This is episode number 2076. We are talking about myths all week. This episode’s myth is that it takes a ton of money to invest in real estate. I don’t think so.

I t takes a ton of money to invest in real estate. In some properties, it does. If you’re brand-new and you’re doing houses, and you don’t have a community or you don’t have people behind you, it does take money. I hear a lot of people saying, “I can’t jump into it because I don’t have $200,000 to plop down on a median-priced home in a good area. I can’t plop down $200,000 and put $60,000 into renovations to hopefully sell it for $350,000,” because in that area, that’s what it’s worth. It’s between $350,000 and $400,000. Those would be real numbers. Maybe they’re like, “I don’t have the credit score. I don’t have this.” It needs money for that product type. I’m talking about SFR. We didn’t even talk about, “I want to have an apartment complex or a duplex,” or fill in the blank. It gets higher.

People automatically think they are not candidates, that they can’t do this, or that they’re not going to be in the club because they haven’t saved up a couple hundred thousand dollars. I’m here to tell you I got a great way for you to get a couple hundred thousand dollars. When you know of my way and my plan on how to easily go from $10,000 to a couple hundred thousand dollars, seriously, you’re going to realize, “Why would I even ever change that plan?” to which I say, “Exactly.”

I want to hear Jill’s quarter-million-dollar plan.

It’s easy. We’re going to do it on the show. We haven’t even gotten to the show. We have a question to do. We have all kinds of things.

Land Academy Member Question

Each day on the show, we answer a question from our Land Academy Member Discord forum and take a deep dive into land-related topics by popular request.

Johnny wrote, “I am brand-new to Land Academy. My brother and I are partners. We are wondering if there are any states or counties that may look good when trolling but we should not waste our time on.”

There are terrible states to buy and sell land in and there are amazing states to buy and sell land depending on who you are and what you like. We have many members who buy and sell and put food on the table full-time. Buy and sell land in California. We have made a lot of money in California. We no longer do for a lot of reasons. In the last several years, it has changed. It has changed politically, tax-wise, and all of that. You are subject under a microscope in that state. For that reason, we don’t buy land there. Half of you who are tuning in to this are going to completely disagree and that’s fine.

It’s fine. I’ll also look at the deals if you need funding.

West Virginia has a lot of problems with what we call undivided interest. Long story short, multiple APNs were assigned to people, not to the properties. The way we send out mail and look at data doesn’t apply to West Virginia. In the New England states, we have some people there from our Land Academy group that smash it. Jill and I do tend to avoid that state. It’s got more regulations.

We are middle-of-the-country people, in general. All those middle states, all the way North and all the way South, we are very into that. Some people don’t even bother with states like Wyoming, Arizona, New Mexico, Nevada, Texas, Tennessee, and Arkansas. We do really well there. Is that the way to do it? Is that where you should send out a mailer? No. I grew up in Michigan. We don’t buy a lot of property in Michigan. I don’t know why. You need to take a look at what makes sense to you and look at the regulations in that state.

There’s so much, Johnny, that you’ll see in our community. When you’re trolling, bring it up to us on the Thursday call or bring it up in Discord. Chat with people like, “This is what I’m thinking. Does anybody see any big flaws? Has anyone experienced anything wrong with this area before I hit the download button?” They’ll tell you. It’s a really good group.

Busting A Real Estate Myth

This episode’s myth is that it takes a ton of money to invest in real estate.

I was talking about houses. That is a true fact. This is my whole point here. I’ve got $10,000 to invest. What can I do with $10,000 in an SFR or any other property type like that? Not a lot. I really cannot get very far with $10,000. Hopefully, maybe you find someone or you find a partner, but then it’s their money, not your money. You don’t have any experience to go with this too to show, “I can do this. I believe in this deal. Trust me.” $10,000 is not going to get you far. That’s a fact.

Think about land for a moment because that’s what we do anyway. I want you to know that it doesn’t take a ton of money to get going. Think about your $10,000. You could start off by buying 1 property for $10,000 and selling it for $20,000. Next month, buy two properties. You buy 2 for $10,000. You spend your $20,000 and double it again. You got $40,000. In month three, I do it again. I do $40,000 to $80,000. Maybe it takes a little bit longer. I do it in month six. By month six, I turned my $80,000 into $160,000. It’s very easy. I could be buying for $20,000 and selling for $40,000 or I could still not change a thing.

It doesn't take a ton of money to get going in land investing. Share on X

Let’s assume you are not comfortable yet. You’re going to keep your buy for $10,000 and sell for $20,000. I f I can do 8, I can do 16. Maybe it will take me five months to do that, but so what? That’s going to be close to a year of all my time invested. At the end of the year, I’ve turned my $160,000 into $320,000 all doing the same type of deals.

Think about this. At the end of the year, you’ve got $320,000. Let’s say I screw a few up. It didn’t go like I planned or I didn’t finish on time. I screwed it up and I have $250,000, but so what? There’s my $250,000 inside of a year. I can make different decisions. This is my point here. Do I want to buy one house or keep doing what I’m doing? If I can turn $10,000 into $250,000, think what I could do with $250,000.

Buying A Property On eBay

In the mid-’90s, I bought a piece of property on eBay. It was an 80-acre property in the middle of Arizona, sight unseen. I won the auction for about $8,000. I cleaned the property up on the internet. I never went and saw it. I didn’t clean the property up physically. What I did was I represented it with maps and cool stuff and re-auctioned off for 2 or 3 times what I paid.

Did you even do anything about photographs?

No.

Did you use whatever photographs they had?

I used what I could find on the internet that was free.

This is good because I was curious. Of the area?

Yeah.

Thank you.

I told the story and all of that. I cleaned up the photos. Back then, it wasn’t even Photoshop. It was something else. That was the real beginning of my real estate career. It was out of frustration with buying and selling nursing homes, which is very difficult. It’s in the eBook. Go get the eBook on LandAcademy.com. I tell the story in the 1st or 2nd chapter. I have never put a dollar into this business since that day. I did exactly what Jill described. 16,000 deals later, here we are and you’re reading about these stories. We know what we’re doing. What Jill said is exactly the way to do it with land.

There’s Money Out There

Point number two and my final point is this. There’s an old saying in life that there’s way more money out there than cents. There are so many people that wake up in the morning and their job is to find people to lend money to, whether it’s mortgage companies, mortgage brokers, or credit card companies. There’s tons of money out there. They are not particularly scrupulous about who they lend money to and what it’s going to be used for as long as they get their money back with a predictable and consistent return interest rate.

There's way more money out there than cents. Share on X

We’ve been hardwired, all of us, and rejected when we have applied for loans in the past because of how it’s structured. Debt leaves a pretty bad taste in our mouths to the point we don’t want to take a bite out of it anymore. That is why we created Land Academy. All you need to do is find a great piece of property and let us know. There are many members in Land Academy and all they want to do is lend money. They have no intention of ever sending a mailer out. I don’t know why. I’ve never understood that.

They know how smart this group is. They don’t have to do any work.

If you bring a house or a piece of property to us that you have under contract for $300,000 and you can show us that it’s worth $400,000, we will not be able to write you a check fast enough. You do not need any money at all to be incredibly successful in real estate.

You do not need any money at all to be incredibly successful in real estate. Your job is to locate undervalued off-market property. Share on X

Go find those deals.

Your job is to locate undervalued off-market property.

Queue them up. You’d be surprised at how fast you’ll get them funded. It’s a natural progression in Land Academy too. It’s really nice. That was one way. There are two ways. Start small. That was one. You watch my $10,000 to $320,000 around a year. No big deal. The other way is to use other people’s money right out of the gate.

Let me paint this picture for you. You have your $10,000 but you’re like, “This is only going to get me so far. It’s going to be a slow process. I don’t want to mail and buy for $10,000 and sell for $20,000 because it’s worth $25,000 or $30,000. I want to go for it. I want to start mailing right away. I want to buy for $80,000. I don’t want to sell these things for $150,000 or $160,000 because I know they’re worth $200,000 or maybe more.”

Those are easy real numbers. You’re like, “I don’t have $80,000.” Jill does. Jack does. I see all these people in Land Academy where they do. The other way is you could dive right in. Buy for $80 and sell for $200,000. Those are really easy numbers. When people get a letter for $80,000, you better believe they pay attention to it.

You don’t get the whole profit. It’s whatever percentage you and the funder work out. Maybe it’s 50/50. Maybe it’s even more depending on what you’re putting into it. Maybe you’re doing more like, “I’m going to sell it in 30 days. I know what’s going to happen. How about 60/40?” People will not argue with that. You could also say, “If I don’t sell it in 90 days, then we rock it to 50/50,” or whatever it is. Whatever you and your funder work out is what you do. You do 4 or 6 of those a year. My earlier transaction was 16 deals to get you to at least $250,000. You’re probably going to do it in 4 to 6 deals and then you’re going to get your $250,000 in a year.  That’s the other way to do it.

Your talent is leverageable. Your funder is going to run out of money eventually, so you get another funder. All you’re doing is running around, placing these properties with your funders. It’s not incredibly difficult if you learn how to do it and utilize data correctly the first time around.

I’m going to argue those bigger deals are a little bit easier too. I want to take a moment and share that. At that price point, probably bring in a professional to sell it for you so you don’t even have to do that work. You find the deal, get the money, put it all together, and get it purchased. You’re then managing an agent and watching the transaction go. How fun is that?

The people reading this are like, “You guys make this sound so easy. Why doesn’t everybody do this?” Here’s why. It’s because they’re not smart, and you are. Join us in the next episode where we talk about the fourth myth, which is that real estate investment is risky. You are not alone in your real estate ambition. We are information and inspiration to buy undervalued property.