How to Become Financially Free with LAND INVESTING in 2024 - Travis King Reveals the Secret | MB 398

so I encountered the same thing put less a little less eloquently about 2 or 3 years into this I realized that I was hamstrung and limited if I was just using our own Capital so that's when I kind of started going out and looking for outside money you know joint you know people to joint venture with me kind of bring in the money I would find the deals so are you serious about taking the next step towards owning an apartment building raising Capital then listen up because I have an incredible opportunity for you now I've been where you are now when I got started there was no guidance along this I had to figure all out took me way too long to figure out I didn't have Clarity I flipped houses didn't know what direction I was going didn't have a plan and I didn't have any experience when I did my first deal now since then we've helped hundreds of students not only do their first deal but become Financial free and they all started with the same step it was 100% free strategy session it's a phone call and in this call you're going to get an easy to follow blueprint you can get you can follow to become Financial free and most importantly on this call which is why we call it a Clarity call really you're going to get a lot of clarity uh on what's important to you in your life and then maybe how to get there you're going to get some guidance On Tools strategies and direction to take on your journey so this is if you're ready if you're serious about starting your journey this is your moment so click that link and schedule your 100% free strategy session today and take that first step towards [Music] Financial Travis welcome to the show hey thanks Michael glad to be here so tell me how you got into land flipping because we all have a story we discovered things we have these epiphanies and the H and how did you get started with land flipping and and how did that turn out a a strategy for you well I think similar hopefully to a lot of your listeners right um commuting right commuting to work commuting to the W2 you know um day job and listening to a lot of podcasts big big podcast fan and just um yeah on my commute was had done some you know um single family house investing and and was listening to Bigger Pockets kind of in search of a new New Angle you know a new strategy a new asset class and heard about land and land flipping and my dad had done some subdividing done some stuff with land growing up so I had a little bit of familiarity but not as like a business model right is flipping so it's something I I I just dove in like anything right you gota you first thing comes awareness and then becomes Obsession right and that's I kind of became obsessed at building out a um essentially a sixf figure second income with the goal of uh becoming a full-time investor that's awesome so describe land flipping as a strategy like what's what's involved how does it work yeah well the way we approach it is the I think the the secret saucer that or the biggest thing is off market so for us you know we're we we're immediately going after off-market vacant land properties um one we feel like if it's off Market it's not on the MLS there hasn't been established value you know um the we don't have now have that listing history to deal with or anything so so we feel like we're a little late to the party with with onm Market targeting stuff on the MLS so we go um you know we pull these these data sets or or marketing lists as most people think everything starts right everything starts with property ownership records you know and real estate investing um so we pull a marketing list um and direct mail is our primary Channel um we do cold calling and texting but Direct Mail is kind of our our our winner as far as signed purchase agreements yeah and then we reach out to um off-market land owners with um unsolicited blind offers you know and an effort to buy their land um you know at well blow market value it's it's um essentially the kind of We Buy Ugly Houses you know approach only to land is really what it is I've gotten a few of those letters Travis probably one of yours um and but the qu probably not one of yours but so how do you so you're making these unsolicited offers how do you know what offer to make I remember I flipped I flipped houses and it was we had a you know formula where we would just come in like 25% under whatever the list price is whatever uh and so when you make these unsolicited offers how do you know what to offer that's a a great question because that's actually where where and why so much opportunity exists with land houses is much easier right to establish a value based on comps and assessed values and you right um within a house you know we don't know the custom upgrades inside the house so we don't know that we're going to get it perfect but there's a lot more data available for houses so that's actually where the opportunity kind of exists for land is that um you have to understand how to Value it understand what platforms to use to pull the comps you know because there's not as many um so yeah so that comping the property out ahead of time U helps us a lot so you have two approaches either you just send this like generic letter of interest that that expresses an interest to buy their property and then if they respond then we we we Deep dive in and that's when we value it and and craft a custom offer you know and I'm sure you're quite familiar that Michael it's kind of the letter of interest approach you know the postcard approach then the other approach is that blind offer approach I talk about we actually throw a number out there and and if we do that approach there's a lot more work on the front end because yes we're row by row we're going through and valuing estimating value of the price per acre within that that zip code let's say um to establish our value and then base our offer on that all right so so you have a way to kind of value the land you have a system for sending out direct mail and then at some someone calls you calls you in what what is the process there for negotiating that that price and then actually do you buy it or do you do you legally wholesale it or what's the actual contract contractual part of that yeah so typically we buy outright um you know we um we also teach this and have a number of you know students in our community so there's a lot of people that come over from like house wholesaling world and and they have no interest in taking ownership and holding something for several months to get top dollar they just say hey I just want to sign over the contract so wholesaling or you know assigning the contract is a tool in the tool belt it is a strategy um but a lot of times we like to you know buy outright capture as much Equity as possible um with yeah with our approach so as the lead comes in the first thing we do is we're we're trying to you know disqualify the property or qualify it as quickly as possible Right is this even worth throwing a bunch of time at you know with land there's things like you know Road Act access um there's Wetlands or flood zone depending what state you're in right there's a slope of the property is it buildable so first we try to qualify the property and and once if it's qualified and makes it kind of through that um then we're moving on to the valuation you have to make sure that establish a value and then like any any asset class in real estate you know next determining the the sellers level of motivation and what kind of offer they receptive to right now how do you finance it because you said you really like to take title of it which is the argument for wholesalers like oh I don't need any money I can do this without any money I live on the spread right and so I I I was I never wholesaled I bought from wholesalers and so I was the same thing I'm going to buy this thing and add a bunch of value instead of making five grand I don't make $35,000 but of course a lot more work and you do require Capital um how do you how do you uh basically finance that purchase it's it's a great question because you know I was I think I was sharing with you before the show um I read it was listen I'm not going to say read I cheated I'm listening to the audio book of of your book and your aha moment was almost verbatim identical to one I had in my journey and I took I wrote it down here you had said you know my ability to scale this business is only limited by my ability to find deals and raise money not my lack of Financial Resources right so I encountered the same thing um put less a little less eloquently about two or three years into this I realized that I was hamstrung um and limited if I was just using our own Capital so that's when I kind of started going out and looking for outside money you know joint you know people to joint venture with me um kind of bring in the money I would find the deals and we started doing that early in our career and that was kind of like a pouring gas on the fire you know for us to bring in outside money because we could now Target these much much long larger deals that we could do on our own right and the number of deals we could do because we weren't waiting to recycle and bring our money back in um so yeah the the answer is first we leverage outside money until we had made enough money by leveraging outside money that we had enough of our own right um so at the very beginning we self-funded everything and it really restricted Us in how quickly we could kind of scale and snowball but then once I understood how to to leverage outside money um it was complete game changer for us and it was a little trickier because of the asset class of land I would I would give people kind of read them my resume give them my transactional history and there I could see their eyes light up and then as soon as I said land it was kind of this w w w you know because you know all the these private lenders associated with single family or multif family once they heard land it's just a um it's a different animal and they were unfamiliar um so it took me a while to crack that nut but once I did um leveraging outside money and Joint venturing on deals I feel is like the fastest approach unless you come into this thing with a war chest of money um but but it's um all the same you could wholesale and assign contracts if that's your your model as well so how do you get top dollar then let's look at the exit of of these things what what do you do because you said you hold it a few months I assume because you you don't have to approve it or maybe you do uh is there approvement or how do you then sell for top dollar then yeah there's kind of two buckets or categories where we're either doing this with rural vacant land or we're doing it with like a residential infill lots you know maybe more in like a metro area right so kind of two different strategies where the the infill lot um we might do no improvements or we might just have like some landscaping and some some cleanup right so that the listing photos look better and get some drone videos or something um so with that it's it's it's very little to no improvements um we like to subdivide also which when I say that people it sounds like a big project or it sounds like this daunting thing but like clarifying we we like to split Parcels okay we we don't put in sidewalks and infrastructure and Roads or anything like that like we literally just split Parcels you know up so that would be kind of our only hold time is how long does it take the surveyors to get out there and and you know and split survey the property and then get it subdivided to sell it off um but no it's it's it's a velocity game for sure um where we're we're trying to you know bring money back in the business as quick as possible um and you know later on as we've gotten we're a decade into this now so there's more on our personal side my wife and I there's a lot more like we'll buy and hold you know if we find one or we subdivide some it's kind of becomes a buy one get one free when you subdivide but um but the business model itself is very much built on you know on velocity and little to no improvements it reminds me of I think something that was in richdad poad where kosaki bought like a 100 Acre track and and sold off like five acres and basically use that money to pay for the 95 that he essentially got for free I was like ha that's freaking brilliant uh exactly we'll do things like that where we take a large parcel we'll split it down the middle and sell off half cash to get our money back and then split the other half up into three or four much smaller pars and then and then sell those off one at a time now you mentioned infra infrastructure right the next level I think from what I know about land and and and and value at is actually creating so you're already subdividing so you're adding some amount of value to because you're doing that uh but but the next step probably would be would be infrastructure or and and if so have you considered it and if you if not why why have is that something that you don't want to get into well what we've found is that Builders and developers we prefer to Source it to them and allow them to stay in the deal longer you know it might be a 15 to 18 month period for them right for us personally um we just would we' much rather make you know several small bets right kind of spread our money out than we would put it all in one project because as we know you know if it takes two years to do a development or a project um you know not time stamp in this this episode but as we know markets shift things change right so there's a little bit of risk associated with staying in a deal too long right so for us our preference is to kind of keep it simple and have these relationships where we're sourcing the land to the developers and to the builders um but we're trying trying to we're leaving enough meat on the bone to Source it to them but not stay in it and develop it ourselves um just because it ties up so much capital on on one project there's not a right or a wrong it's just with with our model that's our preference yeah you're obviously very intentional about that because you are getting into now essentially development and and so yeah the risk goes up uh and it ties up more capital and so you're focused more on on you're really focused which is really the right thing to do now one of the things I found that you read read my book is I I could not really figure out how to how to how to rehab houses and turn it into a Financial Freedom vehicle now I know you talk about Financial Freedom and and in in your world how how does land flipping how can that create uh Financial Freedom yeah well that there's a number of different approaches but one would be like um either we can focus on big cash flips to kind of just pile up cash right or we could essentially what I would say like buy time meaning like we buy ourselves time that uh much of this land especially the rural vacant land um there's this incredibly huge Market that is um is familiar with and used to buying land on payments or or seller financing right so unimproved land is a really good candidate to sell with seller financing and on payment so that's kind of an approach we'll do where like we have a 40 acre in northern Arizona for example that it's a a 15-year note that we created right so we're going to be collecting payments for 15 years plus the the interest income on that so a number of people will approach this with um buying the property you know the the key is we capture Equity when we buy you know as you know like having flip some houses and stuff right the generally you might get a little bit of a deal because it's an ugly house but but really The Sweat Equity is the value ad for us us we capturing Equity at the time of purchase which really really insulates us from risk you know but if we capture equity on the purchase and we we sell this with seller financing so we add that interest income on top of it right the the math pencils out pretty good so um this is how early on actually was my initial approach to to leave the job being a you know a husband and dad with kids I I couldn't be a cowboy you know or a Maverick with with just quitting the job and trying to go full-time I really had to build something that I knew I had enough Runway when I left so we initially that's what we did we built the business up by selling these properties off via seller financing and we created enough notes that the monthly income was 10 thou you know at the time 10,000 a month was as big as I could think it felt huge at the time in hindsight I I I chuckled because as your mindset changes as your business grows your mindset Grows Right but at at the beginning 10,000 a month was that big magic number and we got there and I was able to quit my job we had that recurring income from noes so kind of the long answer is really like with notes or seller financing you can create a situation where you're getting um pretty passive income you know you have a third party note servicer the beauty is you don't have like you don't have repairs you don't have maintenance tickets because it's vacant land you know um so usually it's it's not occupied so there's not much maintenance with it so but I still not a fan of the total passive but it's pretty passive income the main thing is it's recurring so you create the situation as far as the Financial Freedom where when we did that um and I left my job the first thing I did was we took a month-long vacation because you know I knew those payments are coming in right I knew those those payments were coming in so a lot of people will leverage seller financing um to create that kind of you know that kind of financial freedom and buy themsel essentially buy themselves time knowing that they have five 10 15 years worth of note income coming in after they've done all that work on the front end and and you're right that with with single family houses that that there that was not really a repeatable scale model you know uh you could sell a lease option or you can have tenants in there but that's more of a rental portfolio and so creating notes that's uh that's very interesting now can you still how can you still do that when you're actually raising money for land purchase do you it around or how do you structure do do you pass that 15-year note on to the investor or how does the what does the return look like for the investor yeah well a lot of times for us we're we're buying land and it it's hard for people to wrap their head around uh but we typically buy land for like you know 35 to 50% of its value um with like an infill lot in a metro area we might come up to 60% we might pay a lot higher but um we we really only take the slam dunks and layup so we're just we run the business super conservative and I would rather spend more on marketing to find a better deal than I would make a deal work you know and buy too much deeper um so for us yeah like we're we're generally not paying over you know 50% and a lot of times you're paying a little less so that initial down payment we ask for we try to get almost all of our money back you know when we we resell through agents and on the MLS um and it's just kind of uh par for the course to to ask 30 to 50% down when people buy right that's what the banks want on land we ask the same we give them a little bit better interest rate than the banks um but we're usually getting most of our money back when we resell it with that down payment because again we've only we've only bought it for 30 to 50% so the beauty of that is we're not upside down too long in the note you know usually within 12 to 18 months of the note we're we're flush right but yeah you can have that potential like you're saying though if you were you're you're buying too deep um and you're not getting a large enough down payment this was an education I had early on what I you know I we kind of found ourselves dirt rich and note rich but cash poor right where we had created all these notes but we weren't you know what I mean we weren't liquid we had all our everything was trapped in notes so you got to have a balance we kind of have this happy balance of cash sales and seller finance sales so that we're always bringing money back in otherwise you kind of you cap out at how many of those you can buy outright and sell on payments I gotcha so okay I see how that works with a when you get a deposit you actually pay you pay your you and your investor back when you buy the land and so you're basically creating a note from essentially what the equity is that's that's pretty cool now yeah what I'm curious about your last day of work like what was that like you know so the funny thing was I remember remember having some extension or browser extension or some some web app that you plugged in a date and it was like a countdown backwards right so I remember like having this this date that was several months out of like okay I'm gonna quit at this time right and I remember kind of every day going to my workstation and looking at that date and being like okay we getting closer and that's kind of what gave me hope and got me continue to go there we built it in such a way that it was like all of our payments were like our cont contracts were you know using like zapier right we had automations for the web forms for the contracts to be filled out to be docu signed and then the payments were autod drafted right with QuickBook so the reality was by the I kind of got the business running so smooth by the time I hit the date you're like why would I it felt silly why would I quit like I'm not working as hard as I was the first couple years because there was a couple years of overlap so I had to convince myself so I'm like maybe I'll stick around a while um so I actually stayed probably 6 months longer than I need to and then I just had one of those moments in a meeting where I'm like okay time to time to pack up so for me it was a situation where yeah I I got up midday grabbed my stuff walked out and was just done you know um and that yeah it was a be beautiful day right it was a beautiful day what did your co-workers say your friends like were they were they like what what was their reaction it was kind of a um you know office space moment where about 3 days later my manager called and you know it said hey are you you know what's going on are you coming back and you just no no you know um we had built this thing up with the intention of going fulltime um yeah and finally got there um and then you know I probably took the foot off the gas for the first year I was full time and I think that was just kind of recharge and spend a lot of family time after years of of of clock in a lot of hours but after about 10 months or a year I I got re-energized to you know have another Surge and grow the business again um after you know after taking a little well-deserved break I guess so you it sounds like you you kind of stay in your job for probably longer than well you could have left earlier so real realistically uh you're working with a number of people as well like how long does it take realistically um to you know generate whatever 7 10,000 per month yeah well I I approach it different with clients now with that the beauty of hindsight right where I wouldn't actually have people follow my path you know me too me too I'm like the crash test dummy of like apparently everything so don't you feel like yeah you have a better way you say like learn from my mistakes don't repeat them so so I have a much better more deliberate plan for people and it's usually like customized to their situation like um what are you trying to accomplish because you'll have some some individuals um that are happy you know with their job and their profession they just want to scratch that itch outside the day job or build up kind of a second stream of income so their plan looks a little different than the person that says hey this job's so crushing get me out of it as quick as I can so we'll kind of build a customized plan but usually I just start with very much just start with their what what they need annually and work backwards and we generally say how are we going to collect that and what increments right are we going to do one or two really big flips a year or are we going to try to break this up so we're doing one a month and you get that over 12 flips you know so so that that's usually where I start is you know um what fits you and how much time do you have to input in the business because you're really only limited by your inputs right so if somebody says hey I I can only throw 10 hours a week at this it looks a little different you know for the the DAT of four that's strapped for time and only can give the business 10 hours a week then the single guy who says hey man I I'll throw 30 35 hours a week at this right they have all that extra time so for them we can build a different plan um so yeah it's very customized I try to to build it very customized and intentional knowing that not everybody has the same amount of time and also knowing being a dad I have three boys you know um all three boys are in two sports so you know I I understand those time limitations so might help somebody build their business model a little differently than the single guy who's got nothing but time to throw at the business you know but typically within a year um I feel like you can get that income replaced and then I'm a big fan I'm a fan of overlap I really am of rather than somebody leaving too early and having to return to the workforce I would prefer to kind of you know Embrace that suck and um you know experience as much endure as much overlap as you can well you kind of Stack as much cash as you can on the side because um when you get in you know when you become an entrepreneur it's a change when it's a side hustle and it's a second income versus when it's your primary income and you're cannibalizing the business paying yourself right um it's a different ball game so I like people to have more set aside than they need whether it's kind of mountains of cash or streams of recurring node income you know I would prefer that people build it up beyond what they think they need before they quit their job yeah it's it's always interesting to see when people people quit some people burn the boats before they even got started and then other people stay in their job way too long and it's interesting just kind of seeing you're right there's not a single size fits all um I want to talk to you about uh threats and opportunities we're obviously in in interesting challenging uh times and uh a lot of people are struggling and there's also a lot of people argue a lot of opportunity where do you see the threats in in land flipping and then where do you see the opportunities well I feel like the most immediate threat to to not just land but almost all Real Estate Investors is interest rates you know interest rates just have such a significant impact on everybody's you know Behavior right and buying and activity so for us like our um some of our infill Lots we were riding a really high wave you know when people were buying lots and Builders were building or people were building a second home when the interest rate was low enough they could get a construction loan immediately right when rates went up the builders obviously pumped their breaks if not paused totally okay so that slowed down our kind of infill lot flipping side of the business and what we did at that time is we kind of leaned into the rural vacant land and the seller financing and the silver lining of rates going up is when you're the lender you're the bank right we're originating notes uh people were beating us up on interest rates the last three four five years right well all of the sudden when rates go up and you're the one originating notes it means instead of getting 88.9% you're now getting 10.9 or 11.9 on the notes you create right so for us right now it is a really good time for us to originate notes you know with with the current interest rate and lean more in to the rural vacant land because it it's um kind of more sustainable and less volatile the residential infill lots are are very cyclical you know and tied to the interest rates in the building home building industry so for us we don't do one or the other because when you're all in on one you know you could you can be real vulnerable that's kind of the threat so we look at it like having two different products you know in our business and and depending on what the Market's doing we lean more into one you know than than the other um opportunities um I feel like there's a lot of opportunity with uh subdividing you hinted on developing um things like that the the larger projects and that most individuals that are familiar with land or land flipping kind of come in through um through a guru through a $97 course or something right Mo most people are are kind of uh immediately starting out with the very very cheap stuff meaning like auction Lots you know what I'm saying like Michael like 10 $20,000 property so so a lot of people a lot of the activity is at a very low price point the opportunity and this is when we got outside money and we could start going after more expensive stuff we realized these individuals received way less Direct Mail way less calls text letters so we realized there's actually um opportunity at a higher value and the way it was initially presented to us was that this is kind of an inefficient Market at the below 30,000 price point because no agents want no no agents want to take a land listing worth $20,000 there's not enough commission so that's the way it was presented to us and that's the way that worked for us because we had limited means but when we started bringing an outside capital and going after $1 150 $250,000 you know lots um we realized that land was an inefficient Market at at almost every level um we even realized like having um investors in our Network who who do this model with ranches you know I mean meaning like couple million dollar ranches in Texas you might buy for under market value and then subdivide and sell off as Ranch ads so that really opened my eyes to realize that there's opportunity and land is an efficient market you know at not just the the 3,000 price point 30,000 300,000 but up to to the 3 million you know meaning just there's a lot of opportunity if you have enough Capital you know and enough experience to take down and and willing to take the risk to go after bigger deals there's a lot of opportunity in the bigger deals and it's a space that not a lot of people not a lot of investors are playing in so I think that's where our next opportunity is is as we shift is just you know less transactions per year um you know bigger projects more Revenue transaction maybe working with more outside Capital versus using our own capital I think that's where the opportunity is for us Personally Travis how can people connect with you and learn more about what you're doing with the land flips um Travis king.com is probably the easiest uh yeah probably the One-Stop shop from there you can see our different training programs we have um got a lot of respect for what you're doing that with your book put you know whenever you read somebody book you consume it and you think oh that was a good book but you have no idea the work that goes into getting that book launched right I've been working for about two and a half years Michael and finally got um the land investors playbook.com so the land investors Playbook I've been writing for a couple years um and kind of went the conventional route you know this was all before AI emerged and you could write a book in a weekend you know so much like you you know uh did it the hard way the conventional way um so pretty excited about that coming out as well um but Travis king.com is the easiest place to to get familiar with me I'd say well it's fascinating to pick your brain about a new a different strategy become Financial free and uh and I I love it thanks you thanks for for being so transparent with your strategy so really enjoyed chat with you Travis yeah absolutely what I'll tell people is it's not a standalone strategy I have investors that pair this with like Burr you know the bur model single family or like multif family where this model spits off cash but it doesn't have those tax advantages like multif family right and depreciation and stuff like that so it's so sometimes parrying those things right where you've got a a business generating a lot of cash over here and you can push it into this other business over there there's a lot of synergy where a lot of marketers they'll try to kind of pit houses vers land or multif family versus this you know there there's actually um every asset sits on land right so there's a lot of synergy generally when you pair the two love it Travis thanks for being on the show all right appreciate you Michael [Music] thanks

Channel: Financial Freedom with Real Estate - Michael Blank

Views: 147

Keywords: apartment buildings, investing in apartment buildings, buy apartment buildings, syndication, analyzer, deal analyzer, rental analyzer, real estate analyzer, Real Estate (Industry), Commercial Real Estate, financial freedom, financially free, financial freedom with real estate investing, michael blank, contractors, generalcontractors, constructionmanagers, real estate, real estate 101, real estate for beginners, real estate for newbies

Id: VhtfOrsp3Vo

Length: 33min 49sec (2029 seconds)

Published: Thu Dec 07 2023