Land Flipping Is The LEAST Competitive Niche In Real Estate

Dan: Welcome to the real estate investing podcast, where we help you unlock your potential freedom through land investing, real estate investing, and entrepreneurship. Hey, everyone, welcome back to the real estate investing podcast. Today’s topic. We’re discussing why is the competition in land still so low?

I’m your host Dan Apke joined again by my brother and business partner, Ron Apke. I wanted to get into this because one of the questions I have Constantly in the consultations we have Ron are asking about the competition. And that seems to be not only people’s hesitation, but on the flip side, it’s relatively low in competition compared to other business models that I’ve been in other real estate business models.

Just it’s, it’s low competition for multiple reasons. We’re going to get into, but I think that’s a lot of people’s mindsets coming in. They’re scared about the competition.

Ron: Yeah. I think it’s, it’s wild. Like that people. I understand people coming in from a W to all that, but the lack of competition in this business business model relative to the other things, it’s just incredible.

But like you said, people ask that question all the time. Like, what is the competition look like when you’re doing this? And obviously you’re not the only person doing this business model. If you’re getting into it, um, there is going to be competition in some markets while there’s some markets where there’s going to be little to no competition.

Um, But like I said, Dan, it’s, it’s about the opportunity level. And I think opportunity level is somewhat based on competition and just looking at margins still the unbelievable margins you’re able to have in this business. I think that shows. The lack of real competition. And one of the things is there’s a lot of ways to do this business model.

Our way is not the same as everyone else’s way. Um, our target deals are not the same as everyone else’s target deals. I had a call with someone earlier today who said, was talking about infill lots in the middle of Florida. And he was saying like, how competitive, like all these people had six offers.

Like that’s not our business model. We’re not doing that. So competition varies by where you are, what you’re targeting for sure.

Dan: And that’s one of the reasons we call our business land investing online, not land flipping online. There’s just land investing as a whole. There’s so many different ways to profit off land.

And the way we’re doing our business, like Ron said, is way different from how other people are doing theirs. But land investing as a broad term gives you so much flexibility to pivot. And that’s what this is all about. It’s pivoting away and towards things. We’re not buying the same land. We are, we were buying when we first started.

We’re doing things much differently. We’re also doing more subdivisions and value add things now. So the things definitely the, the business model changes over time for sure. And the second half of this podcast, we’re going to get into how to beat competition because competition isn’t that scary. And we have stories on people getting multiple, multiple properties and multiple deals in the same County, you know, the same people in the community, three people sent mail to the same place multiple times.

And they all got deals. So there’s different things that we’re talking about, how to beat competition and the second half. But I want to start with talking about the, the business model as a whole hasn’t been hit by the mainstream yet. And it’s just a newer business model in general. A lot of people still don’t know about land flipping.

If you start talking. To people in the real estate world, it’s getting bigger, but you still go on these bigger pocket forms and these other forms and look at these and ask about it. People don’t know what it is. A lot of, a lot of people don’t know what it is. It is becoming more common, definitely. But at the same time, it’s less talked about.

And there’s over eight times the amount of parcels, vacant land parcels. Then there are houses with a structure. So the supply is much, much, much greater than a property within a single family home. So I think those two things work together and will allow a lot more people to be in it naturally. And then yes, as competition rises, you got to change your business model.

Uh, and adapt and get better than the competition and things will change for sure. But right now that’s the fact there are less people in it and there’s a lot more supply

Ron: Yeah, and I think it’s like you got to hear before you get bought into a business model You need to hear it four or five six times and some people people in real estate Most people who are listening to bigger pockets listening like they probably heard of land flipping land investing whatever it is um But it hasn’t fully registered.

Like maybe it’s just not the buy in and it takes a while. And when we’re talking about buying properties for 40, 45, 42, whatever percent of market value, the margins just, it’s, we try, we were honest with what we’re saying. But same time, time, like when someone’s coming from house flipping where they’re buying for 60 percent of market value, and then, then they need to put in another 20 percent into improvements, and then they have a very slim margin.

It’s just hard for them to understand the margins in this business. I think Dan.

Dan: Yeah. And it comes down to like what you’re trying to say is it sounds too good to be true. And a lot of people think that, and they’re not bought in or they don’t believe it. And that’s another big objection that we get is it, you know, you’re talking about these margins, you’re buying something for 45 cents on the dollar and reselling it very quick and getting your, your money back, your incredible return that you don’t see in a lot of other industries.

And a lot of other real estate sectors. But along with that, it’s the simplicity, right? You’re talking about vacant land. You’re not getting inspections. You’re not adding improvement. I mean, it’s a good housing flip. If you buy a house for two 50, put a hundred into it. So you’re all in three 50, you have a little debt on it and you sell it for four 25.

And that took six months. Like that’s considered a successful land, a house flip period. So you come and you see, okay, we’re taking a 250, 000 property. We’re putting it up for 500, which we do over and over and over again. And we’re making 250, 000 on it. With really not leveraging through deal funding where we’re not leveraging our credit or loans or anything like that.

And we’re not doing any improvements to it. No inspections, nothing like that. So we’re keeping things very simple with making margin that there that’s not really seen in that world. So I think there is some truth to be said that people think it’s too good to be, it sounds too good to be true.

Ron: Yeah, I, I, without a doubt agree.

Like that’s, it’s hard for people to kind of put in perspective what’s being done in this industry, um, because they’re used to smaller margins, which is just crazy because this is literally land is the thing that most real estate investors are looking for. What land provides Dan, the, the freedom financially it can provide for you as an investor land is what people are looking for from an investment perspective, like what land investing can do for you.

And they’re looking in the wrong spots. They’re looking at rental properties. They’re looking in household selling, they’re looking in house flipping and all those industries have more competition. If your house flipping, it takes significantly more time and effort to get one deal. And then your margins are smaller.

Um, So I think eventually, Dan, I think of it slowly. People will come over. You also have people leave like people who came into this land, flipping land, investing, and they didn’t take action. They didn’t make whatever it is. They’re saying it wasn’t for them. Um, but, uh. You’ll have people come and leave just like anything else.

But yeah, right now it’s just, I think people are in denial maybe.

Dan: Yeah. Well, it’s still, it’s still a business and that’s the thing. It’s it’s the money’s not going to come easy no matter what. It’s going to come easier than flipping a house. Definitely. No doubt about it, but it’s still not free money.

You’re not just setting something up and making free money. You got to put in the work. You got to send the mail. You got to send your text. You got to get it under contract. Uh, analyze the deals listed for sale, sell it, understand the process behind all of what we’re talking about when we talk about selling, there’s a lot that goes into that, um, but yeah, so it’s a, it’s a whole business model.

And the people leaving sometimes come in and don’t understand that, or they never owned a business and they just. Don’t understand what really goes into it and they quit. They don’t send out mail. Most of the people who quit don’t even send out a mailer in the first place and try to get a piece of land.

Um, so definitely there are people coming in and out, but the net people coming in because of it is usually greater, um, not greater than the people going out, but it. It’s, it’s greater than the, like the, what I’m trying to say, the net amount of people in the game, the active amount keeps going up. Um, and, and that’s going to stay true for a long time because we’re just so under competitive, I think at this point, but as things get more competitive, like we said, Businesses change.

The business model will change a little bit. People used to not text as much in land flipping people text now to get more leads, more qualified leads, um, for a better price essentially. But there are ways to beat competition. That’s what we can get into now is ways to stand out from the competition. The first thing that comes to mind, a lot of the competition is scared and they’re not really sending out marketing.

They’re not sending out being aggressive on the marketing front. The name of this business model, the name of the game is getting. In touch with as many vacant landowners as possible and finding the ones that want to sell their land for under market value. How you get there is kind of irrelevant. We send mail.

Yes, and we also text, but that’s really doesn’t matter. You just got to get in front of more people and get more qualified leads essentially. And the thing we see with people who quit or fall out or Um, just, you know, are kind of sitting on the sidelines are the people who aren’t attacking leads like that.

And I think that’s the number one way to beat competitions, get more qualified leads.

Ron: Yeah, for sure. This is a marketing game guys. It’s uh, to get leads, you need to market whether it’s texting, cold calling, uh, mail, which is our preferred way. Um, you need to be able to get leads and by being consistent with that.

You’re beating Dan, 95 percent of the people I hear top level people in our community, like top 5 percent people in our community. I would say you’re like, I’ve been struggling to get mail out. How much do you hear that? Dan from like people who are making 50, 60, 000 a month. And they’re like, I’ve been struggling.

I’ve been inconsistent with my mail the last few months. Uh, I hear that

Dan: Matt P on the podcast last week.

Ron: Yeah. And he’s making, he’s legitimately making 50, 60, 000 a month. And he’s talking about struggling with being consistent on mail, which is normal for anyone who’s trying to do this business as individual, as Matt is trying to do it.

And like, he’s doing a lot, he’s putting out a lot of different hats. Um, but the consistent, if you’re consistently sending out mail every two weeks, you’ll be doubt 99 percent of people.

Dan: Yeah, absolutely. And the, the, so consistency is number one, I think, but we’re now let’s talk about if someone gets two pieces of mail with the same offer price.

Or actually that’s just a two pieces of mail period, which leads me to the one you got to price. You can price more aggressively. Uh, so you can just price better because a lot of people will send out mail. And they’ll under price it, whatever it is, they won’t get a call back and being able to price efficiently will get you more leads.

That’s one. Number two, if they get the same offer price, which won’t happen, but still they’ll talk to both sides and try to leverage them. So someone gets two offer letters in the mail, right? Same, let’s just call it 50, 000 each. That guy calls back to each of those and says, Hey, I got a letter for 50, 000.

Let’s talk about what’s going to keep someone in the game and how that, let’s call it player A and player B for 50, 000. Like what, who’s going to win that and why and how?

Ron: I, I always think it’s someone who’s going to stick to their word. Um, I think that starts with answering the phone or having very quick communication, whether you have an answering service or not.

I think sticking to your word throughout the entire process is going to get you more deals. Maybe you’ll lose out on a deal for not over promising, but I’m way more like under promise over deliver. That’s what I want to do. Um, and like being consistent with that, with your, uh. With your leads. I think it’s so, so important.

And again, like this is another thing. If you’re just doing that, you’re beating out another 95 percent of people. Um, but that, that’s what gets you deals, Dan. I think it’s that trust, that relationship with Bob who just called you with that 50, 000 offer. Bob’s got another offer. 50, 50, 000. All you got to do is beat out one person.

It’s not necessarily with money though, Dan. That’s what everyone is not always with money. Very rarely, right. That’s everyone’s knee jerk reaction, is okay, Bob has another offer for 57, I need to beat that. Like, listen, Bob, I understand you have this other offer 57, I have 50, 000 ready to go. I work with title company X title company down or, uh, two miles away from you.

They can, I work with them all the time. They do deals with me. They know who I am. Um, and they, they can get this deal closed in two weeks. I understand if you want to take that other offer, but here’s what I have for you. And if you can say that. With belief and follow through with that, you’re going to get that deal more of the times than not Bob doesn’t care about the 7, 000.

Dan: Yeah. And follow up with them. But the big thing is to like answer the call. Like we’re going back to the basics. How do you beat a, how does a beat B in this situation? 50, 000 versus 50, 000 offer. Person A answered the call on the first time, called him back when he said he was going to call back, stick to his word, got back with him, looked at the land, talked to Bob, build rapport, figured out why he wants to sell, all the questions and sales practices that we teach and preach.

And maybe B sat on the sidelines a little bit, took four days to get back. Whatever it is. And then maybe, maybe Bob comes and he wants 55, 000. He’s asking both parties for 55, 000 and that’s where each situation gets a little bit unique because I do think there is some truth to beating competition. And this is being some of it.

If Bob is, if he’s being honest with you and you guys are using your sales practice and he’s still not selling to you at 50, 000, he wants more money. Some of this might come down to. Alternative ways to make money off the land. When we’re talking about getting really competitive run, like improvements, like all of a sudden I can subdivide that 50, 000 piece of land and it’s going to sell for two 50 after the subdivision, now I can be really flexible on price and I know I can win on price now because I don’t think player B is going to be in that game.

He’s not looking at a subdivide here. Things like that are what I’m talking about. Uh, double closing and getting talking to Bob about, Hey, I can’t get you your money. You’re 60. Maybe you want 60 grand. I can’t get you that. And in two weeks I can, I can only pay up to 50 grand on that. Let’s talk about a double close here.

And you go into that with, with Bob and you try to get a attorney in fact and lock it up for 90 days to be able to list it. Um, so there are options. I think, I think beating the competition, um, is one being a better salesperson, sticking your word like Ron said. And two, coming up with solutions that better the market in general, that can better the market, the seller in those situations.

And I think that’s going to change over time, but a big competitive advantage of ours when we’re attacking these subdivides, we can pay 80 percent of market value. Who’s going to be able to go in there with the cash and pay these people 80 percent on a 300, 000, 400, 500, 000 property. There’s not going to be many of them.

You can go list your property and yeah, you can maybe get 600 out of it out of we’re offering 500 or four 50. But you’re gonna list it for 600, which is market value. You’re gonna sell it with a realtor. You’re gonna have these fees, these closing costs. It’s gonna take six months. That’s when it gets really powerful.

Ron: Yeah, I 100 percent agree. Like if there’s project based, that changes everything. Like you want to make sure you can get the deal and money doesn’t matter as much. But yeah, everything you said makes a ton of sense, Dan. And I think it’s spot on. Like this isn’t like a hard nose. I don’t, when we say sales guys, it’s not like a hard nose like thing.

It is just like conveying information, conveying the process. Trying to pressure them into signing that purchase agreement. That is not going to go well, but it’s about this, this type of sales. And this is about transparency. It’s about relationship building. Um, it’s about a win win like it really is. Do not like, we’re not trying to force them to do that, but being blunt with them, just letting them know the situation and that comes back and that’s going to help you on the back end.

Dan, when you try to go negotiate down because you found out something that’s wrong with the property.

Dan: Yeah, it all helps you. I mean, relationship first, I I’m a big believer of that. Like you’re not going to win all your battles and people will go with the more money price sometimes. But the relationship overall will win and you’ll have a healthier business for sure.

Like if you can build a better relationship than the other player and get their trust because relationships equals trust. And that’s what it comes down to. As long as they’re qualified and everything’s good like that, you will win that more times than not. And you’ll hear it in their voice too. They’ll say, cause I used to be in sales and you’ll hear it.

You’ll be like, listen, they’ll have this conversation with me all the time. And they’d say, listen, Dan. I really want to work with you and I want to go through the project. I think you’ve been great to work with and I really enjoy speaking with you and working with you. But to be honest with you.

Competitor X is just offering 7, 000 more on this. And I, as much as I want to go with you, it doesn’t make sense. I used to have those conversations all the time. Those conversations mean what you’re doing working because they want to work with you, even though you’re lower. And then, and then when you understand that you can go up to their price or figure it out from there.

But that’s a good sign that you’re doing good in sales. Yep.

Ron: Uh, yeah, I think that’s. That’s the name of the game in this business. Um, everything we talked about, Dan, that’s competition is not a thing. If you do these, like it really is not a, like you will run into some things where someone got five offers, like there might be a county where it’s just bad timing, what, who knows, you can still get deals out of there, but the majority of times there’s going to be.

You’re going to be the only offer, or there might be one other offer there. You just gotta be one person. Yeah. Or they’re just saying. You’ll hear that all the time. People just saying, I have five other offers here, and you’re the only one really there. Um, so yeah, I, I think that’s the name of the game Dan .

Dan: Yeah. And we talked a lot in this about like, we almost just acted like competition’s really high on how to beat them the last half of this, I think. But the moral of the story, guys. Competition in land is not that high. There are 8. 5 times the amount of parcels as there are with houses with much less the competition.

Like that’s all you need to hear. I can buy land. If I had infinite money, I could buy land under market value all day long, every day. Like it’s not that difficult to do. There’s just so much land out there. Most of land investors are focused in a specific market as well. You start going to the Pacific Northwest and all these different states, like just picture the country as a whole and where land investors are now are populated in these little pockets, but I’m telling you like it’s, there’s so much, there’s so much land out there ready to be bought and sold.

So I don’t want to make it seem like it’s already competitive because it’s underly competitive in my mind, but that’s all I have. You have anything else to add around?

Ron: No, I agree. Everything you said it’s, uh, yeah, it’s the competition. The way beating the competition, what we talked about, Dan is it’s just how to do business well.

Like if you have competition or not stick to your word, if you have competition or not be responsive to your leads. Like it’s all stuff that’s going to get you more deals in the long run. And if there is a competition in one market, it’s going to give you the upper hand for sure. .

Dan: As always, thank you for joining.

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