Welcome to the December 2022 Income Report. This report is where I document our statistics and progress with our land flipping and development business.
I’m a big fan of the land flipping model of real estate investing. As you’ll see, it can be very lucrative and also rewarding.
We resold our first property using this model in March of 2021 and we’ve been on an accelerating path ever since.
We’re passionate about real estate investing in general. Land flipping is just one of the many business models that you can choose to pursue as a real estate investor. We dive deep into this model and many others in our real estate investing podcast called Turning Profit. You can find us on Youtube and all the other major podcast platforms.
Before we get into the report, I’d like to invite you to join our new free community. This is a brand new place designed for you to learn about land flipping and compare notes with other land investors in all stages of the game. JOIN HERE–>>
I do my best to make these reports insightful.
I know your time is valuable, so I want you to get as much out of this as possible.
So why in the world would I publish a report like this for the whole world to see?
I’ve got 2 big reasons for doing this:
#1 – Motivate ourselves to improve our business (nothing like putting it out there to the public in order to drive progress).
#2 – Motivate you! You’ll see what’s possible and learn valuable lessons (at my expense) which will allow you to become a better real estate investor yourself.
Before we get into the numbers, I will lay out a simplified explanation of how this business works. This will help to give you a little bit of context into these numbers in this report.
Here’s how the business works:
- We send letters (actual offers) to land owners.
- Some landowners respond and are interested in selling.
- We come to an agreement on the price and work towards closing the deal.
- In the meantime, we research the property in depth by sending out a photographer, calling the county/city, getting an opinion from a local broker, and many other little things on our checklist.
- Assuming all looks good, we complete the purchase with our own cash through a reputable attorney/title/escrow company.
- After closing, we will sometimes make some minor improvements to the property such as brush clearing, perk test, surveying, or other things.
- We list the property using a local broker that will market it in the MLS, to their buyer’s list, and neighboring landowners.
- We negotiate a deal when a buyer steps forward.
- We complete the sale at the negotiated time.
- Rinse and repeat!
A couple of other notes:
- We buy these properties all over the country and rarely see them in person
- Purchase prices on the properties range from $4k to $360k (in 2022)
That’s about it… It’s really just buying and selling land.
The main thing that makes this business work is that we buy for an aggressive price so we can resell it for an attractive price to buyers. That allows us to sell quickly. We’re able to negotiate good purchase prices because we pay cash and will close quickly.
Now that you know the basics, let’s dig into the numbers.
Here are the December 2022 statistics:
Overall December 2022 was a pretty solid month. Most of the metrics were a little below average for this month.
I made a big push at the end of the year to try and clear out inventory that had been on the books for too long. This meant lowering the prices until they sold.
As a result, the average profit per deal and the average days in inventory really got skewed for the worse.
For most of the year we averaged about $22k in gross profit per deal and an average of 60 days in inventory.
I’m ok with he numbers suffering a little this month. Moving on from the older inventory is the right thing to do in order to keep our money moving as quickly as possible.
Deal by Deal Breakdown:
In this section, I break down each deal. The goal of this is to show you how deals vary in their profitability and what is possible in this business.
These are all the deals that closed in December 2022. We purchased the property (normally in a previous month), and then resold the property to a new buyer.
***details of the properties have not been shared to protect the anonymity of the parties to these transactions.
Purchase Price = The amount we paid for a property including closing costs
Revenue: This is the amount we received after paying commissions and closing costs
Gross Profit = Revenue – Purchase Price – Property Specific Expenses
Days in Inventory = # of days we owned the property
Return on Investment = Gross Profit /Purchase Price
Deal #1 notes: This was a property that took forever to sell! It is actually a pretty nice property, and it is an excellent value on paper. It is just that this area had very limited sales activity. The lot was also pretty sloped. Both of these factors combined caused us to hold the property for nine months. It eventually sold when I reduced it far enough, but as you can see above, we only made a $275 profit on this property. It wasn’t a loss, but it was also a waste of effort and resources.
Deal #2 notes: This was a really solid deal, but it took longer to sell than I wished it would have. But, if I had to do it all over again, I definitely would. It ended up being a 117% return on investment in a little over 4 months…not too bad at all!
Deal #3 notes: This was a fun one! We priced this property really aggressively from the start. We got 3 offers within the first couple of days of being on the market. We ended up selling it at the list price to a cash buyer that closed it in under 30 days. There wasn’t much inventory and there was a lot of buyer demand in this area which really help move it quickly.
Deal #4 notes: This is another one that was in our inventory for a long time. It was a fully wooded lot and the brush was pretty thick. I considered having some paths cleared on this property to enhance marketability. I ultimately decided against doing that because it was an inexpensive property. I felt a buyer would step up quickly for a much higher price. That didn’t happen and I had to keep reducing it until it sold. Lesson learned!
Deal #5 notes: Another challenging property that took a long time to sell. It turns out that this one had a failed perk test in the file that we didn’t discover until we purchased the property. In this area, it takes a long time to do another test and then they have to monitor the test holes for another 6 months. So, we were forced to reduce it to a really low price and market it as a recreational property. This left us with very little room to put a deal together. We did find a buyer eventually. But, we soon discovered that the original title company we purchased through made an error on the deed. This needed to be corrected and signed by the previous owners. This whole process took months and added to our hold time. At the end of the day, we still made a 20% return on our investment in 282 days. If it were the stock market, that would have been great. In this business, it’s one of our worst deals.
Deal #6 notes: I’d say this was an all-around solid deal. This was a new area for us, and we had to find a new agent to work with. We ultimately found an agent that did a great job for us. He found a buyer as soon as we put the property on the market, and we made a 50% return on our investment in 44 days! I’d do deals like this again any time.
2022 Full Year Statistics
I view 2022 as year of great achievement and growth in our business. As you can see, we did almost $3.5 Million in revenue.
We fell short of our 50% gross profit goal by a little bit, but we weren’t that far off.
I’ve got a really detailed breakdown of the full year that you can see in the 2022 Year End Wrapup Report HERE—>>>
The returns detailed above are very substantial. That is especially true when you consider the hold time and annualize the Return on Investment.
Let’s use Deal #4 as an example which was a below-average deal.
The return on investment was 50%, which is really substantial. What really makes this special though is the fact that we only held this property for 44 days. When you do the math and annualize this return (if you were to keep this money invested for the whole year), the annualized return on investment would be 414.77%!! And that’s not including any compounding.
Where are you going to find returns like that?
In the stock market, if you’re getting a steady 10% a year, you’re crushing it.
But, if 10% a year is crushing it, what is 414.77% per year called?
How can you do the same thing as an investor and get these kinds of returns?
The first thing you’ve got to do is start learning.
It’s not rocket science, but it’s also not as basic as it seems.
Here’s a short list of some of the basics you’ve got to learn to make this work:
- How the business model itself works
- How to get the leads coming in
- Where are the best regions to find deals?
- How to evaluate properties. What makes a good property and what makes a property not desirable
- What software and tools to use to give yourself an unfair advantage
- How to talk with property owners that want to sell
- How to navigate the escrow/title process in multiple different states to buy a property
- How to find the best on the ground partners in each location
- How to find a buyer for your property in a short amount of time for a good price
- How to negotiate with sellers and buyers.
- How to build a team so you’re not doing everything yourself
- How to put a business system in place to automate processes and keep your business organized
I’m working on putting together a free training program to teach this land flipping investment model. For now, I’ve got nothing to sell you. But, you can find a bunch of free content on our Youtube channel and on our podcast that discusses real estate investing.
I’ll be releasing the free course in our brand new Land Flipping community found HERE—>>>
Just as a disclaimer, investing money comes with risk. Research any investments heavily before putting any of your money at risk.
And, you can check out this page that will feature other podcasts and outlets where I’ve been interviewed.
If you’ve got funds that you would like a better return on, please fill out this form. I’m looking for private money lenders that want to earn a great return on their money secured by these deeply discounted properties we’re buying.
We know that the figures in this report may seem unattainable at first glance, but this did not just “happen” overnight. Like any business, we made progress and improvements over time to get to our current income level.
That wraps up the December 2022 Income Report. Sign up here to be notified the minute a new report is published.
P.S. In case you missed it, here are links to some of my past income reports:
- November 2022 Income Report $440,368.81
- October 2022 Income Report $275,462.13
- September 2022 Income Report $281,160.95
- August 2022 Income Report $322,223.92
- July 2022 Income Report $495,885.83
- June 2022 Income Report $178,831.06
- May 2022 Income Report $208,782.57
- April 2022 Income Report $264,322.07
- March 2022 Income Report $479,193.91
- February 2022 Income Report $67,143.23
- January 2022 Income Report $204,952
- 2021 Year in Review Report