ONE-ON- ONE
VACANT LAND
types of properties that meet your criteria and then contact all owners of those pieces of land. You can even get lists of properties where taxes are owed and find them that way. Once you find them, you send them a simple letter offering to buy their land. Since no one markets to these people, your letter is going to be very exciting and likely get a response from the landowner. Once you get that response, you do a bit of due diligence on the property and then you make a (very low) offer. TRM Do people get offended by these offers? JB Sometimes they do, but usually not at all. We find that a lot of owners resent having to pay property taxes on their vacant land and are willing to take next to nothing for that property just to stop paying taxes. JB List the property online in most cases, unless the neighbor wants it! You can sell them outright or you can do what I prefer to do, which is sell the land using seller financing. Because you got the property so cheaply, usually the down payment will often more than cover the cost of acquisition. Then you establish a loan on the property that gets paid off in the next five or 10 years and you not only have a profit up front, but you have a mortgage note that will generate ongoing income for you or that you can sell to someone else and make money in the middle. I personally do not sell my notes because I love the cashflow they generate, but a lot of investors are interested in owning them for that cashflow so you certainly can sell them if you want to. • TRM What do you do with the land after you buy it?
TheArt of Making Something Out of Nothing DONE RIGHT, INVESTING IN VACANT LAND CAN YIELD HUGE RETURNS.
about real estate or negotiating or repairs or anything because you will probably be able to resell that land for a profit very quickly. I know this firsthand because before I started buying vacant land, I tried several other things including wholesaling. Even with wholesaling, which is a pretty simple process, you need to have an idea of what the after-repairs value (ARV) will be to know if you are getting a good deal – and I didn’t – so that did not go very well. The next thing I did was find a great piece of land that was worth about $8,000. I got it for $400, turned around and put a sign on the property, and the next thing I knew the neighbor had bought the property on the spot for $4,000. He paid half price, and I made $3,600. Since then, I have done nearly 4,000 deals ranging from four to seven figures. TRM That sounds like an amazing deal. Is it hard to find to find vacant properties? JB Actually, it’s very easy to locate them. I often use Google maps, Google
views, and other tools like that to look at potential properties. Even better, you don’t have to wait for someone to give you a showing because there is no inside of the property that you need to access. Before I evaluate them, though, I have to find them, and that process is very simple as well: Just as with houses, there are vacant landowners out there who do not want their properties anymore. Sometimes, the original owner has passed away and left the land to a kid who doesn’t really want it. Sometimes the reason that a person bought the land originally, such as for a retirement home or to go hunting or camping, no longer applies. Maybe they no longer want to live there, do not want to spend the money and time to devel- op the property, or cannot get outdoors much anymore. Their life plans have changed. Whatever the reason, they have a piece of undeveloped property and they would be happy to get rid of it and not have to pay property taxes on it anymore. You find these landowners in a variety of ways. You can get lists from various sources, or look for specific
by Carole VanSickle Ellis
R
bunch of student debt. I definitely did not know much about investing in U.S. real estate. By focusing on vacant land, I avoided pitfalls like paying too much for contractors, underestimating how much my repairs would cost me, and just the whole process of fixing-and-flipping or even wholesaling. The key to my success in that was twofold: First, I eliminated a lot of the things that potentially hurt new inves- tors, and second, by focusing on vacant land I was able to develop a method to buy land dirt cheap. That is important, because if you are buying property valued at five to 25 cents on the dollar, then you do not have to know much
Magazine to explain the details of in- vesting in vacant land.
ecently, a Miami-area housing advocate wrote an op-ed piece
for the Miami Herald suggesting that developing vacant land in southern Florida might be a good solution to that area’s issues with unaffordable housing. The idea was a good one, but not, as the author seemed to believe, a particularly new concept. Jack Bosch, managing director at Orbit Investments, LLC, a real estate investment company based in Scottsdale specializing in land invest- ment and syndicated acquisitions, has been buying vacant land and selling it for many purposes, including develop- ment, for the past 17 years. Bosch sat down with Think Realty
Why do you
THINK REALTY MAGAZINE
like vacant land so much?
JACK BOSCH Vacant land offers some big advantages. For starters, you do not have what a lot of real estate investors call “the three T’s,” tenants, toilets, or termites. There is also no trash, because there’s nothing on the land! Perhaps best, investing in vacant land is easy. When I got started in real estate in 2000, I had recently arrived in the United States from Germany and I was carrying around two suitcases and a
Jack Bosch is an expert in investing in vacant and unimproved land and tax de- linquent properties. He may be reached at www.jackbosch.com.
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