Infill Lots vs. Vacant Land Flipping: Which Will Make You More Money?

real estate investing podcast

Infill Lots vs. Vacant Land Flipping: Which Will Make You More in 2024?

real estate investing podcast

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In this episode, the Apke Brothers discuss the differences between infill lots and vacant land flipping.

Land is a great financial asset as there are many different ways to invest in it. It also appreciates over time where a lot of other real estate depreciates. 

The infill lot strategy is just one of the many ways to invest in land. Another being flipping land with cash offers. 

The question the Apke Brothers answer today is which of these two investing strategies yield the most profit in the shortest amount of time?

Infill Lots

While the benefit to infill lots is that they offer lower risk, the reward will also be lower compared to land flipping since it generally has smaller margins.

If you decide to go down this path, be prepared to manage more deals than you would flipping land. 

The infill lot strategy is a great way to get involved in the land investing world as it is a less intimidating option and is a viable way to make good money if you are willing to put in the work. 

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Flipping Vacant Land

Compared to infill lots, land flipping offers a much greater reward, but with a bit more risk. 
Due to the fact that you are typically working with higher margins, a lot of beginner real estate investors are intimidated by it and tend to sit on the opportunity. 

Vacant land flipping is also significantly more scaleable than infill lots due to the low competition and big pay offs from doing fewer deals. 

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Listen or watch the full episode below ⬇️ to get the full breakdown of pros & cons of both infill lots and land flipping, and find out which option is best for your financial goals!

Listen to the Podcast Here


View Transcript here

Dan: If you have a 100, 000 deal, bring it, 200, 000, bring it, 20, 000, bring it, whatever it is, million dollars, bring it.

Ron: I had a consultation call with someone earlier today, she’s like, he’s been doing Infill lots for a year. She’s like, my assignment fee is 5, 000. I’ve never made more than 5, 000 on a deal. To make a hundred grand, you got to do 20 deals a year.

And a lot of people, if you’re an entrepreneur, like you want to make more than a hundred grand.

Dan: You do 10 deals with vacant land and you’ll make over 300, 000. It’s very low risk, low risk. Lower reward. That’s what we’re talking about here. It is lower risk. It is a lower reward. It just is. That’s the fact of it.

Hey everyone, welcome back to the real estate investing podcast. Today’s topic. We’re discussing info lots versus acres versus rural vacant land. I’m your host, Daniel Apke with my brother and business partner, Ron Apke. So we had Eli Bryan on the other weekend. He mainly does info lots and we talked a lot about info lots in that episode, but we didn’t talk about a lot of the differences.

And when I was sitting there, I even mentioned in the podcast to Eli, I was like, it’s crazy how different our business models are. And it is, it’s crazy how different our business models are. We’re still land investing, right? Land investing is a very broad term, but his specific business, it just had such different.

And it’s just, it’s just a different business model as a whole is land investing, but it’s such a different business model. So in this episode, we’re not talking about rural vacant land acres. We’re not talking about info loss. We’re talking about them against each other and what are some of the main differences.

And this is to help educate you. Maybe you want to get into info lots. Maybe that’s part of your business. Maybe you get leads back that are in full out leads. Um, and vice versa. Maybe you’re an info lot person and get some, Row acres as well in the, in the game.

Ron: Yeah, for sure. And Eli did a great job explaining his business model.

So the way Eli does it, or the way a lot of info, a lot of people do it. Is find the builders first, find the end buyers of the land first, and then find the land to kind of line up with the builders there. If I were to do info bots, I wouldn’t do that. I would do it with our model in terms of sending blind offers and trying to get it.

Dan: And he did say he’s taking down some, what, how did he put it? He’s like, he’s taking down some deals with his funds and putting on the MLS. He said, so they are looking, and he even said that’s a advanced strategy for bigger margins in the game. He’s like, that’s how we’re increasing our margins. But I do want to touch on, you’re going down a good route right now, but to find info lots while you’re talking about that before anyone who doesn’t know info lots versus what we’re talking about.

 

Ron: Yeah. So info lots is pretty much anything in a neighborhood. Like right now we’re sitting in an, uh, in a house in a neighborhood with a bunch of quarter acre lots. Um, Info lot is a lot in this neighborhood, a lot in any of those neighborhoods that’s not built. So you have houses all around it. Then you have an info lot, which is a lot that is, uh, can be filled with a house.

Um, so that’s essentially what an info lot is versus what we’re talking about or what we do more is rural land acres is five acres outside the city. Typically outside the city, more County, maybe a County removed from a big city. So just more rural, like it is more rural.

Dan: Usually an acre and a half and up, uh, not in a subdivision.

Most of the time, sometimes they are still, but just vacant rural, like more rural, uh, just not in a suburban, very densely populated area for info lots. You can attack very populated areas. For the sake of rural vacant land, we usually go a county removed from a city or so, but there are multiple strategies to both sides.

Ron: Yeah, some of our best, best deals, honestly, Dan, over the years have been like really nice areas, but they like cut off there and they did not let anything under three acres or something like that. So it was an infill lot just in a giant subdivision with only three acre parcels, which you can kind of look at as an infill lot, a little different, but we’ve had some great deals like that, that are And the way I kind of view info lots is the only uses is building a house, honestly, like there’s no other use than building a house, putting a mobile home, right?

And that’s how I kind of define.

Dan: I mean, that’s what it is. Like, you don’t buy a 0. 25, 0. 5 acre lot to hunt on or to have recreational land or, uh, your future cabin and. Wooded area. It’s just different. Like it’s, it’s a cleared air. You’re going to clear the area out and you’re going to put a house on it.

Right. That’s just what info lots are. When you start talking about acres, like we’re talking to vacant land, rural vacant land. Uh, it’s multi purpose, you can hunt on it, you can have wreck land, investments, same with Infill lots , it can be an investment as well. Um, but there’s just so many different, you put a house on part of it and you have all the woods, you know, to hunt, wreck land, dirt bike, whatever people like to do on land, right?

That’s, uh, some people like to timber it, it just becomes such multi directional with, with what you do.

Ron: Yeah. And that’s why. A lot of the infill lot investment flipping finds the builders first because the only use case is building. So why not find the builders first, right?

Dan: And that’s a good way to look at it that I’ve never really put, um, you know, there’s one use for it and it’s building.

So you find a builder first versus us. We’re not going to find a person first because the economy flips, there aren’t builders out there. Oh, there’s still people who want to buy 20 acres for their investment or their timber company or farmland or, uh, to put their future house on it. Whatever it is, lease the land.

You know what I mean? You just have so many options when you’re listing it to the mass public.

Ron: Exacty. So let’s kind of compare the two, Dan. Are there certain types of people you would push towards doing infill lot if they were getting started or is it like, what’s your, what’s your thoughts, just your personal thoughts, like on the Infill market?

Dan: It’s very dependent on the economy and, uh, economy is constantly changing. Like the building market has dried up significantly the last 12 months, but we talked to Eli last week. He’s still crushing deals, you know what I mean? So as things change, people are still going to survive. It’s, it’s just such a different business model, the way the two work info lots from what, what I know, I have smaller margins to work with the competition’s high.

You have more people in your backyard competing against you. You have more people looking at the same exact deal. You start going vacant. You land investors complain. And this isn’t a bad thing. This is a great thing. Land investors will complain about one other land investors sending mail to their County.

Tell a wholesaler, tell a household sailor in Tampa, Florida, that there’s another person in their zip code. They’ll be like, Oh, there’s 200 of them. You know what I mean? Competition means it’s a healthy market, but at the same time with vacant land, that’s much, much less competition with rural vacant land.

Like we’re talking to acres, much less competition. Um, so margins are smaller typically.

Ron: And with, with, with infill lots that go on that you have, there’s a stigma behind it, where you have people who might be cold calling whatever it is, and they’re okay, they found a builder or whatever, who can pay 20, 000 for the lot.

Um, or for a lot and they, they are okay with very small margins and they’re wholesaling the property or double closing the property and they don’t have money out of their pocket. So the margins are small because that the investors in those markets are willing to have small mark, uh, margins, uh, from what I took from Eli, like a huge part of it is having legitimate builders lined up people who actually have money to buy, but.

I think that is the biggest difference in two. I had a consultation call with someone earlier today. She’s like my assignment, she’s been doing info lots for a year. She’s like, my assignment fee is 5, 000. I’ve never made more than 5, 000 on a deal. That’s a lot of work for a deal. A hundred percent. And to make a hundred grand, you got to do 20 deals a year.

And a lot of people, if you’re an entrepreneur, like you want to make more than a hundred grand.

Dan: You do 10 in reverse. You do 10 deals with vacant land and you’ll make over 300, 000.

Ron: Exactiy. You offer, you, you average 20, 000, 30, 000 and it’s just a much more scalable business. Yeah. I think that’s the biggest thing is honestly the scalability.

You can, there are people I’m sure making hundreds of thousands of dollars in with info lots, but the ability to scale it is just much more difficult when you have to do so many deals.

Dan: Exactly. That, that’s the biggest thing because the operations are very similar. Um, they’re, they’re different when you’re wholesaling because you’re assigning and there are some differences.

But in terms of finding someone to sell, doing all the work, calling, uh, texting, negotiating, all that stuff is similar. So when you lock someone up and you’re going through the process, wouldn’t you rather make 30, 000 than 5, 000 or 100, 000? Like on the low end, we’re making 20, 000 of profit per deal. On the low end, like just by sell price, right?

Yep. On the high end, we’re making 200, 000 to 500, 000, 200, 000 to 400, 000. That’s the higher end. Uh, you can make a million dollars if you want. You can go after more expensive properties. So. The scalability of it, like Ron said, from one, just, uh, how much you can get from each deal. The best business people like to do the smallest, lowest amount of deals with the highest price.

You know what I mean? Like, it’s like selling a race to the bottom verse, keeping your price high, knowing the value and selling fewer items. It is when you sell fewer items. Your, your margins increase because everything else decreases. Your margins increase because you now need less employees. You now need less overhead.

You now need less cold calls to get the deal. Uh, everything just goes up like the margin wise when you do a bigger deals.

Ron: Yeah. I mean, when you look at it at the end of the year, like the way I always review business is like how much. Time do I have to put in this to get X dollars out? And in my mind, like with info lots, like, I think it has to be almost full time to make a hundred, 200, 000.

Like if you’re okay with 5, 000 margins. And you’re

Dan: grinding to cold call and doing it’s a grind.

Ron: Yeah. It’s not like it can be a part time thing for sure. And I don’t want to act like we know exactly the time and focus. We’ve never done infill lots full time, uh, but the scalability of what people can do with an hour a day with rural land, with big acre land is night and day.

And I think also you talked about operations, Dan. With infill lots , you’re balancing both sides. Like even though the builder told you he’ll pay whatever X dollars for the land. Uh, if you’re wholesaling, if you’re assigning it, if you’re double closing it, like you have to have that buyer lined up and the seller lined up at the same time where we prefer buying the land, buying our 20 acres, whatever it is, using deal funding, whatever, using an investor and then selling it.

So we have complete control of the deal. We don’t need like if the seller falls out when you’re doing double closing wholesaling. You lose the deal. If the buyer falls out, you have a pretty good potential of losing a deal if you don’t find an end buyer.

Dan: Yeah. And I think some of the advantages going from there of info lots, because there are some, even though the margins are slow, the operations are high.

Our margins are lower. Operations are high. Um, there are some advantages to it. And I think one of the advantages, they are smaller deals and people can wrap their head around them a little bit more. Um, so it’s easier to get involved, I think, from that way versus, you know, when we say we’re buying a 60, 000 deal, we’re flipping land, they get all caught up, they need deal funding and they get a little overwhelmed, I think, even though it’s not as difficult as they might think.

Ron: The Lady, the lady this morning used the word intimidating when she talked about, uh, why she hasn’t done acres yet.

Dan: Yeah. And it’s, it’s really not like. Think of like million dollar houses and flipping those like that sounds more intimidating than a 40, 000 vacant piece of land where you know structures on and we can just determine its land and look at the, you know, features on a map and understand it very well.

But it can be intimidating to some. So I think that’s one of the cons or cons of rural vacant land and pros of info lots is You’re slinging for 4, 000 assignment fee. You know what I mean? You’re buying for 45 and assigning it for 4, 000 to the builder down the road. Um, but one of the other pros is low risk.

You don’t have money out really. It’s very low risk, low risk, lower reward. That’s what we’re talking about here. It is lower risk. It is a lower reward. It just is. That’s the fact of it. Um, quick flips, like even in our business model, any business. When you bring inventory in, getting rid of the inventory fast is one of the biggest things for sure.

And when you’re flipped, when you’re, when you’re assigning it to a builder, you have. The future buyer already lined up, which is how we pre mark. We used to pre market some have buyers before things like that. Kind of the same concept when you have a buyer lined up at the end that, you know, you’re selling to That’s the best business model.

That’s a great business model And we try to do it as much as possible and list and all that stuff But when you already know who it’s going to and you’re just getting rid of it quick. That’s really good It’s like when I used to be in um the building material industry We would bring in truckloads and truckloads of material and I’d get people committed to their truckloads before it even came in.

So boom, comes in, goes out, comes in, goes out. When you look at an inventory perspective. That’s the best case scenario for first in first out.

Ron: Yeah, I think yeah having a having a buyer who could buy all your land Theoretically with info lots is a great great advantage Like you could have a builder who buys 40 lots from you and you make 200 grand if you have the sellers He’ll buy the land and he’s okay with your business model.

That’s where it gets hairy. I think it’s, if you have these builders who are whatever, trying to cut you out, whatever the situation is, yeah, you can, things can get a little hairy or builders are kind of flaking on deals that they said, yeah, to that hundered, that’s going to happen for sure

Dan: Just cause you got a 0. 25 acre lot in their zip code that they’re looking for. Doesn’t mean they’re going to buy every single one.

Ron: But we’ve never had a buyer. Buy multiple pieces of our land. I don’t think ever. Um, in turn, unless it’s next door, the same parcel and we’re, we subdivided, whatever they take two of it, but it’s not like we have investors.

Our investors. I’m sorry, investors are not our end buyers.

Dan: Yeah, we list on the MLS, we list a mass marketer.

Ron: Yeah, yeah, so having those buyers lined up I think can be an advantage of that.

Dan: It definitely is. Especially if you have a good relationship and then, you know, it’s just, that’s a business, that’s a business relationship.

That is You’re their marketing, you’re the builder’s marketing. You’re the builder’s marketing, but also they’re your buyer. Like, that is one to many. Anytime, like, you can take one person and assign many deals to them, it’s much, much more scalable than one to one. So, like, the way we are doing it We’re selling one deal to one person who’s never going to come back essentially.

Um, which makes it a little less sellable as a future, uh, as a company as well. Once you start selling to businesses like a builder, you have one to many. So there is an advantage of that as well. But there’s disadvantages too because they’re looking for deals to other people are coming to them. The margins are tight.

It’s just, it’s a tough, it really is guys. It’s, it can be a really tough business model because of those reasons. Like you’re doing a lot of work. Like if you want to make 3, from a deal, that’s great. You can do that. But once you have some money or marketing money and you want to make 40, 000 per deal and you will, like if you have that mindset and that hustle, Vacant land in my mind is the way like rural vacant acres that we’re talking about is the way to scale to six, seven figures relatively quick.

There’s no doubt in my mind.

Ron: And Eli even said that, like he, that’s like the scaling up is going from info lots. Then scaling up is like, it’s a stepping stone. Rural land. And then maybe after that is entitlements or bigger projects, whatever it is.

Dan: But I don’t want people to think they can’t just get in rural land first.

Cause it’s like, you just need the marketing money, but you need marketing money for either. It’s just. The difference is, Ron, one of the main differences that we haven’t talked about is you have a hundred leads, right, for info lots, all vacant land, in the same zip code. Say you have a hundred leads, and then you have a hundred leads vacant, uh, rural vacant land.

So we have info lots, a hundred leads, and we have a hundred leads for, uh, acres, let’s say. The difference is, info lots, You’re going to get a couple from that a hundred because you’re offering 90%. The competition, you’re offering 90 percent of market, whatever you’re like, whatever you do, you’re offering 90%.

You offer them 45 grand and you’re going to make 5, 000. Your buyer bill is your builder is buying it for 50 out of that hundred for acres, a hundred leads. You won’t get a deal typically, but our margin, once you do get a deal, our margin, instead of making that 5, 000, you’re going to make 000. Um, and you just have to up the amount.

It’s more of a shotgun approach to get a higher margin game. And the numbers make sense that ROI is better on your time and your money, but that’s just the fact of it. Like you can call a hundred people with land and you’re probably going to lock up a deal if you offer them that kind of money.

Ron: I think, yeah, for sure.

If you, if you do that enough. You’ll get deals and it is our approach with rural vacant land. It’s, it’s like we say, it’s a shotgun approach, but it’s also an approach to minimize operations. We send blind offers out to these people. The blind offers are, I’m going to offer you 20, 000 for your land or I’m willing to, um, some people call and negotiate for sure.

There’s some operations there, but it weeds out uninterested sellers. So that right there where info lots a lot of times like you get the leads and then you got to tell them the price And then you got a hag on negotiate and you might be negotiating with a hundred two hundred people at once to get a couple Deals where if we have if we have responses to our 2, 000 mailers and we have 20 responses good chance We’ll get a deal make 30, 000 But we only talk to 20 people to get that deal like the mails the easy part to get out Like mail, it costs money for sure, but mails, it’s not hard to generate leads with mail.

The hard thing is, the hard thing with Infill Lots is you are talking with so many people, haggling with so many people to have the operations, I think.

Dan: It’s like texting. Yeah, it’s just, it’s just more of a Operational game, understanding how to weed the bad sellers out much, much more to it. Um, again, we’re just fighting for lower margins at that point and it can be used as a stepping stone to get into rural vacant land.

It doesn’t need to be, but it, uh, it doesn’t need to be because you guys, Ron and I fund hundreds and hundreds of deals every single year. Through our program called deal funding and it’s where we put up a hundred percent. It’s a joint venture If you guys are from the wholesale It’s just a JV partnership where we put up a hundred percent of the money you guys market it and sell it we split the Profit in some fashion so that once you understand that it’s not that intimidating It’s not your money going out for these bigger deals If you have a hundred thousand dollar deal bring it two hundred thousand bring it twenty thousand bring it whatever it is million dollars Bring it you can scale up that way.

Ron: Yeah, I mean we have Deshaun’s a great example Dan of someone who just like grinded it out like he’s been watching our He’s been watching our free podcasts, our YouTube, like you guys are. And he just started cold calling. He didn’t invest in the program. He just started cold calling. He got a deal. He’s making 15, 20, 000 on an assignment fee.

He’s going to purchase program. He’s going to put that into marketing and just scale up. Uh, but I don’t have much more to add, Dan. I think it’s. Info lots are, you can learn a lot in them. It’s going to be more of a grind in my opinion, and there’s going to be lower margins.

Dan: Exactly. They’re, they both have a place.

You can also do both of them. You can also, if you are already doing info, try some acres. A lot of the marketing techniques aren’t that different. Once you understand them, it is at the end of the day, Ron, all land investing, and that’s what we’re talking here, all things land investing. Guys, as always, YouTube channel.

It really helps drive our mission forward. Thank you for joining. And we’ll see you guys next episode. 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.

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_mask_size_scale='false' _mask_size_scale_tablet='false' _mask_size_scale_mobile='false' _mask_position='false' _mask_position_tablet='false' _mask_position_mobile='false' _mask_position_x='false' _mask_position_x_tablet='false' _mask_position_x_mobile='false' _mask_position_y='false' _mask_position_y_tablet='false' _mask_position_y_mobile='false' _mask_repeat='false' _mask_repeat_tablet='false' _mask_repeat_mobile='false' hide_desktop='false' hide_tablet='false' hide_mobile='false' _attributes='false' custom_css='false']https://www.youtube.com/watch?v=Ol1Mngf-pwE[/embedpress]
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