Last week, Mark Podolsky, who has completed over 5,000 raw land transactions in his 14-year investment career, taught us how to consistently buy raw land for $0.20 to $0.30 on the dollar. Here’s a recap of his raw land investing advice, which he calls “The Best Passive Income Model”:
- He purchases the lowest hanging fruit, which is land that’s owned by investors who live out-of-state or owe back taxes.
- He sends the owners an offer for $0.20 to $0.30 on the dollar.
- A small percentage of those people accept the offer.
- Once an offer is accepted, Mark conducts due diligence, purchases the property, and quickly resells it at 300% to 1000% return on investment.
Now, Mark is back for part 2 where he explains how to sell the land at a price that is 3 to 10 times higher than what he originally bought it for.
Mark has 5 main methods for finding potential buyers for his raw land investing deals, which are ranked from highest to lowest in terms of the number of overall deals closed:
1. The Neighbor
“We have a built in best buyer, the neighbor,” Mark explained. “The neighbor is going to give us a lot of good information on that property.” There are three typical scenarios when approaching a buyer, Mark said.
- “Number one: they’re going to want to buy the property because [they’ll think] ‘hey, I don’t know who my neighbors going to be, so I want to control it.’”
- “Number two: they’re like ‘hey I don’t want my property either’, and they want to sell it. Now we’ve got a larger asset to sell to somebody outside or to another neighbor.”
- Number three: the neighbor isn’t interested in buying the land or selling theirs.
This is the most effective method for selling during raw land investing deals.
2. Buyer’s List
If the neighbor isn’t interested, the next best option is to go to your buyer’s list. “What I like to do every single day,” said Mark, “is [to] do something to create some value or educate people on the benefits of owning raw land.” Then, he will end the content with a call-to-action. Two example of calls-to-action would be, “If you want to learn more, just opt-in here” or “Get $250 off your first land purchase.”
This opt-in function is how Mark builds his buyer’s list. Then, he said “every week, I send them a promotion on a piece of raw land. Every week, I sell land to my list.”
If Mark has more than one piece of land to sell per week, or if he has exhausted his buyer’s list, he posts raw land investing deals to Craigslist. “Craigslist is the 10th most trafficked website in the US,” he said. “We use a program called Posting Domination. I’m able to automate 124 postings a day, all at the click of a button. It’s unbelievable. So we sell everyday on Craigslist, and we are building our buyer’s list everyday on Craigslist.”
4. Buy/Sell Facebook Groups
If, for whatever reason, you don’t want to use Craigslist, another option is Facebook. Mark said, “right now, people are selling all day long on buy/sell groups on Facebook.” However, these are not the typical raw land investing or real estate buy/sell groups. “They’re going to Craigslist buy/sell groups, recreational vehicles buy/sell groups, hunting buy/sell groups, or fishing buy/sell groups.”
This, like the previous methods of selling raw land investments, can be automated as well. “Using a tool like Buffer, which is free, or Meet Edgar, you can automate your Facebook postings in these buy/sell groups.”
5. The Lands
If the free platforms, like Facebook and Craigslist, don’t pan out, you can go to what Mark refers to as The Lands. “We can go to landfarm.com. We can go to landofamerica.com. WE can go to landflip.com. We can go to landwatch.com. We can go to landhub.com… There’s no shortage of them, and these are people looking for raw land.”
The Secret to Raw Land Investing
According to Mark, he has never been stuck with a piece of raw land. Every time he buys land, he is able to sell it. How has he accomplished this, selling 5,000 pieces of property and never getting stuck with a single one? Because Mark says, “I make it irresistible.”
“Just like a car payment, if it’s a car payment that everyone can afford – a low down [payment], a low monthly [payment] – it’s irresistible.”
Mark continued, saying, “I’m in the pulling business, not the pushing business. I’m not sending people [opportunities] or advertisements to get traffic. I’m going to places where people are already telling themselves a story that it’s very valuable to own raw land, even if they aren’t going to use it one day. It’s just a good asset to have.”
Example Raw Land Deal Structure
The reason why Mark calls his raw land investing strategy the “Best Passive Income Model” is because “it’s a one-time sale. Then you get recurring income without having to deal with a renter, rehabs, renovations, or rodents.”
How does he get recurring income? Let’s say that Mark has a 40-acre parcel in Nevada that he purchased for $25000 and is selling it to you for $25,000. You likely won’t have $25,000 in cash lying around. Therefore, at that point, here is a simplified example of a conversation that will occur:
Mark – “Hey, why don’t we do owner financing on a land contract.”
You – “Great. Let’s do it.”
Mark – “How much do you want to put down?”
You – “Well, I’ll put 10% down.”
At a 10% down payment, Mark will get his original $2500 back at closing. Then, you’re going to make payments to Mark over the duration of the loan, which is the passive income aspect of the vacant land investing strategy. He gets monthly income without having to maintain or protect the property, because, after all, it’s just a piece of dirt.
Mark’s investment strategy is to purchase raw land at $0.20 to $0.30 on the dollar and quickly resell it at 300% to 1000% profit.
Mark’s top 5 sources of buyers are:
- The neighbor
- His buyer’s list
- The Lands
Mark has never been stuck with a piece of raw land because he always makes the deal irresistible. When selling the land, the typical deal structure is seller financing. Mark gets an initial down payment, which will usually cover his current out-of-pocket costs. Then, he gets monthly passive income in the form of a payment based on the seller financing terms.
How to profit from buying land? Raw land investing can be hugely profitable, with few risks to you. If you have any questions or feedback about Mark’s model, please post them in a comment below.
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Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.