yes we can raise a million dollars but if I don't need to
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that's even better go ahead Alan yeah one thing I want to mention like in my price point it's a little bit
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more difficult to talk somebody into seller financing it to us because I mean
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just a lot of these people are are hoping to get that lump sum of cash a lot of these people probably won't have that lump sum of cash right so the B the
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price point you guys are playing in sometimes they will are right but I mean you guys are are creating more seller
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finance opportunities than I see happen in my space or my you know range and and
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you hit it on the head is that the lower price point they want it all in cash and that's non-negotiable it's
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non-negotiable but if you're doing a million dollar property and you give them 250 Grand they're like yeah 250
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Grand is perfect you know that's you're right at that sweet spot and for us it's 25% down and it might be two lot sales
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that bring that so it's it's a different it's a different Dynamic that you get more flexibility the bigger the property
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and it's it's such a great and think we nobody taught us this we kind of found out by doing it after a long time but
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yall hearing it today like you you get to do different levels based on whatever
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your comfortability is is currently you know so it's it's a really cool kind of
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position to be in based off of your risk tolerance and your experience of where
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you want to be one thing Ryan said I'll go back to Ryan is every property we're getting over seven figures we're
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negotiating some type of seller financing every single time and can get it because a lot of times at that price
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point they don't want to receive it all in cash they just want somebody to move the property remember the the bigger the
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the bigger the land deal the the less liquid it is the bigger the land deal the less liquid it is it gets a lot
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harder to move 100 acres at a million dollars than it is to move 30 Acres at
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250 it's a lot harder it's a lot harder to move that bigger stuff so they want some activity and movement and that's
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why they're willing to sell our fin names and tax tax advantages and a down payment of 250 grandish where that's all
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the money they need for the next few years so they're okay with it the payments are fine and you get a lot you
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get a lot of negotiation power so it's it's a really cool like buffer zone the
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bigger the Lots you get free housing usually there's a threshold I don't know
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exactly where it is but it's different per Market if you buy 50 acres of a house they're selling it usually as land
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only whereas if you buy 20 acres the house they're like oh I want 500 grand
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for my house and 200 Grand 300 grand for my for my 20 acres so now it's 800 Grand
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like what that's crazy but if you go after 75 Acres with the house like oh
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it's just 75 acres and there's a house they can't get one or the other
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and I think I think the varying price point I think the that that variance is if you're especially if you target stuff
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in MLS do a search for 58 50 to 100 acers with housing and see what comes up
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there's probably some opportunities there because if they're selling it as a house they might not py land buyers and
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they selling as land they might not find a house buyer so that have to do one or the other so you can find some Arbitrage
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there just by targeting stuff that is mispriced based off of what comes with it and sometimes you'll find especially
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with big big land with houses usually they'll they'll cut off that house separately so if you can buy it together
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and sell it separately there's your Arbitrage of selling the house and getting some type of down payment or
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some funds of for purchasing so it's a it's a
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unique unique opportunities now we've we've gotten seven figure deals with
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seller financing I don't think we've done one yet that we didn't get seller financing I'm trying to think of an
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instance currently I think every deal over seven figures we got in still our financing so the biggest thing I want to
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make a point of this is is that if you're a wholesaler trying to sell these
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or acquire these and sell them get seller financing ask for seller financing it's almost like it's almost
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it's pretty much a non-negotiable either you get seller financing or you get a extended escro period they're both
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equally important if you get both it's good if you get one or the other it's
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okay but you're going to need one or the other to do a deal especially with little Capital out of your pocket and
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this is the deals we like doing we like amplification our Roi and that's that's all we're looking for amplication of our
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Roi we're going to do a lot of business this year just because of these strategies and techniques to do these
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deals we're going do a lot of business this year just off of those two things any questions a lot of these people that
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have you know very expensive properties they're probably not so much in a a rush for the money I want to get some water I
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do that um
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so uh when you're structuring that offer like what do you how do you convince
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someone to give you six months to close or like receive some sort of money and
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then like what happens I guess in that period is that when like you start kind of advertising it or like the
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subdivision contracts start happening that period or how does that process kind of work absolutely as soon as we
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contract we are selling it immediately one thing we do with our with our Acquisitions contracts um that we send
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out is they all have uh an exhibit a that asks for marketable title now
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what's marketable title marketable title is we don't hide anything from our sellers agents we work with so most of
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the time we tell them hey our expertise is subdivision you have 100 acres we want to cut this into 10 10 acre lots
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and we'll pay you your price point we just need six months with an optional extension or we have three we have three
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months with with an option to extend one thing we're we're getting really czy with our offers on the front end to get
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those terms so we have a deal right now it's like a 90-day close a lot of these
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times the you you get to extend for TI title issues title problems uh survey
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problems we had a deal we just signed for today that we were supposed to close
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May 26 now what happened a lot of it was survey issues survey in Texas in order
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to do a survey you have to have a title equipment the wholesaler did not the title company they chose did not pull
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the title equipment till we called in as an assignment like hey you have the title commitment so we can start a survey and like oh we haven't started it
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yet and they had the contract for like 45 days so we're like okay we're immediately pulling that deal from you
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from you and sending to our TI company because we need to get a tile equipment that way we can start in a survey so that immediately put us behind on the
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initial surveys she had it was like an 80 acre track and she wanted to keep 20
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acres so we had to do a we had to do a title commitment survey of the 80 acres
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then figure out what she wanted then get a new title commitment from the cut off and then we had to do new surveys for
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each of the subdivide Lots so that took like 60 days H we were closing today but
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it was just one of those things that surveys just muddied the deal a little bit longer since we know T commitment
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and we have to wait for that stuff and usually surveys can be anywhere from
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two to six weeks out on average so if you want to stall don't order the
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survey right away or you can have your surveyor play the game and stall stall at the T
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company so you can you can use these tips and tricks to kind of play the game
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if you need to without getting an extension you get an extension oh we need the series so it's a it's a game
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you play go ahead Angie so I was talking to somebody last week and they said hey we couldn't get seller financing on this
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deal so and we didn't want to bring any money to the table it was a lot of money we were still going toide it so they
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were saying what they did was rather than getting you know releases because they didn't really you know they didn't
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buy it and uh they were selling off say 10 Parcels they just told the person this
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is what we're doing and so what we're going to do is we're going to incrementally after the subdivision we're going to buy one parcel then we're
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going to buy the second one then we're going to buy the third one so just toly didn't end around on the partial
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releases and just said we're subdividing this and we're going to buy them incrementally as we find our end buyers
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so I hadn't necessarily heard of anybody doing that approach obviously when you get a a seller finance situation you
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don't necessarily need to do that but I thought that was an interesting approach I haven't tried it yet so us poor people have to be
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creative on how we structure and how we restructure and save deals so you get
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really good at nagling stuff and it's a it's a skill you learn through
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experience and that experience sometimes blows up in your face and the experience
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sometimes pays off so it's it's it's a game you play
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but we've had deals blow up in our face for that and one of the easiest way
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around that is just disclosing if you disclose disclose disclose from the beginning you're going to get a lot less
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hang up and get hung up on a lot of different things and that's one thing we learned because we used to play the game
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but now we play it better because we got experience so we just disclose what we're doing and how we're doing it and
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usually most the time they don't nine times out of 10 they don't care we even got a deal right now working that
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it's probably 500 acres two parcels and a student brought it I don't know if
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he's here today we should be getting the contract hopefully this week and it's all Frontage but the problem is the ugly
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side is really deep which means you're going to get really p pencil line subdivides or bigger Lots which is
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bigger price points which is what we don't want but we're like the bottom part's perfect and like can we buy the
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bottom part for the same price breaker and they're like yeah like okay so we're
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buying usually when you buy a big chunk like that is a cheaper price breaker so
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we literally chose the best part of the lot at the same price per Acer of the whole project and we're getting
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we're cutting it's 160 Acres we're cutting into 161 acre lots and it's all Frontage with driveway spacing all that
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all that jazz I'll show it once we get the contract but it's such a textbook deal that we got that uh we kind of just
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like I just want that part and they gave it to us the same price and we got six months of close so it reminds me
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speaking of you know crappy Parcels within large acreage I had a realtor
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this the property it wasn't listed but he wanted to get his real friend on the phone with me and he goes hey how do we
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know that you're not going to if we sell our finance you're not going to sell off the good Parcels first and then you die
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or something you get hit by a car and then we've got these crappy you know the crappier parcels left so do you hear
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that very often I I typically don't but we hear objections with that and we we
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actually we actually dealt with it earlier this year so what we did was is we actually sold the rear
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first we did you write that in the contract that you would do that I'm gonna sell first they bring that was a
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concern so this is one do too this this is one of the things where like everything's a negotiation so that was
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one of their concerns was like hey if you leave us with the bad part understandable let me sell the back
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first it's a little more challenging but if I can still do the deal it's gonna work out so that's one thing we did
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that's something we did on a recent one is we sold the back first um 6 months to close what does that include as far to
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diligence upon closing time we usually ask for six months six months
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for surveys water studies we kind of throw all that jazz at them and then tell them we're going to bring we're GNA
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find some end buyers to to S to buy some of the subdivide whatever we can't sell
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in that time frame we're gonna bring to close and that's kind of how we frame it is you have 100 acres I six months due
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diligence time if I can sell 20 acres I'm only buying 40 for the remainder or
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whatever that is and you kind of piece the piece it together so like I have the capability of buying it all but I would
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like to get a better Roi by bringing some buyers to the table to buy so what
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about what about like as far as like are you doing like 45 days of due diligence and then the rest on time to close are
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you doing like half and half we we play the game man some of it is an option
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period some is due diligence some is an option to extend it really depends on what they fight us on so we always ask
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for the moon and then work backwards so they're like we'll ask for like 30 0
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90day option period with for 500 for a grand and then we ask for a 10K 20K hard
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EMD after the option period and then we'll do a 90day extension for 50 Grand
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or 10 grand or five grand whatever that number is we just play the game on your contract and you you kind of work it
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forever timeline you need for example I don't know if he's here but somebody brought us a deal we're jv on somebody
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brought us a th acres in Colorado that we're jv on with with a student in the group he's not here today but he has 90
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days 60 days 60 days is the option period so what we're going to do is we're going to push it into the sales team sell as much as we can and then ask
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for an extension for uh 50 to 100 Grand whatever that is so you you can play the
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game however you see fit but if we bring one buyer to the table hey I'm bringing
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100 Grand down down but you need to release these Acres so you can play the game however
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you want and everybody everybody's gonna play differently one thing we like this
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is a great one is we'll do different we'll do different offers and it's all
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wonky we ask for like we ask for like 90 days option fee for five grand with 20K
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hard for 30 30 days with a 90-day extension option for 20 grand and you
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kind of piece it and muddy it together however you see fit you always we always make it cheap up front like the deal
29:05
where Contracting is 50 Grand hard they wanted it's like a 880 purchase price
29:12
and they wanted $100,000 EMD and we're like we'll do 50 but the 50 is we'll do
29:20
10K after seven days and 40K after 21 days so you kind of just you kind of
29:27
mixing match all all your EMD your option fee option to extend you kind of
29:34
mix and match all that all those terms with different amounts or whatever whatever you can negotiate to kind of
29:40
get your timeline and it's it's all negotiation this is your you put on your negotiation
29:45
hat and you go to work uh go ahead
29:51
Harker yeah I had a I saw this question in the in the Facebook group but I I
29:57
couldn't find it again for me to be able to comment but it was about seller financing and Wholesales and seller
30:02
financing deals and that's still like something that really confuses me for an
30:08
example I have like a a fix your upper deal it's just a house in wo sure I
30:13
think I think the terms make sense so purchase price is 80k but they will do
30:19
seller financing with 16k down so 20% but they want 12% interest with a 5year
30:27
balloon and I'm like in my head I'm like okay well I can flip the wh sale at like
30:33
56 you know what I mean outright cash make 40 but then I'm stuck on payments
30:39
for five years with the balloon and then it's like I did the math on that it's like more than 40K so I'm like how do I
30:46
where how does a math math up do I add like interest on my offer or it's just
30:52
been a brain fog for me I've been trying to figure it out and I'm like I don't I just don't see it I have a I have a good
30:57
answer for you and this is for everybody here some good stuff so this is off the
31:03
Tweet so it's all in your
31:08
negotiations we talk about creative finance a lot I saw this street yesterday but this is this is really
31:13
good all right so price versus terms you have a a single family home we
31:19
run for 1250 your operating spense are 500 a month expected NY is 750 right
31:26
well they're asking $15 5,000 for it well you can offer 110 with $10,000 cash
31:33
and then you offer you have three you have three different offer so it gets better as it goes but offer one is 110
31:38
with $10,000 cash 7 and a half interest you cash 50 a month you don't really want to do that so the whole point of
31:44
this is you want to offer more so they're asking 125 you offer
31:49
130 or 120120 with $110,000 down you get 6% interest rate 9090 $90 in so the
31:59
more interest they want you lower the price point the more if you can get a higher price point and less interest you
32:05
actually cash flow more so number three is offer $1 130,000 with $10,000 down
32:11
120 at 4 and a half% for 30 years you C 140 bucks the big thing is on the bottom
32:16
is what are you what are you really offering who cares what the total purchase price is
32:23
if you can cover the debt and that's the big thing covering the debt so $10,000 what you're really offering
32:30
is $10,000 cash and a promise of 360 payments of $699 when you make when you when you
32:38
lower the interest rate you actually lower your payment as well so on the last one he offered 5,000
32:45
over his his payment almost dropped 90 bucks a month so he's cash flowing more so you can create a win-win scenario by
32:53
offering more money and this is one of this is one of my levers that I love doing is is I'll pull the I'll pull that
33:00
lever all day long I will offer you more money if you give me 0% interest financing or a low interest rate I will
33:05
pull that lever every time because you can create a better opportunity for
33:10
yourself over time if you're in the deal for the long call especially with a fiveyear am or longer so I'll pull on
33:17
that price point all the time and just raise the
33:25
price so it's one of those things you got to you got to do your you got to do your numbers and your math on your
33:31
offers to make sure they make sense um depending on your exit strategy no no matter what asset class you're doing
33:37
houses land doesn't matter you can you can create a win-win scenario without having to pay cash which is the big
33:44
thing I had a question yep so for the on the back end when you sell the Lots off
33:51
I think you guys mentioned before that the seller usually gets paid first yep
33:58
is that always the case like so the seller gets paid in full before we pocket anything it depends what you can
34:05
negotiate so let's say let's say you have a this let's have a hypothetical situation you have 100 acres for a
34:11
million dollars is 10,000 an acre my exit on that would want to be 20,000 an
34:16
acre so I'm going to create 10 lots for 200,000 and let's say I have a b a cash
34:22
buyer come in with $200,000 down hypothetically I can go to the seller I can play this one or two ways
34:29
Mr seller we have a six months through diligence period it's month number three
34:34
if I gave you 200 200 Grand would you release 20 acres because if you think about it 100
34:41
acres 10,000 an acre if I'm putting 200 Grand down I should get 20 ACR right or
34:48
you can play the other way hey Mr seller if I give you 100 Grand will you release
34:53
10 acres they're both not they're both not wrong they're both right so it depends
35:00
what you do me personally I'd rather pay the seller off first because then
35:05
they're out of the picture they're out of the transaction I don't have to worry about them if it's a cash transaction
35:10
they're out they're gone I'm in the money I don't need the money today I'd rather do the deal and I'm in the green
35:16
and I don't have to worry about anybody suing me that's my biggest thing but hypothetically if you have a buyer for
35:23
200 and you go to the seller and like hey if I give you 100 gr for these 10 acres and you release it and he said he or she says yes boom you double close it
35:31
hey I want these 10 acres for X you give them 100 Grand you pocket 100 Grand boom
35:37
boom boom boom boom 100% possible everything's negotiable everything's a
35:47
negotiation gotcha that's what I was thinking pretty much is
35:54
negotiable Sometimes some sellers will be like you're you're parceling it off
35:59
any money received can you pay me first Sometimes they'll voice that concern if they don't voice that concern don't
36:06
bring it up just move forward but sometimes the voice concern and some we hear that sometimes so if I if I'm
36:12
releasing this I want to get paid all the money all right that's fine I usually work my deals like that anyway
36:18
boom you get 20 acres free and clear for 200 boom
36:24
you get all the money but now you own 10 acres free and clear for the next deal so you can play the game however you
36:29
want um everything's negotiable and it's what you every the the bigger the
36:34
property the more negotiation space you have whether it's price terms or seller financing so that's that's a sweet spot
36:41
I like and you can kind of create whatever you want and no one can stop
36:47
you good
36:53
question we got another one
36:59
and the the big the biggest thing too is like I will take any sell seller financing whether it's 10% 20% 50% 90%
37:08
80% I will take any type of seller financing to do the deal uh mortis river
37:13
is 50% down potit we bought was 25% down what's another one we got we got a deal
37:18
in San Antonio it's I want to say it's like 30% down we got a deal in what's
37:25
another seller financing deal we got oh uh a Freer Freer is we bought for $4.95
37:33
or something like that 168 or it's like 180 acres for 495 we got that deal for
37:39
40K down with 100 with 160,000 due in three months so you can create a lot of
37:45
cool stuff just by negotiating and you can get into a lot of deals just by negotiating so it's it's endless
37:52
opportunities if you negotiate and the longer the deal sits the more negotiable they are we have a deal we did about a
Chapter 5: Expanding into New Markets and Future Events.End)
37:58
year ago and they wanted cash cash cash we tried to do it blew up in our face a
38:04
student potentially has seller finance for five years time will beat up these sellers where they're open to anything just to
38:11
get the deal moved that's the biggest thing follow follow up was key so like Reuben I don't know if Ruben's still
38:16
here Ruben Torres follow up with your Italy seller they're probably negotiable now remember we looked that deal
38:22
probably eight months ago maybe a year ago so the the the deals open up the longer still pending y I'm on it yeah
38:30
and it's probably still available you know so you got you got to follow up with your follow up with your leads keep
38:36
it keep it going and the yeah no yeah that one specifically is most definitely
38:41
still available it's just the real T we're fighting on that one he'll come around he'll come around he'll come
38:47
around that's how it works he'll come around time will beat him up they have an liquid asset a very liquid asset
38:55
especially the bigger it is so ain't going anywhere anytime soon it has to be parceled off and sold into smaller bits
39:02
that's the only way to move this stuff and we know that but they don't know that so you got to come around you
39:07
disclose cover your ass when you're on your contract due diligence and then you negotiate with your negotiating haton
39:15
and you can nego you can create endless opportunities over and over who's got another question so me and Anthony were
39:22
trying to get into bigger transactions not that we're scared of them we've kind of developed our tolerance I would say
39:30
our tolerance to do these bigger transactions where we're not scared of them anymore and a lot of it is we' we've gotten a lot bigger money Capital
39:37
Partners behind us that where we know we can follow through so we're looking at
39:42
bigger transactions now that we can still get because they're even more liquid we're we're negotiating a $10
39:49
million land deal that we're still negotiating but might take months to negotiation but we're still working it
39:56
out they want 20% down so like you want 20% down which is $2 million we need 12
40:03
months to come up with that and we're just going to pay them off their own property same strategy just longer
40:09
extended timelines for to cover their down payment so it's uh Endless
40:16
Possibilities on the on the on the front end you should have to negotiate
40:25
it would you buy 20 AC tracks at market rate If the sellers open to financing
40:31
100% 100% I would if I can get a a seller finance deal at a current arv
40:40
with a little down payment I will take that all day long hell I even overpay because then I can wrap it you can get a
40:47
price you can get a financing Arbitrage just by getting yeah 210 let's say
40:53
hypothetically you're getting 20 acres for 200 Grand you're getting it for 10,000 an acre right easy math and it
41:01
say it's only worth 200 Grand but you know you can sell it for 200 Grand if I can get 0% interest with 10% down or
41:09
less I will do that deal because I can wrap it for 10% down cover my down
41:15
payment and then I have a interest rate Arbitrage so let me do the math here so
41:20
we can figure out what we're talking about I'll probably do that for 240 months 0% interest is 750 a month if I
41:29
do 12% interest it's 1981 that's 1,200 a month cash flow on a
41:35
deal with no equity then it comes down to that that
41:41
graphic I showed earlier if I can if I can I'm making a a promise it's $20,000
41:49
down cash and a promise of 240 months of 600
41:54
bucks and then I'm going to create another promise with another buyer with $20,000 down and 1,00 a month and we're
42:02
in the money and if one note defaults I still have F on cash flow and I get to restructure the other
42:11
note there's there's money and Arbitrage of the debt if you can get it and that's
42:17
why I really don't care what the price point is as long as I can get good debt
42:23
or good good terms good terms is I guess the the variable that if I can get good terms I'm okay with it and all all I do
42:31
is ask for extended esro 90 days 120 days find two buyers cover down payment
42:37
double close and wrap it easy money so there's there's plenty of of as long as
42:44
there's some type of Arbitrage you can create a win with little to no Capital any other
42:50
questions um the event is next two Saturdays from it's last Saturday of the
42:56
month I know we have some people coming to the event we're excited to have them hope you all show up I know we'll keep
43:03
doing the event every year it's a opportunity to get our team together so uh we have a lot of people virtually uh
43:10
we have a new guy from Belgium who brought in a buyer hopefully for two ARB
43:15
Lots so hopefully he'll come to the next event I don't think it'll come to this one but we have a lot of people working
43:21
virtually so the event is an opportunity for us to meet shake hands with you have dinner with you lunch with with you
43:28
break bread have a conversation do some content have some fun but if you guys can make it we'll love to have you
43:34
Corpus chrisy at the end of the month Allan speaking Chris rou just confirmed we got Tai which is splitman and uh
43:42
Rooster's coming again and me and Anthony are speaking of
43:48
course but this is our fourth event did you say Ty is coming FP man yes flipman
43:53
is coming no tie okay flipman is coming the one and only flip man I'm excited
43:59
I'm excited to meet him uh Henry Washington's coming we got a lot of good people we have a lot of fun that's the
44:05
biggest thing we have a lot of fun so if you don't make it this year we'll do it next year somewhere and run get run to
44:13
play again does matter who shows up but we have fun doing it we'd love to have you and meet you shake your hand take a
44:19
picture with you and if you can make it let us know for everybody here if you have any questions hit us up in the
44:25
group if you have any deals hit us up we are always moving finding opportunities anywhere and everywhere we're opening up
44:32
into new markets as you can see we have a deal in Florida we haven't done a deal in over a year in Florida we have a deal
44:38
in Florida right now and possibly deal in Colorado never done a deal in Colorado we just expanding so I'm
44:44
excited to see got go Mar I got got RV park for you in Florida it's doing U he
44:51
says it's doing 10K a month but he doesn't have Financial okay
44:57
send it we'll negotiate it we have RV park deal right now we're we're getting to the point where we're doing anything and everything that makes money I don't
45:04
really care but I'm always a land guy first so we'll look at anything and everything
45:10
we got as long as there's money to be made we are on it h we we're we're doing
45:15
some big numbers this year so it's only going to get bigger and better and we're excited to see what the future holds
45:21
everybody here have a good week we'll see you soon I got a question Daniel but let's say because I have a different deal in Colorado I've speaking with the
45:27
sell for a while he eventually listed it it was like I think like 80 79 Acres but
45:32
the thing is as you know to understand the subdivide process I don't know how long it takes but even when I looked at comps like let's say five acres we're
45:38
going for about 200,000 he was asking for about 1.2 for 79 acres and I know he
45:44
was open to like sell a finance when I offered maybe about like 200,000 down and then like I said maybe carry for I
45:49
don't know five years or longer or something but we'll see the bigger anything over a million we want some
45:55
type of seller financing or bottom line I know Colorado we're
46:01
learning has a 35 acre soide rule so cut that into two lots without getting
46:07
County approval but at that price point he probably wants to entitlement so if he's gonna wait 24 months 12 months
46:15
probably money there and he's got to wait for it sounds good it's the bottom
46:20
line so if they they want a high price point they're gon have to wait for it exactly yep and I want s Finance
46:27
yeah push pull like you said that's it perfect we'll see you next week you has
46:32
any questions let us know we're here for you guys have a good week thank you too bye bye