Welcome to the February 2023 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 you can 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 invite you to join our new free community.
This is not your typical “group”. It’s an actual community of people interested in land flipping. We’ve got brand new investors as well as investors generating $1 Million plus per year.
In the coming weeks, I’m releasing a top-notch training program that will share exactly how we run our land flipping business so you can do the same. It will be absolutely FREE.
February 2023 Income Report – Total Revenue: $464,159.35
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 3 big reasons for doing this:
#1 – Motivate ourselves to improve our business (nothing like putting it out there to the public 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.
#3 – Gain exposure for our new Land Flipping Community
Before we get into the numbers, I will lay out a simplified explanation of how this business works. This will 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 landowners.
- 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 to 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 February 2023 statistics:
I had high hopes for February, but it fell a little short.
But, can I really be upset about $464,159 of revenue? Not really.
Although we didn’t top last month’s record figure, we still did pretty well. We had a couple of deals fall out of contract and also a couple of closings got delayed.
That is the nature of this business and real estate in general. Plans always change and nothing ever goes exactly as planned. That’s ok, because I expect the unexpected at this point.
Our gross profit for this month was pretty healthy as well. I obviously would like this figure to be higher, but for 7 sales this was pretty good.
We averaged $23,821 in gross profit per deal this month. This is slightly above our historical average. I’m hoping to push this figure higher as we do a lot larger deals going forward.
The average days in inventory has been creeping higher over the past several months. This month we averaged 87.72 days. I believe there are a number of factors contributing to that such as clearing out older inventory, the market itself, and the seasonality of selling in the winter months. Historically, we’ve been able to average about 60 days in inventory. Possibly in this market, 75-90 days will end up becoming the norm.
We sent out 52,718 letters this month. For right now, our target is 50,000. So, we did well with this in February. This is a very important metric for me to track because it drives our whole business. The letters sent in February will likely not turn into closed deals for 3+ months. It’s very important we keep these letters going out regularly so we don’t encounter future dips.
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.
These are all the deals that sold in February 2023. 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 = number of days we owned the property
Return on Investment = Gross Profit /Purchase Price X 100
Deal #1 notes: This land flip profited us $24,417 in only 35 days of ownership.
This property is located in a fairly rural area off a dirt road. It has lots of nice trees and a gentle slope to it.
We bought this 14-acre parcel for $40,886 including all closing costs. Our goal is normally to double our money (or come close).
Due to the shape of the property being a little unusual as well as the access off a dirt road, it was not quite as valuable as other properties in the area. This actually helped in our marketing because our agent was able to list it at a price that drew a lot of attention.
This property didn’t need any site improvements, so we listed it at $79,000. We soon received a lot of interest. We ultimately went under contract at full price. We closed the sale after holding it for only 35 days.
After all commissions and closing costs, we took in $70,230.88 in revenue. This left us with a gross profit of $24,417.
One of the best parts about this deal was the ultra-short hold time of 35 days. We like to keep our money moving quickly and this hold time was well below our historical average of about 60 days.
Our return on investment on this land flip was 54.18%. When you consider the hold time of only 35 days, this was truly a really good deal for us. While we shoot for a 100% return on investment, this was still a great deal for us as well as the buyer.
Deal #2 notes: We made $14,070 on this land flip in 92 days
This is a unique property. It is located in an older established suburban area. It is commercially zoned with many potential uses. We don’t normally target commercial properties for our land flips but we do buy them if it makes sense.
There is an existing gas well on this property as well as a lease for the gas. We investigated the property and determined it was still buildable despite having a gas well. The other interesting thing was that this lease produced income for the landowner. As soon as we bought it, these gas lease payments started being sent to us. It was only $100-$200 per month, but it was still a nice bonus.
Our total cost to buy this property was $40,886 and that includes all closing costs. We bought this property with cash as we do with all of our land flips.
Since we didn’t have an established commercial agent in this area, we first tried to locate one to help us with the marketing. The commercial agents we talked with in the area, didn’t like to deal with land. In fact, one told us we should “just donate it for a tax write-off”. That was not my plan and I knew this property was worth a lot more than we bought it for.
We found a local land broker that knew this area very well. We ultimately listed this property with this broker for $79,900. There was limited buyer activity at first, so after a few weeks on the market, we dropped the price to $69,900. This helped drum up our buyer.
We soon received a solid cash offer and negotiated a sale price of $63,000. After all commissions and closing costs, we netted $55,706. This was much better than donating it…haha!
That left us with a gross profit of $14,070.38 after a hold time of 92 days. This gross profit is less than our average of $22k and the hold time was longer than our historical average of 60 days.
With all that said, this was still a very profitable deal. Our return on investment ended up being 34.41%. That’s not a bad investment in my book!
Deal #3 notes: We made $46,523 and more than doubled our money on this land flip.
This is a 40-acre piece of land in a pretty rural area. The access for this property was off a dirt road, but easy to get to. This piece of land was fully undeveloped with lots of pine trees. The trees were harvested from this property about 10 years ago, but they were growing back naturally.
We bought this land for $46,523 and this includes all the closing costs. We bought this land off the market directly from the previous owner. We bought it as-is with our own cash and closed it through a title company as we always do.
After we closed, we listed right away with a local agent for $129,900. Although we had some interest, we didn’t have any offers. We then reduced it to $119,900. This drummed up a buyer and we went under contract for full price. Unfortunately, this buyer backed out for some unknown reason.
We put it back on the market for $119,900 and soon we had a new offer from a cash buyer. We negotiated the price down to $109,900 and went under contract again. This buyer ended up closing on the deal as planned.
After commissions and closing costs, our revenue was $97,629. This left us with a gross profit of $50,356. Our return on investment was 108.24% and our total hold time was 92 days.
The end result: We more than doubled our money in 92 days. This was a really good deal for the buyer and us as well. Not all deals are like this, but I love it when they do come along!
Deal #4 notes: We made a $10k profit on this minor subdivision land flip
This 15-acre land flip was not a typical deal for us. That’s because it was once part of a larger 75-acre property.
We bought a larger 75-acre property and then split it up into 5 separate parcels. This process took a good amount of time and we had to hire numerous contractors to make it happen.
The contractors we hired were a surveyor, a brush-clearing company, a soil scientist, and a road grading company. These services not only took time, but they added to our costs significantly.
When considering the purchase price of the property of $49,496 and the costs of the improvements of $117,000, we had a cost basis for each parcel of $33,299.35.
This parcel was lot 4 of 5 in total. It was a little farther from the main road. We listed it for $49,900 and a cash buyer stepped forward right away for full price. That buyer decided to purchase a different lot number instead. We put this back on the market and found another cash buyer at $50k within a week.
We brought in $44,725 in revenue after commissions and closing costs on this sale. That meant our gross profit was $10,675. Due to all the work we had done on the property, our hold time was 239 days, which was considerably higher than our average of around 60 days.
Overall, this was a profitable deal for us on this lot and the rest in this minor subdivision project. But, if I had to do it over again, I would have just resold the property as-is with no improvements. It would have sold right away and our overall profit would have been very similar.
The big expense of this project was the road which was about $85,000. Lesson learned: Roads are expensive! I’ll keep that in mind when evaluating lot splits in the future.
Deal #5 notes: This land flip generated $20,861 in profit and a 46.49% ROI in 113 days.
This is the story of a 19-acre parcel that we bought on the outskirts of a large town. In this area, there were numerous established homes. Our property was at the end of the street and the largest on the street by far.
We purchased this property directly from the previous owner off the market as we always do. He responded to a letter we sent him and after a little negotiation, we agreed to buy the property in cash at a price that worked for both of us. The total cost for us to purchase ended up being $44,870 with all closing costs.
We closed on the property and immediately listed it on the market with a local land agent for $89,900. After a few weeks, we didn’t get any offers so we reduced it to $79,900. At this point, a buyer stepped up and submitted a solid offer. We agreed to sell at $74,900 and then proceeded toward closing.
The closing process went smoothly with just a couple of minor delays (pretty common). We closed the sale after holding the property for 113 days in total. This is longer than our average and what we shoot for.
After all closing costs and commissions, we received a wire for $66,481. This left us with a gross profit of $20,861.
Our return on investment was 46.49% in only 113 days. Even though the hold time was longer than I like, it’s still a return that is far greater than any other short investment strategies that I know of that are not speculation.
This deal was not a home run, but I am happy to do deals like this any time!
Deal #6 notes: This land flip made us a 69% return on investment in just 32 days!
This is the story of a 5.25-acre parcel we bought and resold in a rural area in the Northeastern US. The property itself has a lot of nice trees and overall has the potential to be a really nice homesite.
We bought this property off-market direct from the seller as we do with all of our purchases. We negotiated an as-is purchase price (including all closing costs) of $23,147.
After completing all of our research which includes a long checklist of things, we closed on this purchase when we wired the cash to the title company.
This property was ready to market it as-is, so we immediately listed it at $59,900 with a local land agent that we’ve worked with on numerous sales before. After a few days, we received a cash offer from a solid buyer and negotiated a sale price of $45k for a quick close.
I’m pretty sure we could have sold it for more if we held out longer. My philosophy is to not try to squeeze every penny out of our deals. I prefer to keep our money moving fast and take a solid deal when it presents itself.
The transaction went very smoothly and closed as planned. We received a wire for $39,876 after paying for commissions and closing costs. This meant a gross profit of $15,978.
Our return on investment was 69.03%. The cool part about this deal is that we only held it for 32 days in total. Generating returns like this in only 32 days will accelerate your capital really quickly!
Although the profit of $15,978 was less than our average, this is a really solid “bread and butter” deal that keeps our land-flipping business growing exponentially.
Deal #7 notes: A new record for our quickest deal ever! 52% ROI in only 11 days.
This is the story of a property that we bought and resold in February. This 11-acre parcel was purchased directly from the previous owner off-market. They responded to our offer we sent them in the mail and we negotiated an as-is cash deal.
This piece of land was a little unique because it was split into 2 separate sections by the railroad tracks. One side of it was farmland and the other side was fully wooded. The area is very rural but in a County that is growing.
We closed this property through an attorney w/ title insurance and paid $58,371.43. This figure includes all the closing costs we paid to acquire this piece of raw land.
This property did not need any improvements to put it on the market. So, we signed a listing agreement for $99,900 with a local land broker that we’ve worked with many times. This broker has an extensive buyer list and was able to find a buyer before it even hit the MLS.
The offer was full price, cash, and a quick close. This is exactly what I like to see in an offer, so I accepted it. The closing went very smoothly and we received a wire transfer for $89,508 after paying for commissions and closing costs.
I know it’s possible that I could have sold it for more if we had put it on the open market and tried to drum up multiple offers. My philosophy is always to not try to hold out for top dollar and instead sell fast.
And this one was definitely fast! In fact, it was the fastest deal that we ever made. We only owned this property for a total of 11 days!! Our average hold time is about 60 days, so this one is about the fastest a deal can get done.
The gross profit on this deal was $30,386 which meant a Return On Investment of 52.06%. When you consider the ultra-short hold time of 11 days, this return is astronomical if you multiply that out for a whole year! This was one of my favorite deals I’ve done recently.
Year to Date 2023:
2023 Year to Date (YTD) Statistics
We passed the $1 Million mark in mid-February! That’s a good milestone for us and now it’s just a matter of doing that 9 more times to hit my goal of $10 million for 2023. I know we can do it!
To be exact, we are now sitting at $1,192,296 for revenue year to date. That’s an average of just under $600,000 per month. This number has to increase in order to hit our 2023 goal, but I fully expect the momentum and our revenue to build as the year goes on.
Our total gross profit year to date is $417,271. This is the profit we made on all of the sales combined. It does not include regular business expenses such as staff, software, services, and the mail we send.
Our average gross profit per deal is sitting at $23,181. This is slightly higher than the average of $22k per deal that we did in 2022. I like this trend!
So far this year, we’ve sold a total of 18 properties. We’re averaging 9 properties a month and I think we can build on this. I’ve been working hard to set up our team for an increased volume of deals that we’ll need to do if we want to hit our goals.
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 #7 as an example.
The return on investment was 52.06%, which is really good for any asset class. What really makes this special though is the fact that we only held this property for 11 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 1,727%!! And this does not even include compounding that would happen.
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 1,727% 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 land flipping model 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
If you want to learn how to flip land whether as a part-time investment strategy or a full-fledged business, you need to learn all this stuff.
I can help you with that for free! I’ve just launched an amazing land flipping community full of supportive and super smart people.
I’m working on a full training program (ready soon) that will be completely free. I do not have anything for sale now, but later this year I may offer a paid mentorship program if you need a higher level of assistance.
For right now, join our new community for free and get access to all of the free training as soon as it is released.
Just as a disclaimer, investing money comes with risk. Research any investments heavily before putting any of your money at risk. It’s never a good idea to risk more than what you can afford to lose.
And, you can also check out this page that features other podcasts and outlets where I’ve been interviewed and talk about land flipping. I’ve appeared on over 50 podcasts and am booked for many more in the coming months.
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 February 2023 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:
- January 2023 Income Report $728,137.29
- 2022 Year in Review Report $3,474,800.60
- December 2022 Income Report $256,473.60
- 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