The Value Of Diversifying Into Houses, & Overcoming Initial Funding Concerns

This is episode number 2242. In this episode, Jill and I talk about the truth about adding houses to your land business. You’ve got to do it. If you want to be incredibly successful at this, it really makes sense, especially right now. We’ll explain all it in a second.

Do you think just adding another property type is as valuable or houses in particular?

Another property type. For us, houses have worked really and then continue to work really well. I’ll explain why. You’ve done all this already. You’re at the research stage or you’re already doing it. You’re reading this because you know you want to get better at it or get into it. Why not just add one little additional product type to the stuff that you’re already doing anyway? You’ve figured out the mail, you’ve figured out all these systems. Just add a product type. Each episode, we answer a question from our Land Academy Member Discord Forum, and we take a deep dive into land-related topics by your request.

This question comes from Matt. Matt wrote, “I have a title company claiming I need a boundary survey to get title insurance. I’ve only done a handful of deals, but I’ve not had this come up. Should I find a new title company or is this legit?” I think it’s 1 of 2 things. One, you might be right. Crazy title company. Two, it is actually a needed thing because there’s something wrong with the legal.

Either way, ask them.

Yeah. Why?

I agree with Jill. There’s a 95% chance it’s the former. It’s a crazy agent. These people at some of these real rural, really local title companies, where there are only 1, maybe 2 in the entire county, where they are 2 counties over, they do not want people buying their real estate. They have their own agenda. Believe me, I have so many stories about this.

They’re trying to slow you down. It is a real thing.

Let’s just say it’s a second and they don’t understand the legal description. If you have a legal description that says Lot 6, Block 3 and Section 24 of the X, Y, Z subdivision, which is like where we live, in cities and towns. That’s what it is for the most part. If it’s a rural piece of land, like you find out West specifically or in the South, and it’s a large piece of property, maybe it’s agriculture, it’s going to read nothing like that.

It’s going to read the Northeast quarter of the Southeast quarter. That could potentially trigger to some escrow companies a need for a survey. Largely because, like Jill said, they’re issuing a title policy. They want to make sure that the policy that they’re issuing, they know where it is and what it is and all of that.

In very rare situations, you’re going to see, you start at the road where it meets the rock to go to the tree, to this, to that. Stop at the well. What if somebody took the well out or they covered it up? That would be the problem.

You see that in West Texas.

Now we don’t know where it is.

The survey system was based not on a meets and bounds like everywhere else in the country. It was based on railroads and landmarks. You see it in some places on the East Coast. I’ve seen it in Delaware. It’s just some places on the East Coast, like in Virginia, the state of Virginia is a working case example of disastrous surveys, and just disaster lot lines.

I wish you would’ve said what state. I wonder if we just nailed it.

This episode’s topic, the truth about adding houses to your land business. What does Jill have to say?

Jack, I barely have enough money to buy all these properties that I’m buying for $15,000 to $25,000 a pop. You want me to buy a house now? I’ve been following you for a long time. You guys said that, “If it’s sub $300,000, the math may not work.” I have $300,000. How am I going to do this?

Here’s the deal. If you are in Land Academy environment or not, if you have chosen your job and life is to find underpriced real estate transactions, the money will find you. Trust me. Forget about the money. Just make it your job to locate great real estate deals in the beginning of your career. If you’re a Land Academy member, put it in the Discord. You’re going to find people. There’s so much money out there to buy, especially houses.

If you’ve chosen a job and life focused on finding underpriced real estate deals, the money will find you. Share on X

I’ll tell you why. It’s because it’s real easy to value a house. Everything in the entire area is selling for X, Y, Z per square foot. I’m a big fan of the cash break point. There hasn’t been a property here that has sold for less than $400,000 for a lot of years. I’m buying a property for $320,000. Believe me. Please call us if that’s the case.

Key Differences & Nuances Of Buying & Selling Houses Vs. Land

Forget about the money. What you need to focus on, Jill and I created a whole program called House Academy. It’s just like Land Academy where Jill and I talk about in the program, the differences between buying houses and reselling them and land. Here’s the summary. It is a lot harder to find willing sellers to sell their houses, although it happens to us every week, but it’s very feasible and possible.

It’s way easier to sell them. If everything in the area is selling for around $400,000 to $450,000, you’re going to send a mailer out in that area for around $300,000, $310,000. Somebody or a few people are going to call you back and say, “I’m experiencing a life event and I don’t care about the price of this house. I need to get out of it. I want to get out of it and I’m done. Please tell me what the next step is.”

That’s what you’re looking for. You help them. Here’s the big difference. They need help. They don’t know how to clean their house out. They might be embarrassed in the shape that it’s in. We’ve seen it all. All kinds of stuff could be going on. Maybe it’s vacant and they inherited it. They want to know what to do next or how to buy and sell. They’ve probably never bought and sold a house by themselves before.

They need you to take over the transaction in a very polite, courteous, intelligent, helpful way, which I think a lot of people get hung up on. They need their hand held. Every single one of them I’ve seen has some trigger. “I’m so embarrassed about what’s going on in my basement,” or, “I have to leave in three weeks. I’m going to leave. Can you just handle this whole thing?” It’s a huge convenience that they’re throwing you the keys and saying, “Please finish it yourself,” for the most part. You can’t do that across state lines.

True. Not without not you being the boots on the ground. It doesn’t work. You do need to have a local presence. We’re talking about the truth about it. There’s so much value in adding another property type, especially something a little bit different than what you’ve been doing. You know how to do a deal. It’s a different kind of deal. There are moving parts. Do I have to turn on utilities? Yeah, you do when you’re going to sell it because people are going to be looking at it and walking through it. Do I need to get insurance? Yeah, you do, because remember, if it burns down, there goes most of your value. We need to do that. There are other little things, nuances, like Jack said, which we do cover in our other program.

It’s just so smart and easier, like you said. It sounds like parts are harder, but selling in is going to be easier. Buying it is definitely easier because, like Jack said, it’s really easier to look in a whole neighborhood and go, “This whole subdivision was all created in 1975.” I can tell some are updated, some are not, but no matter what, every 3-bedroom, 2-bath with a car garage and a pool, fill in the whatever it is, they’ve all went under contract inside of X days if they were priced like this. Done. It’s beautiful to do that.

The valuation of these types of assets is crazy easy. Algorithms that are out there, you can just eyeball it and you’re almost always right. The other big difference is that you’re buying a vertical structure. You don’t ever have an inspection on land. You might get a perk test in some places, but you it’s not part of our land business. You have an inspection on a house and the inspection’s going to come back and a bunch of stuff’s going to be in there like this house needs a new roof.

Profitability & The “As-Is” Business Model For Houses

You have to decide to adjust the price. There’s a lot of little decisions that go along on the way because you’re buying something that is not just a vacant piece of land. It’s all in HouseAcademy.com. It’s crazy profitable. We don’t do house deals unless we make $100,000. You only need to do 10 of them to make $1 million a year.

Here’s the deal. The worst it is, the better it is for us. They don’t know what to do. A lot of people won’t get interested. A realtor would walk through and go, “I don’t know what to do with this because you need a roof, you need that, you need this. I need all that taken down. I need new carpet. They don’t know that. They didn’t get that training.

By the way, we do not renovate, ever. We don’t ask other people to renovate on our behalf. The as is condition, we offer a price.

Buy it and then sell it. The bottom line is, everybody, the right people, the seller sees all these negatives as a way to get out of it right now with your price. They’ll take it. They don’t have to do any of the work. There’s huge value there. When we resell, it’s probably going to be to a flipper and they see the value in it there.

Yeah, that’s right. Now you’ve got a real captive audience. You got there first. That’s our talent. We’re acquisitions people. We’re not contractors. We’re not real estate agents. We’re not lenders. For the most part, we’re partners. Money partners, but not lenders. The value is getting there first. Join us next time where Jill and I discuss the truth about neutral letters and open-ended land offers. You are not alone in your real estate ambition. We are Jack and Jill. Information and Inspiration to buy undervalued property.