Welcome to the October 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.
October 2022 Income Report – Total Revenue: $275,462.13
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 October 2022 statistics:
Now for some insight into these numbers.
Overall, October 2022 was a pretty average month for us. It’s funny, but most of the metrics for this month fell within the running averages for 2022 as a whole.
The October Revenue of $275,462.13 breaks down to $8,885.88 per day. Of course, the revenue doesn’t come in daily. Instead, it comes in lump sums as we close each deal.
This month we closed 5 resale deals. We had a couple more that were due to close this month, but they got delayed until next month. That happens in this business. It’s always good to plan for the potential for delays when you are managing your cashflow.
We averaged $21,407.28 in gross profit per deal. This is the difference between what we sold a property for minus what it cost us to purchase that property. There are other expenses in our business that are not factored into this figure, but this gives you an idea of how much we’re profiting on each deal.
Another key metric we track is the Average Days In Inventory. This is how long we own a property for before reselling it. This month it was about 2 months on average. As you can see, our focus is quick sales and very limited hold times.
Finally, we sent out 22,738 pieces of mail this month. Lately we’re trying to hit 50,000 pieces of mail sent per month, so we fell short of that goal. This is the most controllable part of the business, so going forward, I’ve put systems in place to make sure we hit these milestones. The amount of direct mail we send directly impacts the deals we are able to buy in future months.
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 October 2022. We purchased the property (normally in a previous month), and then resold the property to a new buyer.
***addresses are incomplete in or 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 – Arbor Dr
Deal #1 notes: This was a solid deal all around! We closed on this property and put it on the market, and a few days later we had a buyer come forward. We didn’t sell it for the full list price but we negotiated a deal that was a win-win with the buyer. Anytime we can hold property for less than the average and make a good profit, I will go for it every time.
Deal #2 – Cahn Rd
Deal #2 notes: This is a really cool property. It is flat, is mostly cleared meadows, has a pond, and a couple of barn structures. For these reasons, I was pretty confident the property would sell quickly. In fact, it sold in record time. In total, we held this property for only 12 days! As soon as we put it on the market, a neighbor reached out and expressed interest in buying the property. They made us a solid offer, we negotiated a couple of terms and put a deal together. The closing was quick and went smoothly!
Deal #3 – Price Ln
Deal #3 notes: This is a fully wooded parcel on a dirt road. It had some nice mature trees and was relatively flat. I was confident this one would sell quickly as well. It was on the market about a week before we got a solid offer and negotiated a deal. The buyers ended up with a great property at an aggressive price. We got a really solid return on our investment for only being in our inventory for 60 days.
Deal #4 – Club Rd
Deal #4 notes: This is a nice and flat 5 acre parcel with mature trees, road frontage, and deeded access to an adjacent small pond/lake. We priced this property aggressively (like normal) and we found a buyer right away for full price. This one we only held for 39 days which is shorter than our average. And, we were able to more than double our investment on this deal in such a short amount of time.
Deal #5 – Smith st
Deal #5 notes: This deal had hit some snags! First of all, this property was in our inventory for 147 days which is way too long. We initially listed the property for a higher amount, but had to consistently reduce it until we found a buyer. It is a big open field that is beside some train tracks. It had access to water and sewer, so I figured it would sell quickly. However, I failed to factor in the negative impact of being beside the train tracks in my pricing. In hindsight, I still would have done this deal, but I would have priced it much lower from the start. In the end, we more than doubled our money, so it was a win. It just didn’t have to take as long as it did.
Year to Date 2022:
2022 Year to Date (YTD) Statistics
Our year to date numbers in the chart above show our progress in 2022 through the end of October 2022.
With a cumulative revenue of $2,777.958.19, we’re average $277,795.82 per month so far in 2022. That’s $9,138.02 per day if we averaged it out.
We’ve closed a total of 55 sales this year so far. We’re well short of the 10 per month that I was hoping to achieve, but ultimately it is more about the profit than the number of deals. I’d much rather do 1 deal that paid the same amount of profit.
Our average gross profit per deal so far is at $22,640.79. This is slightly higher than last year’s average of $20,580.47. Obviously the higher we can get this number, the better.
The average days in inventory has been ticking upwards the past couple of months. We’re now at 64 days on average, and my goal is to be 60 days or under. This is definitely pretty close though and I can’t complain too much about it.
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.
The return on investment was 106.24%, which is amazing in the world of investments. What really makes this special though is the fact that we only held this property for 39 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 994.29%!!
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 is994.29% 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.
Just as a 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 October 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:
- 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