You must have heard the term house flipping where you buy a house, fix it and sell it for profit within a short period. However, did you know that you can apply the same profitable method to vacant land, lots and acreage? In this article we are going to discuss the best land flipping niches in 2023.
The best part about land flipping is that you do not need a large sum of money and can start with as low as a couple of thousand dollars. So let us discover what land flipping is and which land flipping niches in 2023 are worth looking into.
What is Land Flipping?
Essentially, land flipping involves buying undeveloped land at a price below market value and making a profit by selling that piece of land later on at a better price.
Making Profit from Land Flipping Niches in 2023
Well, there are a couple of ways to land flip. For instance, as a land flipper, you can buy a neglected or unwanted piece of raw land at a bargain price. The next step for you is to improve the condition of the land by clearing the area and possibly leveling the ground before selling it to someone. Typically land flippers tend to earn profits by actively marketing and seeking land flip projects. In this approach, you will search for land at bargain prices by finding landowners in financial distress or someone who wants to get quick cash for their investment. However, these properties are not on any sales listings, so you must do some legwork and research.
Once you find suitable land, you offer the owner an easy and quick cash sale and start marketing the land to sell it to the next buyer at a price closer to the market value. You can sell flipped land for cash. However, land flippers commonly make profits by offering land buyers financing and making payments on the land over a pre-determined time period.
So, where is the profit in that? First, the land buyer will have to pay you a down payment, and on top of that, they will have to pay you the remaining amount with interest over an agreed period. You sell the land at a price higher than you bought it for. Plus, you earn more profit by charging interest for financing the land to the new buyer.
5 Land Flipping Niches in 2023
While there are several options that you will come across, here are five of the top lucrative land flipping niches that you need to focus on in 2023.
High-Value Land Deals
Most land investors tend to focus on entering multiple low to middle revenue land deals. However, this approach is more suitable for those just starting in the land flipping business. This strategy allows you to repetitively practice the deal-making process several times a month, building your confidence and experience. As you gain experience over time, you can start focusing on high-value land deals to earn profit in 6 or 7 figures on a single land flipping deal.
Infill Areas
Infill lots are the vacant areas or pieces of land found in-between existing buildings and houses. Try to buy these infill lots in an area with growth potential. This will give you an excellent opportunity to capitalize on a highly profitable land flipping market by selling the infill lots to the builders.
Land Notes
You can sell a piece of land with a seller financing option to the new buyer. This allows you to enter into a sales contract with your new land buyer to make a down payment. The buyer also agrees to enter into a mutual agreement to pay you in installments, including interest rate, over a specific time.
These future payments that the land buyer will pay are also known as “land notes”. Land notes are one of the best ways to create an excellent passive income portfolio for yourself. In addition, the land notes are also assets you can sell to another party at a profitable price.
RV Lots
You probably would have never thought about this particular avenue to becoming a profitable business. However, RV enthusiasts create great money-making opportunities for land flippers. This is because of a pre-existing buyers market you can tap into to advertise the land you just bought.
People who already own RVs are always looking for places to enjoy while having a lot suitable for RV parking.
Selling Land to Developers
Land flipping can be a profitable business if you handle it tactfully. One of the best ways is to buy and sell raw land for profit. This approach comes with an added benefit: you will not have to make any changes, maintain or redo the land to sell it to the next buyer. However, suppose you wish to improve your chances of earning higher profits. In that case, you will have to step up your efforts and try to find land that developers might be willing to pay for. You will have to do thorough research and learn which land developers may be eligible to buy for building a project.
Reasons Why Land Flipping is the Best Investment
Are you wondering why you should focus on land flipping instead of other real estate investments? Here are the top reasons why.
Avoiding Hassles Associated with Other Real Estate Sectors
Most real estate domains come with the hassles of dealing with tenants, property management issues, etc. However, suppose you don’t want the problems associated with investing, such as mortgages, financing, tenancy agreements, repair, and maintenance. In that case, land flipping is a perfect niche for you. All you need to do is find suitable land at the right price and sell it at a higher price. The more you do it, the better you will get at marketing and negotiating a price that is profitable for you.
Cheaper Funding for Deals
Financing your operations is another pain point for real estate investors. Since you can buy most land flipping properties within a price range of $1000 to $5,000, it is easier to fund the deals. There are also options such as deal funding, when a company helps fund your deals while providing you with some guidance along the way.
Ease in Finding Deals
One of the main issues real estate investors face is the struggle to consistently find good deals worth investing. Land flipping is easier because you purchase at a lower price than the market value. As a result, you will be able to find a buyer sooner than actually trying to sell a property worth thousands and thousands of dollars.
Location Flexibility
This is another lucrative aspect of why land flipping is a fantastic venture. Although real estate investors are usually tied to a particular city or state, land flipping can be done anywhere by buying land, marketing it throughout the country, and selling it to the highest buyer.
Generating Cash Flow with Incredible Returns
As a land flipper, you can sell land, making more than 100% ROI. However, it is also not uncommon for land flippers to generate additional income by charging up to 15% of interest on seller financing to the land buyer.
Unlike other real estate categories where you may earn a percentage of profit in a deal, you can make a profit of 100% return on investment in a single land flipping deal. For instance, you buy land for $2,000 and can sell it for $4,000 in the next couple of months, doubling your money.
Limited Competition in the Market
Not many people have ventured into the land-flipping business. This is mainly because most people have never heard of the model known as land flipping and do not understand how someone can make money through it.
This ignorance by many leaves land flipping as an almost new real estate domain for you to explore and take advantage of. It is also rare for you to find yourself in the market competing for the same piece of land you are after.
However, other competitors in the market trying to buy the same area can actually be a good thing. This is because those competitors can also become your potential buyers in the future. So instead, think of competition in a specific place as a positive sign of validation that the market you are targeting has the potential to generate profits.
Protection Against a Financial Recession
Unlike other real estate domains, the land flipping business will never stop, even if another housing market crash happens. Because the land you buy is cheap compared to houses and buildings, you will still be able to sell the land to the next buyer for a profit. Therefore, no matter how bad the market is, you will be able to recover your investment and make a profit. You can even benefit from land flipping during a recession because land prices will decrease. You can buy land for cheaper and sell it later as the market improves.
Conclusion
Land flipping is a direct practice that allows you to make a legitimate profit by buying and selling vacant properties. With a promise to generate over 100% ROI, you can get started right away. Land flipping is more straightforward than it appears, especially if you know some hacks and some trade tips that come with experience. Get this right, and you can say goodbye to your 9 to 5 job and start earning a 6-figure income with each land flipping deal.