On the show today we talk… Land Flipping with Pete Reese – 7+ deals a month!
Show Links:
Show notes: Land Flipping with Pete Reese!
Pete Reese got stared in 2012 by buying single family primary, and did ok selling that house, and figured he could repeat that. From there he got into flipping homes until the market crash in 2008. In the meantime he got his real estate license, amen got into that world.
Getting his license was actually a blessing in discise. He was working with banks, and then short sales for some time. And learned a lot.
From there he started working with investors, and bringing them deals.
Just a couple years ago he wanted to get into the investor side of things and stumbled into the land flipping things. So, for the last 2 years he’s been 100% into land.
How did Pete stumble into land flipping
He read something about land flipping, and thought that it took a really long time to sell. And the cashflow isn’t there like it is with flipping homes.
There are a couple companies that talking about land flipping, and he was talking with his wife (who was interested). He bought a training course on land flipping and implementing the model.
It’s all predicated on direct mail and sending mail to property owners and see what comes back.
All of a sudden there is a new surge with land flipping.
Where did RealVest come from?
He was looking for something creative, and it came to him.
What percentage of business in land flipping?
100%. There are some different types of flipping, but all land.
Do you have a niche?
It has evolved over time. They focus on larger properties that are 25 acres or more. 1-2 hours outside of a major population. They use Data Tree by First American.
They send out about 50k letters a month right now. So a lot of letters.
Sometimes you never know what’s going to hit.
How they build their list (round 2)
There are a lot of rural areas where there’s not a lot of transactions happening. They are looking for places that have a good amount of activity.
Are you closing on the properties?
Yep, they close with cash, then list with a local realtor, and maybe do minor things to the property. Polishing it up to make it easier to sell.
What will you not buy?
These are based on mistakes that have happened in the past. But they have never lost money on a deal.
Pete will never buy a landlocked property, or legal access.
There are a lot of properties that have no legal access. It’s crazy!
Do you care about water or electricity?
In most cases, no. Most properties end up needing a well.
If someone is going to build, meaning a mobile or manufactured home (in most cases), they will bring in solar and a well.
Who are the buyers (profile), what’s risky
The riskier are too small to be recreational. You have to do a lot of research.
How much are you buying these for
Goal is to double their money.
Average hold time is about 60 days.
When the owner gets the letter it has an offer amount and info about Pete’s company. Then they call in, and Pete has a team that works the leads.
What is the direct mail response for land
It’s a lot higher than for houses. And because there is an offer amount attached to the mail piece. Which is unique.
A lot of times the owner has never been to the property and inherited it.
Are you finding competition?
Yes, but there are a lot of different ways to run a land flipping business. A lot of people are doing the low number land flipping businesses.
Most wholesalers don’t understand land. And bring overvalued deals.
Take us though a due diligence
They will close as soon as they get clean title and due diligence. Getting the cleared title can take some time.
Now days all of the stuff is on autopilot for Pete.
They always get drone photos of the property, and walk the property to find the corners.
It’s important to get to know the land brokers in the area.
Agents give a desktop analysis but don’t go to properties until it’s about to close.
Are there any checks you’re looking for on title report?
Just weird red flags, like easements, or restrictions. Like “you can’t ride ATV’s here”.
How much is a perked test?
$800
There has been some learning that they haven’t made a lot of money.
Are you using cash?
They are using their own cash, but there are partners in this type of business.
Partnerships happen in different ways.
What are you investing in for cash flow?
There are some things they are looking into to generate cash flow. Most are energy generation, like solar farms.
Nice, the world continues to have these environmental issues.
Ted Turner was buying up properties with natural water running through them. There’s something going on there.
Is a stream a negative?
There are a lot of things to consider. And it depends what the intended use is. If there are setback for a house…
What’s the most you’ve spent on a property
$315k and sold for $595k. It was a rec or timber investment property.
What are you looking for going forward?
Pete keeps a whiteboard and is big on monthly data. He’s trying to hit $4mil this year, and $10mil next year.
He wants to get into more projects that are more long term value add projects.
It seems like there would be big buyers looking for things like that…. Yeah there’s big money in those. And it could be 2-5 years to get something like a solar farm built.
It sounds like an interesting thing to do the intitlement for someone that wants to build something big.
They are trying to switch out the grid by 2035 to 100% renewable.
Are you closing deals every month?
The goal is to hit 10 a month, but are about 7.
Marketing costs
About 50k for $25k.
It’s a letter with a purchase and sale agreement. Very simple.
What are you looking for?
Always looking for money partners.
What is your favorite tool?
Map Right that is specifically made for land business. You can look at properties all over the country from your desk. It’s amazing!
What markets are you in?
Mostly in the South East, but they test mail all over. And on the East Coast.
Where can people get ahold of you?
Checkout TurningProfit.com for the podcast and monthly income reports. Also things that can be learned from.
What is your goal?
More exposure with other investors.
Leave a Reply