519: Raw Land Investing

SHOW NOTES FOR EPISODE 519: RAW LAND INVESTING

If you want to be a real estate investor and generate monthly cash flow but don’t want to deal with tenants, toilets and trash, raw land investing might be just the solution!  In today’s podcast, veteran, real estate investor, coach and raw land investing expert Brent Bowers shares how he went from a struggling Army officer to land baron, all with raw land.

What You Will Learn

• Step-by-step details on how to start investing in land TODAY!
• How you can manage a robust raw land investing business while working full-time
• 5 reasons why a land business is a great asset class
• Why land flipping and rental properties together make for a great real estate investing and tax strategy
• How to create massive passive monthly income through land flipping
• What you need to know about successfully dealing with land buyers and sellers
• How to find great land deals in your own backyard for pennies on the dollar

About Our Guest

Brent Bowers

Brent Bowers is an investor and coach with a focus on buying and selling vacant land. As an Army Officer with over 8 years of service, Brent was spending a great deal of time away from his family.  He knew he needed to make some serious changes in order to be more present with his wife and children. Brent began investing in real estate as a way to support his family, while having more time to spend with them.  In a short period of time, Brent was able to expand his business, hire a team, and (most importantly) spend quality time with his family while still working hard and helping others. Brent now helps other investors learn the ins and outs of buying land.

More About Brent

• He grew up in Okeechobee, Florida
  • Known for its feeder calves industry
• He got his real estate license in 2007
• He moved to the coast to continue to be a Realtor
• But when the Great Recession hit in 2009, he knew he had to do something else to make money – being a Realtor wasn’t working
• He enlisted in the military
  • The Army helped pay for school
  • He was oversees for a number of years
  • Had a couple of deployments
  • But it was difficult on his family
  • He was always away
• In 2013, he came back from overseas deployment
• He hit the ground running and was all in for real estate investing

Becoming a Real Estate Investor

• He bought his first house in Melbourne, FL that became his first rental property
  • It was near the Florida Institute of Technology
  • Had to borrow $1,000 from his great grandmother just to put in his earnest money deposit
  • He was able to pay her back pretty quickly as he was the buyer’s agent on the deal and got a commission check
  • The property went up in value pretty quickly
  • He got tenants in it and started receiving rent
  • He re-financed it
  • Pulled $60K out of it to invest in another property
• He bought another house
  • Fixed it up
  • Put renters in it
  • Got a line of credit on this house
• In 2015, he bought a triplex in Colorado Springs, Colorado
• He started buying houses all over the country
• He had amassed a lot of debt
  • He had mortgage loans
  • Lines of credit
  • His credit cards were maxed out
  • His Home Depot card was maxed out
• He started thinking, there’s got to be a better way to invest in real estate
• He knew, with wholesaling, that it didn’t require any credit, so he started wholesaling
  • He paid a coach to teach him how build an automated system to wholesale houses
  • He wholesaled a few houses
  • It was going OK
  • But he was spending a lot of money on direct mail
  • He also was still in the military and was a full-time officer
    • He had a lot of responsibilities
    • He would get on base at 6am for physical training
    • He wouldn’t leave sometimes until 7 pm
    • It didn’t give him much time to talk with sellers and buyers
    • He built an outside team to work his business but it was still a challenge
    • He still needed a better way
  • He heard a guy on a podcast talking about how he was buying land at massive discounts at tax auctions
    • This sounded good but he knew he didn’t have time to go to tax auctions with his job and family
    • He did, however, acquire a list of 687 records of people on (what he thought was ) a tax delinquent list.  It was actually the county-held tax delinquent list.  The properties, for example, would have a condemned house on it or other problem.
      • He decided to mail out letters to all 687
      • He received 85 phone calls back
        • He only had enough time to return 20 calls
          • Out of the 20, he did two deals that netted him over $4,500 each or $9,000 total
          • He was hooked!
  • Once he was able to replace his military income with land transaction income (in 2018), he put in a packet to release him from the military
  • He was making between $20-50K a month cash flow from land note payments
  • That’s why he still held on to his rental properties — for the tax write-offs
  • He still buys other real estate (rental properties, commercial properties, and apartments) to be able to leverage those properties to write-off the income from land flipping
  • He also still flips a house every two months or so (He has two active crews)
  • He has four main businesses:
    • Rental properties
    • House Flipping
    • Raw Land Business
    • Coaching/Education

His Land Business

• He buys land at massive discounts
• He sells it to people at a premium because he allows buyers to make monthly payments, which creates steady cash flow for him
• He has FIVE  REASONS why he loves buying and selling land
  • It gives him financial freedom
  • It gives him time freedom
  • It creates regular monthly income (from payments) for the next 5 to 30 years – that multiply and compound
  • No calls on tenants, toilets or trash
  • If the buyers stop paying, he still gets the land back
• Because he has systems, automation and a great team (that he calls his “family), it doesn’t take that much of his time
  • His team and he have the same vision and as their income grows, so does his

Why Land is His Favorite Real Estate Investing Asset Class

• It’s for the average person or “the small guy”
• He started flipping land in 2016 when he was broke, just bought a new house, his wife was having another baby
• He was living paycheck-to-paycheck
• Land allowed him to get in that asset class for very little out-of-pocket money
• And when he invested, he got his money back, and then some, rather quickly
• Compare it to rental properties
  • Buying his rental house in Colorado Springs costs $300,000-400,000
  • His first land deal cost him $285 and he flipped it quickly for $5,000

Land Investing Tips

• By accident, he discovered a list that he calls “pure gold”
  • He thought he had purchased land that was just delinquent in paying it’s property tax, but it wasn’t
  • It’s what’s called the “county-held tax delinquent list”
    • It’s basically land and houses where the owner doesn’t pay their taxes
    • But it is such an inefficient property or non-buildable or non-accessible
    • It may be a condemned house where not even a tax lien investor would be willing to pay the back taxes and get a return on their moneySo, the county gets stuck with these properties
    • He still does deals with the regular tax delinquent lists
  • The property he bought for $285 was simply not buildable
    • He ended up selling it to a Realtor who was speculating (it’s still unbuildable) but it overlooks the Pike National Forest
• He recommends investing in your own backyard if you can (he defines “backyard” as up to a 2-hour drive from where you live)
  • His students that are crushin’ it right now are the ones starting in their own backyard
  • He first started within 30 minutes to 1.5 hour drive from where he lived
  • And then expanded to places like Arizona, Florida and Colorado
  • He’s trying to get into California, too, but hasn’t been successful

How to Make Money Flipping Raw Land

• Steps to Success:
  1. Pick Your Playground
     • What county do you want to invest in?
     • There are over 3,100 counties in the U.S.
     • Find something within a 2 hour driving radius of your home
       • This gives you confidence
       • You can go and look at the land
       • You can take pictures or videos
       • You can post a “For Sale” sign
       • You can meet the buyer there and collect the cash
  2. Find the Landowners
     • Get a good list
       • Prycd.com/TheLandSharks
         • You can try it FREE for 7 days!
         • You will be able to see the projected market value of a property
           1. They’ll show you the comps they are pulling
         • They allow you to price it (i.e. if you want to offer $.05 or $.10 to the dollar)
         • You can mail to owners TODAY!
     • Mail to the list yourself or use a mail house
       • He recommends hiring a mail house to take the work off of your plate
         • He uses a company called 3-D Mail
  3. Send Landowners a Letter
     • LandOfferLetter.com
       • Terra (a girl there) can actually mail out your letter in a few days
  4. Talk to the People Who Respond to Your Letter
     • 99% of the people you mail to will not need your services
     • But that 1% will be motivated and ready to do a deal
       • Talk with them
       • They will want to get this burden off of their shoulders
         • They may have inherited the land
         • Bought the land years ago to build a cabin but never did but have been paying taxes all these years
     • Once you find the motivated person
       • Run the due diligence
       • Run some title work on it
  5. Find a Buyer
     • Put signs on the property
     • Run an ad on CraigsList.com, Facebook Marketplace
     • Find a buyer BEFORE you buy the land
       • That way, you can make sure you don’t get stuck with a piece of land

Dealing With Land Buyers

• He doesn’t believe in building a “buyers list” by running “ghost ads”
• He likes to have an actual piece of land first – before contact
  • He either has it under contract to buy the land
  • Or he already owns the land
• Brent has two goals when someone reaches out to buy a piece of land
  1. Sell the potential buyer the land
  2. Get their “digits”
     • Their email
     • Their phone number
     • Tell them, “I answered all of your questions.   I come across parcels of land all the time.  Would you be interested in me reaching out when I have other land parcels that might be of interest?”
       • Then, before you know it, you have a buyers’ list
         • You have a person who is:
           • Waiting for that 5 acre piece of land in Apache, Arizona
           • Or that piece of land in the mountains that has a stream flowing through it so I can can you go up there and fish

Dealing With Land Sellers

• You’ll also come across people who have been buying land for 50 years who are now selling land AND they have lots and lots of other land parcels they want to sell as well
• He also has a friend who used to be in the land business and is slowly getting out of it and, every time one of his buyers defaults, he sells Brent the land at sometimes less than what he paid for it
• You can develop “Sellers Lists” as well

How Often You Should Mail

• Brent always tries to keep his pipelines full
• He recommends that you NEVER stop mailing
  • He equates it to those old hand water pumps – you have to keep pumping and pumping to get the water out but you also need to keep pumping to keep the water flowing.  You can slow down but you should, at least, always pump enough to make sure there is water coming out
  • He personally send out 300 offer letters a week (he calls them his LOLs – land offer letters)
    • Every time they go out and come back signed (at usually less than $.50 on the dollar), for this amazing piece of land, he laughs out loud. And sometimes the sellers laugh out loud because they’re thinkin, “You’re crazy! Why would you send me such a low-ball offer?”

Buyer Financing vs. Full Cash Purchases

• 95% of his buyers want to finance their land purchases
• Once every 3 or 4 weeks, someone will just want to pay cash
• In his LOLs, he emphasizes the down payment and monthly financing amount
  • You don’t want to confuse people
  • Henry Ford said about the Model T, “You can have any color you like, as long as you like black.”
  • Brent says in his letters (for example), “The price is $40,000.  That’s $5,000 down and $500 per month at 6% interest.”
• He prefers people to pay by payments which generates monthly cash flow for him
• And because he believes in 100% passive income, he uses a “Note Tracking System” called EasyNoteTracking.com
  • It does everything
    • Charges late fees
    • Sets up ACH to pull the payment from buyer’s account monthly
    • Tells Brent when the buyer pays the loan off to transfer the deed
    • Interfaces with QuickBooks
    • Payments go directly into his bank account

 Finding a Good Land Market

• In Colorado Springs, for example, they have:
  • Amazon is building the largest distribution plant they have ever built
  • Google is possibly coming
  • Space Force is possibly coming
  • He likes to see a market like that
  • And he will look at properties located 30 minutes to 2 hours drive away
    • He wants to be on the edge, where it will take a while before anything is going on
    • Where land owners are still willing to make deals with him
• He also looks for volume, too
  • Where there’s lots of land buying and selling going on
• And demand
  • He doesn’t want to see on Zillow where there’s 50 listings where there have been no sales in the last 6 months
  • You can also check Prycd.com or Redfin
• He looks at the whole county
  • He looks at what sold and what’s available
  • And what people are paying for land

How Much Does it Cost to Get Started?

• He has two answers
  • When he first got started, the $285 dollars was a lot of money to him
    • The fact that he had to come up with that for his first deal scared him
    • So he had to get a buyer set up first, before he did the transaction
    • Once he found a buyer, he went through with the transaction
  • When he saw that it worked, he spent about $400-500 a month on mail
  • Today, he spends about $1,200 a month that generates a steady stream of leads to convert to sales
    • You could do it yourself and just pay postage for 300 letters a week ($150/week)
      • But it’s very time-consuming
      • He and his wife did that in the beginning

Biggest Mistake

• Waiting! Not taking action!
• Analysis paralysis
  • People get caught up in all the research and never end up doing any real transactions
    • They run tons of numbers from 15 different counties for 6 months or longer
  • He can go into a county tomorrow and know if it works in 3 weeks
    • Sure, he may spend a little on mailing and lists but he will know if it works pretty quick

Biggest Success

• Sending out the 687 postcards out in the very beginning without even thinking about
• He heard a guy on a podcast that inspired him
• He sent the postcards out (Today, he prefers his LOLs over a postcard and pays a service like Prycd or hire a virtual assistant $5-10 per hour to set up the LOLs so you get less calls but more QUALIFIED leads.  However, if he gets a good response on the LOLs, he may follow-up with a postcard)
• He got multiple deals from that one action
• He even bought a piece of land from a bank – he did an assignment and made $14,000

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

• He’s done over 250 land deals, holds over 100 notes but he’s also holding about 200 parcels of land
• This is part of the land business that nobody talks about
  • When you make something that is an “easy come” proposition it’s also an “easy go”
  • It’s easy because, when people buy the land, there is no credit check, no background check, no job required – they just come in with a down payment – they may make payments for 6 months, 12 months or 3 years, but, one day, life happens and that piece of land that is on the “someday/maybe list to build a cabin” takes less priority than kids’ college, job changes, unexpected medical bills or something else, they’ll just let the land go and you, as the seller, will have to take it on and try to re-sell it.
    • Sometimes he’ll try to modify the loan or give them a credit if they come back to buy another parcel of land
    • He tries to work with people but is not too worried because they have value way beyond what he paid
    • One day, if he doesn’t sell the land, he’s sure that the land may very well be passed down to his children and children’s children

Current Business

• His long term personal goal is $100K per month in passive income
• Then, he wants to do more philanthropic things, give more back to the community
• If he achieves that goals, it will also benefit his team as well
• He also wants to see multiple success stories from his students in The Land Sharks Course
  • He wants to see other people being able to achieve their dreams
• He wants to continue coaching and showing others how they can do this too
• There’s much more land than there are houses!

Rap-It-Up

• Favorite real estate book: The Wealthy Gardner by John Soforick
• Favorite business book: Who Not How by Dan Sullivan
• Most valuable web site for success (other than your own): EasyNoteTracking.com
• Favorite app: The Insight Timer
• Favorite quote: How you do anything is how you do everything – Steve Jobs
• If you lost everything – all your assets – and had to start all over, knowing what you already know, and you only had $1,000, what would you do to re-launch your real estate investing business?  I would buy a Boost phone and go to the County Assessor’s office and start calling all the land owners and see if they would sell me there land today at a massive discount, get in under contract and find someone who would be willing to pay a little more for that contract than what I have it under contract for and I’d have $900 left!

How to Reach Brent

• Instagram: BrentLBowers (click follow and send him a message)
• Website: TheLandSharks.com

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