I formed my land investing company on January 24th, 2022. My primary goal was to close on my first lot within six months. During these six months, I tried many “get your 1st deal” strategies – from direct mail to SEO. Below is a breakdown of my educational process, setting up the company and closing on my 1st deal.
Back to School
I have nothing against YouTube but let’s be honest. For every video saying do it this way in land investing, there’s another saying don’t, not to mention the many channels driven by sponsorships and affiliate marketing. I wanted to sit in a virtual classroom and learn real estate investing objectively.
Here are the online courses (six-week study w/instructor) I took prior to starting:
- Real Estate Investing – the best $119 I’ve ever spent. Check it out here.
- Creating WordPress Websites – Though self-taught in web design, I wanted to polish my skills to build my online presence, and $119 was better than hiring someone for $500. Details on this course are here.
Reading is Fundamental (to Success)
Wealthy business people read. If they don’t read, they hire people to gather information. Education is key to succeeding as an entrepreneur! My favorite read was:
- Rich Dad, Poor Dad by Robert Kiyosaki – This should be required reading for every American child before their junior year in high school. The author’s breakdown of how debt and middle-income producing jobs have hog-tied millions of Americans is spot on. After reading this book, I changed my spending habits & paid off my consumer debt. It lifted an enormous financial burden and I gained enough financial momentum to launch my business without going into debt.
Other books/blogs I recommend:
- Powerhouse Principles: The Billionaire Blueprint For Real Estate Success by Jorge Perez – inspiring and practical advice for rookies by a billionaire who started out investing in affordable housing.
- ReTipster – start at the bottom of the blog and work your way up. Their videos are insightful and helped me establish a winning strategy.
Establishing a Successful Mindset
A laborer thinks one way. An entrepreneur thinks another. The laborer hates his job and lives check to check. The entrepreneur has multiple streams of income & works because he wants to. The difference between the two isn’t a college degree or seed money. It’s a mindset.
- Don’t sweat the small stuff. Successful people see the big picture long before they’re successful. They don’t overreact to market changes or throw in the towel at every obstacle.
- Get a mentor. I posted a question on the Bigger Pockets forum and landed a FREE six-week mentorship (curriculum included) during the summer of 2021. My mentor is a premiere Houston home builder. He started out in real estate investing by purchasing vacant lots. Anytime I have a question, he is accessible for FREE.
- Write your vision down! I can’t tell you how important this is. I never wrote things down until I began my business. I made a vision board in Canva, printed it out, and placed it on my desk. I also keep a small notepad where I often write what I see my business becoming and how to get there. It includes goals, simple to-do lists, an informal business plan, and positive affirmations.
- Take out the trash. Eliminating clutter improved my workflow. The junk I eliminated included negative people, social media use unrelated to business networking, and news media.
Pick a Market, Duh
Pick a market. Stick with it. Between blogs, virtual classrooms, a mentorship, and YouTube, I became inundated with market opinions like:
- Missouri is the place to start.
- Arkansas is cheap but decent.
- Texas is difficult to find deals.
Here’s the thing. I knew I wanted Texas to begin with, but I lost about two months of productivity because I got caught up in others’ opinions and not my gut.
YOU Define YOUR Deal Before YOU Spend a Cent
This was my biggest mistake. My failure to identify what a nice deal looked like for me, cost me time and money. I spent too much energy listening to the internet about what a good deal is. I called my mentor, who helped me.
During the conversation, he made a simple statement. “If I’m buying lots near Houston, I’m only paying a few thousand dollars, and it needs to be ready to build.” Thanks to that FREE fifteen-minute conversation, I devised what my rookie deal looked like.
- My max price on my first deal? $5,000.00 cash. I preferred to use my own money for my first deal. I knew if I used my hard-earned cash, I wouldn’t go out and buy junk. Under no circumstances would I buy anything over my max price.
- The lot must accommodate SFH. No small lots.
- The lot must have sewer & utilities – these are attractive to owner builders who don’t want extra expense or hassle.
- The lot should be within 120 miles of Houston – close enough for me to see the lot and conduct any future business in person.
- Stay away from flood zones due to historic Texas flooding over the past few years.
To LLC or Not LLC
I opted to form my LLC. Northwest Registered Agent was the best service I could find. It was $25 plus the Texas LLC formation fee of $300. They set up everything, and I got business banking without a problem. Bank of Texas offers free business checking accounts, so I went with them. Forming an LLC isn’t going to make or break a rookie investor. You can always create an LLC later.
Methods and Madness
Direct Mail
This method proved time-consuming & money-draining. After trying to generate lists in Listsource, Propstream and Realeflow, I went with Realeflow that provides an all-in-one CMR/Direct Mail Service for $75 plus .40 to .80 per mail piece. I mailed to recent tax delinquent owners everyday for three months but ultimately, it didn’t work for me. With the Texas market so hot, the few leads I got weren’t willing to discount their lots. Buyers were lining up to pay delinquent taxes and well over market price. I had two choices, sink more money into direct mail or use other methods to find motivated sellers. I chose the latter.
SEO
Search Engine Optimization sounds great in theory but with more and more businesses setting up online, it’s not as easy as it looks. Here’s what I tried.
- Carrot Website – Carrot offers one SEO website for $69 a month. I felt it a waste of money for someone just starting out. SEO in a large market is established by releasing content over an extended period – sometimes years. The best value in Carrot is their blog. Read it. Grab some ideas and implement them over time for FREE.
- Semrush – This is a great product but expensive. $120 a month is a bit steep but it is the most comprehensive SEO tool available. There is free version but it is pretty limited.
- Rank Math SEO – It’s affordable, easy and will grow you into an SEO expert over time (not overnight). I ordered it and use it across all of my businesses for one low price of $59 per year.
Shopping Online
- Facebook Marketplace and Facebook Groups – Great for networking! I found most postings were by land flippers or wholesalers and very few motivated sellers. Although I didn’t find any deals within my criteria, I was able to network for future deals. The We are Land Specialist FB group is a great resource if you’re new to land investing.
- Craigslist – I checked the listings daily but found mostly spam & junk lots. Craigslist is like dropping your keys on Bourbon Street during Mardi Gras and going back the next day to find them. Do you want to dig through every body fluid imaginable, step over drunks and flee prostitutes to find them, or pay a locksmith to rekey your car? I’m going locksmith.
- Zillow – This is very easy. I set up an account, made a filter according to my criteria, and checked every alert that came to my phone. Simple & FREE!
- Land Sites – Most listings were outdated, and any inquiries I sent went unanswered.
What I Didn't Try
- Paid Coaching – Throughout my trek into land investing, I met many people who wanted to help me without charge, even through chance encounters like the guy at Smoothie King who sat at the table next to me. After some casual chit-chat, he shared how he began real estate investing with a few thousand dollars and grew it into a successful business.
- Land Investing Courses – Online college courses are cheaper. Most of the principles applied in other real estate investing strategies can be used in land investing.
- Tax Auctions – After speaking to various investors, I decided against any auctions. $5k isn’t going to snag an auction deal in today’s market within my region.
What Ultimately Worked
Plain and simply – Zillow. Once I abandoned direct mail, I was able to better concentrate on other avenues of finding motivated sellers. It took me a few days to find what I spent months looking for via direct mail. The key to Zillow is jumping on a deal immediately. Don’t wait. Even if you think it’s impossible to close the deal, try!
How the Deal Came Together
On June 24th, exactly six months after I started, I got an alert on Zillow for a lot. I compared it to my criteria.
- Within 120 miles of Houston? Check.
- All utilities? Check.
- Is sewer available? Check.
- SFH Ready? Check.
- Price $5,000 or less? Check.
- Is it cleared & leveled? Bonus check!
- Comparable lots were selling for $35,000. Jackpot!
I couldn’t believe my eyes! I could flip it immediately for a nice profit, buy & hold or build on the lot. I immediately reached out to the realtor. When she responded, I was shocked. Rookie doubt kicked in. I decided it was too good to be true, so I hesitated. The next day I noticed that Zillow placed a banner over the property and announced:
This property will sell faster than 93% of nearby properties.
Good grief! I reached out to the realtor again and became discouraged when I found out offers were coming in. It turns out the seller couldn’t put a mobile home on the lot and just wanted to get rid of it. After offering to pay full price, $4500, I signed the contract on June 28th, my birthday. The deal was closed two weeks later. I did it!
My Advice
- Make concrete goals before you start. Be willing to tweak your goals but don’t become discouraged.
- Don’t spend all of your startup money because someone on YouTube says so.
- Find people who genuinely want to see you succeed.
- Educate yourself without breaking the bank.
- Stick to your plan.
What's Next
I’ve begun searching for my next lot and building off my experience as I look for partners and opportunities. Since the lot is near Houston, I’m planning day trips to network and explore the market. Ultimately, I want to be like my mentor and build profitable real estate in Texas. It will take time, but I’ve gotten over my first hump. I know now I can succeed in land investing. In fact, I will succeed. You can too! Good luck!
Feel free to reach out to me if you’d like to connect or network by clicking here.
Monti Bailey
Founder, The Quantum Land Co.