All Forum Posts by: Douglas Larson

Great idea, but difficult to execute. I have owned 60 or so vacant land parcels and I have only been able to get a zoning change (actually a variance) one time. I have tried it a few times but the reality is that most cities have a master plan and they don't approve changes that are outside that master plan. In the "path of progress" you are likely to get an agricultural parcel changed to residential or perhaps SFR zoning to multi-family, but not residential to commercial, unless that's what the town already wants to see in an area.

That said, I am looking to buy an old house right now in a nearby city on a very busy road. I think the city wants the street to eventually become all commercial so I'm hoping to get an insurance office or small medical building approval one of these years. It can be lucrative, but it takes patience and persistence.

I appreciate the votes and comments on this post. Like most investors, I've got some great success stories . . . . and some . The successful deals are certainly the most fun to share! Still, the question most of us want answered, at any level of investing, is "How can I duplicate that?!?"

Every market and investing niche has it's own trends to watch and timing cycles. There is a real estate market just 3 hours from my area of Salt Lake City, Utah that is in a price-drop free-fall because it is tied to the oil industry. There is another city an hour north of me that recently made a National Top Ten List for projected price increase in 2016. I would use very different strategies to invest in these different markets. The beauty of Bigger Pockets is that with the podcasts, forums, and local meet-ups, every investor can find a strategy that can make some money, when combined with personal interests and abilities!

Have Fun! . . . and make Your Own Luck!

About four years ago I saw a nasty, old house on decent piece of land about 2 miles from my home in Salt Lake County, Utah. Other investors stayed away because it was obviously not going to be a traditional, cash-flowing property without significant expense. They were absolutely right. My strategy though was a long-term hold and to use the large lot for storage. I boarded up the home and fenced off the lot for safety, but made no other improvements to the land.

The strategy and patience paid off last month with a sale to a developer who also purchased a larger, adjoining piece of land.

My cost for the property, including taxes and other holding costs was a total of just under 70K. The sale price was 205K. There were no commissions or other costs, except the usual title and recording fees. My net gain was about 134K.

I wish I could say that this investment was all genius and foresight, but of course there's always a little luck, and perhaps even some divine intervention!

Now, I won't pretend to be any kind of Donald Trump rival.  Consider that the developer is combining my small 1 acre parcel with an adjoining 35 acres, and I estimate that his company will net between 7 and 9 million bucks after a few years' work and the sale of all residential lots in this project. Now, that's a serious paycheck! ... And, this is just one of several projects they are involved in.

Whenever you evaluate a deal (either projecting potential returns or considering the actual outcome after the sale) you should always ask... "Compared to what?"  On closer inspection, the real cash on cash return was about 30% per year. Without including any of the other important advantages of using the land for storage and some tax benefits, a really smart Wall Street investor could have just invested 70K in Apple stock and done about as well over a 4-year period. 

I am not a savvy stock guru and I like investments I can touch, smell and possibly add value to. I like investing in land and SFR's. Residential lots and homes just make sense to me, and thankfully they also pay dividends.

Hi @Bryce Satterly

As mentioned above, the local clubs are great for networking. I especially like the lunches and meet-ups, SLREIA.com, which are more casual and free (except for what you order for lunch!)

If you can define well what you are looking for and trying to do, you will find it! Your construction skills are a plus! even if you don't do the work, it's important to know what to ask for and what to expect to pay. If you are ready to flip something I do know quite a few wholesalers and private lenders. Connect with me and send me a private message or perhaps we'll meet at one of the lunches or meet-ups.

Hope to see you around!

I ran across Marquis a few years ago and their contracts were absolutely laughable. In my quick overview of some paperwork sent to me, it seemed that Marquis essentially reserved the right to sell you a substitute property if the one you agreed on and signed all documents for somehow wasn't available when the actual closing took place.... How does that happen?!?... I'm not surprised they are on the hot seat now!

@Scott Royer

Hi Scott. Welcome to Utah! There are some great networking clubs here and some good lenders. I could recommend two that lend at 2-3 points origination and 12% APR if that works for you. I have heard great things about both companies but I have only used one of them. We've done 4 loans together, from 100k to 350K. It's all about the deal and your experience. Send me a private message and I can give you the info.

@Jeff Fairchild

I'm glad to see my old post getting some new interest. I wanted some of these answers too when I first considered wholesaling. Several podcasts, especially in the first 60 or so episodes, had great info on daily tasks, specific marketing campaigns, how to answer calls, etc. Those interviews got me interested in wholesaling in the first place. However, asking, "How much do wholesalers make?" is like asking, "How much do stock day traders make?' The potential is huge but very few people learn the business, apply the strategies and keep at it long enough to make it work.

I am NOT a traditional wholesaler. I do not have a marketing campaign or weekly mailings or a phone answering funnel. Like @Steve Vaughan said above, it's just another tool in the belt when deals find me that are not my niche. I have been investing in real estate since 1999. (Feel free to listen to my  when you have an hour to kill.) My investing strategy has mostly been SFR rentals, a few fix & flips and lots of land deals. Honestly, the land deals have been the easiest and have made me the most money. It's not for beginners though because it's a buy and hold game and requires lots of cash and patience.

Wholesaling and co-wholesaling are strategies that BEGINNERS CAN DO, but it does require education and hard work. I work with several young investors in the Salt Lake City area of Utah. I always tell them that the less money you have, the more you have to work. It is rarely physical labor but most often it includes driving neighborhoods, looking up ownership records, making uncomfortable calls, etc.

A couple months ago I bought a wholesale deal from a newbie. It was his first real estate deal of any kind and I had to coach him through it with the motivated seller. I wrote him a check for $5,000 the day we closed. He found that motivated seller after posting a few ads on Craigslist over a month's time. He said it was the easiest money he ever made. That said, he is still posting ads and hasn't found another deal since then. It sounds like "luck" more than skill but you always find that the "luckiest" people are often the ones that work the hardest.

Yes @Brent Coombs. 

You nailed it! That's exactly the reason I couldn't see wholesaling as a business strategy in the first place. 

That said, this city is not an area where I want to work, manage subcontractors or be a landlord (higher crime, far from my home, mediocre tenant base). I would have never even looked in this city if I hadn't heard so many BP-ers raving about wholesaling. It was an untapped market and revenue stream for me. In 2015 I was able to complete 4 more wholesale deals and all of them were outside my rehab & rent business model. The net was about 8K per wholesale and it didn't take a marketing campaign or a lot of time. 

Basically, I have 2 agents filtering REO leads on the local MLS and making low-ball offers on the older listings when prices may be more flexible. It is just a side-bar of what I already do, but with an extra 32K or so in my checking account. I plan to do about 8-10 more this year.

Hi @Tanzeela Qureshi

Sounds like you got an interesting deal. Usually if a seller anywhere in the world cannot find a local buyer... it's not a good deal. 

That said, I love land and I have bought parcels all over utah. Box Elder county is large and rural. There are some nice, little towns and some vast areas of worthless dirt and sagebrush. 

Have you located the property on a plat map or county tax parcel viewer? How about on Google Maps? Having the pin-point location and the current zoning, use, utility access, water rights, etc. will help with valuation.

Hi @Dax Gurr

I have purchased a couple dozen properties through Auction.com (and REDC as they used to be called). I rarely find deals anymore but a couple years ago I was the winning bidder on a large home that had an owner/occupant that had not paid a dime of his mortgage in 4 years and had no intention of moving out, even after the foreclosure. Auction.com informed me that Bank of America finally posted a sheriff's eviction notice for a certain date and then offered him $2,000 cash for keys if he was out before the sheriff's date and if he left the home in good condition. He took the deal but only after it appeared that he would thrown out in the snow... literally. He was out just a few days before I closed on the property. I was relieved not to have to deal with it. He did leave a little mess behind and took all the appliances and a few cabinets. Still, it was a good value and it all worked out in the end.

I wish you well on this one and please keep us informed on how it goes!