Exploring Land Flipping: The Little-Known Investment Opportunity - Episode 36

We dive into the little-known industry of land flipping as an investment opportunity. Our guest, Pete Reese, shares his journey from traditional real estate to finding immense success in the world of land flipping. Pete's passion and expertise shine through as he reveals the ins and outs of this highly profitable and scalable business model. Discover how you can start flipping land with little upfront capital, leveraging public data and remote systems. Whether you're a novice looking for a side hustle or an experienced investor seeking a lucrative venture, Pete's valuable insights and free training program at LandConquest.com will guide you towards financial independence through the exciting world of land flipping. Don't miss this chance to learn from a true industry expert and explore the limitless possibilities in this unique investment opportunity.

About our guest:
Pete Reese is the President of Reelvest Properties, a land development and investment company. With nearly two decades of real estate experience as a broker and investor, Pete has successfully purchased and sold hundreds of pieces of real estate for a profit over the years for himself and on behalf of his clients. He did $3.5 Million in Revenue in 2022 with his land flipping and development business, and he’s pushing to do $10 Million in 2023. Pete’s always looking for his next deal, including his longtime dream of his own private island. Besides his professional accomplishments, Pete is a proud father to three beautiful girls, keeps up with his family by working out and enjoying a vegan diet, and is the 31st great-grandson of King Henry II.

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TRANSCRIPT:

[00:00:00] Naseema McElroy: What's up? What's up? My financially intentional people have a special treat. We are joined today by Pete Reese and he is going to expose us to the little known industry of land flipping as an investment opportunity. Hey Pete, how you doing?

[00:00:15] Pete Reese: I'm doing great. And it's great to be here.

[00:00:17] Naseema McElroy: Awesome. Awesome. So, I'm in the personal finance community, fire community, and a lot of our investment portfolios typically just consist of index fund investing, but a lot of other people have real estate, but in the traditional sense of just buying and renting out property. So I'm very interested to learn about land flipping as a potential investment.

But before we get into this, I want to know how you landed in land flipping and found out about this opportunity.

[00:00:51] Pete Reese: Yeah. Yeah. I never considered myself an expert in land by any means. I've been in real estate I guess, since the early 2000s, my wife and I. We started like a lot of other people, we bought our first home with an FHA loan three and a half percent down and a couple of years. And just because of market appreciation and some very questionable repairs that I did myself we were able to increase the property value, probably about 50, 000.

So when we sold it, we ended up with a check with about 50, 000. After all closing costs and stuff. So I thought I was like a real estate mogul and I thought this is too easy. Let's keep doing this. So we bought another house that needed work. Also we did the same thing with that one. And then we started flipping homes.

This was, early two thousands before it was as mainstream as it is now. Now there were still shows on HGTV and everything. And that's how we. Got somewhat interested in it, but we were doing that as a business for a while market actually then crashed in about 2008 and at that time we were like, okay, probably not the best business to be in because.

There were very few regular buyers buying, it was just cash investors and everything that we're buying because the financing dried up for a lot of people. So I had gotten my broker's license in California here, a couple of years before that, and I was just using it to find deals for myself.

And when the market crashed, I thought I might as well just use this license for something because. I knew there was a need for the banks to have agents to sell their properties for them. So it's just focused on that niche for a while, just listing these bang on properties for the banks and not the best business to be in honestly, but it did pay the bills at the time.

So I was thankful for that, when a lot of people were struggling in real estate. And then I got connected with a bunch of large investment companies through that, that were just buying and holding or buying and flipping a bunch of these. Properties as many deals as I could find them. So I was just focused on that for a while, finding them as many deals as I could.

I loved the investment side of things, but I was really scared off after the market crashed to get back into investments. I was young and I didn't really understand how things work. That was the best time to be buying stuff, in hindsight. but anyhow and then I got sidetracked. I got sidetracked in a good way on, on a business with my wife.

With training. It's an online education business. She's been a blogger for a long time travel blogging and Lifestyle blogging and everything and she had a lot of people asking her how to do it So we knew there was demand there. So she wanted me to work with her on that So I helped her build up the whole education side of things on that business and that went really we had many thousands of happy and happy students, but I had the edge to get back into real estate because that was always my true passion decided that I wanted to get back in as a, as an investor, but I didn't really want to get back into the house flipping again, too many things can go wrong, a lot of things to, to manage and stay on top of.

So I was just looking for something that was. I don't know that that caught my interest and

I stumbled into some people talking about land flipping, buying a property for 10, 000, selling it for 30, 000 and I thought that's great. I'd love to do that. I love buying and selling stuff.

So it seemed like a really good fit for me. I bought a training program on it and I went all in and learned everything I could started sending out mail, which is how you generate your leads a lot of times in this business. And then in, that was in the, at the end of 2020. And then our first deal we did in March of 2021 and in March and then that first year ended up doing about 1. 2 million in revenue and almost 50% gross profit margin too. So on average, we were able to, any property we bought, we were able to sell it for double what we paid for it after all closing costs. So buy a property for 20, 000, sell it for 40, 000, that type of thing. So, it really worked out well. And that first year was about proving kind of the business model.

The second year we bumped it up even further, did about 3. 5 million in revenue and and then this year we're already at 3. 5 million and looking to hopefully close out by at 10 million by the end of the year.

So really trying to scale it as much as we can, but it's a fun business, just buying and selling stuff.

So we're buying properties off market and then maybe sometimes doing some minor stuff to them. Nothing like flipping a home though. And then we're reselling them on market.

[00:05:19] Naseema McElroy: So, are these properties are just like vacant lots.

[00:05:22] Pete Reese: Yeah, these are vacant pieces of land,

so there's lots of vacant land all over the country pretty much, and a lot of people that own them don't have any plans with them. They may have inherited the properties, they may have, owned them for many years with the intent of maybe building on them one day, and they just never got around to it.

So a lot of times, these properties are just sitting there, these people are tired of paying the property tax bills, they're just... It's not top of mind for them and anything or anything like that. So we're sending out direct mail, like letters in the mail to people with an actual offer amount. And we base those offer amounts on average land prices in a particular area.

And then, sometimes people respond and are interested or interested in, and but they want a higher price. So we work out a deal, whatever the case is, but. We're just putting together deals, as many as we can and just buying and buying and selling.

[00:06:16] Naseema McElroy: so. from traditional real estate that you were in before or more of the flipping actual properties versus this, like what are the pros and cons that you see? And it seems like you, you've been extremely profitable, so I know you're successful in it. But

why were you attracted to this more than going back to a property flipping.

[00:06:37] Pete Reese: Yeah. Just for me, the ease of it, it just sounded like it was really high profit business, and the ease of it too. I like the fact that we can buy a property and a lot of times we don't have to do anything to the property, and then we resell it right away, hold times on our property is really on average or the first year was about 60 days and then the second year, it was about average, like 67 days or something like that.

And then this year it's bumped up a little higher, I don't know if it's because of the market or just that I'm focusing on larger properties, but we're probably 90 to a hundred days on average this year. So a little over 3 months, I guess right now is our average hold time. So it's quick and very little to actually do to these properties, which makes it super easy, some of these properties I've bought properties were close on them and then put them on the market right away and then get a cash buyer and then we close it in a couple of weeks. It's great, flipping is a lot more of an extensive process, a lot more things

[00:07:32] Naseema McElroy: Yeah. And a lot more people and things involved. Yeah. Whenever you deal with contractors, you just build in a whole nother layer of complexity, but it sounds like you've had extreme success in this. Like, how repeatable

how easy is this for anybody else to duplicate?

[00:07:52] Pete Reese: yeah, it's pretty easy. There's 4, 000 counties in the United States and I don't know what the number of privately owned vacant pieces of land is, but it's just astronomical in this country. So basically what we do is we just pick an area, we figure out kind of the values in that area, and then we send out our direct mail.

Now it's not like I'm here, writing, an address on an envelope and, licking the envelopes and, I'm not doing any of that stuff. I just send a list basically to a mailing company. They send it all out and then obviously that starts the phone ringing or the emails coming in or whatever the case may be.

So, it's just a matter of, sending out more mail, picking more areas and just staying on top of all the leads that come in. So it's very repeatable. So that's 1, 1 thing that I liked about the business. It just seems so scalable,

if you're looking for downsides, I would say that.

There's not as established of a, like a, there's no real private lender. Type thing available with land flipping. So you've got two choices. You can either buy it all yourself cash or through home equity line of credit or whatever you have set up, or you can take on a partner.

And there are partners available in this business. And I've recently just stepped into that myself. And basically what happens with the partner situation is that at least the program I offer is that. If someone finds a deal, brings a deal, and then what happens is we partner with them on that deal.

I send all the money to close the deal. And then when we resell the property, basically my team takes over and handles like the whole process from there. When we resell the property, whatever profits are there, we split 50 50. So, for the investor that generates a deal, it's great because, they don't have to...

Spend any of their own money to buy these properties

or anything like that. Plus my team is really experienced and we, get the deal done and sell it for as much as we can. And then from my perspective, it's a great, because. There's more, there's like a continuous flow of deals coming in and I'll do as many deals as there are deals.

So yeah, it's a good win win situation for sure.

[00:10:00] Naseema McElroy: So, if you want really just want to get started, you can start in 1 of these partnerships with basically, not having to pay anything, but just spending time on finding properties.

[00:10:11] Pete Reese: That's where the whole value is. You can find the properties. There's people like me that will take it from there. And then obviously. What's cool too, from the, the investor standpoint, the person that generates the deal is there's no downside for them either. Say for instance, something didn't work out.

Right. And we lost money. It's not like I could come after them and say, Hey, you owe me some, half of my loss or anything like that. There's no downside. And, so I, I think it's a pretty cool win win thing. And it's something that when I got started in it would have been really.

There were some people doing that, but they all had caveats. It's got to sell within three months. It's got to sell within six months or you don't get anything and, that kind of stuff. So I eliminated all that stuff and the kind of leveraging the team that I built up. So. The investors that I work with, it's just kind of like, I try to make it easy for them.

Like just focus on finding the deals. We'll take care of the rest. And then we split the profits, I think that's a really fair way to do things. And then kind of a win win. So,

[00:11:05] Naseema McElroy: So, for people who are looking to add extra investments into their portfolio, how do you usually approach them as far as using this as a form of investment? Is it more of them like opening up like their whole infrastructure and firm like you do or being like investors to people who offer funding for people?

Like, how do you typically work with people who just want to use this as a form of investing?

[00:11:28] Pete Reese: yeah, yeah. There's a couple routes they could take, they could take it as like a side hustle situation, learn how to evaluate properties. Send out mail and then deal with it an hour or two, here and there, every, so every few days or whatever to follow up on the leads and stuff.

So that's 1 thing that I see people do sometimes. The other thing, if you want to be completely passive. There's always opportunities for private lending and things like that. Like I've got a couple private lenders that I work with here and there where they'll just basically lend their money to close the deal.

And then we pay them, 12% and give them a couple of points on their money as well. And then they get repaid, obviously, when it resells. So that's, it's a good win from them. Good return percentage and is any secured by deeply discounted properties that we buy because we're trying to buy them for under 50% of what we think we can sell them for.

So, it should be should be pretty secure in that way. So yeah, that, those are the kind of two routes that I see people taking, or, they started as a side hustle and they're like, why am I at my W2 now? And when I could make more doing this as a side hustle than I'm making all year, and that stuff happens, all the time.

So,

[00:12:41] Naseema McElroy: And how long from when you 1st started, did it take you to build out your team and your systems?

[00:12:48] Pete Reese: It pretty much, it, it, I just added it a piece at a time, it started as just me at the very beginning. And then I had an assistant that was working with me in another business. And I just started teaching him how to do certain things, certain tasks that I wanted to take off my plate.

So I started like that and he was like part time. And then I started putting more and more on his plate. And then, I just gradually added people as the cashflow allowed and, and it as it made sense, like certain things I, I didn't want to do anymore. Like I didn't want to call and talk to all the sellers and stuff like that.

That was like one of the big first things that I did. It was like, okay, I'm going to hire someone to do this. And it worked out great. They're better than me at it and they enjoy doing that kind of stuff. And I didn't. So, and I just gradually just build it up over time as far as the team goes, we're all remote.

So it's pretty easy all over the world too.

[00:13:40] Naseema McElroy: That's interesting. So you don't even have to be it's location independent. You don't have to be in the areas where you invest in. Do you even do you go out to inspect the land that you buy or how does that process work?

[00:13:53] Pete Reese: no. We have a whole process built up where I, I don't ever see any of these properties. So, one of the things after we get under contract is we're. Sending out a local photographer to go walk the property, take photos. We also get a broker opinion, local land broker. We have them, give us their opinion on the value as well.

So like the whole checklist of things that we. Check out before we actually send the money to close the transaction. But no, I don't ever see any of these properties. I did on a road trip our first year when it did, we stopped at a couple of the properties we owned and it was interesting, but it didn't really give me any additional perspective on those properties aside from the fact that I liked them.

And I was like should I even sell them? So that, that type of thing might happen, but I'm in California and I buy stuff all over the country, like East coast. Midwest, Northwest, it doesn't matter. So,

[00:14:43] Naseema McElroy: That's cool, but you, but now you work with people that buying land from different parts of the region to you said internationally. So, it's people are doing this all over the world.

[00:14:54] Pete Reese: It's, I'm sure people are doing it internationally, but the one thing we've got going for us here in the United States is our public records. Now, like property ownership records are all public data, which makes the outreach really easy. And it makes the property research really easy. Canada, for instance, it's not that way.

And I know a lot, most other countries are not that way as well. So it's real difficult to get information. So if you've got the data at your fingertips, like we do, like we've got great apps where I can just type in the County and the parcel number, and then I can look up so many different things about this property.

I could see it on the map. I could see if it's on the road. I could see. Tons of different satellite images of it. I could see wetlands, I could see contours. All different things I could see on these properties. Without that, it would be tough, unless you're really focused on a local area and you're going out to check all these properties out yourself.

So, maybe internationally, maybe that's what they do. Maybe they're just going out and step in front of these properties like that. But I don't have to do that, which is nice.

[00:15:57] Naseema McElroy: That's nice, but it seems like there's a lot there's a sharp learning, a steep learning curve that you had to go through to understand, like, how to look up properties, how to contact people, how to put these systems in place to make it Easier for you to scale. So for somebody that's just interested in getting into land flipping and learning about land flipping, where do you recommend them?

Start.

[00:16:23] Pete Reese: Yeah definitely it would be going to my community. I've just started a community towards the beginning of the year here where, it's all about land flipping. So we've got brand new people in there. And then we've got people that are. Season land flipping experts that are, doing over a million dollars a year in land flipping.

So we've got everything in there, but the big cornerstone of the community really is a, a training program that I did, which I give away to everyone in the community, it's a hundred percent free. It costs me tens of thousands of dollars actually to put it together. It's professionally done and edited and I don't know how many videos, a hundred plus videos, probably.

So it's all free and, the reason I do that is people are like why would you give away the free free? Because it's better than a lot of the other courses out there that are, they're charging thousands for. But, the thing is that I, by doing this, I'll, obviously teach people how to flip plan themselves and it's all the systems is everything you need to know from A to Z.

And then, by doing that, I'll be able to partner with people on their deals. And at some point I'll have a mentorship program as well that I'm going to be offering to people that are looking for that extra level of assistance or whatever, but I don't have anything like that ready yet, but that's the, that's the goal, build up this community, show people how to do this business model and yeah, just connect people.

I know the rest will fall into place and that's just what I'm looking to do. But but yeah, it, Oh, to, to get to that community, I guess it'd help if I told you that would be to go to landconquest. com. So, and it's just the branding that we did for our community and the training program, landconquest.

com. So,

[00:17:59] Naseema McElroy: I think it's actually extraordinary that you have put together that level of content and are giving it away for free, because like you said, there's a lot of programs out there that probably don't have the level of information, but are charging a lot of money. But it goes to show that there's so much value in what you provide that you don't have to get

those upfront wins in order to still be successful financially. So I really like that. And I encourage people to go check it out if this is something that you're interested in. And I love that your community is so broad that you have both novices, people just coming in and people that are making millions.

I just think this is phenomenal and I can see like how this has provided your family financial independence. But I'm thinking like, from my perspective, like coming in, like you said there's a way to come in and you can make money without any kind of upfront capital with just, your, your sweat equity, your time equity.

And that's amazing. But once people start really getting into the side that you're on, as far as buying and flipping properties on their own, typically, what do you see is the initial investment that people have to make to make good, profitable deals?

[00:19:19] Pete Reese: Yeah. It's, there's all different levels, a lot of the properties that I focus on now are purchase prices anywhere from. 20, 000 kind of all the way up to the most recent, the largest one I've done recently is 450, 000. So that's that's the range. I'm looking at another one right now that's 500 something thousand, but but so it just, it just depends, but, but other people, when they're just getting started, they focus on a lesser price properties as well.

Maybe anywhere from a few thousand, some properties that can get really cheap, like these desert, for like in the middle of nowhere properties, they're buying for 500 and selling them for 2000, and obviously that's a great return on your money, but it's hard to really stack it up and And get some big numbers from that, but, but, like I, I use my kids as an example and I call them kids, but they're adults.

Now they're 23 and 21, two girls that they've when I first started the business, I was having them help me out quite a bit, just researching properties. I was trying to teach them the business and everything like that. But They came to me and they said, dad, Hey, can we do this too? And I thought, yeah, that'd be great.

I would love for you guys to do that because they had saved up some money. They had 8, 000 between the two of them. So what they did was I just started, giving them kind of the smaller deals here and there that were out of my focus area focus, I wanted to focus on bigger properties.

So they took that 8, 000 and they parlayed it into 84, 000. In about a year and a half, so. Yeah, and it was like six properties So, you know a lot of the properties they bought were like six or seven thousand and they may have sold for 20, you know so and they had a couple that went well and a couple where they you know made some profit but it wasn't a home run by any means but over the six deals, yeah, they were able to accelerate it pretty quickly.

And so I think, so I know something like that's, that's definitely a pretty possible, you don't have to start with, with a huge, bankroll of, hundreds of thousands of dollars or something like that. So

[00:21:17] Naseema McElroy: well, 1st of all, kudos to you for getting your kids involved in your business and them seeing that side and then being like, oh, okay we can do this too. And I think it, oh, that's extremely like. Amazing that they were able to generate so much revenue in a year. Most 20 year olds, let's face

it,

[00:21:38] Pete Reese: where I was at at that age. I was, we have a paycheck to paycheck and, so.

[00:21:42] Naseema McElroy: yes, but it just goes to show what's possible and that sometimes we just don't know what's out there. And so I love that. You're exposing my community to these opportunities because people are always looking for ways to either increase their income or, even transition out of their traditional 9 to 5 work.

And this seems like an amazing opportunity that. Not too many people know about and so I think that, it would be really, really advantageous for people to check out your community check out your course, see if this is something that is viable for them. But again, I love that you offer it for free the amount of stuff that you are

giving away. Yeah.

[00:22:24] Pete Reese: always a catch. And honestly, there's no catch, but you know, my goal with it is to get, grow the community as big as we can. And I know that mentorship program, I'll be able to offer that in the future and I'll, I'll do well with that.

If I can build a great community of people that. Our interest in, in what we can offer for them, but also partnering on deals. So that's a, that's a, that's a great thing for me. If, if people can generate deals and I can partner with them and it set up a win win scenario. So, that's the catch.

So

[00:22:57] Naseema McElroy: And it seems like a pretty win win catch for everybody involved.

[00:23:01] Pete Reese: I try to

[00:23:01] Naseema McElroy: And it's just

[00:23:02] Pete Reese: win.

[00:23:03] Naseema McElroy: Yeah, nowadays you have to be careful about like snake oil salesmen, it's a lot of people out there that are just like, you can just do these things and then you'll be a millionaire in no time.

And it's just okay, but wait, there's a catch like, and typically it's just. Yeah, it's just them trying to sell a product or a book. So the fact that you're delivering all this information and value up front, that's really free and, like just benefiting off of the relationships that she builds.

I feel like it's really admirable and I can tell that. Your wins are other people's wins. And so it's not like you're using this as like a get rich quick for you and taking advantage of other people. It's truly providing value for people and helping people grow financially.

So I appreciate what you're doing. I think that it's an amazing opportunity for people. I'll definitely check it out for myself because why not?

[00:24:08] Pete Reese: yeah, yeah,

[00:24:10] Naseema McElroy: So, yeah, let's share like where people can connect with you, how they can get access to your training program and your group.

[00:24:18] Pete Reese: yeah, yeah. Great. Yeah. So first thing that the community and which is where the free courses and everything is land conquest. com. Try to make it a kind of cool and different branding than. Anything else that's out there. So hopefully you'll appreciate that. The other thing is we'll have a website called turning profit.

com and it's related, we have a podcast as well, and we talk a lot about land flipping on there, but the turning profit. com is the home base for the podcast, but on that website, what I do is every month I do an income report. It's my land flipping income report. So it basically talks about what we did in our business that month, like the revenue we took in.

The profit each and every deal that we did, like what we bought it for, what we sold it for, how much profit we made, how many days we held it. And a bunch of notes about each deal we did that month. So I've been doing that for about. I guess about a year and a half now. And so every month I do that.

It's a lot of work, but it's people tell me they like it and they get to see, what's possible, I guess. And I had also did another thing on there, which, which I think is pretty interesting, but it's the 50 first deals that we did. So, and I, I, it's like a screen record thing where I go through.

The numbers of the 51st deals, like the first deal we did, like what I bought it for, what I sold it for profit and days, they held it for everything and tell a little story about each property. So I think that's very insightful if you're curious about the land flipping business. So, that, that's another thing.

And then obviously on Instagram, Reese Peter. So it's like my name backwards. So Reese Peter. And then on YouTube it's at turning profit. So we do a lot of YouTube videos and stuff as well.

[00:25:59] Naseema McElroy: Oh my god, that's so cool. And first of all, I love the receipts I love you breaking down the numbers

[00:26:08] Pete Reese: That's just all, it's the number. It's all about the numbers. That's the way I feel too.

[00:26:14] Naseema McElroy: 100%. 100%. I love to see the numbers. So, I'm definitely going to check this out. I think that this is an opportunity that people should not sleep on. This is something that is definitely worth checking out and it's just an investment of your time because he's offering a whole lot of free game. So I think you.

And the people in this community can really benefit from just taking the time to learn more about this as an avenue of wealth building. Here in financially intentional, we believe in growing your revenue as opposed to scarcity and cutting back. So, this is definitely something that you can do and a sustainable system that's replicable and that, I feel like it's pretty profitable. So I appreciate you Pete for taking the time and joining us and teaching us about this amazing opportunity. I've learned so much and I think our community will benefit from this as well.

[00:27:12] Pete Reese: Thanks to see him. I really appreciate you having me on here and, and, highlighting me to your community. I really do appreciate it.

[00:27:19] Naseema McElroy: Thank you again. And I'll make sure to put all the links in the show notes where everybody can access the information and make sure you guys hit up Pete if you have any other questions. So thank you.

[00:27:33] Pete Reese: Thanks.

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