Investing in Raw Land, with Mark Podolsky, the Land Geek
Curious about how investing in raw land could help you accomplish your financial goals? In this episode, we’re talking with Mark Podolsky, The Land Geek, the raw land investor who’s completed over 5500 land deals, with an average ROI of over 300% on cash flips, and over 1,000% on the deals he sells with financing terms.
So if you want to learn from a raw land investor who’s replaced his income and helped many other people do the same … tune in below!
Table of contents
How Do You Invest in Raw Land?
In our interview, Mark starts us out with a case study, using Bruce as a hypothetical. In this instance, Bruce lives in St. Louis, yet owns 10 acres of land in Texas. He also owes $200 of back taxes. He’s advertising two things here: no emotional attachment to that raw land, and there’s some sort of financial distress.
You, as the raw land investor, would look at the comparable sales on his 10-acre parcel for the last 12-18 months. Then, you take the lowest comp divided by four, giving you what Warren Buffett would call a 300% margin of safety. Then you’ll send an actual offer. Pretend the lowest comp is $10,000. You would send an offer of $2,500. Chances are, Bruce will accept the offer, because it’s better than nothing.
In Mark’s case, 3 out of 5 people typically accept his offers. Then it’s time to do his due diligence.
Doing Your Due Diligence with Raw Land
When Mark Podolsky talks about due diligence, here’s what he means:
- Does “Bruce” still own the property?
- Are the back taxes only $200?
- What’s the ingress and egress?
- Are there any breaks in the title’s chain?
- Are there liens or encumbrances?
- Is there legal access?
- What are the neighbors doing?
- How far is the property from other services?
- What are the roads like?
- What is compelling about the property?
It’s crucial that before you make an investment on a property, you know all the important factors. You can also enlist help: Mark himself outsources this step to his team in the Philippines, because they are connected to an American title company. It’s not costly either. For larger investments, working with an American title company directly is beneficial. Or you can even outsource through Craigslist.
Taking the time or spending the resources to vet your land thoroughly will pay off in the long run.
What Happens Next?
The trick to raw land investments, after you vet the property, is to sell in 30 days or fewer. Then, you can make it cash flow similarly to a rental property, and be ready to invest in the next plot of land. So who do you sell to?
Fortunately, with raw land, you have built-in buyers: the neighbors. Intrinsically, the neighbors are going to have an interest in this land more than anyone else to start. They may want it to protect their privacy, or to build out their estate. Giving them the first pass can often have a huge payout.
Should that not pan out, you have several other options to find buyers. Start with your buyer’s list, then you can start looking online:
- Facebook Marketplace (or buy/sell groups)
- Land sale websites
How to Make Your Offer Irresistible
How you package and sell the land makes the offer irresistible. You ask for a $2,500 down payment and recoup your investment. Then, Mark recommends this: a monthly payment of $449 over 84 months at 9% interest.
This way, you have a onetime sale, earn your capital back, and then you have monthly cash flow without renters, renovations, or rehabs. Because you’re not dealing with tenants, you’re also exempt from Dodd Frank, RESPA, and the SAFE Act.
[13:28] “The game we play is, can we create enough of these land notes, where our passive income exceeds our fixed expense, and now we’re working because we want to, not because we have to?”
Raw Land Creates Value
One of the many benefits to raw land investing is that it doesn’t just line your own pockets. You’re fulfilling the needs of the seller. In our case study, Bruce was looking for a way out—he wanted to be free of the land and get caught up on his taxes. Then, you have buyers with a need, so you’re also solving their problem. It’s a win for all sides.
Nor can you forget about the county region. The county collects more tax revenue this way, so you’re helping to improve schools, hospitals, and county services as well. There’s value all the way down the line.
The Risks of Raw Land Investments
The first risk of investing in raw land is the environmental risk. Before buying any property, there’s another component to add to your “due diligence” list. Go to the epa.gov site to ensure you’re not buying a Superfund site. A Superfund site is a site that ensures that the company that pollutes the land is liable for cleaning it up. If you buy it, it does not make you liable, however, it can complicate the selling process.
The second risk to raw land is overpaying. You make your money on the buying of the property, so if you’re not paying 25-30 cents on the dollar, you’re overpaying. People will accept offers like that because they’re often trying to rid themselves of that land. Mark equates it to selling off the clutter in your garage.
[26:20] “Close your eyes and picture your garage right now, okay? And imagine I sent you an offer on all that stuff in your garage [for] 25-30 cents on the dollar. How happy would you be to accept that offer? Now yeah, you could go and try to take pictures of each item in your garage and try to sell them on OfferUp or eBay, but you’re busy. Right? That’s not what you want to do. It’s the same thing with the people who own raw land. They don’t want to learn how to market their own land.”
Privatized Banking and Raw Land
The power of the deals that Mark structures is that he recoups his investment immediately upon selling. So his monthly cash flow is pure profit. If you combine that with the power of the Infinite Banking Concept, you can continue to leverage your cash value repeatedly and pay your initial investment back.
This means that you can do more deals more quickly, because you are borrowing against your value and not carrying the loan for long periods of time.
About Mark Podolsky
Armed with only $3,000, gut-wrenching fear, and absolutely no real estate experience… Mark bought his first few parcels of raw land in 2001.
Today Mark is the author of Dirt Rich, the ultimate guide to helping you build a passive income. He’s also the owner of Frontier Properties, a very reputable and successful land investing company, and has been buying and selling land full time since 2001. By focusing on working smart, not hard, he has completed over 5,500 land deals with an average ROI of over 300% on cash flips, and over 1,000% on the deals he sells with financing terms.
Prior to his land investing success, Mark had a high-stress, soulless corporate job, and felt trapped in a state of solo-economic-dependency (i.e. his income stopped as soon as he stopped working).
Escaping solo-economic dependency changed Mark’s life in so many positive ways that he decided to teach, coach and mentor others to help them achieve their financial goals.
Even though Mark invests a lot of his time helping others, he stays actively involved in running his land investing business, and is dedicated to teaching the most current and relevant “real world” land investing methods to his students.
- The Land Geek , Mark’s company
- Mark’s course, “Wholetailing” (available free to our listeners)
- Mark’s email: email@example.com
Find Out Your Next Step to Time and Money Freedom
Do you want to use Privatized Banking, alternative investments, or cash flow strategies to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We would love to help you.
Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/.
By the way, to find out more about how Privatized Banking gives you the most safety, liquidity, and growth … plus gives you the ability to have your money do 2 things at the same time, boosting your investment returns.
Go to https://privatizedbankingsecrets.com/freeguide to learn more.
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