We’ve all seen those HGTV shows about flipping houses. How “fun” it can be. How much money you can make. The grit and the grime—and the big paycheck at the end.
But what about flipping land?
No, I’m not talking about grabbing a shovel and flipping land to dig for gold in your backyard. I’m talking about buying raw land to flip it.
Flipping land is actually a great way for real estate agents to create a passive income stream. You can use your existing knowledge and with a little upskilling, dive into a niche industry.
So if you’ve ever wondered, “Is flipping land profitable?”, the answer is YES! But only if you know what you’re doing and are smart about it.
I’ve interviewed some of the top land flippers around to bring you the best strategies on how to do this. We’ll explore everything you need to know to get into this lucrative business. You’ll be able to see if it’s something that would be a good fit for you.
Let’s dive in and learn how to flip some land!
What Is Land Flipping?
Land flipping is basically like house flipping—but without all the expenses and annoying renovations. It’s a process of buying raw land from owners and selling it (flipping) at a higher price to make a profit.
Here’s an example of how land flipping works.
Let’s say someone lives in California but they own 10 acres of undeveloped land in Colorado.
They’re also financially distressed, owe property taxes on it and are about to lose it. The county treasurer is breathing down their neck to collect back taxes. If they don’t pay their back taxes, they’ll lose the property to a tax lien or tax deed investor.
Then they won’t have anything to show for it.
On top of this, the owner isn’t doing anything with it. They’re not developing it, building on it or even looking to sell it.
Maybe they inherited it, or they bought it in the past and moved on. But they still own the deed.
As a land flipper, you reach out to them and offer to buy it from them for one-third or one-fourth of what you know you can probably sell it for. (This keeps your profit margin higher.)
Maybe they owe property taxes on it, or they just don’t know what to do with it.
Your offer is enticing to them because it means cash in the bank for land that’s not doing anything for them. The owner usually has no emotional attachment to the land since they live hundreds or thousands of miles from it.
You research the land, making sure it’s clean and doesn’t have any issues with the title. Then you buy it with cash.
You then find a seller and create a deal for them that generates passive income. You can then rinse and repeat—creating multiple passive income streams and building the life you really want, freeing up your time and money.
Is Flipping Land Profitable?
Yes! Land flipping can be highly profitable.
Some are making thousands of dollars a month doing it and even quitting their day jobs.
Land flipping doesn’t take that much money to get into and once you close a deal, you really don’t have much to manage.
One person can do a lot of the research and legwork by themselves. Or you can outsource some of the title research and administration work to freelance virtual assistants. This can all be done very inexpensively.
If you’re willing to put in the time, money and effort upfront, flipping land is a very profitable business model. The question is whether you have enough hustle and grit to chase your dreams.
How Big Is the Land-flipping Market?
Is there even enough raw land out there for you to get into this?
Are there that many parcels available to make it worth it?
Most people don’t realize this, but the land-flipping market is actually huge. There are billions (with a “B”) of acres of land for sale across the United States right now.
People have no idea how much of a market this really is. It’s wide open! And it’s a perfect side hustle for real estate agents because you already know the value of property, land and homes.
As Mark Twain once said, “Buy land, they’re not making it anymore.”
There also isn’t that much competition in the space. There aren’t millions of people doing it because it’s kind of a boring industry. It’s something that doesn’t get a lot of press.
For instance, if you wind up at a real estate investment association meeting, 99% of the people in the room will be:
- Landlords
- Wholesalers
- Land flippers
There’s no big money that you’ll be competing with. There are very few private equity groups or hedge funds involved.
And as you’ve probably heard me say, the more niche something is, the greater the opportunity.
Land flipping fits into this category. It’s a super small niche. It's something great to get into—and very lucrative.
Next, we’ll show you how to flip land and set up deals that generate passive income while you’re sleeping.
How to Flip Land and Generate Passive Income
Flipping land is essentially two steps:
(1) Buy a parcel of raw land.
(2) Sell it to a buyer.
It’s obviously more complicated than this, but we’ll walk you through some of the steps in the process so you have a better idea of what’s involved.
First, how do you buy a parcel?
How to Buy a Parcel of Raw Land
Once you find a parcel (we won’t get into all the details on that here), you start by looking at the comparable sales for the last 12 to 18 months on the parcel. Let’s say it’s a 5-acre parcel. You take the lowest comparable sale—maybe it’s $10,000.
If you follow Warren Buffet’s advice—what Buffet would call a 300% “margin of safety”—you divide that number by four. That becomes your offer to the owner—$2,500.
Most people will accept this type of offer since it’s a better deal than losing the land and getting $0 for it. And they probably don’t have a lot of interested buyers like you knocking on their door.
So, if you buy the land for $2,500, you know you can sell it for $10,000.
But land flipping isn’t just a matter of buying the parcel and turning around and selling it for $10,000. Yes, you might have just made an easy $7,500. But that deal is done and the land won’t generate any passive income for you.
Due Diligence on the Title
After they accept your $2,500 offer, you must do your due diligence on the property.
Here are a few steps in this research phase. And keep in mind that some of this work can be outsourced to virtual assistants or freelancers:
- Confirm they do actually own the property.
- Make sure the back taxes are what they say they are. This way you’re not surprised with a hefty bill.
- Check that there aren’t any breaks in the chain of title.
- Make sure the title doesn’t have any liens or encumbrances on it.
Now you’re ready to find a seller and make a deal!
And so far your total investment is just $2,500 and a few dollars here and there to research the title.
How to Sell Your Parcel
In order to find a buyer for your parcel, you’ll need to create a marketing package. Gather material like plot maps, aerial and satellite maps and pictures of the area that you can use to entice potential buyers. You can even get videos or drone shots to make the land more desirable.
Your goal is to “flip” this parcel in 30 days or less so you can make your initial investment back and create cash flow.
Here’s a breakdown of the types of buyers you should reach out to:
- Neighbors—The first buyers you should contact are usually the neighbors around the parcel you just bought. You can send out neighbor letters informing them that the parcel next to them is going up for sale. Give them an exclusive option to buy. Usually, this works right away and you don’t need to do much more shopping around for other buyers. Think back to the Colorado example. Maybe the neighbor wants to expand their ranch, give their cattle more grazing space or protect their property boundaries.
- Buyers list—If the neighbors aren’t interested, you can start to work through your buyer's list.
- Craigslist—If no one is interested from your buyers list, you can list it on Craigslist. (Despite some of the press over the years, millions of people still use Craigslist to wheel and deal.)
- Online platforms—If all these methods still don’t work, there are a ton of other websites and platforms where people buy and sell raw land. You can even list it on Facebook’s buy and sell groups or Marketplace.
Once you’ve lined up a buyer, the next step is to create an irresistible offer.
How to Generate Passive Income from Land Flipping
Instead of selling the land outright to the buyer, lease it to them. The last thing you want to do is sell it outright.
Here’s an example of how to structure your deal to create a passive income stream. There’s some math involved, but stick with me! I promise it won’t get too complicated.
- $2,500 down payment—This will immediately give you back your initial investment. Score!
- 84-month lease on the remaining $7,500 at 9% interest—This is structured just like a car loan. It comes out to a $284/month payment to you that becomes passive income.
Splitting the parcel into monthly payments over the course of a multi-year loan makes it a lot more affordable for the average person. And the real benefit is that it gives you $284 a month in passive income for the next seven years!
Hopefully, you’re starting to see the potential here. Now imagine if you did this with five or 10 or 20 parcels. You can quickly start to see how you could create thousands of dollars a month in passive income.
Benefits of Land Flipping
Besides the ability to create multiple passive income streams with very little upfront investment, there are other benefits to land flipping.
- You’re not a landlord! No renters. No rehabs. No renovations. No rodents! And you’re not dealing with a tenant.
- You’re exempt from owners’ real estate legislation like Dodd-Frank, the SAFE Act and the Real Estate Settlement Procedures Act (RESPA).
- It’s a (relatively) simple game. Land flipping is one of the simplest passive income models in real estate that I’ve found. There are very few moving pieces to the puzzle. It’s just a seller, a buyer and a raw piece of land.
- You can automate around 90% of the business model with software and inexpensive virtual assistants. This means you can truly set it and forget it.
Land flipping basically comes down to one question: How many land notes can you create to generate enough passive income to cover your everyday living expenses?
Once your passive income covers this number, you can technically retire. Or go do whatever you want. Keep selling homes or start another business.
Your goal is to work because you want to, not because you have to!
How Do You Get Into Land Flipping?
All of this was only the tip of the iceberg on land flipping. There are a lot of resources out there to learn how to get into it.
But you need to make sure you’re learning from people who know what they’re talking about and won’t steer you in the wrong direction.
If all this seems too good to be true, it’s not. It’s very real—but it does take work. If it was easy, everyone would do it.
And nothing in life that’s worth doing is easy. There is a learning curve to land flipping. But if you’re really serious about doing it, there’s a big pot of gold waiting for you at the end!
There are 3,142 counties in America that have raw land parcels available for land flipping.
But you still have to know what’s a good market and where to start. How do you get a list of owners? How do you find the right prices for your parcels? How do you send out offers in an effective way?
Are You Ready?
If you’re interested in learning more about how to get into flipping land, check out my YouTube video where I interview Mark Podolsky.
Mark’s done over 6,000 raw land deals with an average return on investment of over 300% on cash purchases and 1,000% on land deals that he’s actually financed. He has made millions of dollars throughout his career just on land flipping. And now he’s teaching others how to do it.
Mark’s podcast, The Art of Passive Income Model, is one of the top-rated podcasts in the investing category.
I think flipping land is a great way to solve your money or time problems and bring some flexibility back into your lifestyle. And it’s an especially good side hustle for real estate agents.
