I’m Steven Jack Butala.

I’m Jill DeWit, and this is The Land Academy Show.

This is episode number 2199. Jill and I are talking about why flipping twenty land deals or a bunch of land deals beats holding one rental property. I have to tell you, a lot of this is personal choice, but we tend to be on the same page with each other.

Spoiler alert, it is more work. Maybe, maybe not. We’ll talk about that, but it comes down to the bottom line. That’s the only reason. Let’s be honest. It’s about the dough.

It’s about the money. That’s why we’re here. It doesn’t have to be twenty land deals. It’s probably better to flip three land properties versus holding one rental, but it depends on what your outlook is in life. I like having fast money. All week is reality week. We’re talking about why flipping twenty land deals beats holding one rental. On Tuesday, we’ll talk about how to know when you’ve found your land niche market.

On Wednesday, the difference between fast money and wealth building. On Thursday, land investing lessons from other real estate sectors like houses, commercial real estate, industrial real estate, and so on. Friday, how to deal with jealous friends when you’re winning.

Did you come up with that?

No.

That’s funny.

Our producers did.

That’s good. I like it.

I left it for Friday, because I figured you might. Each day on the show, we answer a question from our Land Academy member Discord forum. We take a deep dive into land-related topics, by popular request.

I can’t believe it. Ten years of Land Academy. I’m thinking about this. Every Monday, I want to lead off with, if you’re finding us for the first time, how do we know what we speak about? Over 30 years full-time at this flipping land, 16 years for me, and 10 years of Land Academy. That’s how I know.

It’s a lot of land. It’s a lot of talking about land.

A lot of deals.

This is a question that was put in here by Samantha, who helps us out in front of the camera frequently, and it’s very on topic, so I would like to read it if it’s all right with you, Jill.

Of course.

Real Numbers From House Flipping Vs. Land Flipping

“It’s a summary from an ATTOM Data article, which I love. I love ATTOM Data. This is for national statistics in 2024. The median gross profit for flipping a house,” meaning before repairs and all of that, the gross profit, I bought it for X and I sold it for Y, “is $72,000.” I agree. She says it seems right, which I think is about right. That’s slightly low for us, but splitting hairs.

It depends on the market.

“If the resale price, the sale price of the property, is $315,000, and you’ve got commissions at 5%, that’s almost $16,000. If your repairs and your resale took six months, there are property taxes of around $2,000. Again, national averages. When you close the sale, there are title fees, $2,000, and then repair costs, and this is a big variable. On the light end, it ends up being around $20 a square foot, so for a 2,000 square foot house, that’s $40,000.” That seems crazy light to me. I think it’s always more than that for us anyway, if we ever do any repairs at all.

“Gross profit minus basic costs equals net profits, so according to ATTOM Data, $72,000 of gross profit minus $60,000 of costs equals a whopping $12,000, which is about 4% of revenue.” This is why house flipping is so competitive, and it’s very on topic for what I think Jill and I are going to talk about. “Sixty-three percent of flips are cash buyers. There’s no interest expense or carrying costs in this. That taps into it even further,” and then she goes on to say, “I’m so glad we’re in the land business,” and I agree. Do you have anything to say? It’s all numbers.

I’m excited about this. You seem mellow about this topic, and I’m like, “Why is he so mellow about the topic?” This makes me excited, especially with those numbers, so let’s get into the topic.

Why flipping twenty land deals beats holding one rental property?

That’s it.

That’s the whole show?

Pretty much. Not only that. The things that we’re not talking about that the article didn’t even cover are all the possible things that can go wrong. Was there a permit that had to be pulled because after you got into it, you found out there was a leaky faucet, and then it resulted in a plumbing mess, and then it resulted in a permit pulling and time delays? There are all kinds of things like that that can go wrong. This math, this whole exercise right here, is like a perfect deal. It’s probably the national average perfect deal.

I bet, let’s be honest, there are a lot of people running around right now saying, “Hold on, you guys. You’re nuts. My husband and I do this. We average one a month. We do the work ourselves. We’re spending 40 hours a week at this, and we’re very happy to make $12,000 a month. What’s wrong with that?” Nothing, if that’s your thing. However, I think that’s the whole point. We want you to know what’s possible sitting at your desk. You could sit at your desk with your feet up in air conditioning wherever you are, or in the heating in the snow if you live in a mountain town, and make the same $12,000 a month, and probably work less than a couple of hours a week. Definitely less than ten. I was going to say maybe less than five.

Summarizing what Jill is saying, there are a bunch of differences between flipping a house and flipping land. I know this says having one rental property, but let’s look at the differences between buying and selling land and houses. 1) You never leave your desk, as Jill said. 2) If you’re a technical person and you understand computers, which most of us are now, unless you’re 82 years old. You understand computers, and let’s call the fact that you have to be patient with applications, programs, and a bunch of stuff like that.

Furthermore, if you’re a data person like I am or a salesperson like Jill is, you shine in front of a computer. The business is what Jill said. You’re sitting behind a desk. You’re efficient. The time that you’re spending is crazy efficient, and there are very few variables. When you buy a piece of land, you pretty much know what you’re getting into, and you pretty much know what you’re going to sell it for. The variable is when. How long is it going to take to sell?

With land, you never leave your desk. If you're tech-savvy or data-driven, you shine—it's an incredibly efficient business with minimal variables. With houses, the variables are crazy—you knock down a wall and discover mold. It’s endless. Share on X

You don’t buy it if the math doesn’t work.

With houses, there are crazy variables. You knock a wall down. You find out there’s mold. It’s endless. If you’ve ever renovated a house, even for yourself, you know how many variables there are. When you hold a house as a rental, instead of flipping it, those become exacerbated. I’m not saying never do it. Jill and I have rentals. We do, and we handpick the tenants and make sure that a lot of this stuff doesn’t happen, especially with the types of properties that we buy. Let’s do the math. This twenty-to-one thing came about, I’m sure, one of our producers on the show probably arbitrarily picked twenty, but I’ll tell you. We can do twenty land deals in the time that we do one house flip, and an infinite number if it’s a long-term rental.

The reason we do it is because we don’t have all our eggs in one basket, and we’re in strategic markets where it makes sense. That’s a whole other thing. I was thinking, what’s the average national inflation? I bet it’s shockingly low. I bet the national average of SFR inflation percentages year over year is probably a lot lower than we think they are. You and I are sitting in hot markets. You and I always hang out in hot markets. We’re not sitting in frozen tundra places or that.

It’s amazing, like you said, “That house was $400,000 when I was a kid, and it’s $400,000 today.” That’s something else to think about, too, when you’re doing these rentals. You want the asset to appreciate while you’re getting the rental income. I wanted to say, you guys sound like you’re eating your words because you have rentals, too. No, it’s because they’re in the right places, and we know what’s going on.

Efficiency, Predictability, & Scalable Math Of Land Deals

Not just the right places, but the right area of the right ZIP code. I overanalyze everything to the point where we’re both comfortable in making a decision, but just look at the math. Forget all that. Think about this for a second. You buy five pieces of property. Your average is $20,000 to $30,000. Let’s say $30,000, and you don’t have the math that Samantha pointed out here on a land deal. You’re not renovating anything. There’s no mold. There’s no real surprise. Once in a while, there is, but it’s not worth mentioning. You do five land deals at $30,000. You make $150,000. You flip one house, and you make $12,000. If you keep it, and you’re making $800 or $900 a month net, if nothing blows up, how long does it take to make $150,000 on a rental?

That’s the argument.

That’s the tragedy of rentals. The reason we have chosen rentals, just to be devil’s advocate here, is because it’s part of our estate. We’re hooking our kids up in the future, and because of that, the actual annual increase in value.

I didn’t want them to hear that, but I’m pretty sure the kids don’t listen.

They listen to somebody. It’s not us. They’re listening to a podcast right now, all three of them.

Not ours.

Join us in the next episode, where we discuss how to know when you have found your land niche market. You are not alone in your real estate ambition. We are Jack and Jill, information and inspiration to buy undervalued property.