I've had some success flipping land, but prefer houses. However, an old friend of mine was of the opposite mindset; he preferred land to homes and excelled at it. He was good at finding 20 - 40 - 80 and 120 acre tracts of land and splitting them up into smaller parcels...and he made a lot of money doing it.
He also flipped commercial land and buildings…and occasionally he even flipped rental properties, too; and although he didn't discriminate against types of properties to flip his niche was flipping rural, agricultural zoned real estate.
I learned by watching and shadowing him that it takes a lot longer to sell vacant land than it does houses and apartments. For example, in a strong market you might sell a house in 30 - 60 days while it could take 1 - 2 years to flip land. So, if you’re interested in land investments you should modify your strategies accordingly.
I also noticed that many of his prospective buyers were white collar professions - physicians, dentists and other high income folk - people who could afford to buy the properties and not depend on rental income to pay for them. He’d found a niche and was working it like a pro.
More to the point though, his clients didn't want the hassle of collecting rents, making repairs, finding tenants, fixing up properties when tenants moved out, etc. Instead, they were willing to make the mortgage payments, reap the short to mid term tax benefits, and wait until they resold the land to reap the rest of their profits.
Also, it takes longer to sell when flipping land in part because there are fewer prospects interested in buying vacant land. Most people need shelter right away, so they look for something they can move into with the least amount of money.
Finally, when people buy vacant land they have to be able to support two mortgages, one for the house they live in and another for land that they hope to build on. But as you know many people are struggling to make ends meet with a single mortgage, let alone two.
Still, there’s a lot to like about flipping land. Most notably is the fact that there is less competition for it and sellers are more apt to give creative terms. For example, it’s common practice to have annual mortgage payments verses monthly payments, which frees up cash to use for other things.
That's it for this article. Click here to learn more about flipping real estate. Here's To Your Real Estate Marketing Success!