In this episode of “The Real Estate Investing Podcast”, host Ron Apke discusses the five steps needed to make $100,000 or more by subdividing land!
Subdividing involves buying a large parcel of land and selling smaller portions of it individually for a higher overall profit.
Watch the FULL video below, or listen to the podcast in order to get an in-depth explanation of each of the 5 steps, so that you can apply this valuable information to your own land flipping business!
STEP 1: Identify a Market
Good news is, this step can be completed anywhere since land investing can be done remotely! We have more info on identifying a market & county selection HERE.
STEP 2: Find suitable land for subdividing.
This can be done either on or off the market, but we always recommend you focus on finding a property with high road frontage.
STEP 3: Get the land under contract.
We highly recommend you consider the quality of the land during the due diligence process.
STEP 4: Survey the land and prepare marketing materials.
This includes getting drone pictures to attract buyers.
Listen or watch the full episode below ⬇️ for an in-depth breakdown of each step in the process to making $100k by subdividing land!
Ron: Welcome to the real estate investing podcast, where we help you unlock your potential freedom through land investing, real estate investing, and entrepreneurship. Hey everybody. Welcome back to the real estate investing podcast. I’m your host Ron Apke. Today in this episode, we’re going to talk about the five steps to making a hundred thousand dollars or more on a subdivide.
So what I mean when I say subdivide, it is buying 50 acres, breaking it down into 10, five acre parcels, five, 10 acre parcels. So you are taking a big chunk of something and selling smaller chunks of it. So if you went to Costco and bought a hundred bottles of water and then went on the street and sold each individually, very similar, you’re going to get more money selling things individually.
So if you break things down, you go from something large, a big chunk of something, breaking it down into smaller, you’re going to get more money. So in this episode, I’m going to talk about the five steps on how to do this. It is a very powerful thing. It’s not as difficult. Some people get overwhelmed by the, what it is, what subdividing is.
And in reality, it is not that difficult. If you are following these steps, if you’re choosing the right areas to do this, then the right land to do this with. It is not unfeasible for you to do this in your first three months of land investing. It could be your first deal for, for all I know. So starting out step one, you need to identify a market.
It doesn’t have to be near you. So many people restrict where they’re doing deals based on where their location is. We have people doing this from Europe in South Carolina, from Europe in California. You can do this from anywhere. And do it anywhere. It is so accessible with computers, with obviously cell phones, talking to people, getting people to your land, doing your due diligence over the phone, getting emails, everything like that.
Everything can be done. Do not restrict your location to where you are. It does not, you do not have to ever see your land to subdivide. You don’t have to fly to it. If you’re far away, um, you just need to do some stuff on the computer, talk to the county, make some phone calls, everything like that. When you are choosing a location, there’s a couple of things you want to keep key.
Typically, more rural is going to be less restrictions. We want to keep it when you’re doing your first subdivide as a minor subdivision. A minor subdivision, you don’t need as much permitting. It’s a lot simpler to work with the counties. A lot of times, all you need is a survey. And then you record the new the parcel numbers with the county, and you can sell them off very, very quickly.
A minor subdivision can be done in 30 days. If you have your surveyor, who’s ready to go, you can make this happen very fast. Or if you’re a major subdivision, where you’re putting in roads, you are, um. You’re putting in utilities, all this other stuff. These are 18 months, 24 month projects, much more specialized.
So you want to look for counties when you’re identifying a market, you want to look for areas, typically rural areas, and you want to look up their subdivision requirements. So look online X County. Minor subdivision requirements. And you want to look for things where you can break it down into 10 acres or something like that.
You’re not going to be able to go into one acre parcels typically. Um, but you can break it down into five, 10 acre parcels, and there are not many restrictions within that. That is a key. If you’re not choosing the right market and then you start looking for land and then you get a deal, then you find out I can’t do this, you wasted marketing money and a deal might not be able to happen in that County.
So number one, identify them market. Number two is find the land and with subdivisions, you can do this on or off market. I know we talk so much about sending mail, getting off market deals. You can find on market subdivisions. It’s going to be, there’s going to be less margin in there. I prefer you going and sending mail, cold calling, sending texts and trying to find, find off market deals.
But number two is finding the land. If you find it on the market and it works for a subdivision, awesome. Like a lot of times you can do make this happen. The land has to be good and you need to still get it at a right price. If you’re trying to pay too much money, your numbers are going to get tighter.
Survey can be expensive and your expenses are going to add up and you might make a little bit. Or you could lose money if you do it the wrong way. You really could. So I prefer when you’re finding land, doing it off market, sending texts, sending mail, uh, cold calling, whatever it is. What you want to look for in the land is high road frontage land.
You do not want to look for a deep land where it’s really far off the road, but you can’t cut it up. Ideally on your first, second, third subdivision. You are breaking everything up from the road. You’re not putting in roads. You’re not putting in driveways. You’re not doing any of that. You have enough road frontage on the 70 acre parcel.
One that we did very recently was 70 acres. And I think it had about 3, 500 feet of road frontage. We wanted to give everybody about 300 feet of road frontage. So we broke it up into 10 or 11 parcels, I believe, and gave everyone about 330 feet of road frontage, seven acres each, something around that. And we’re going to make three, 400, 000 on that deal.
That was ideal because we had so much road frontage. It makes it so much easier when you have the road frontage. And so many people are trying to force subdivisions that don’t really work because there’s not road frontage. Putting in roads, putting in utilities, putting in all this other stuff gets very expensive.
And when you are not using road frontage, there are going to be more restrictions as well. So number one, identify market number two, find the land number three, you want to get under contract. You need to contact these people. You want to get under contract and buy the land. This is pretty self explanatory.
Like as you’re getting under contract, you want to have a small due diligence so you can make sure you can do everything. One thing a lot of people don’t think about when they’re subdividing land is the quality of the land that they’re giving the end buyer. So for us, if we’re breaking up that 70 acre parcel into 10, seven, seven acre parcels, and three of the parcels are crazy sloped, those parcels are going to sell for 50 percent of what they’re of market value because they’re bad land.
When you’re subdividing, when you’re doing your due diligence, you need to think about your subdivision, not only by road frontage, but also by the terrain, the quality of land, because you want to make sure you have buyers for all the parcels. It looks good on paper when you break it up, but you get out there and then you see something that’s wrong with the land.
You’re like, this isn’t buildable. This one’s not buildable. And then three out of your 10 parcels aren’t buildable. You’re going to have an issue and there’s a good chance you’re going to lose money. So when you are doing your due diligence, after you get under contract, make your offers, get under contract.
You want to make sure your train’s good. So you want to get drone people out there. You want to get a realtor out there once you get under contract so you can see what’s actually going on with the land. Make sure it’s going to work while you’re doing this. So this is still step three. While you’re doing this, you should be contacting surveyors.
Getting quotes, getting timelines is very, very important. You don’t want to buy your land and then not have a survey for another. Three, six weeks, whatever it is, you want to buy the land and have that surveyor ready to go right after you close. So getting timelines, getting quotes from surveyors should be done at this third part when you’re getting under contract and buying.
So again, let’s, let’s go back a little bit. Step one, identify a market. Step two, find the land, send mail, send text, cold call, look on the market, whatever it is. Step three, get under contract. You need to make some offers, get under contract and buy the land. So that’s a lot that happens in step three, um, but you got to get a lot of offers out there in step two.
When you’re finding the land. Step three, you’re going to get under contract and buy the land. So going on to step four, you own the land now, you need to get this surveyed. You need to get this broken up. You need to get your own pictures. So now it’s like the pre marketing part. And I, ideally this is happening 24, 48, 72 hours after you bought the land.
The longer you have to wait for these steps to happen, the longer your money’s out, or the longer your partner’s money’s out, if someone else is funding the deal. And it just, it makes the deal worse and worse every day. The deal drags on out something moving forward. Money is being lost. Whether you think or not, like it’s the opportunity cost of that money being out another day.
So again, like you want your money out as little as possible. So get that survey or lined up so you can get that survey done right away. So step four is getting a survey, getting those pictures, like getting your marketing ready. You cannot market the property. You cannot sell the property without getting it surveyed without having drone pictures, everything like that on this step.
If you plan on using a realtor on the backend, you should do that, but that’s getting into step five. Step five is selling the land. So after step four, you have 10 different parcels, 10 acres, each, whatever it is. And now you have the land to market. One key when selling surveyed land that so many people mess up on is they post all the parcels at the same exact time.
What this does is dilutes the market incredibly. So if you’re a buyer and you see eight, five acre parcels all post up on the market at the same time, like, okay, yeah, I have some things. Obviously it might be the same seller, whatever. But it dilutes the market like crazy opposed to you posting just one five acre parcel and then someone calls and you’re like, yeah, I have three other parcels ready available also available if you do want some more land.
Um, but diluting the market with multiple postings with a crazy amount of postings is not ideal in these situations. You want to post as few of the parcels as possible when you’re starting. But if I had a five acre parcel. A 15 acre parcel and then three 20 acre parcels, I would post one of each without a doubt, but you don’t want to post multiple parcels of the same acreage range.
Do not post three 10 acre parcels if you’re splitting it up into 10 10 acre parcels. Just post one, sell them one at a time, and then they will go off so much faster and you’ll get way more money. So let’s break it down guys. Number one, identify a market. Number two, find the land. Number three, get under the contract and buy the land.
While you’re doing this, you should be getting a surveyor. Number four, actually get it subdivided. So at number four, you already own the land, get it subdivided, get your survey, get the parcel marked, everything like that. And then finally, number five, sell the land. You guys, it sounds easier said than done when I go through this, but it really is possible for your first land deal to be a 200, 000 profit subdivide.
There’s so many of these parcels out there that are waiting for projects to happen. You just need to reach the sellers. Like, that is it. You just need to attack the right market, reach the sellers, and these deals are out there. Like, there are so many of them. It’s not that difficult of a process, and you can Well, you might make 20, 000 in a deal.
If you subdivide it, you might make 120. Like that is the difference. That’s the power of subdividing. Other than that, guys, thank you so much for watching. If you have not already, please subscribe, uh, with the button below. If you guys have any more suggestions for future podcasts, future episodes, please put it in the comments.
Other than that, thank you so much. We’ll see you next time. As always, thank you for joining. Please do us a huge favor and like, and subscribe our YouTube channel and share this with a friend. It really means the world to Ron and I, but more importantly, it could help change the life of someone else.
Thanks for joining and we’ll see you next episode.