Welcome to the May 2022 Income Report. This is where I detail everything associated with our land flipping and development business.
I’m a big fan of the land flipping model of real estate investing. It can be highly lucrative and also very rewarding.
We resold our first property using this model in March of 2021 and we’ve been on an accelerating path ever since. It’s now grown from just me, Heather and one single assistant, to a large team dedicated to bigger and bigger growth.
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.
May 2022 Income Report – Total Revenue: $208,752.57
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.
Without further delay, let’s get into the good stuff.
Here are the May 2022 statistics:
Now for a little insight into these numbers.
The revenue figure of $208,782.57 is below our average for the year. The big reason for this lower than average number is the fact that we only closed 3 deals. A couple of the deals that were supposed to close in May have been pushed back to a June closing. Assuming they close as planned, I’m looking forward to a big revenue number for June.
Overall, the gross profit was $84,500 which is a pretty substantial number.
This month we sent out the most mail ever, We mailed over 100,000 letters this month that will likely lead to some big results 3-6 months from now. Mailing out letters consistently is the lifeblood of this business. It keeps the phone ringing and leads to more consistency on our purchasing side of things.
Plus, when we have more leads, we can be choosier about the deals we move forward with. There is no reason to move forward with marginal deals as long as we have an abundance of leads.
Our average days in inventory crept up over 60 days. This is pretty normal. One of our 3 deals was held in our inventory for 96 days, so this threw off our average.
Keep reading for a breakdown of the properties we sold this month.
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 May 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 – Mount Harmony Rd
Notes: This property got a lot of interest on the market. But, it took awhile to get it under contract. The issue was that there was a driveway that was shared with the neighboring property. I didn’t give it too much thought when I bought the property, but in hindsight, this scared off a lot of buyers. In the future, I’ll have to adjust my buy price accordingly to account for this situation. Overall we still profited $10,000 so it ended up working out ok.
Deal #2 – Woods Rd
Notes: This was a really good deal for us! We bought the property for $16,410 and resold it for $53,510.05 after commissions and closing costs. The reason was that this was just a super hot area. As soon as we put it on the market, we had lots of interested and is sold for our asking price. We need to buy more properties in this area! I think the return on investment may be a record at 222.43%!
Deal #3 – Bertha Dr (3 lots)
Notes: This was a little bit of a unique situation. I purchased these 3 lots as a package deal as they were all side by side. Then I hired a soil scientist to do perk tests on the properties. The soil scientist was able to find 2 good locations on for the 3 lots. So, it was going to be tough to sell them all separately. Thankfully, a buyer came forward that wanted to buy all 3 of the properties. We had to discount our list price substantially, but I was happy to do it. We ended up with a solid return and held the properties for less than our typical average number of days.
Year to Date 2022:
2022 Year to Date (YTD) Statistics
5 months are now in the books! I’m honestly not where I wanted to be. However, when I look at it objectively, we are doing really well as a company.
Our revenue over 5 months is nearly our total revenue for all of 2021. We’re averaging $244,878.86 per month so far in 2022. If we were to annualize that, we’d be on track for $2,938,546.32. That’s well short of my $5 Million target. It’s time to step it up for the rest of the year!
Gross profit is averaging $116,800 per month. Annualized, this would be $1,401,600 in 2022 at this rate.
We’re averaging 4.6 sales per month, which is well below the 10 per month that I’m shooting for.
I’ve got some work to do for the rest of 2022. I know I’ve got some loft goals, but I also know that they’re attainable.
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 #3 as an example.
The return on investment was 43.94%, which is amazing in the world of investments. What really makes this special though is the fact that we only held this property for 49 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 372.00%
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 372% per year called?
How can you do the same thing as an investor and get these kind 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
In the future, I may decide to offer a training program to teach these skills. 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.
disclaimer, investing money comes with risk. Because without risk, there are no returns. 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.
One last thing, if you liked this, you’ll also learn a lot from this video I filmed. It’s our 50 First Deals that we did in the land flipping business. It’s a very detailed breakdown and it gives you a good idea how our business started and how we did on each deal. Get it here.
That wraps up the May 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: