How to Wholesale Real Estate Without Using Your Own Money
We were recently joined by Jaren Barnes on the DealMachine Real Estate Investing Podcast where he shared his expertise on wholesaling land and how to make a $25,000 profit without using your own money. So in this blog, we will cover some of the topics he discussed like, the process of getting under contract and passing it off to an investor, the value of vacant land, finding a land-specialized real estate agent, and the reasons why most people don't take advantage of this opportunity. Without further ado let's jump right in!
Jaren's Journey in Real Estate Investing
Before entering the real estate investing world, Jaren had a background in nonprofit work and even served as a superintendent at a homeless shelter. However, he soon realized that he needed to find a way to pay the bills and started exploring entrepreneurship.
He credits Brendan Burchard's book, "The Millionaire Messenger," as the catalyst for his interest in entrepreneurship. Jaren eventually found his way into the real estate industry, starting with wholesaling real estate houses and later transitioning to wholesaling land. He has since built successful businesses, including the Land Maverick Society
Wholesaling Land: A Lucrative Opportunity
Wholesaling land can be a highly profitable venture, particularly for those who are looking for their first real estate deal. Jaren Barnes emphasizes the potential for making a substantial profit without the need to invest your own money. By getting under contract and then passing the deal off to an investor, you can make a spread of $25,000 or more.
Finding Vacant Land and Getting it Under Contract
Jaren explains that one of the key aspects of wholesaling land is finding vacant pieces of land. He shared a personal story of how he bought a piece of land for $17,000 and sold it for $50,000 the very next day.
When it comes to finding land deals, Jaren emphasizes the effectiveness of direct mail. He finds that a focused direct mail campaign can yield great results, with an average of one deal for every 3,500 units mailed. Other methods, such as texting and cold calling, can also be used.
Once you find a potential deal, the next step is to get it under contract. Jaren suggests sending the property owner a letter and waiting for their response. Once they express interest in selling, you would then run comps and make an offer.
Working with a Land Specialized Real Estate Agent
Determining the value of land can be a bit more complex than valuing houses. Jaren recommends working with a local land-specialized agent to help with running comps and due diligence. These agents have the expertise to accurately assess the value of the land and ensure that you're buying the property at a discount.
When it comes to selling the land, he similarly advises selling through a land-specialized real estate agent. This ensures that you get the best price for the property and also gives the agent the opportunity to earn a commission from the sale.
Taking Title and Reselling Land
In the land wholesaling business, Jaren and his team take title to the properties they buy. This means that they actually own the property before selling it. While some investors prefer to assign or do double closings, Jaren finds that taking title offers more control over the property and allows for alternative exit strategies, such as subdividing or making improvements. The main challenge with taking title is the need for working capital, but Jaren's team solves this by funding all of their members' deals.
The 80/20 Principle: Finding Leverage in Real Estate Investing
Jaren is a big believer in the 80/20 principle, which states that 80% of your results come from 20% of your effort. In the context of real estate investing, this means focusing on the activities that produce the highest return on investment. Jaren advises eliminating distractions and identifying the core tasks that will lead to the desired results. For land investors, these core tasks include running comps and due diligence, talking to motivated sellers, and finding and managing land-specialized agents.
We hope this blog helped you along in your journey to start real estate investing and consider wholesaling land as a potential avenue. From how to find vacant land to reselling land the process can be a lot to process. But, by following some of Jaren's tips it may help streamline your journey in real estate investing. And as always Happy DealFinding!
About Samantha Ankney
Samantha has been a media specialist for DealMachine for 1.5 years. She produces, edits, writes, and publishes all media that is distributed to the DealMachine and Real Estate Investing community.