PODCAST

Buying And Selling Land Remotely With Justin Sliva

Episode 482: Buying And Selling Land Remotely With Justin Sliva

View this episode on:

itunes
stitcher
google_play

REIS 482 | Buying And Selling Land

 

Real estate investors have many strategies in buying and selling land, some of them more popular than others. One not-so-popular way is buying land remotely, which takes a lot of work to pull off. In today’s episode, Mitch Stephen discusses land buying strategies with real estate investor Justin Sliva. Justin talks about getting his start in the real estate game and his strategies and tricks in buying land remotely. We also get his insights on how real estate investing has changed his life for the better.

Watch the episode here:

 

I have Justin Sliva on the show. He’s doing some things that I know are near and dear to my heart because I love his strategy and method. I like the results. I could say the whole world is not into it. You can still get out there without having to fight tooth and nail. We are doing our best to make sure that everybody knows about it, gets out there and takes advantage of the strategy. Buying and selling land even from afar is a really good strategy. It’s not a super popular strategy. It’s one of the reasons why I like it. I like things a little off the beaten path.

Justin, how are you doing?

I’m doing well, Mitch. It’s great to see you. You hit the nail on the head. Inland, the niche in doing it a virtual is so far off the beaten path. People are, “There’s no way you could buy a piece of land anywhere away from you without stepping foot on it.” We figured it out.

I know that it’s possible. I know that it’s done. You are not the only guy in that market for sure but there are some cool guys out there too. I have seen it from them. It works. A lot of these strategies, people think, “Does that strategy work?” They all work if you work them but you’ve got to slow down, put on the blinders, look at every damn thing that comes across the street, drill-down and become good at something. You say, “That’s easy for you to say, Mitch. You have eight businesses. You are all over the place.” I became good at one thing for ten years. I owned it with my town, then I’ve got bored. First of all, a little bit about your background, Justin. Tell us how you’ve got here.

It’s a fun story. Like a lot of people, I was in the corporate world climbing the ladder and trying to do well at that but I also had that urge to own a business on the side. My partner and I from our podcast, Casual Fridays REI, had Amazon business together. We are doing dropshipping on Amazon. That’s one of those buzz words that were around for a couple of years. He was a real estate agent and investor before the crash and said, “I want to get back in real estate investing.” I was, “Cool. We will sell the Amazon stuff. Sell it out and start buying real estate together.” He’s like, “I want to do it by myself.” We dove into it separately. It brought us back to our journey here.

I’m not going to say that it was a rag to riches story because people often get caught in that grind. I did have a good career going. I was an Executive level for a railroad. I’ve got that Friday morning call and I’ve got let go. At that time, I and my wife just started our company. I had sent out 2,600 pieces of mail. We ended up buying 21 properties with that, which sounds like a cool number but it was five acres anywhere to 40 acres. They were recreational pieces of property. We bought 21 of them. We end up selling that. Fifteen of those are owner financed and made $70,000 total but we had to keep it going. What’s the next move? We use some creative financing and put some more money back against it. Now we are five years later, 500 plus transactions and I bought properties in 42 states.

Is it difficult to keep up with all the different laws in all the different states or it doesn’t affect you that much?

It doesn’t affect us that much because the way I buy land, I use title companies in those states. You can self-close land. That was the biggest thing for me that a lot of people still don’t. You can self-close any kind of real estate deal if you want the title policy or not with it. You want an escrow officer to handle it or do you want to go down the recorder and send your deed and have it recorded. You can do all the title search stuff. Once we started using title policies and closing agents in those states, they handled the law aspect for us. All we had to do is send them the contracts. They would sign it together and handle all that escrows.

REIS 482 | Buying And Selling Land

My Life & 1000 Houses: The Art of Owner Financing

That sounds like your contract is not a board of realtor’s contract from that state. You are a generic, short, minimal pages or one-page contract.

Yes, sir. We send a one-page contract with a one-page cover letter because we send out blind offers.

Honestly, if someone wants to back out of a contract, you need to think seriously about backing off and letting it go. It’s hard to force someone to sell something to you. The main thing is they feel like they signed something. To them, they were off the market, whether it’s the tightest or the boldest contract is ever written. It doesn’t matter either the people want to sell or they don’t. If they want to sell, it wouldn’t matter if you did it on a napkin. The only reason you need it formal is you would like to get the title insurance. You are a fool if you go around buying stuff without title insurance because sooner or later, it’s going to bite you in the ass.

You are right about that. As we have grown through this over the last 500 plus transactions, at first it was, “It’s not a big deal to buy with that title policy.” I can tell you I have used title policy four times in the last year. Usually, it’s an HOA that’s missed by the title company. They don’t get clearance from that, and then it pops up on the sell-side. We typically flip a lot of our stuff for cash but we do have the exit strategies with owner financing.

Not to mention the fact that there are a lot of liars out there when they are trying to sell. They are not telling you exactly who all the heirs are, what happened in the chain of title or that the will wasn’t probated. There are a lot of little gray things that people can hide behind and say, “I didn’t know,” but they all know. You just learn. You leave the gate open, the account is going to go through it. It’s just a matter of time. Leave the gate open and wake up with a cow in your pool one day. I like to do things. It sounds that you, too. You get a routine. This is how we do it. We always get a title policy. You set your standards and it’s cookie-cutter. Everything in a different state.

The hardest thing for people to understand is they hear somewhere, someplace like a guru will say, “It’s an attorney-only state.” “Hire an attorney. You don’t have to hire a title company. They just called it a different name.” “They don’t have a title report.” “They use an abstract because it’s an abstract state. You just change the word out.” It’s the same process.

It’s all the same. Give or take a few. Once you find someone who knows what they are doing in that state, then they will guide you through. Stick with them. Tell me about your first deal.

Our first deal was a couple of $100-deal we bought from the State of Arkansas. We bought it for $200 and sold it on eBay for $1,000. That was not a huge number but it’s enough to wet your whistle.

I don’t want to blow over this. It was a proof of concept. It doesn’t matter if it was $500, $5,000 or $1,000. The point was, I just made the system crap a nickel and it’s exciting.

A paycheck is almost like a drug. You get used to it, and it’s comfortable. You're addicted to it, and you can't get away from it. Click To Tweet

You crank the volume up from there then we went to direct mail. As I said, we bought 21 properties off that. The definitive moment on the direct mail side was the type of properties we are marketing to. Those who were telling you that we are offering $125 an acre. We bought 21 of those and sold them all. This was 2016. I said, “I sent the same type of offers out elsewhere. I’ve got my ass hammered. They are like, “We are not selling our property for that much.” I had to take a second look and see what we did.

We have a phrase we call on our show called a bass boat property. That’s the property that is like a recreational vehicle, camper, bass boat or Harley Davidson. It’s the thing that guy doesn’t need but he likes to brag about. We start shopping for those markets. It’s a $50,000 property or less. We are offering $0.30 on a dollar. We can owner finance it really easy. We are picking it up, a $30,000 property for $10,000. We ask for 20% to 30% down, and then we will cashflow it for ten years. It’s a ten-year note at 10% interest with a $20 service fee. We keep them going and stack them up like that. It’s the thing that the guy goes like, “I camped on my property this weekend. I went and hunted on my property.” He’s at the water jug and bragging to his friends. His wife thinks he’s the smartest guy in the world because he’s investing inland. They’ve got a secondary property. We are laughing all the way to the bank and say, “We love this because we are helping that person out.”

She’s happy because he can take all that crap, put it over there and stuck it in her house. I love seller financing. That’s what I’m known for across the nations. It’s selling my houses on 30 years fixed 10% notes. The PITI payments are close to whatever they are paying for rent for the same house across the street. I did a book called My Life & 1,000 Houses: The Art of Owner Financing. I also like raw land in what you are doing if it has mobile homes on it. It’s the same thing. No one values and wants to finance the mobile home. You can change the whole value of the property because you changed the dynamic. You will seller finance the raw land and most people call it hunkajunk called a mobile home, which I have made millions of dollars off of in my careers. I will take all the mobile homes and land you can sell to me all day long, every day. You all just spit on them, walk past them and ignore them all you want. Give them to li’l ol’ Mitch.

We are doing a subdivide in Texarkana where we bought 11.5 acres. We are splitting it down to 2 acre lots and 1-acre lots. It’s got water on the street, power and phone lines. That’s what they are for. It’s for mobile homes. It’s non-restricted. It’s outside of the city limits of Texarkana for that. It’s a fun project.

I’m doing my first bigger development, 100 acres into 120.5 acres’ mobile home lots. I’ve got to cut road. It’s taking me 27 years to get here. I’m certainly not sticking my chest out bragging about it if there’s someone across the streets doing 1,000 acres and someone figured it out in a year and a half.

We talked about the small little half a quarter acre property that we bought from the State of Arkansas. We closed on 2,400 in 24 acres in Sutton County, Texas, we are splitting that one up. It’s going to be twelve ranches. That’s out of the deal. They average anywhere from 88 acres up to 250 acres. All have power and well water on. We have one house in the place. It’s known for access and Barbados sheep. We are taking a seven-figure property and bringing it down to under the $500,000 mark. That’s where our preferred lender for these guys. That’s where he likes them because it’s a two-page application instead of a full sixteen-page mortgage for him. It helps streamline the process. When you know the right people in the right places, you get it done. That’s one we are working on right now. It’s fun.

That’s one of my things. We are subdividing some ranches in the mood to find some more. Almost out of necessity, the house has got so competitive in town. The inspectors, rules and regs are slapping me with fines because I bought a house. The guy before me moved the ceiling fan eight inches. He didn’t pull a permit and they have given me the fine. It’s like, “You guys can have all this. I’m going to go out to the country where I can store all my guns, dynamite and everything.”

It’s a neat concept. We have been rolling for a while but going in, buying two deals and turning them into twenty, and then you have that. With the exit strategy, the owner finance piece on the backside. We’ve got that bigger one. We’ve got another section outside of Fort Worth and Palo Pinto County. It’s near gray for Texas that we are working on as well. We’ve got a bunch of those going on.

How are you funding these 24 acres or these big deals? Are you pulling that out of your pocket or you’ve got someone behind you? Tell me how that’s structured.

REIS 482 | Buying And Selling Land

Buying And Selling Land: Little things add up. They accumulate to a big impact on society because we can have people doing better now.

 

It depends on where we are at and what part of the country but the majority of our stuff has been cashed. This one has a bank backing it. We have a little bit of leverage with them. We raised $920,000 for improvements and down payment plus the first year’s payment. We are on an annualized payment, just a point over a prime. We have released rates in it. We release 115% of what we paid for the property. It’s rough numbers. We are in at 1,300. We are releasing at 1,600. Everything else after that, that’s profit. It goes on the market at 2,600 acres.

Ways to get it done is we are using private lenders until we’ve got it all mapped out, wells, septic, fences and everything. At that point, the bank would come and take out our private guy. A private guy is usually a little more expensive but not that much more expensive. It’s 6% or 8%. The bank would come and take us out at 4.25%. Everybody is happy. My private people aren’t charging me any points or anything. Here’s the money. Pay me this interest rate. I usually pay monthly but in this case, the guy said, “Pay me the interest whenever you get the new loan and cash me out.” You can hold a lot of properties when you don’t have to make payments.

That’s for cash-on-cash return with the annualized payment when we use leverage. It’s the fun part about it as well.

You have a partner in this, right?

My normal business, no. It’s just me. I have a co-host. We have separate land businesses. Like you, you said you had eight businesses. They have the media stuff, the podcast. I have a current land company. I have one that we do private funding for raw land investors. We do joint ventures where they bring us the deal. We put up the cash. I do have a partner in that company. Everything has got its own little place and a little niche.

A few cases on my own like my storage business is my own appeared to like. Every other business, I have someone who’s good at some aspects of that business to make up for the part that I don’t have. Usually, what I bring to these businesses is either some trail of clients or buyers or I bring the money. Most likely, I bring in the private lenders that want to invest. How long have you been financially independent?

I have been full-time at this for five years.

Can you lay out the deal that made the most money for you?

Look for something that lights your fire and gets you excited, and go all-in on that. Click To Tweet

The first six-figure deal was in 2017. I’m going to two right at that time. I had a management pension for the first railroad I worked at. When I left, they were cleaning up their books. I had been gone about a year and a half for the paid out. I bought 135 acres in Oklahoma and paid after quiet title because of some past stuff in the chain of title. Grandpa left a son improperly. He left it to three sons when he passed away. It’s a quiet title, legal fees and all that. We are in it for under $50,000. It’s sold for $157,000 to the neighbor. That was the first six-figure deal. We bought a little eight-unit apartment complex off a direct mail. We bought it for $315,000, sold it for $475,000 two months later. I put in some staircase carpet and a couple of clients’ packages. Those were back-to-back. As you get going, you have two big deals like that.

You feel good about yourself back then, right?

Yes. You are like, “We can eat for the next two years. We are good. Let’s keep going. Let’s see what else we can do.”

Someone can now take the gun away from my head.

I’m glad you said that. I know that we share the same philosophy. You don’t want somebody just to quit their job and say, “I’m going to be a real estate investor.” No, you want to get up and go get the money built up for your passive or your net income is replaced. Sometimes, you are forced into it a little bit early. There is stress that happens that most people will never understand in their life. I have heard you say this before that paycheck is almost like a drug because you get used to it. It’s comfortable. You are addicted to it and you can’t get away from it. When you don’t have that, you are having to take on the insurance. Your wife and your kids are looking at you. Your wife doesn’t work. Your kids break a leg or an arm. This stuff happens. It’s life. That’s the journey of it. When you have to shoulder that all, go out and hunt every day for the food, meaning you have to go make that paycheck, you have to get to a point where you can be financially independent and free.

Your skin has to get a little thicker. Your nerves have to get tougher. Everything has ratcheted up a little bit. There’s no greater reward than being in control of your own destiny, having no ceiling on anything you can do. You can go as far as you want to go and do as much as you want to do. If you do it right, you can sit down when you want to, take a break, take care of yourself and find a little balance. If you are doing it wrong, you will have no balance. That’s how you will know you are doing it wrong. You will be tired and aggravated. You will say, “I’m going to quit,” then you realize, “I can’t quit.” That’s when you have to do wrong.

You created a job for yourself.

You’ve got on a hamster wheel and you can’t even get off because the other hamsters will eat you alive. You’ve got to keep running.

I have twins that are seven. They are in first grade. It’s 9:00 in the morning, I’m at their award ceremony and you are seeing the parents looking at the clock and tapping their feet like, “I’ve got to get out of here because I’m about to get in trouble with my boss.” There are little things that come up over this journey or this freedom you have. You sit there and you go, “Land was the avenue that got me here.” It could have been owner finance deals, rentals or fix and flips, whatever the thing that gets you here. It becomes a different mindset. Now, you can replace the widget with a gadget and you understand the machine or the concept of what we need to do to be successful, what that looks like and what that piece of success is. The time that you get back that freedom. If I wanted to go have lunch with my wife, I don’t have to check in with the boss. I just go have lunch with my wife and we enjoy it.

REIS 482 | Buying And Selling Land

Buying And Selling Land: You don’t have to be the smartest guy in the world to achieve financial independence. You just have to know who to get ahold of it.

 

Do you train on this?

We do. We have a training program called The Land Flipping Blueprint. It gives you everything that we do in our business from how to set up your LLC through sending your blind offers, your mailers, how to look at properties, how we do our due diligence, who we use in places that contracts forms, everything all together. It’s 41 videos in over eight hours. The videos range from fifteen minutes.

I want everyone to go to 1000Houses.com/flippingland. Take a look at what Justin has to offer and take advantage of any free stuff or a free education they have. It doesn’t hurt sometimes to dip your little finger in and see what these people are up to. I do it all the time. I’ve got my own thing but I like to see what people are doing. Sometimes, I can use what they are doing to some stuff that they are doing. I can morph it over into my strategy. Sometimes, it’s like, “I just need to hire someone to open up this avenue and be my partner on this.” I have done a lot of that in my career too. Tell us about a success story from one of our students.

One of the fun things for me is that you get to see people’s lives change. I’ve got two of them. I will go real quick because everybody likes the underdog story but we forget about how that affects real people’s lives. I had a guy. He used my private money company. He used the consulting to pick the area he wanted to mail and get it dialed in. We bid as offers and we sent it. I hadn’t heard from him for a little while. We bought and sold three properties together in three months. He got paid out. He was happy. I hadn’t talked to him.

I called to check him and say, “I want to check on you and see if you are getting more mail going out. If you are going to need some more help.” He’s like, “I wanted to tell you. I did this for a means to an end.” I’m, “What’s the means to the end?” His daughter had got taken away in a custody battle. He used the profits that he did to go back and get his daughter. She was in a bad situation. He got full custody back over. I don’t know all the particulars. He was in tears telling his story. He goes, “You helped me get my daughter back. I know she’s going to have a better life because of this.” It wasn’t going to change this whole like, “I’m going to be the next Donald Trump,” or whoever. It was, “You impacted my life at a granular level that I know my grandkids are going to be impacted by this and my daughter.” Her life is going to be out of this bad situation than she was in into a better situation. He didn’t have those means to an end at the time. To me, those little things like that will add up. They accumulate to a big impact on society because we can have people doing better now.

Not everybody wants to be a multimillionaire land flipper. You don’t have to do that. We talked about 2,500 deals. You talk about your 500 deals in the last couple of months of land deals. The main thing is that you figure out how to make some income or positive cashflow that you don’t have to go out and hunt every day so you can find out who you are, where you belong and quit your job so you can free up 2,600 hours so you can be who you are supposed to be, given that 2,600 hours to someone else’s family and life. We all got to have jobs from time to time. Most of us had a job or usually, we have to have a job long enough to figure out that it didn’t work.

I take it a little different stance because I was happy in my career but I didn’t feel as fulfilled as I do now. The amount of stress level, my blood level and my health, everything is ten times better now than it was during that time. Making that transition from corporate hamster, “I’m going to climb this ladder. I’m going to be the best. I’m going to be the next executive. I want to be the youngest executive. I want to do all this stuff,” and selling your soul. I and my wife lived in seven houses for eight years and we had kids. Your kids aren’t impacted positively by that because they are living across the country. They are moving. They don’t see their parents.

As my twins were in their first year of birth, I may have helped give a bath three times. Now, I take them to school every day. I don’t miss a dang thing that they want to do. My newest child knows dad at a personal level. He sees dad every day because he walks into my office to see if I’m there working. If he wants to work with me, he sits in my lap while I do what I’m doing. These types of shows or inspiration that we give people, whether it’s flipping land or houses, whatever that is, that’s the ultimate goal.

Go to 1000Houses.com/flippingland. Check out what Justin Sliva has to offer. Take advantage of his experience and learn from someone who has already been there. You don’t have to reinvent the wheel. Anything you would like to say to that person out there that’s got the job, not satisfied and doesn’t know what to do but going to do something somewhere? What do you have to say to them?

Successful people know how to use the playing field to the best of their advantage. Click To Tweet

It doesn’t have to copy what you or I do but look for something that lights your fire, gets you excited or makes you want to stay up a little bit later and get up a little bit earlier. Go all-in on that. Whatever that could be. It could be if you are an artist and you want to draw. There are going to be days where you need whatever it is that’s driving you to drive you through those LOLs or that early morning to get up because it’s not going to be, “Go work for yourself and do your own thing.” You have to grow with two things at one time. It’s going to feel like you have used all your brain capacity some days. You need to find that fire that lights you up.

That’s what I’m always looking for in my students. Number one, I’m looking for is, “I have had enough of this crap meter? Is it pegged over in the red?” If you had enough of everyone telling you when you can get up, what you have to wear, where you have to be, how long you have to be there, how long you can vacation if you can even take a vacation, can you go watch your kid’s baseball game or can you not go watch your kid’s soccer game, all that stuff. Have you had enough of people telling you about that? How much money can you make? If you had enough of them telling you, “This is how much you can make. You are not allowed to make any more than this.” When you have had enough of that and you find something that you are passionate about, which means you may find yourself doing that, whether you were getting paid or not. I’m not sure that house flipping fits that category but it makes so much money that I was drawn to it. The margins were big enough to get excited about.

You don’t think there was something in the process that turns you on, whether it was finding the deal or the negotiating. There’s something in there that got you there.

In the wall thing of it, it was showing up with nothing and coming out with a big check at the end of two weeks or one day. That grows all fast. For those of you who haven’t made it to this point yet, it sounds like complete bullshit. There is a point in time where more money is not going to do anything for you. We are that good. You’ve got to have a higher reason to do something. Mine is to help renters get out of the rent cycle and become homeowners. The average American’s wealth is in the home that they own. Ninety percent of their wealth is in the home that they own. Help renters move over to be owners, then you have done a tremendous thing for those families, whoever they are.

The other thing is if you can help regular people, average people or people learn how to find their own financial independence through some vehicle, then you have changed that person’s life or that family’s life. It’s about 2,600 hours is what I calculate. If you are the kind of person that can get it done, you will be saving yourself about 2,600 hours. I had some people do the math. Forty hours a week isn’t less than 2,600. I said, “If you are the guy that only works eight and goes home, you are not going to make it.” You need to be the guy that is trying to free up 2,600 hours. You only get paid for eight hours a day but you are working more than that. I give a damn level high. You have a lot of responsibility for what you are supposed to be covering. That’s why I said 2,600. You’ve got to be a little more than just the average guy.

I figured that the first time I heard you use that quote. I was, “That’s not 40 hours a week.” You want somebody that wants a little bit more. Somebody has to have that one. We can’t give it to you. That’s what they have to have. They have to have that want to do more. They have to have that, “I’m going to make the phone calls. I’m going to write the email or look up that little piece of information,” because they just don’t quite understand what it means. As you said, you don’t have to be the smartest guy in the world. You just have to know who to get ahold of it.

I’m living proof of that. I want to talk about not smart. What I think that you have and what a lot of the entrepreneurs that I interview have is you have a boatload of common sense. You are not afraid to do things. If your common sense says to do it even if it’s against the grain, as long as it’s legal and it’s not hurting anybody. You can bend all the rules you want and you can get out of the box. When I start buying houses with my credit cards, everyone was telling me I was a fool. They are going back and go, “I’m buying a house worth $60,000 for $30,000. The only way I can do it is to put it on a credit card.” I kept saying, “What’s wrong with that?” I go outside. They scream at me and blow me off the stage. I would go back in the closet again, look in the mirror and go, “No, this makes sense. I don’t care what they say, I’m going to do it.”

We did a show not too long ago called Living in the Gray. It was that concept. There’s a trait that you develop and understand how to bend or make it work for you, whether that’s other people’s money or private lenders. Now, it’s your history. You could walk into a bank and say, “These are my asset. Put a line of credit on everything.” You would not need another investor for the rest of your life. You use the assets you already have, the paper you already have and run off a line of credit as a wealth management program. You have made relationships with these people. In return, you are using their money. We get those things. Successful people learn how to use the playing field to the best of their advantage, what sings to them, what works for them and how to put it all together in a package that they can deliver on and make money with.

REIS 482 | Buying And Selling Land

Buying And Selling Land: There’s a trait that you develop and understand how to bend or make it work for you, whether that’s other people’s money or private lenders.

 

Exactly to your point, I can go to the bank. I can cash out all my private lenders but you know what’s going to happen in the next recession? The banks are going to close. They won’t loan any money to anybody. Not for anything, no matter how good you are. You better not shut the door on your private lenders. There’s a fine balance in my business. I’m paying 1/2 of the 7% to 8% when I could be paying all of them off with the bank in 4%. You’ve got to have these guys in the wings because when the fit hits the shan, everything is in chaos and the bank closes, you better pray to God you didn’t cut all your private lenders off and they went and spent their money someplace else. That’s the only way you are going to be able to buy these houses at $0.50 on the dollar. You pull other people’s money because the banks are going to close. They are going to climb up so tight. They will have an open sign. They will take your application but they will find any reason in the world to turn it down because they are unsure of the time. During the last recession, I was buying a house a day. It wasn’t any help from the banks. They wouldn’t give it to anybody. Have you been raising private money?

We have been. With some of these bigger deals, we have come in to bring private money. The last one we did was equity in, equity out. If somebody comes in, it was LLC that was structured for these people. We have six investors and each of them, whatever the percentage of the down payment is, they brought that. We hold a little bit of management feedback on that. It was a good deal for them on returns. That’s what we are seeing.

Some people want to do big deals because they want to do big deals. If you are doing a bunch of small deals, it’s okay. You can bring six people in and do a great big deal. It ends up making the same for you, personally, as if you went and got one little deal down the house and didn’t have all that crap to worry about. The reason why you might want to do it is it gets you introduced to people. You get used to the playing field and people get used to playing the game with you. It solidifies teamwork. Don’t go into big deals just because you want to say you bought some big deal or you did some big deal. If it’s not going to make you that much more money than if you stay small because big deals can go sideways too, it can be hard for one guy to manage if it’s a big problem. I get the feeling here the same way, Justin. I like to go grassroots. I will move up to another level when I’ve got a certain amount in the bank and I can play it. I can ante up.

We have used very little leverage throughout the five years. This one, it made sense to with annualize payment and the interest rates being where they at. We could have raised all of it privately and the cash-on-cash returns look better with that leverage there. It’s not something that I would go tell the guy that’s never done a deal like, “Let’s look at this and go raise all this private money for people. You don’t even know what you are looking at.” I have had a couple of those deal reviews where guys, “Would you look at this for me? I want to see if it’s worthwhile for me.” I said, “I subdivide. You are going under of high-power, power line easement. You have to make everything that’s going to be a flag property so you can get the county regs. It’s not a good deal.” He’s like, “I need to get $900,000 for this.” I’m like, “There’s no way. You are buying it at market value for what you are trying to do.” You are trying to talk people back off the ledge. There’s a right way to do it. Some people were like, “I’m more risk-averse but I will make a decision and run with it too.” I will say, “I’m going to be conservative. My underwriting is conservative. I’m going to look at every angle and make sure I have multiple exits if needed.”

That’s key. Multiple exits too. Check all your back doors. Worst case scenario, can I still get out of this burning house if it’s on fire? You better have some backdoors. If you can get out and nothing bad happens, go in. You are taking a chance. When you can’t get out, next. You’ve got to counter with an offer that creates a backdoor and don’t take it if you are.

I’m sure you will attest to this as you’ve got more deals as you go from being from 96 start date. You start to understand it’s okay to say no or counter back with what works for you. There are so many deals that we had where the deal that’s presented to us doesn’t look good. I will do this deal if it’s a $50,000 house. It’s not great at $50,000 but at $42,000, I can make that number work well. “I will give you $42,000 for it.” If they are already wanting to sell it and you are there and you are that close, a lot of times, they will come $42,000 or $43,000 and you have to decide what your number is.

I call that never let a deal die on your side of the table. Always mark it up and push it. Let them kill it. If they push something back to me, I have to. It’s my job to either accept it or then write what I will accept and push it back. I have to keep making sure that the deal doesn’t die on my side of the table.

I don’t know how many emails or responses that I have said back that has been, “I would love to do the deal. The best I can do is this number. I hope to look for and talk to you soon about it.” We have left it there. Everything has back in their court. As you said, we push it to their side of the table. They know where my bottom dollar is. I’m telling you this is my last and final. You are not getting me off this. If somebody is brave enough to counter back again, typically, we are right there and I will go for it. Most of the time, they tell me a simple yes or no at that point.

I want to thank you for taking the time to come on. Again, go to 1000Houses.com/flippingland and learn what Justin Sliva has to offer. It’s a great way to do business, especially if you are in an expensive market like California or you are in someplace where real estate is expensive. This is a strategy where you don’t have to be there. You can buy all over the United States. You can find the places in the markets that are more your speed or more the average person’s speed so that we can proliferate. That’s another reason why I like the strategy that Justin is talking about because you can do it from anywhere. You don’t have to walk on these pieces of land. This is Mitch Stephen. I would like to thank you, Justin. Thank you very much. I would like to thank all the readers out there for stopping by to get some Justin Sliva. Remember, 1000Houses.com/flippingland. We are out of here.

Important Links:

About Justin Sliva

REIS 482 | Buying And Selling Land

A full-time Real Estate Investor, that focuses on bringing off-market properties back into the marketplace. Specializing in Rural Land and Multi-Family Property, along with assisting new Real Estate Investors through their start-up woes by providing Consulting and Capital Funding for deals. Co-Host on Casual Fridays REI podcast.

 

 

 

Love the show? Subscribe, rate, review, and share!

Join the Real Estate Investor Summit Community: