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On October 27th, the Biden Administration announced new actions to support the conversion of high-vacancy commercial buildings to residential use, including through new financing, technical assistance, and sale of federal properties.

During the second quarter of this year, the office vacancy rate across the nation soared to 18.2%, marking a three-decade peak, according to the CBRE 😱

These new actions from the Biden Administration could be good news for those who have been struggling to find more affordable houses on the market. It could also create potential opportunities for real estate investors.

We will discuss what investors should be doing with this new information, but first let’s break down the four actions the Biden Administration intends to put in place to support redevelopment of these commercial office spaces.

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1.) Low-Cost Financing for Housing Developments
near Public Transportation

The DOT (Department of Transportation) has released information on how $35 billion in loans can be accessed to fund housing projects near public transit,  including repurposing office spaces.

2.) No-cost Transfer of Properties from
Transit Agencies to Affordable Housing Developers

The Department of Transportation (DOT) is set to permit transit agencies-frequently in possession of real estate near transit hubs- to transfer unused properties to affordable housing developers without incurring any charges.

3.) HUD Funding for Office-to-Residential Conversions

$10 billion in funding from the Community Development Block Grant will now be available for purchasing & converting commercial properties to housing and mixed-use projects.

4.) Resources, Training Opportunities & Technical Assistance

A guidebook created by the HUD Exchanged has been released by The White House. It details 20 different federal programs that can help developers make redevelopment projects more viable and accessible. 

What Does This Mean for Investors?

With this new plan emerging from the White House, converting a vacant office space may actually be financially advantageous, especially when compared to selling. 

Office building values have declined between 20% and 30% from their peak, and as vacancy rates are now higher than after the global financial crisis,
These new low-cost financing options could enable investors to take their low-value office properties, and convert them into revenue-earning mixed-use or multifamily properties. 

While not all office buildings are in the right condition for conversion, some conversion projects could end up being cheaper & less time-consuming than new builds.

Investors, if you want to look at converting buildings, you’re going to want to make sure they are equipped with plenty of light, working windows & high ceilings.

Buildings with these features could save investors up to 30%, relative to demolishing and rebuilding a new property.
Moreover, conversions can also be rent ready in as little as 12 months or sooner compared to new developments. Certainly worth thinking about 🤔

Curious about buying land but don’t have the capital?
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We will review and get back to you about your deal within 24 hours!

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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 are going to talk about the top three things you need to know about land investing.

And a lot of this is going to be geared towards someone who maybe has not got into this business yet. I think it can be valuable for those of you who are doing land deals as well. But the three things that I let anyone know before they really get into this industry, I want to touch base. I do a lot of coaching calls, a lot of consultations about people thinking about getting into this.

And this is, like I said, the three things that I really. Tell everyone, honestly, like it’s just, I, I’m not trying to withhold anything in terms of what this business model is about. Um, but number one, it is different than all other real estate industries. I’ve come, I do, I still do rental properties. I, I have done, uh, other flips.

I’ve done other, other types of, I own a salon, I own commercial properties and I’ve tried to wholesale houses, that kind of stuff. And this land in general is just a different. I don’t want to say different animal because it’s not like more difficult by any means, but it’s just different. Like the education, you, everything you’ve learned in every other industry, while maybe you can bring it over and it can provide some value.

The way we do business and land and land flipping. It’s completely different than really any other real estate business that I have seen. Um, land is transitioning right now. I think from like every seller right now and it’s, it’s easier to get deals to like maybe a little more. You need to be a little more of a salesperson to get deals, um, wholesaling.

is about multiple contacts. It’s about beating out other offers. Same thing with house flipping, getting a deal is all about beating out other offers because every market has every seller has 10, 15 wholesalers, house flippers who are trying to contact them. And that is what it’s all about. While land is kind of about, it’s, it’s about building a relationship.

It’s about just performing, honestly, we’re buying the properties for cash. You need to stick to your word with these sellers and that’s how you get these deals beyond the business model itself. Land, evaluating land is completely different than evaluating structures. Uh, we, we do a lot of our due diligence on the computer.

Calling counties, looking at deeds, looking at zoning when you have a house or something like that, you don’t have to worry about the zoning. And then finally, like our in person due diligence, much simpler than doing an inspection, something like that. If you’re having a house, rental property, anything like that are in person due diligence is hiring a drone person, getting boots on the ground, having them walk to property, have them see if it’s water or if it’s.

Saturated, anything like that. See if there’s any defects that we don’t know about. And that is our kind of like boots on the ground. Our due diligence process can take 24 hours to 36 to 48 hours. Maybe while if you’re flipping a house that you’re going to have, yeah, there’s cash offers and you really don’t know what you’re getting into.

The thing about land is when we’re buying a deal, we know exactly what we are buying. Have we made mistakes when buying? Absolutely. But it’s rarely anything that we couldn’t have uncovered, uh, before while a house flip, you might have to put in a cash offer and be willing to close within 10 days. And there’s really no due diligence because how competitive that is.

And that is one of the key differences land, the due diligence period, what we, how we do due diligence is extremely quick. Uh, we have cash ready to go. Um, but the due diligence period is really quick from, and that’s what we push our students, our members to do due diligence in 24, 48 hours, because you want to keep those sellers on board.

You don’t want to have to back out after seven days, something like that. So that is the first one. Top three things you need to know about land investing. Number one, it is different than other real estate industries. And if you come in here and tell me or tell someone that you’ve done a hundred house flips, like, yeah, that’s great.

You might have some success with how you got leads, but in terms of the business, it’s going to be completely different. Um, going on to number two, kind of from there, flipping land is not passive. We have a lot of people who, I don’t know if they’re hearing it other places. I really don’t know where they come in and think that flipping land is going to be a passive thing.

This is active income and that’s how the IRS looks at it as well. The IRS is not looking at this as like it’s passive income, like a rental property, something like that. This is going to be added income. Um, if you’re doing this and if you have a nine to five, you’re making a hundred grand. And then you do land flipping, you make 250, 000.

You’re going to be taxed from the federal government from, uh, at all the governments based on making 350, 000. This isn’t capital gains. It’s not that kind of stuff. This is active income where you are working these deals. Like I just talked about in the previous one, number one is you need to do heavy due diligence on these.

Like that is active. That is not like going to be given to you. And the thing about really passive income comes from when you’re holding a property, someone’s paying you month over month. This is like the next deal. You’re not anything without your next deal. So if you’re flipping land, you need to constantly be getting more leads in so you can do the next deal land.

How I look at land, how we look at our land business is our land income. Let’s say we do 2 million of profit next year, 3 million profit, whatever it is. We put that into more passive areas and that’s going to provide tax incentives. That’s going to help with a lot of things, but we just land is kind of like our cash machine.

We use that cash machine to put into different areas, whether it’s rental properties, commercial properties, apartment buildings, anything like that. And those can provide really good, not 100 percent passive income, because I don’t really like that word, honestly, for rental properties, even, but it’s going to be more passive.

It’s going to have a great tax write offs. It’s going to be really fun. Um, spread your portfolio out and diversify your portfolio. Everything like that. While land, you just keep on doing these deals, keep on cranking more cash in, and that’s going to help take your money elsewhere. So number one, different than all the real estate industries.

Number two, this is not a passive business. Flipping land is not passive. Can’t some people do it delegate better than others where they can, I don’t want to say have a passive business cause it’s not, um, but where they can be a little more hands off. And number three, just in general is it is an untapped market.

There are other players in land. There are other people doing this business, obviously, um, but relative to other real estate industries, there is nothing like that. I can say that wholeheartedly, like there is nothing quite like land making money in land, whether it’s flipping land, whether it’s holding longterm, whether it’s leasing it out, the competition within land.

Is so, so minimal compared to these other, the people who complain about competition in this industry. Um, I don’t know what they really expect. Like, yes, multiple people can be doing deals in the same County. Yes. You might have to win a win a deal from a different land investor, not take it. But just like outperform, like they both got a letter at the same time, whatever they called both and someone’s going to win.

Like someone’s going to get the deal. It’s sales at that, that at the end of the game, when, uh, to be able to get a letter from the same person. Um, so yeah, like it is an untapped market relative. That’s why we always say that, like, it’s a blue ocean. There’s so much opportunity in it and we’re talking so much beyond.

Just flipping, whether it’s subdividing, whether it’s entitling, whether it’s holding long term and leasing, there’s so much opportunity within those different avenues. And that’s why I always tell everyone, like just getting in to this business model, whether we’re flipping land the same way, 10 years from now or not, that business model is going to change.

Obviously, there’s going to be different strategies that change and we’re going to be ahead of the game with that, but just learning and understanding land, it’s going to be so valuable. It is a limited resource. There’s not. An unlimited amount of land. If you understand about it, if you understand how to make money in it, you can do this for the rest of your life.

You’re going to be doing different things within land for sure. But if you learn about it, if you learn how zoning works, all these different things, um, that’s why I think it’s such an untapped market. Land flipping is going to change. Absolutely. I think it’s going to change personally. I think land flipping is going to change into more of a multi.

Uh, multi touch business where three years ago we could send letters and you still can where you can send letters and you get a deal every 2, 000 to 2, 500 mailers. And that’s what we still kind of get. But I think it’s about that follow up. How is your follow up system? How is all that? And I think that’s what land flipping is going to turn into, um, just like these other business models, honestly, but where you can send a follow up text to these people.

You really work the leads. It’s a little more sales like and that’s where the business model is going to go, in my opinion. So let’s break these down real fast, top three things. And this is for. Obviously, if you have not done any land deals, if you’re interested in this business model, this is very helpful.

I think number one, if you’re coming from other industries, other real estate, uh, specifically, don’t just expect this to be the same and that to all of that to carry over land is a different. Industry for sure within itself. I get it’s not like real estate with structures on it. Number two, this is not a flat, uh, passive business.

Flipping land is not passive. It is active income. That’s how the IRS is going to look at. That’s how you can get taxed. And that’s what your hours are going to put into it. Like you’re not going to put 10 minutes into this business a day. Like maybe you can get there eventually by delegating out to a team, but it’s not going to be initially.

And number three, this is an untapped market. Like there is so much potential within land. Keep on learning about it. And for those of you who have done land deals, keep on extending your knowledge. Like, do not just stop and like, just keep doing the same thing forever. Put 95 percent of your time into what’s working right now.

5 percent maybe into trying something new. If you’re flipping land, buying for 30, 000, selling for 60, 000 all day, all day, keep doing that. Do not take a 180 degree turn and start just trying to subdivide maybe 5 percent of your time, 5 percent of your deals, whatever. Maybe you’re doing some subdivisions there and that’s where you can really grow and like, okay, now this subdivision thing’s working.

Now I can, this can be 20 percent of my business and you can keep growing from there. And instead of just going all into something that you’re not sure if it’s going to work. Other than that, guys, thank you so much for watching. If you guys have any suggestions for upcoming episodes, please let us know in the comments, message me on discord, whatever you guys think would be more than happy to take suggestions.

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.

Watch the Full Episode Here