Jack Bosch is a land investor. He flips lands that don’t have houses. Originally an immigrant from Germany, he came to the U.S. over 20 years ago. He’s been flipping lands for the last 18 years and has done over 4,000 deals. In today’s episode, Jack tells us all about land investing, his methods, and how he makes money.
Land investing is similar to wholesaling but with some differences. Compared to wholesaling houses, they never have to see or inspect the property. They also don’t have to make repairs.
They buy properties through direct mail and then use websites like LandWatch or Zillow to put up the land for sale. Everything is done virtually.
They focus on properties that are below $100,000-200,000. With those properties, they can get up to 95%. They typically buy them for 5c-25c to the dollar. This lets them make the same or more money than house flippers but with much less effort and less risk.
There are two ways they sell houses, one way is wholesaling and the other way is owner or seller financing.
One example of selling through owner financing is when they take a $30,000 piece of property and put it into contract to purchase for $3,000. They turn around and sell it for $30,000 with owner financing that includes a $5,000 down payment and monthly payments of $500 for the next 6-8 years. After paying for the closing costs, they are able to get more money from the difference in the down payment and what they paid for, plus they get $500 every month.
The type of buyer they get depends on the kind of land they focus on. They focus on typically three types of properties.
The first type are infant lots. These are empty lots in a street filled with houses. These are typically attractive to home builders and financial buyers.
Builders buy these properties no matter what the housing conditions are. Financial buyers buy properties in areas that are coming up. They sit on it and let the price come up.
The second type is properties in the path of growth which are those that are half an hour to an hour drive outside of the city. These are interesting to future retirees. The baby boomers retiring know they can’t afford their homes in the cities anymore, so they look for something they can pay off over time.
While retirees would need more financing, there are millions of them and they want to live a low-cost lifestyle that is still near the city.
The last type of property Jack buys are large mini ranches or properties in rural areas where there’s a lake close by. Being 1-3 hours away from big cities, they appeal to the people who are recreational buyers. They want to be able to take their RV and have fun somewhere. People who buy these properties have money, and they usually buy in cash.
The contract they have with the landowner is they have 6 months to market the property. If after 6 months they haven’t found a seller, they will have the option to back out of buying the property.
This way they never put out any money at risk and don’t have to make escrow deposits.
There are 5 different ways that they value a deal. They don’t have to use all 5, usually using 1-2 is good enough.
The easiest way to get the value is through sold comparables. Websites like Zillow can be used to check how much a property in the same location has sold 6 months up to 2 years ago.
Another way is to look at the assessed value. Proposition 13 locks down an assessed value based on the last purchase price. It can go up, but only a little bit. But in most states, there’s a clear relationship between assessed value and market value. So when going into an area, it’s important to know the ratio between assessed value and market value. Then that can be the basis for valuing the property.
Other ways are to look at a list of property values or list prices.
The last way is used for infant lots. You go by the value of the house. Typically, lots are worth 25% of the market value of the average area.
You can use a combination of any of the ways. Once you get used to it, it’ll only take a minute or two to check.
The owners of the type of land Jack buys typically did not get financing to purchase their property. They’re now tired of being property owners, or maybe their kids don’t want to inherit the property. While they can pay for the property taxes, they just don’t want to anymore.
Jack has already developed ways to filter through the data they get from the county, and then they send their letter. They’ve tested their letter through the years and get a 3-15% response rate from their letters.
They already have an arrangement with the mailing house that sends out the letters and another arrangement with the call center that takes the calls.
They also have virtual assistants that help value the properties and get the listings out.
Most of the work can be outsourced out.
Jack is on a mission to create 1,000 millionaires. He has been teaching his method for 11 years and has helped hundreds of people achieve 6-7 figure incomes.
He has a podcast called Forever Cash Life where they talk about the steps for their land flipping. They also have a Facebook group called Land Profit Generator where their students hang out to help each other become successful.
His training is a video-based, home-study course with live sessions and one-on-one coaching.
The first thing they teach students is how to select the areas from the point of view of where properties are already selling.
They teach them how to select the list, how to send the mail, and automate the responses.
On the selling side, they teach them how to put a listing that stands out.
The program is an exact copy of everything they do in their business.
There is one area outside of Phoenix, Arizona where Jack bought 5-acre parcels. That area is north of a place being developed to become a smart city.
He picked up 15 parcels for $3,500-7,000 apiece. They are worth between $20,000-40,000. But in 10-15 years, they would be worth $200,000 apiece.
One trick he learned is that when you have a rural property, you could engage a farmer with a grazing lease. That reclassifies the land as agricultural and drastically lowers your property taxes.
Tackle real estate at the complexity level that you can handle. Match the technique with your needs and abilities at the moment.
The secret to his success is to tackle something that you can grab into and actually do.
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