This is episode 2031. We’re going to talk about how we have funded hundreds of land deals. We’re going to take a look at how these land funding deals actually work in real life. This is reality.

I’m going to give you the whole process you can really understand and grasp.

Before we start, I have to tell you. This is the reason Jill and I started Land Academy years ago. We didn’t start Land Academy to give away our business model or to actually make money. Believe me, this is not a good way to make money. Buying and selling real estate is a fantastic way to make a lot of money. We started this to get funders because we were constantly and still do run out of our acquisition capital. We created this Land Academy group in an attempt to, and it really worked, educate people and find people who want to fund our real estate deals and be our partners. To this day, we have a lot of partners because of it.

Buying and selling real estate is a fantastic way to make a lot of money. Share on X

I look at it like my personal thing was funding other people’s deals, educating people, and being frank.

It is now.

That was what got my attention early on. Sharing our whole secret sauce may not have been our best idea. Ask me after a couple of drinks when we’re not on camera, but it’s all worked out fine. We have helped many people make millions in many different ways. How can you be unhappy about that? That’s the reality. We’re going to talk about the step-by-step process of what really goes on when we do these deals.

Sewage And Septic

For our entire week, the theme is everything you need to know about funding your land flip or your house flip transaction. Each day on the show, we answer a question from our Land Academy member Discord forum and take a deep dive into land and house-related topics at your request. Jill, there’s a question.

Joseph wrote, “I just talked to a seller about a piece of land. They want to sell for my offer price of $11,752. It’s 2.65 acres with a house, chicken coop, and a workshop but no septic or sewage.” Where does that go? Do they have one of those things that go behind the RV and they just wheel it away once a day?

That could be.

I’ve seen some weird things, by the way, on the road like that. It’s like their tiny house and they have one of those things on wheels where you can dump it and then go dump it. Joseph, this is not nuts. I’ve seen this stuff. “Basically, in the area, I think you can get $20,000 per acre and it’s right off a main road. I asked why they were selling and they said they just can’t keep it anymore. The kids don’t want it. They need to cash fast. He sounded emotional. No back taxes.”

“Of course, I’m sending someone out there to take a good look at it and lots of pictures, but I’m also pinching myself a little bit and wondering what I could be missing. I flipped derelict houses before, but they said this is in livable condition.” This is interesting. “At this price, I don’t see how I can go wrong. Is just the model working? My question in the group would be, what could go wrong? How could I lose? We’re doing everything right.”

I would do exactly what you’re doing. Let’s get some eyes on it. Get a signed purchase agreement so we have that locked in. Maybe even open escrow because you can change your mind later. You haven’t done anything yet. I might even open escrow, get an escrow number so I feel a little bit like I can breathe and get other people involved here, and then send someone out to take pictures of it. You have good eyes on it. Get some drone shots. That’s a thing maybe at this point, too, because it really is a house and you have it in escrow. I feel good about it.

I would then even bring in a local real estate professional and have them go walk in it. Never tell them what you’re spending. That’s my thing. Let them go in, take a look, say, “I don’t know what to do with this. I’m just about to close. Can you please go take a look at it? Tell me what you think. What could you sell it for inside of 60, 90 days? Whatever you think.” That’s my go-to. I don’t want to sell it really fast. I always tell them it’s not a fire sale, but I’m not going to be here for a year to reset the market and mark it up and wait. I’m not doing that too, but I want to know what’s a good price.

When you say a sentence to yourself about a transaction, “How can this go wrong,” you are absolutely on the right track. This happens. There are a lot of different reactions you can have when you first review a transaction when it comes back. The vast majority of where we have a lot of success, maybe all of them have some component of, “What am I missing? This is an amazing deal. Is it 100% foolproof?” No, but I love that you said it twice in here.

I have one little point I wanted to add that I picked up on, too. It’s a house with all these things there. We don’t know what’s up with the septic in the sewage. I do have to ask. My only red flag is to find out what’s the problem there.

You’re going to get an inspection. We cover all this in House Academy. It’ll come up at the inspection, and then you can adjust the price or deal with it at that time.

The price is so good. I just want to know what the story is there. Is it on the side of a cliff and it’s all on stilts and no one could afford to do things? I don’t know. Forget you had that. That would be it and you’ll find out. These emotional things, this is real. I get it.

Land Funding Deals

This episode’s topic, we’ve funded hundreds of land deals. Let’s look at how land funding deals actually work in real life. Jill, go ahead.

You join Land Academy, you learn the education, you follow the steps, you send out mail, you do everything right, you pictured amazing acquisition criteria where you’re only buying things where you’re going to make at least $50,000 because then you’re going to get somebody else. You can get a funder that will get involved in it. What am I talking about? If I send out a bunch of offers, I’m only going to make $5,000. The chances of getting somebody involved and excited about splitting $5,000 with you is slim.

If you send out a land of investing offers about making 5 grand, the chances of getting somebody excited are slim. When you are talking about making 50 grand, you will get people’s attention. Share on X

When you’re talking you’re going to make $50,000, now you got people’s attention like, “What’s going on? Let’s look at this deal.” It could be buy for $30,000 sell for $80,000, something like that. Very reasonable and really easy. How does it work then? The purchase, it could even be like the question for this episode. “It came back, it’s signed and I’m ready to go. What do I do?” My first thing would be to go ahead and open escrow because it’s that good. That would be my first step. Open escrow and get that locked in and then come to me with the deal.

You present it. Where do you do this? Go to LandFunding.com and fill in state, county, APN, the details you have, the cell information, and a copy of the purchase agreement so that I know that that’s a real deal and then it gets to me. I’m going to look at it and go, “This is great, Joseph. Holy cow. We’ve got to do this. It looks like you’re all ready to go. Awesome.” Done. I approve it. It’s either going to be, “I love it as it is,” or, “Don’t forget to check this. Let’s make sure we get maybe the septic thing. Did you get the right person out there?”

“Can I see the report back just so we know?” If it doesn’t work at all, I’ll tell you, “You’re spending too much money,” or, “I don’t see the access. Do we know about the access,” or something like that, so you know. Let’s just say I green-light the whole thing, it’s this deal that we’re talking about that you wrote in. Let’s go. My team then gets involved. Here’s one of the beautiful things I didn’t mention. My team is phenomenal. My team were former escrow agents who now understand our side of the business.

They will get deals done that sometimes other people can’t get done. Any help you need with that scenario, they’ll jump in and take over and do work side by side with you and get the deals closed, often, faster than you think we can get closed. I approve the deal. I send you a quick little 1, 2-page partnership agreement. It’s just saying you’re in charge of this. I’m in charge of the money. That is usually how it goes, and what our percentage is going to be when we split. That’s it.

That document is between us. It’s not like it’s sent to the county. We don’t share with the escrow people. As Jack said before, we’re not opening an LLC together. It’s a simple little partnership agreement, telling us what the steps are. Our responsibilities are split. With our split, too, it says in there, we’re going to each get paid out of escrow. The costs that I’m covering, that’s in there too. Typically, I’m covering the whole purchase price and the closing costs. If we’re closing on the 30th, whatever money needs to go to the escrow company to get closed on the 30th, that’s coming out of my pocket. You’re done.

Now we’ve closed it. Part of the normal responsibilities at this point, too, is I ask you, you’re the manager, I call you the manager of the deal, either you’re going to be in charge of selling it or you’re going to find an agent and manage the agent to sell it. That’s part of your things. Usually, we will remind you, getting close to closing time, get that agent lined up. We don’t want to wait until, “We own it today,” and then wait until the 5th to find an agent and get it posted and marketed and for sale.

Even the guy that you used a couple of weeks ago, let’s get his opinion too that we talked about. We may have a guy already picked out. We close on the 30th. Hopefully, that’s the day of the 30th or the 31st, our agent or you is ready to go and list that property and get it sold. Now my money’s in there. I just sit back and let you manage them. You talk to them. You make sure the posting looks good. I’m here if you need another pair of eyes for my expertise, but you just run with it. I’m your bank. I’m not in your way. That’s how I am. I’m not going to sit here and nitpick. I’m not going to call you every day and say, “Is it sold yet?”

That’s the value of bringing in someone who’s experienced like me, too. I understand where these deals go. I’m going to sit back and wait for you to call me when you’ve got something great and you’re ready to go on the sell side. That’s it. You call me up and go, “Jill, we’re ready to go. Remember, you and I talked about we’re not going to take anything below $80,000? Guess what? I just got a full-price cash offer for $82,000 and I opened escrow. I told your team we’re done.” I say, “Congratulations, Joseph. I will be watching for when it closes thing and that’s it.

You with my team, they’ll help you manage it to the close and then at that point, whatever percentage you and I agreed upon. Jack talked about it that I’m open to all kinds of variances, but let’s just say we bought it for $30,000, we’re selling it for $82,000, we got costs in there, we had an agent working with us. Now, our $82,000 is $72,000, let’s just say, whatever it is. That’s really realistic. That’s a $42,000 profit, right? Divided by 2, that is $21,000 each.

At the close of escrow, what you’re going to do is you’re going to submit before escrow closes, when we get the HUD 1 or the closing statement saying how much money is coming back, we’re going to take the total profit, the $42,000, cut it in half, and you’re going to submit an invoice, if you will, to escrow that you’re going to get your management fee of $21,000 at escrow to your account, wherever you want it wired or whatever or check, whatever you prefer. That’s what happens the day it closes.

I get my investment back, my half of the profit, and you get your half of the profit at the same time. I’m not writing you any checks or anything. It’s right out of escrow. It’s really easy and simple and clean. Hopefully, while this was all happening too, you’ve submitted two more to me at that time, and we’re doing it again because now we got a team, by the way. My team knows your team. You and I got this figured out, how we roll. You’re like, “This is great, Jill. You don’t bug me. I love it and you’re there if I need you.” Now we have this agent that we love and this escrow is so fast and let’s do it again.

As I said before, that’s great, guys, but if it’s so easy, why doesn’t everybody do it this way? The reason is stuff goes sideways in deals. That’s one of the reasons you want to fund with somebody like Jill, too, because she’s going to step in within reason. She’s not going to do the deal for you, but she’s going to step in within reason and either save it or not. This really is a no-lose situation for you. I’m not trying to sit here and sell anything. You’re not going to lose. You’re not putting any money up.

Episode Wrap-Up

If something goes sideways, Jill’s going to end up with the deal, which makes her very choosy about the deals that she gets involved in the first place. She chooses deals that basically can close themselves. They’re a great deal and the numbers work. Join us next time where we discuss the difference between funding land flip deals and house flip deals. You are not alone in your real estate ambition. We are Jack and Jill. Information and inspiration to buy undervalued property.