389: Profiting from Raw Land Investing

SHOW NOTES FOR EPISODE 389: PROFITING FROM RAW LAND INVESTING

Learn how two immigrants with no credit, savings or experience built a happenstance land flipping business into a real estate empire.  In today’s episode, entrepreneur, podcast host and real estate investor Michelle Bosch shares how she leveraged a land flipping business into 8 different enterprises generating eight figure revenue.

What You Will Learn

• Why investing in raw land is better than investing in rental properties
• How Michelle’s father’s real estate investments benefited and impacted her life
• What you can do to generate cash flow as a real estate investor when you have no credit, no savings and no experience
• Step-by-step instructions on how you can start investing in land today
• What is the benefit of finding a real estate niche with very little competition?
• How land flipping differs from house flipping
• What Michelle and husband did to more than 10X their land flipping business
• How they created 5 more businesses out of one

About Our Guest

Michelle Bosch

Michelle Bosch is the Co-Founder of Orbit Investments and a full-time real estate investor since 2002.  She has bought and sold over 4000 pieces of real estate and built the 3^rd largest land investment and auction company in the US, bringing that company successfully into the 8-figure revenues in a matter of 18 months.  Through the recession she positioned Orbit Investments for rapid growth in the Single Family and Multifamily investing space with over $40 million in assets under management.  She is also the creator of the nationally recognized Land Profit Generator Program focusing on teaching others how to invest in Land and has created over 145,000 followers via the Forevercash Podcast/Radio Show, LandProfitGenerator.com, UltimateBoardroom.com and social media channels.  Her businesses have been featured on: INC., FOX, NBC, ABC and Forbes and she holds an MBA -Business Finance- from Thunderbird Global School of international Management.

More About Michelle

• She works along side her husband Jack
• They have complimentary skills and strengths
• They both are immigrants
  • He is from Germany (he came to the US in 1997)
  • She is from Honduras (she can to US in 1995)
• They started with almost nothing – just hearts full of dreams
• Honduras is a tiny country in Central America
• Michelle was raised by a mother who believed in her
• Michelle’s father passed away when she was very young
• Her father was a successful lawyer and invested in rental properties that provided passive cash flow income for his family even after he was gone
• She was raised by her mother, a school teacher and single parent
• Her mother provided Michelle the best education she could afford
  • Michelle was able to attend a private school, where she also learned English
  • She came to the U.S. on a student Visa in 1995 to get her Bachelor’s Degree in Finance
    • When she graduated, she was able to stay another year working in the Finance area
    • She met her husband when she was in college
    • They both were able to find companies to sponsor their work visas
  • She was able to get a great education and find a job
  • Although they were grateful for the opportunities, they both did not like their jobs
    • They both traveled a lot for their jobs and didn’t see each other very much
    • They also both wanted to visit their families but their combined salaries didn’t allow for them to visit both countries in one year
    • They both knew they wanted more
    • They lived paycheck-to-paycheck and only had $3,500 in savings
• Michelle and her husband started looking at other business opportunities
  • They wanted something simple that would produce passive cash flow
  • Michelle knew from experience that real estate could do that

The Move into Real Estate

• They knew they both wanted to get started in real estate but didn’t have any credit
• They also didn’t have much in savings
• They didn’t know how to estimate construction, repairs, etc.
• Everything looked very complex
• They were living in Phoenix at the time
• They found a “junker” house and put it under wholesale contract
  • It had a lot of problems:
    • foundation issues
    • roofing issues
  • Advertised the house in the local newspapers but had no interest
  • They thought they had to get out of the contract as soon as possible
  • They didn’t know what to do with it

Finding a Niche

• Somehow they stumbled on concept that exists in the U.S. but not in either of their countries – that’s tax liens and tax deeds
  • She attended an auction in Northern California (Sonoma County)
  • She could believe how very competitive it was
  • At the auction, she also noticed that there was a lot of vacant land for auction
    • She tried to bid on a piece of vacant land but the price went higher that her budget
      • Michelle happened to meet the owner of the property who was loosing her land
      • And even though Michelle didn’t win the land for auction, the owner said she had another piece of land that she might want to buy
        • Michelle got an option on the land
        • She was able to find a buyer
        • Michelle bought the land for $75,000 and sold it to the buyer for $100,000 – making $25,000 on the deal!
        • She felt that she was just at the right place at the right time and didn’t think she could replicate that again
        • She thought, however, that if they could get to people BEFORE it went to auction maybe they could make a business out of it

Becoming Raw Land Barons

• They started with delinquent land lists in the county
• Started sending people on the list direct mail letters
• After about 5-7 years they had perfected the process
  • For every 750 letters sent
    • They got 10-15 responses
      • Then got 1-3 deals
• A typical flip was around $5,000 and $15,000
• On rare occasions they could get $50-100K
• They do pretty much everything via mail, follow-up phone calls or email
  • She considers herself an introvert so she prefers that (she doesn’t like cold calling)
  • They respond to mailers via email or phone
  • She researches the land online
  • She sends an offer/contract by mail
  • When contract is signed, she sends to a Title Company
  • Her husband Jack finds a buyer (he’s the extrovert)
  • They help relieve the owner of the burden and solve their problem rather quickly
  • They also get the land at a discount which gives the the cash flow they are seeking
  • They can handle the land in one of two ways:
    • Flip for cash – $10-20K average – on 60% of market
• Over time, they have improved in their sophistication as investors and mastered the raw land game
• They now focus more on the middle of the U.S. and South East

Problem Scaling

• They were generating a lot of leads
• They could no longer handle the responses and processing/administration
• They were talking to both buyers and sellers
• They hired a few people who worked in their living room
• They were stuck at selling 150 parcels a year
• They wanted to sell 1,000 parcels a year
• There was a company in L.A that was auctioning houses
  • They went to the Phoenix Convention Center, where they were hosting an auction, to see what they did and moved tons of properties
  • After seeing it, they thought, “If they can do this with houses, why can’t we can do it with land?”
• They built up an inventory of 150 parcels in about 4-5 months and held their own auction
• They went from selling 150 parcels a year to 150 in a day!
• They worked they continued doing their own auctions once a quarter where they sold 200 parcels each quarter and they did it for several years
• However, in their last auction 2007, it started getting more expensive for them  to do the auctions to market to get people into the auctions
• It was costing much more to manually market and create the excitement and energy that was required for each auction
• They became students of online marketing and sales to see if it was more cost effective to market more online instead of manually mailing and marketing to get people to the physical auctions
• Today, everything they do is online  – no more physical auctions.  They have a beautiful website with beautiful listings to present properties to buyers
• They still do direct mail to acquire the properties but to SELL the properties, they now do that part online, through their website
• Her direct mail pieces are very effective.  Doesn’t look like junk mail.  Uses personalized, expensive “linen” paper letters that look very professional that generate personal calls back to real people who respond to their inquiries.

Broadening Their Real Estate Business Scope

• They still continue to flip land
  • They know this to a science!
  • The model still works
  • Some markets are getting tougher but most still work fine
• Becoming the Bank
  • They have also been successful at generating $12 million in notes and $70,000 in passive cash flow
  • Which allows them to create “forever cash” through rental properties
• Started buying SFR (rental properties (in 2009) – have built a sizable portfolio
  • They wanted to turbo charge their cash flow, so they went to the next level – multifamily
• Buying multifamily
  • They have expanded their rental property into multifamily
  • They currently own 360 units in larger apartment buildings in three different markets
  • They syndicate
  • They have property managers that run the apartments for them
    • Check-in weekly
    • Are optimizing their apartments
• Educating Others
  • They teach others how to do what they do

Their Current Life

• They live in Phoenix and are now both U.S. citizens
• Have a 12 year old daughter
• Family is first priority
• They travel a lot together – 60-90 days out of each year
• They have been doing their business successfully for over 20 years

Living the “Four Freedoms”

• Michelle said that most people are just seeking the “Four Freedoms” for their life
• She and her husband are now able to enjoy those Four Freedoms
  • Freedom of Time – Able to spend your time how and when you want
  • Freedom of Money – Never having to worry about having enough money to do the things you love
  • Freedom of Relationships – To work only with people you want to be around and share the same values
  • Freedom of Purpose – To share your wealth and freedom with others.  To help others achieve their dreams

Biggest Mistake(s)

• In order for her company to grow and scale, they had to develop a unique process
• If you skip and part of the process it won’t work
• Getting sloppy with Due Diligence
  • Michelle is in charge of acquisitions.  After a little while, she got a little arrogant and started skipping steps in the process
  • For example, when contracts came in, she got a little lazy in regards to due diligence
  • She wasn’t as thorough as she should have been and, in one case, she bought one-acre lots that were unbuildable because there had been a change in zoning and, to be buildable, required a two-acre minimum zied lot to be buildable
  • Luckily, the lots were adjoining and she was able to pair up the lots to get the lots to be buildable but they did not make as much per acre as she had initially hoped
  • It really humbled her because she wasn’t even following her own systems that were designed to avoid problems like this
• Straying from the Four Pillars of Success – Missing “the Who”
  • The Why – Why are you doing what you are doing?
  • The Who – Who are you doing this for?  Who is coming along on your team? Who is your team? Who are you there to serve?
  • The What – What is the vehicle for you to accomplish your goals?  The land was the “what”
  • The How – Your systems to accomplish your goals
  • She knew each step but was missing it regarding “the who” part – especially when it came to her employees — “the team”
    • She wasn’t really developing a team that was aligned in terms of “core values”
      • A team that shared he values
      • And was aligned in their mission and vision
    • For too long, she was hiring people but not focusing more on her employees training
      • Building them up in terms of:
        • confidence
        • mindset
        • skill set
        • capabilities
      • She didn’t see how it affected their customers’ vision of the company
    • As a result, she had a lot of headaches, wasted a lot of money and time with teams that just did not fit their mission and vision
    • A business is made out of people – the “who” is most important

Biggest Success

• Restructuring and reemphasizing in her business the importance of “The Who”

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

• Find a way to simply create “passive cash flow”
• Real estate is the perfect vehicle to create massive cash flow
• Find a model that is…
  • simple
  • has little competition
  • that you can wrap your mind and skill sets around
  • that really aligns with who you are and where you’re at
  • and still produce the results that you need to achieve your goals
• Michelle sees land as that perfect vehicle
  • In their “Land Profit Generator Community,” she saw an “old dawg” couple (in their 50s), who had been flipping land for only 18 months, be able to quit their jobs and retire early
  • You don’t need the “high tech” to make it work

Rap-It-Up

• Favorite real estate book: Rich Dad Poor Dad by Robert Kiyosaki
• Favorite business book: The Pumpkin Plan by Michael Michalowicz
• Most valuable web site for success (other than your own):  The Art of Living
• Favorite app: My Fitness Pal
• Favorite quote(s):
  • The man in the arena – “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” – Franklin D. Roosevelt
  • “If you’re always trying to be normal, you will never know how amazing you can be.” – Maya Angelou
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? – I would go back to land. Specifically, I would go to a county I know here in Northern Arizona where I can turn $1,000 into $20-30,000. And do this with direct mail only.

How to Reach Michelle

• Websites: LandProfitGenerator.com and ForeverCash.com
• Her free Facebook Community: Land Profit Generator Real Estate Investing Group (8,500 land flippers in the group)
• Her personal Facebook: Michelle Bosch
• Instagram: Michelle Bosch Official
• Her podcasts:
  • InFlow (targeted to women)
  • ForeverCash (co-hosted with her husband Jack)

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Apple Podcast, Stitcher, GooglePlay, iHeartRADIO, SoundCloud and Spotify and Subscribe, Rate & Review our podcast.  This will greatly help in sharing this podcast with others seeking to learn real estate investing as aCBRE means to achieve a successful retirement.

Check out our other podcasts at olddawgsreinetwork.com.

Get a FREE copy of our 3-Minute Rental Property Analyzer at olddawgsreinetwork.com.

Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com