The Science of Flipping - Episode 139: Interview with Jack Bosch – Land Flipping Expert

Episode Date: February 21, 2019

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What's up, everybody? Welcome back to the Science of Flipping Podcast. I am your host, Justin Colby. And if you are watching this on YouTube, maybe you're seeing this on social media, or maybe you're doing the old school thing and actually listening to a podcast on iTunes or viewing it nowadays, you can see I have a very special guest, Mr. Jack Bosch. I'm bringing him in because this is the science of flipping land. He is the land guy. I stick to residential real estate, but this is the guy who we, myself and others, get advisement when you are looking at land. So what is up, Jack? How are you?

I'm doing great. How are you, Justin? Man, I'm doing awesome. I'm on my, I think, 16th cup of coffee. So if I'm yelling at the microphone right now, it's because I'm all in. Well, so listen, my podcast is all about the systems, the strategies, the tools that people can not only just get into investing, but then be able to build a true investing business. And so I try to share all of my secrets. And I know you're a big advocate of that. But one thing I don't have a ton of knowledge on and why I wanted you to be on here and share your knowledge is simply the land flipping, how to buy land, how to negotiate land, how to leverage land into cash flowing assets and

everything that you are the expert at. So I want you to kind of take over here is this is something I've bought land to develop on, which is something I can talk at length about. But you handle it in a lot of different areas. And I know for any of my followers who are out there marketing the way I'm telling them to market, that I'm advising them to market from PPC, direct mail, bandit signs, you name it, cold calling, they're getting opportunities with land that have no homes on it or something that needs to be torn down. So let's just jump in now and start off with a normal conversation about how, you know, what is the first piece of advice

you have to anyone, any investor when given an opportunity to look at a piece of land? Great, great question. So, yes, so we have done over 4,000 land flips in the last 16 years or so and in all kinds of categories. Like literally we are an escrow right now to sell a piece of land, an infill lot that we put on a contract for $92,000. We're selling it for $220,000. So we have just literally last night or yesterday evening signed a sale agreement for a property that we bought for $10,000 and we're selling it for $47,000.

So deals, so land can be flipped the exact same way that you can flip houses. The thing is that you got to look at is what is the land ideally be used for. The first piece of advice would be don't just look at it as something like oh there's no house on it so it's worthless. Now look at it from a point of view what is its ultimate best use for a buyer and that determines a lot of the value. Like the infant lot that we just had a contract with is a commercial lot. So the seller needed to get out and so we put in a contract. We actually bought it and kept it for a little bit. And then when we sold it right now, we just waited for somebody who was willing to build on it, so a developer. So you would have been perhaps a perfect customer

for that thing. So I never tried selling that lot on like Facebook or Craigslist or something like that because the buyer for that lot doesn't hang out there. So instead on that lot, I went with a realtor. I looked for the best commercial land broker in town and I listed it through that. Another lot that is like, let's say, a lot in the outskirts of town is ideally the perfect lot for a future retiree or somebody that wants to live close to the city but doesn't have money to really afford a place in the city anymore because prices get out of reach. So in that case, you look at that lot, you find that lot, there's a vacant lot, and instead of saying, ah, it's not a house, I'm not going to do with it, it's like, well, what does an acre cost in that area?

And if I can get that property for, let's say, $0.25 on the dollar, because the seller doesn't want it anymore, can I make a profit with it? Right? So you can buy a $20,000 lot sometimes for $3,000, and then we turn around and sell it for like $17,000 again or $15,000 and make the same kind of wholesale profits that you can make with houses. What a lot of house flippers do, unfortunately, is they look at a piece of land and they're like, well, I don't know what to do with it, and they pass on to it. Or they come across a house with two lots next to it. And instead of thinking, ooh, let me split off the lots and sell the house on its own, because the house has, people buy the house for the world value of the house. They don't buy the house for the value of the land. So you can often get the house with two lots next to it for the same amount that you

would have gotten the house on its own. You can sell it for the same amount on its own. You can get full value of it, but you split off the two lots and you sell those to a builder at 40 grand a piece. And all of a sudden you added $80,000 to the profits of a house deal. So plenty of questions on my side, right? But I want to take, for example, I'm going to say I've never, all I've learned is wholesale flipping houses, right? Whether I learned it from Justin Colby, Sean Terry, Ken Clothier, whoever. How would I go find a buyer for a piece of land? Because in that world, there's a lot more buyers for properties that need to be rehabbed than there are, in my opinion, for lands. Now, I could be totally wrong. You could completely correct me. But how do you go find that buyer? It's an infield piece of land. I love your

commercial example. If I'm not going to buy it because I'm a rookie investor, I have no money, I have no means to take it down like you may have. What could I have done to flip that commercial lot like you did, but I didn't have the means to buy it? Yeah, so I can answer a question two ways. The first way is answer your last question, which is on that specific deal, what could somebody do? Well, the way most of our students, because we teach this now, we have seminars and so on about it and home study course and so on. When we teach this, or what most of our students, they're exactly in that situation that you just talked about. They're beginning investors,

they don't know what to do exactly, and they're actually attracted to us because it doesn't have the complexities of houses. But that question that you just raised is one of the key questions. How do I go sell it? Or the other question is like, why didn't the seller go sell it themselves? Which is the same question you get, right? Why doesn't somebody go and sell the house for more money? Well, because they're sick and tired of dealing with it. Or in the land area, many times they've inherited the land or their life plans have changed and so on. But bottom line is, what could they have done specifically? Well, on such an infill lot, I realized it's a special use

property, right? Because you can't go and build a house on it. It is what's called C0 zoning, which means you can put medical on there. You can put perhaps a gas station on there. You can put things like a restaurant on there. But even for a gas station, you need some zoning variance. So it's only good for certain kinds of buildings. So in that case, under normal circumstances, I would have not gone and shelled out the money. I just knew it was such a good deal that I just paid for it. But if you're a beginning investor, number one, what you can do is you just make an offer, put it on the contract, because there's a big difference between land sellers and home sellers.

And the land sellers, typically, the competition is so much less in the land selling area that the land sellers, that you're often the only game in town. You're only the only one making them offer because their property, this property was not on the market. We literally, we sent direct mail out. We sent out a letter. The seller contacted us. It's like, yeah, I've owned this thing for a while. I really don't want it. I live a thousand miles away. We offer them 92 grand. And they said, yes. Now, what most of our students do in that moment is

they execute a contract with zero escrow deposit, because we don't actually ask, we actually usually put escrow deposit down. And with a close of escrow of because we don't actually ask we actually usually put escrow deposit down and with with a close of escrow of anywhere between three and six months it's very common on land anyway that close of escrow is a little bit longer because typically on these commercial deals people want to do like due diligence and and phase one environmental tests and stuff like that on the real commercial ones. So nobody's going to give you a hard time if you ask for a four-month close of escrow. Now you've got four months. And now the thing we do is you either, in this case, we contacted a well-connected broker, or you go to the builder community if it's a buildable lot, if it's a lot

for like home builders and for houses. And you go to the, and just basically offer it to them as a bargain because builders are not used to getting property at a bargain price right they're used to to realize if i get this on market value and their numbers still make sense they buy it their builders are not marketers builders are builders they know how to build So when you go with a lot, and this lot probably is worth $300,000. So if it's not $300,000, we sold it for $220,000. We had it sold very quickly. Whether or not we owned it before. So what most people in summary, what most of our students do is they just put deals on a contract with a six-month close of escrow, no escrow deposit.

So there's no risk. Plus, they have the ability to back out of a contract anytime for any reason. We literally put that in there and then they go market it. And their best way to do it is through realtors or builders slash developers. Would that be? Well, if it's an infill lot, you can go either way. Now my first, if I get an infill lot, a residential infill lot, I usually don't hire a realtor. I only hired a realtor in this case because it was a very specific property. And on typical deals, you go and go to the home builders association of that town and you just call down the list.

And very quickly, you have somebody that's willing to buy the property, particularly if you bought it for 30 cents on the dollar. Home builders association of that city of that city and everyone has them you don't have to join them they literally have a directory on their website where all the lists they were all the members show up i've gone to 50 of them around the country it's always the same right on top of their website there's a taxes there's a link says directory all that are all the listings come up of them with name with telephone number you just go call one after the other say like hey are you buying in this area no okay next are you buying this area yes we got a lot it's this dimensions here's the market value we can sell it to you for 60 percent of market value and they're like really let me go out there and if it's a good deal, it sells very, very quickly.

Now, having said that, our bread and butter deals are usually the deals in two other areas. So we focus on deals in three areas. Number one, the infant lots. Number two, we go in the outskirts of already existing of larger cities. So just beyond the path of growth and where properties of value, where demand is there from builders, from people who want to live there, retire down the road and things like that. Or when we also deal, thirdly, we deal in large acreage in the more rural areas. So like who wants to, would you like to have a ranch somewhere? Well, sure. Why not?

Right. Lots of people would love to have a 20 or 40 acre ranch. They can take out the kids. They can take out the RVs, they can go shoot some stuff exact opposite of the house flipping business. So what I mean by that is you're right. In the house flipping business, once you have a deal on the contract, the selling is very quick because you have a lot of people involved in that. The funny thing is, and the effort in the house flipping business is actually on getting the deal. You got to do all kinds of stuff to get the deal.

Well, in the land flipping area, it's the exact opposite. I have not talked to a land seller in probably 13 years. Why? Because they call in to a call center. The call center takes the phone calls. They submit it into a database for us. We make an offer without ever talking to the seller. The thing is, in our our industry in the land industry the the level of competition is about i would think for every one land flipper that's in the market there's probably a hundred to five

hundred house flippers in the market 100 so we have i mean if you think around how many house flippers you know a ton how many land flippers, you know, a ton, how many land flippers do you know? Very few. Yet there's just as much land out there, if not more than there's houses. So the key comes in on the selling side. It's not harder. It's just different how we sell our property. So in essence, there's properties, properties are a dime a dozen. So you send out, we send out, we use direct mail.

You send out a thousand letters. We get a hundred phone calls from sellers wanting to sell their properties. So we get huge response rates. But then on the selling side, we sit down and we have to actually think about what is this property used for? Just like I said a moment ago, what is the best use of that property? And then we create an ad for it that we put on Craigslist on facebook on zillow and all those different redfin in those places that ad then talks to that buyer right so we're making the ad specific for that buyer so if it's a forested property with a little creek going in and an area for hours well

it's the great cabin place right it's the place away. Now, if it's a piece of desert that there's not much on there, it's a great RV place and it's a great ATV place because you can horse around on the thing without hitting anything. If it's an infant lot, it's one for the builder. If it's a lot in the outsides or outskirts of town, it's for somebody who is looking to retire 10 years from now, who perhaps wants to pay the property off in monthly payments, because that's why we generate cashflow. We allow people to pay these properties in monthly payments and then wants to perhaps put a mobile home on there 10 years from now and have a dignified retirement while being only 10 miles from the doctors the movies the restaurants and all this kind of stuff so it's

it's different angles for different properties but in essence it's real estate without houses you can do everything with land you You can do it with houses. You can rehab it. And no, that's the only thing you cannot do. You can retail it. You can wholesale it. You can sell it with seller financing. You can build on it.

You can rezone it. You can do all those different things. What we tend to do is just a quick wholesale, just boom, boom, boom. And seller financ is our two different. One of the more common type of lots that someone in a MySpace would get, you know, when you're already marketing for residential. So, let's talk to the person who's already in residential and was like, man, I get all these lots. A common lot is like next to a tire shop, right? Like if in the city of Phoenix,

I'm in Phoenix, specifically Scottsdale, but you get that like random lot that you have a house, you have a lot, and then you have a tire shop. And you're like, well, what the hell do we do with this? Right? Like it's not necessarily just a residential, there's sporadic commercial around. Obviously you want to look at the zoning. I understand that. But how do you find a buyer for a lot like that where it's not, where do you go with that? Well, the first touch is always the neighbor. Okay. Right. So you literally, you know, and about 25% of our properties we sell to the neighbor. Okay. One of our students right now literally just posted in our Facebook group that they uh say they went out to the neighbor the neighbor bought it they bought the property for three thousand sold it for twenty thousand dollars

to the neighbor right so uh or didn't even buy it they put on a contract for three thousand never bought it did a double closing right simultaneous closing and sold it to the neighbor for twenty thousand dollars the neighbor is always our first, our first approach because it is, it is very possible, particularly in that scenario, if that lot is owned individually and you have a house next door and you have a tire shop next door that the tire shop needs more space or the house owner wants to prevent the tire shop from having more space and coming closer.

So you get, you get one or the other other has a very high likelihood that they'll just take the deal. Yeah. Good. So that's one thing. The next, if that doesn't happen, you again, you look at the zoning and if the zoning is residential, then you go to a builder again and see if the builder wants to, because some builders, they also, they go in and they might actually rezone it because if it's not so commercial by so rezoning a commercial now it becomes actually worth more mm-hmm if it's owns commercial

great then you go find in that case I would go and probably find a broker because in our case for that deal again the broker who by the guy who buys it is a guy that has bought stuff through that same broker multiple times before. It was one of the first context to look at first but the price was a little too high but he kept looking at it and as we dropped the price a little bit he says okay now the price is where I want it and he doesn't yet know what to do with it but he has relationships with the city, he is a repeat buyer. I on my own would have had a hard time

finding that guy. Yep. Yep. No, I understand that. So there's, I mean, I could probably sit here for the next hour, but I understand how people listen to podcasts is they usually have a bandwidth issue. So I want people to be able to find you. Where would they, where can they go to find Jack Bosch to get more information on how to do this? Because I think this is even for the, you know, most of my listeners are residential. They get plenty of land opportunities, but they probably just throw them out because they're like, well, what the hell do I do with this? You guys need to get educated. He's our guy. Jack is my guy. Get educated by Jack on how to handle this land, but where can they even go to find you? Yeah, they can go to, for example, we have a home study course that lays out in a specific detail how to find the lots, how to put them on a contract, what documents to use and includes the documents, how to list them, exactly how to structure the listing and how to get that done very quickly.

And you can find out more about that under www.landprofitgenerator.com. Landprofitgenerator.com. Yes,landprofitgenerator.com. So there's like some free videos. Landprofitgenerator.com. Yes, landprofitgenerator.com. There's free videos on there. You can watch it and just see. You don't have to buy anything. It's just like more information and so on.

You can check it out. Then obviously on jackbosh.com, there's a bunch of information, links to the podcast that I have my own podcast and, and different things and, and links to everything else is there too. And then we have a Facebook group called Forever Cash. A few years ago, I wrote a book called Forever Cash. And so we, what we like that term, because it, it, to us, it means cash comes in forever. Because our financial philosophy is not just flip, flip, flip, but flip to make money to then get into additional things.

So we just bought a 147-unit apartment complex, for example, and things like that. And that Facebook group has turned into really our biggest and baddest land support group that exists on the Internet, where we all help each other getting more land deals done and it's called the forever cash uh real estate group great great in your podcast what's the name of your podcast that they can all go find it's the forever cash real estate podcast perfect perfect the other one is actually called the facebook group is actually called forever cash

land for pennies or something group. So about the Forever Cash should show up. Forever Cash. Focus on Forever Cash. You're going to find my guy, Jack. Well, thank you, dude. I know it's, you know, you're busy. You got a lot of things in the fire, so to speak. And so I really appreciate you spending time with me and the Science of Flipping tribe

to give some more education. This has been incredibly useful because I know even as a residential investor myself, there's deals out there that we're throwing away right now that can be monetized. So this is big. So I appreciate you again, man. Thank you so much for coming. Wonderful.

Thank you for having me. All right. All right, guys. That is the end of this episode. Find Jack Bosch, Forever Cash. I look forward to getting you guys rocking and rolling here. Stay tuned. There's many more great interviews that I'll be doing, but guys rocking and rolling here. Stay tuned. There's many more

great interviews that I'll be doing, but that's all for this one. Peace.