What does flipping land vs. flipping houses compare? With more investors buying land, scraping properties, and entering into new construction, we thought it might be of value to discuss just what flipping land vs. flipping houses compare
We talk with Jonathan Haveles on the pros, cons, and comparisons of flipping land vs. flipping houses all while looking at case studies what land deals look like in real-world scenarios.
This is a free event for members & first-time guests. Subsequent meetings are $25 per individual.
- Land: Requires less than $1,000 to become a property-owning investor. Double or triple cash balance from there.
- Houses: In nearly all cases, it requires a lender or partner to begin.
Property Visit Required?
- Land: No. Land flipping is very scalable. We never look at the property we purchase, which means we operate in many states. I haven’t left my desk since 2008.
- Houses: Yes. House flipping is usually confined to a single geographic area where houses need to be “walked through.” At best you can set up another shop in another area.
- Land: Buy for cash (usually less than $1,500.00) and sell for cash. Just the buyer and the seller. It is all managed through the internet. Land deals are easy to close.
- Houses: Buy with financing and sell for cash. Both sides require an agent, a lender, an appraiser, an escrow agent, an inspector (at least five parties) and the buyer and seller. Each party gets a piece of the profit. Selling a house requires a lot of people and time which can kill the deal.
- Land: We never buy land unless we know we can double or triple our money within days of the acquisition. 100% to 200% margins quickly are the norm. Land deals are better, faster, and cheaper than flipping houses. However, you do need to do a lot of them to bring in a substantial living.
- Houses: The best wholesale house flipper regularly makes 20%. Buy for $100K and sell for $120K or so.
Income Stream Potential
- Land: Buy for cash and sell on terms to collect monthly payments for years.
- Houses: Buy for cash or with a lender, rent or sell on terms for years or forever.
Asset / Inventory Management / Carrying Cost
- Land: Requires no management except for paying the annual taxes (it’s usually worth the same amount if it burns to the ground).
- Houses: Require constant maintenance and expense. We could fill pages with how much it costs to own a house.
Liquidation / Ease of Sale
- Land: With the advent of the internet, making rural property available takes just minutes. If it’s priced right and posted on the right websites (Landwatch, Land and Farm, Zillow, Trulia. eBay etc.) it sells within days.
- Houses: If a house is purchased property, it sells within days (same as land). It takes a month or two to complete the deal (see Deal Structure above).
Land flipping is a great place to begin or enhance a real estate career. House flipping can be very profitable but the barriers to entry are much higher and more complicated.
Jonathan started in real estate in 2003 by getting his license and then opened a brokerage in 2007. Around this same time, he realized that investors were some of his biggest clients. He started investing in short sale flips, rehabs and wholesaling at that time. He also received extensive commercial real estate training around this time.
He has done over 500 land deals in this time and for the past couple of years, has helped in educating those who either find houses too difficult to do, or are sick and tired of the competition in the house area and how to make the same or larger checks from simple land and lot flips without any of the hassles and complexities that come with houses. He has also implemented strategies to make land cash flow massively and consistently
Great education and speakers, networking with other investors (this is a team sport everyone!), and delicious catering! This is a free event for members & first-time guests. Subsequent meetings are $25 per individual. Come early (5:45 pm) to get a jump start on networking and tasty food, then join us for ICOR After Hours in a casual networking environment.
5:45pm - Registration opens
6:30pm - Sharing Success / Haves & Wants
7:00pm - Main Meeting
8:30pm - End of Main Meeting
8:31pm - Join us for ICOR After Hours following the main meeting - the best place to find a deal!
All the best and see you there!