Transcription
Going good here. All right, hey guys, what's going on? Joe Mcall here. Welcome to my weekly master class. And every Wednesday, um, pretty much, I just started doing this, um, a few months ago or two. And, uh, so pretty much every Wednesday, I go live and I teach. Not really a Q&A coaching call, I'm just going to teach different things. And I surveyed you guys, um, remember a month or two months ago, and I asked you what are some of your biggest challenges. And there were four things. Today, we're going to be talking about number three.
The first one was pricing and offers. You wanted help with how do I price my deals, how do you use comps, how do you handle situations where it's hard to get comps? So we did that. Um, then we did number two, which was deal analysis. How do you analyze deals, how do you do your due diligence? Number three, which is what we're doing today, is funding. How to fund your deals, how do you find private lenders for your deals, how do you manage your cash flow, especially for those just getting started? What if you don't have much money? Right? We're going to talk about that.
And then the other two things we're going to be talking about through this weekly series. Number four is marketing and mailing. Direct mail campaigns, you know, letters versus postcards, how often should you mail, how do you get your lists, do you send neutral letters or blind letters? We'll be talking about that. And then finally, uh, the fifth topic is market selection. How do you choose the best counties and markets to target and things like that.
So today, we're going to be talking about funding. How do you get the money for your deals? Um, do you need money for your deals when you're just wholesaling? Well, yes and no. One of the things that you got to remember across the wholesaling landscape right now, it seems to me that it's getting harder and harder to actually wholesale deals because the licensing police, they think, you know, Realtors, the local Realtors associations, the board of Realtors and stuff, they say it's, it's illegal, immoral, and fattening to do wholesaling. And that might be true. Don't know, right? I don't think it's fattening, but it's, it's definitely highly illegal and and immoral, right? Because how can you make that much money if you are actually, if you're not a licensed realtor? And really, in my humble opinion, my arrogant opinion, it's just a power grab by the realtor, National Association of Realtors monopoly, whatever, to try to control the industry. There's a big need for us, for wholesalers, in this space, right? Um, Realtors don't want to list properties that need a ton of work, that are trashed, right? And Realtors don't want to list small little, $20,000 pieces of vacant land and make a $500 commission. So there is a place for wholesalers.
So how do you do deal with this where it's hard to wholesale properties because they're passing these laws, states are passing these laws that you have to have your real estate license to do assignments, to do double closings, to advertise a property you don't own yet, to, um, wholesale, you have to have a realtor's license or you just can't do it at all. Well, how do you get around that? Well, number one, you can go and get your license, which may be a good idea. I used to have mine for a long time. I let it expire a year or two ago, just because I got tired of taking all those extra classes. Or option number two, which is my favorite, is just buy the properties. Just close on the deals, take them down, buy them in 30 days. While all these other investors, specifically land investors right now, are out there saying, "Hey, we can close, we'll buy your property." Um, they're putting six months on their contracts. They are maybe even 90 days, and it's really easy to get out of these contracts. What if you found a way or knew of a way you could stand above the competition and you could say, "Hey, listen, I actually can pay cash for these deals and I can close in 30 days." And then when you actually own the property, guess what? You own the property. You can turn around and list it and sell it on the MLS and make a lot more money because you now can get these properties on the MLS, where the largest pool of buyers are, that's where the most eyeballs are. And you can advertise it on Redfin, Zillow, the MLS. And so you'll be able to sell your properties for more.
So in the house world, Jerry Norton, I think, kind of made this phrase, you know, um, popularized it. It's called the takedown method, or some people call it wh-tailing, whole-riling, like retail and wholesaling combined, where it's just, you know, get the property at a good price, don't play these games. You know, it's also easier sometimes when you have a deal and you're going to make $50,000 profit on it or something. You know, sometimes it's harder to do assignments on those deals and you don't want the seller to know how much your print, you're making or whatever. So again, just close on the deal and then turn around and sell it for whatever price you want. There's no, like, in houses, sometimes when you're selling a, a flip, a fix and flip, or you're wholesaling it and you're selling it to somebody who's getting FHA financing or, you know, whatever, sometimes there are restrictions on, what's that time period called? Your holding period, you know, um, where you have to hold it for at least three months or six months or something like that before you can flip it. There are so, certain lenders have that, but with land, there's no banks involved, so you don't have to worry about any of those restrictions on selling your deals. Make sense? Cool.
Any questions as we're going into this? Um, I'm going to, I have a mind map here. I'm going to share it and I'm going to walk through some of these things with you right now because this was, um, this is a big topic in my program, in my simple land flips program. So I'm just going to open up my main mind map and share that with you right now. Okay, let me go, I need to move some things around here. Ah, hold on. I moved it up there. I have three monitors. Is that crazy? And let me share the right thing. Okay, cool. I got it ready.
So this is the main mind map from my course, and I've got some resources that I want to give you as we're talking about this. Um, selling your deals. One of my favorite ways to get funding for your deals is to partner with other land investors. I'm going to just talk about this a little bit, um, because maybe you don't have to worry at all about the money, right? Find somebody else who's already done this before and just bring the deal to them and say, "Hey, listen, I got this deal under contract. You have the buyers, you have the title companies, you have the Realtors, you know, who can take the pictures, and you might even already have buyers. Why don't we partner on this deal and we'll split it 50/50?" So I strongly advise, partner. And this is something if you're one of my students inside the Inner Circle, you can partner with me on deals, um, if it's a good deal, right? But I strongly advise to find someone who's already doing land deals in this new count. If you're brand new, and just partner with them on it.
And inside of our community, in the Inner Circle Community here, um, hopefully I don't have any freaks posting me messages and things like that. So in our Facebook group, we've got 1500 members in there. If you're part of the Inner Circle, and it's a very active community. In fact, this guy, Sandrew, right here, I'm partnering with him on a deal right now. But, uh, there's a lot of people in this group that are lending money to each other on deals and partnering with each other on deals. It may not be a percentage profit that you make or you pay them. It might be, um, I'm sorry, it may not be an interest rate that you pay them, but it might be a percentage of the profits. But if you've got a good deal, just get in here and start, um, posting your deals and people will partner with you. In fact, I just, I just saw her name, Ria, right here. Ria is amazing. She's awesome, and she lends money to people on deals. And I think August 28th, by the way, yeah, my next Wednesday night, we're going to be doing a panel of experts and we're going to be interviewing students that are actually doing deals, talking about, "Hey, what are, what's working well for you?" And Ria is there. So I'm going to do this, that, where's my, would be awesome. I will send you more details. Okay, anyway, great group.
So, and there's a lot of land investing groups out there, right? If you just go to Facebook and I, I'm a part of a ton of groups and I just did a search in Facebook for the word land and I click on groups. And, um, my groups right here, hopefully I haven't been kicked out of any of them. All right, cheap land US, land for sale, um, the official land geek motivation and wealth creation group, there's 14,000 members in there. So look for the groups that are a lot of, uh, investors are in there, right? Raw land and vacant lots. So as I'm showing you this, just screenshot this and join these groups. [Music] Um, now, some of the groups I get kicked out of because I'm a guru and they don't like other gurus in there. But here you go, land flipping and investing online, land flipping for real estate, wholesale land investors, real estate investing, land academy, that's a great group. All right. So, you know what I'm saying? Find these invest, these land, uh, wholesaling groups, land investing for professional millennials, look for the ones that are active, land investing motivation mastermind, land deals, freedom lots USA. If you click on their name, look at all these properties they have right there. They're out of P Pon, Vera, Vera, whatever. Website right here, um, get their phone number, call them. They're veteran-owned, operated, small business. They got a lot of properties all over. But you know, they're doing some deals in, uh, Citrus County, right? Uh, buy that land, Billy land, they're huge. House owner solutions, sergy smart land buys, Mustafa. Yeah. So these are all investors. Some of them, you know, like you can see which ones are doing a lot of them, like MT land ventures, Landes first land. All right. You picking up what I'm laying down here? Contact these guys and say, "Hey, I do want to partner on a deal."
You could also go to more filters and find the ones that have sold their properties. If you just click on solds, apply filters. Now, sometimes they won't be actual sponsored anymore, but secure land, freedom lots, again, AOK land, secure. So this secure land's got a lot of property and it's a doctor lady. She's got a lot of land deals. And, uh, go up here. She's out of Las Vegas. Go to her website, give her a call, talk to her. H, it's interesting. Success leaves clues, you know? So they already have the right paperwork, they know how to self-close, they already have a title company, usually in these areas. They probably already have someone that can take pictures and do drone footage. They're already paying like $500 to $1,000 a month for premium listing space on those websites. They already are advertising properties many times in Facebook Marketplace or Facebook groups. They already have the VAs that are doing the ads, doing the research. They already know the people in the county to call for due diligence and stuff like that. Um, so yeah.
Now, you will need some JV agreements and some of these things if you don't have them already. Um, if you go to simplelandkit.com or just type in the comments, um, and I'll send you a link later after this video, just type in simple land kit or kit or something like that. But in there, you have some, I have some, I should have some JV agreements. Um, and so it's important when you partner with somebody, you, you want to have something in writing. Says, "Hey, this is how it's going to work, right?" And so this is a joint venture agreement that I've used before for JV deals. It's just a one-page thing. Um, there's another one right here. It's real simple. You, now, I'm not an attorney or a lawyer, so you should always get legal advice whenever you're working with attorneys and stuff. And here is a sample partnership agreement that I got from a website called Savvy Lands. This was something that I, they had available for free on their website and so I downloaded it. But I'm giving credit to them, Savvy Lands.com. And it's really interesting how they, how you agree, how you partner on these deals. You explain the purchase price, how much the investor is supplying, how much the manager is supplying, who's going to be on title, the profits, how that's split, disbursements of funds, time is of the essence, property taxes, HOA fees, what happens if the seller defaults. Um, and yeah, anyway, deadline for acceptance, risk, owner financing, marketing consent. Cool. So check that out.
Um, now, if you just don't want to do any of this stuff, I interviewed these guys, Robin, Robin, um, I forget his last name. We sellly.io and it's actually now redirecting to the landpilot.com. Um, let me, are this the same guys? I mean, like, does he do this now? He's selling. Okay, so I'm going to put this link in the Zoom chat. Thelandpilot.com, thelandpilot.com. And, um, he used to, I've interviewed him on my podcast. Dang, I wish I could remember his name. Nice guy. And they have a service where they will actually, you just give them the deal, they'll buy it, they'll do all the work of selling it, and then they'll split the profits with you. But to do it, it used to be free. Now they're wanting $149 bucks, I guess. So this is access to unlimited listings on the land pilot's done for you sales and marketing services, 30% off your first property listing, 10% sign, 10% off weekly master. So I'm not sure. Take a look at it. Looks like they're charging more money now, but it's, it's really good. They, um, so what do I need to get my deal sold? Sign up for the land portal, upload your listing, and wait for the its sold call. Okay, so check that out.
But I also have some other guys in here. Um, one of them is Pete. Pete Reese. He has a program. And by the way, this is, I'm showing you everybody that's out there. I also, if you're in Inner Circle, you can bring me your deals. I'll fund your deals if you're a member of the Inner Circle. But you can also do this with Pete. If you go to partnerwithpete.com, he will fund your deal and we'll split the profits 50/50. Now, everybody who does this always has restrictions, okay? Minimum $20K projected profit per deal. Partner will partner on rural or infill lots, no maximum purchase price. We're open to assignment deals as well. So $20K projected profit per deal means the minimum profit and the deal needs to be $40,000. So Pete has gotten a little more strict. He only wants the big deals, he only wants the good ones.
Freedomland Capital is a guy that I've had on my podcast before. My names are really bad right now. Freedomland Capital, we fund deals. I've had clients. What's his name? Jason. Anyway, FreedomlandCapital.com. You can go there. They've been doing this a long time. And there's a place in here where you can submit your deal and they will fund your deal. And this is how it works. There's a checklist. There's a 70/30 split, 70 to the land investor, 30% to Freedomland Capital after a 20% fee. So it's really like a 50/50 split. Deal criteria, each property is unique. Yeah. So what size is their limit? They're generally looking for properties that are between $30 to $120,000 purchase price. Does that make sense? So if you're buying it for $30,000, you probably, it probably needs to be worth about $60,000. And here's an investor split tool. Where is that? They have something here called the investor split. Here it is. All right, let me zoom out a little bit. This is kind of how it works for them. And this is similar to a lot of the funding companies, by the way. I'm going to give you a spreadsheet that is, um, has all the different land funding companies. There. So let's say you're buying this property for $45,000 and you're going to sell it for, uh, $85,000. You're going to pay a realtor 10%, 10%, and you're have about $2,000 in total closing costs. And so the investor funding split is 70/30. Now, the land investor, you get a prop, get, um, will make $14,000 and Freedomland Capital makes $15,000. Now, here's how the calculation works, okay? You're going to sell it for 85. Closing cost, I'll zoom in a little bit. Closing cost for $1,000 on the buy side or sales side, right? Realtor, you're going to pay a commission to realtor, 10%. That's kind of generous, maybe it's 8%. But anyway, you get what I'm going here with this. So the sale proceeds are $75,000. Purchase is $45. Freedomland Capital gets, it's a 20% fee, right off the top of that. So it's a 70/30 split, but it's really 50/50 kind of after that. Um, so the total reimbursements are $55. So the profit is $75 minus $55 is $20,500. You, the investor, get 70% of that, and Freedomland Capital gets the rest. So at the end of the day, you get $14,000. Freedomland Capital gets a total of $15,000. Travis King, thank you. Gregory. Travis King, I've had him on my podcast a couple times. Really good guy. And I've had students bring deals to him. And, yeah, he's amazing.
Now, when you submit your deals to these guys, they're going to, you can't just submit dumb deals to them, right? Like they're going to want a lot of things. And I'll talk about that in a minute. But you're going to need to bring them two different realtor price opinions of what the property's worth. Um, you know, it can't be wetlands, it can't, it has to have good slope, it has to have good road access. These have to be good deals. All right.
So here is something really cool that you're going to want. By the way, Elizabeth is asking, "This looks much sexier than a spreadsheet." What site is this? That is Freedomland Capital. Freedomland and Capital. These guys. But I got something better for you. Then I'll share this link with you in just a second. If you go to FundMyLand, oh, the project is on pause right now. All right. So later. Interesting. I don't know why it's on pause. If you go to FundMyLand.com, normally there's a big old spreadsheet here of all of these different funding companies that will fund your deals. But it's not there. So go back to that site later on. I don't even know who owns that site. But somebody puts this information together. Now, in a minute here, I'm going to show you, um, um, these funding companies. All right. So here we go. I'm going to share this with you now. You, if you're a member of my Inner Circle, you can submit your deals to me. So inside the Inner Circle area is a place you can, um, you can get help with that.
I want to talk about this concept real quick here, and I'm going to show you those the rest of those funding companies because I have them right here. Um, some, a lot of them. But, um, when you're, you, this is something you need to think about before you actually start doing a bunch of marketing. And there's this concept of digging your well before you're thirsty. You can't just, I mean, like, if you've got a good deal, the money is easy to find. You, you will find the money if you have a good deal. But it's a little stressful when you're, you know, you've got this great deal and you've waited two or three weeks before you start really actually marketing it. And then all of a sudden, you, it comes time, you got to close on it, and, and where am I going to get the money? And you kind of freak out because you're, you're supposed to close in one week. So you got to stop doing that. You need to start, deal, digging your well before you're thirsty.
I talked a little bit about finding other land investors to partner with. All right. But here are the, there's a bunch of funding companies here. Um, you, again, you can submit your deals to us. Freedomland Capital, I already talked about them. They're, they're, they're good resource. Um, partner with Pete is another one. Liberty Capital is one of them. Now, again, I, I have to like, be careful about talking about these guys because I've never done business with them personally. So they should be good, right? But you got to do your own due diligence. Liberty Capital. Let me give you their link again. Partner with Liberty Capital. You just go Google that. Or if you're on Zoom with me right now, I'll put the link in the Zoom chat. Um, another one is Parcel Funders. These guys have been around for a long time. ParcelFunders.com. Again, I'll put this in the Zoom chat. And if you're watching this on the YouTubes, go ahead and just, um, you know, screenshot this and Google it and you can find these sites, okay? Um, another one is LandWell. These guys, Land Investing Pros. I'm not sure they're still doing this. Nope. I don't think they are. I might need to take them out. Fund My Land Deal. I don't know who these guys are, but somebody recommended them to me one time. FundyLandDeals.com. By the way, um, if somebody can find out for me, FundMyLand.com, find out whose website is this and find out when it will be back. Um, so I don't know how you'd find out. Like maybe you could go to some Facebook groups and ask somebody, "Hey, who, who has this website?" And I'd love to find out who that is. And and again, find out what's going on. Um, WeSellYourLand.io. I think this website, we looked at before, and it redirects to the land pilot. And yeah, this website is not working.
Now, let's talk about how to raise your own private money. This is very important. If you just want to get your own money, this is what I do. When I need a good deal, I have a list of private lenders and I send it out to them and I say, "Hey, who, who wants to lend me on this deal? Totally cool if you say no, no pressure." Um, this is my program. This is what I do. If you're interested, give me a shout. And I never have a problem finding money for my deals as long as it's a good deal, right? And I only submit good deals. And I'm not doing anything fancy. See, you're saying, "Oh, Joe, find my land. C." Okay, that's different. Phillip, this is FundyLand.com. FundyLand.com. So I didn't, I'm not doing anything that you couldn't be doing yourself. I am looking, I'm, I'm always putting word out there. Um, I am, I'm trying to, like, say, I'm just saying, "Hey guys, I'm investing in land. If, um," and I talk about my deals on social media and I talk about the profits that I'm making. And and I'm involved in the local Facebook groups. And so by the time I actually get a deal, this is part of digging your well before you're thirsty. You, you, you're going to people are going to know who you are and you're not going to be begging for money. You're just, it's more of an opportunity like that. You're going to be presenting, "Hey, I got a deal here. Anybody want to partner with me on this?"
So there's a good book, U, you should get called Getting the Money by Susan Lasser Lions, I think is how you pronounce her name. This book was written a long time ago, nine years ago. Is that like really ancient? I guess, isn't it? Great, simple book. How to raise $250 grand in private money in the next 30 days. Great book. Check it out. Um, now I have here a really simple one-day one-page business plan. By the way, the, the thing of this book, Getting the Money, one of the main things she talks about in there is when you need to have a simple elevator pitch because sometimes people always ask, you know, like, "What do you do?" I don't, I do this. "What do you do?" And so you could tell people what you do is like, "Hey, I invest in real estate and I partner with private investors and I give them consistent returns." You can't say safe, con, I was almost going to say safe, consistent returns, but I give them, uh, return. Um, I invest their money in my vacant land deals and, um, I give them consistent returns backed by real estate. That's what you need to change your, your, when you're presenting, talking to guys and people about what you do. You raise private money for your vacant land deals, for your house deals. That's what you do. And many times people are going to ask you, "Well, what is that? How does that work?" You know, and you, it always starts in an interesting conversation where they're now asking you. And that, and it's all about positioning. So I'm not asking them for money, but when I'm talking to them about my program, I say, "Well, you know, sometimes when I get a good deal, I have a, a small list of pre-qualified private investors that I submit the deal to them, and it's first come, first serve. And my program is pretty simple. Uh, I buy land and I usually hold it for two or three months while I flip it, and I pay my private investors, um, really healthy return."
Now, what do, what do you pay them? Well, that's another conversation. But, you know, I might say something like, "I pay them three points and 1% for every month that I'm holding the property." So if I'm borrowing $30,000 for a deal, all right, they'll get three points, which is $900. And I, and let's say I'm holding it for three months, I'll pay them another one point is of $300,000 is $300 bucks, right? So I pay them $300 a month interest, which works out to be about 12% interest on their money. Um, but after the points, you know, they're making, I don't know the numbers, 20% annualized return on their money. And so I position it as, you know, "I am, if, if you qualify for my program, I might give you a deal." You see the difference there? So here's some notes I have on on raising private money. So yeah, this is kind of what I was talking about. I put together lucrative real estate deals so that my investment partners make safe and consistent profits. You might want to do safe. Nothing is safe. You can't promise that. Backed by real estate.
Now, I like to have a simple one-page business plan that you could use. And sometimes when I get together, put a deal together, um, I think I might give you an example of that in here somewhere. Um, I, I always put together like a little prospectus about the property. Now, by the way, I should say this, when it comes to raising private money, again, talk to a legal advisor, an attorney about this because there are issues with securities and the law and violating, breaking the law when you're trying to raise private money. And I'm not an attorney. Like, you can only raise money through friends and family and people that you know and you already have a prior relationship with. That make sense? If you're going out there trying to solicit money and you're doing it wrong and you're not licensed to do it, you're selling securities. And that's could be potentially a violation. So I'm just saying that like, do your own research. When I raise private money, it's with people that I already know, have kind of a relationship with already. And, um, I'm never pulling money together. It's always one investor, one deal. I'm not pulling the money together. It, so that's like a whole another thing. Does that make sense? All right.
Um, yes, some of you are asking, "Hey, can I get this document?" Yeah. So what I'm do is I'm going to put this link in the Zoom chat right now. All right, there it is in the Zoom chat. And someone else was asking for my mind map. The mind map is in my land flipping course. So this is a sample one, simple one, business plan that you can kind of, these are things you can put in there, okay? So what's our mission? We source discounted, distressed parcels for land investors at 75 to 85% of current market value. Our objectives, first year revenue growth. So this is where you would send to a potential private investor saying, "Hey, this is what we do." So our first year revenue goal, $100,000. Monthly cash flow of $5,000 a month. Within 12 months, have a buyer list of 500 land investors. Flip an average of two vacant lots a month. So this is our investment criteria. We're targeting these counties and these states. We're looking to buy recreational lots between one to 20 acres, or you could say, you know, infill lots, whatever you want. Assess value under $150,000. We buy maximum at 50% of current market value. We sell for cash at 85% of value. When we sell on terms, we sell at 100% of value, 10% down, 10% per month. Expected worst case 30% default rate. Expect max three months to sell lots. Our goal, again, we're talking about goals. Criteria is we want to recoup our investment back in 12 months maximum. In other words, we want 100% cash on cash return on our first year on our money. We want 150% ROI on cash deals, 300% ROI on terms deals, which it sounds crazy, but that is very possible. And that's why I love vacant land. So our marketing plan, you just spell out what your marketing plan is. Letters a month or week, offers a month or a week. Sell two-thirds of our deals on terms, a third on cash. Uh, we want to find at least five investors to partner with us on deals and pay them 12% interest on their money. We use title companies to close all of our deals and we use Realtors to sell all all of our deals. All right.
So now let me give you some important, that could be a simple one-page plan that you give to anybody who has questions about what it is that you do. And then you can give them, you can tell them, I think I have here in the mind map too, in a minute, I'll show you like an example sheet that you can give to a private investor when you have a specific deal. All right. So here are some important notes that I put into this document. I think I want to share with you. Oh, I got to share my screen here. What I was showing with you before, sorry, I stopped sharing my screen, is, um, this stuff here. So just screenshot it if you're watching this on YouTube. All right, I'm just going to zoom out. Go ahead and screenshot this. Okay, pause the video, screenshot it. And if it's really small, sorry, just get a bigger monitor or something. Screenshot this. Pause it. Okay, this is the marketing plan. Now, here's some miscellaneous notes. It's important to do a lot of due diligence on your land deals, okay? Um, you want to find a typical deal and put a perspective together on it. Um, you need a specific but flexible private money program. So when someone asks you, "What do you need?" You never say, "I don't know." What were you thinking? You need to know exactly what kind of deals you're looking for and exactly what you will pay your lenders. They don't get to suggest the amount borrowed or that they'll lend or the interest rate. You tell them what your program is. Does that make sense? This is really important to understand. But you can still be flexible within a range that's acceptable to you. We're never desperate. We're never selling or we're begging for private money right now. This is really important. We always use a private, a title company, rather, when using private investors' money. Never have, listen to me, never have the private investors send you their money. They always send the money to a title company or a closing attorney. And that title company or attorney will prepare a promissory note secured by the deed and recorded in the county records. Does that make sense? So never co-mingle funds. Never borrow more than 50% of the value of a land deal. And the private investor always gets paid first. Always. So that's how I do it. And every time I do a webinar, I say, "Hey, you saw how I do this. Who, who has $20, $30,000 that they would invest to an investor, not me, but to an investor that follows these kinds of rules?" Right? And a lot of people raise their hand, say, "Yeah, I'd love to do that." There's a lot of private investors out there that have $20, $30, $40, $50,000 sitting around not doing anything. And when you can lend a borrow money on a deal at 50% of the value, 50%, think how well protected that private investor is, right? And that private investor knows that you're a man or woman of your word and you operate in integrity. So you never, um, you always use a title company. You never have the investor send you the money personally. That private money always gets, um, promissory note secured by a deed to the property recorded in the county records. So if you, something happened to you, that private investor is protected, um, by an instrument recorded against that property. So they could foreclose, they could get their, they could turn around and sell the property and get their all their capital back plus a bunch more. So that's why, um, we don't co-mingle funds and we never borrow more than 50% of the land deal. I mean, I'm telling you, when you got a deal that's worth $50,000 and you go out there and say, uh, you know, "I got a deal here. If you're interested." Not cool. But I'm looking to, I'm looking for $25,000 to close this deal. My goal is to sell it in two or three months and, um, make a big profit. If you're interested, I'll pay you this and this. If not, no big deal. Okay? That's how I kind of do it.
Now, you could also use private money for long term. So if you wanted to buy a property, um, on and pay a private investor for five years on that money and then turn around and sell it, that's a great way to make a lot of money on land deals too. Maybe I'll show you the numbers on how that works. But it's amazing. But here's the key thing here. This is really important. It's in yellow and it's in red. Your private investors always get paid first. Always. All caps. The, I, I'm lending money on a particular deal myself right now, and it's five different lots. And, um, we sold one of the lots. And the, um, the client that I'm lending the money to, who's one of my students, he thought we could split the profits on that particular deal. And I said, "No, no, no. We can't. I, I'm the, I'm the private investor. I'm the one who put in the capital on this deal. I get paid back my money first." And it was in the agreement. I gave him an agreement, and it's very, very clear. And it spells out in there. And he just, he probably just forgot. It wasn't a big deal. He said, "Oh, yeah, that's right. Cool. No problem." But that's, that's really, really important. When you're borrowing the money from anybody, they get paid first. Now, we just sold the, we, we just sold, I think we sold two, and then we sold another two. And the money is getting wired to my IRA, if it's not been already, it's going to be this week. And so now that I've got my capital back, now there's some profit, and now we're splitting that with him. And there's still one more lot to sell. So he'll get an even bigger portion on that final lot when it sells. Does that make sense? Always make sure your investor is well protected and get paid and gets paid first. I, I really want to emphasize that and talk about it. Okay. All right.
So here is, yeah, this is a sample one-page summary document that I give to private lenders after I've talked to them, after I've qualified them, to tell them kind of about the deal. And it's very simple. It's one page. And let me zoom in here. Sorry, let me show you what this was. So this is, um, I blurred out some things in the certain counties. So it's a 3.2 acre lot. Lot two is 2.87 acres. They'll be bought and sold as a package. I gave them a link because this is a PDF and you can text it and email it to them. All right. And so you see here, I keep on moving around. I, I put in a map where the two lots are. Sorry, purchase price $118,000 for both lots. Estimated closing cost $1,500. So I'm looking for an investment for $199,500. We're going to close on this in March, 2023, which was at the time, probably 60 days out. It's not currently on the market. This is, this is just some notes. Not currently on the market as broker requires closing on the purchase side before marketing the deal. We found a realtor. This is a common problem, which I started this whole coaching call from. It's, you're going to find a realtor to list your property. They're going to say, "Oh, you don't own it yet? N, sorry, can't help you. I'll list it for you after you own it. Wholesaling is illegal, immoral, and fun, and and fattening, right?" So we, we, we were required to buy it. So local agents believe we could get $30 to $40,000 for a quick sale. What's, we're buying it for $19,500 and we could sell it quickly for $30 to $40,000. We'll likely list it for $40,000. There's always underestimate and over deliver too. And and yeah, there's been one buyer who has expressed interest at this price already at $40,000. So the loan to value. And this is, we were testing the market and we already were getting feedback and we did sell this deal very, very quickly. Oh, good question, Gregory. Remind me of that. Do we provide proof of funds letters? Yes, inside the Inner Circle. Okay. So loan to value is 49%. Estimated gross profit $14,000 after realtor commissions and after interest paid to investor. Approximate profit to the private investor, we're offering 10% annual interest. Period. Now, let me explain this. We were going to hold this money, um, we only wanted to hold this money for a couple three months, but it was only $19,000. So I told the way I pitched it at this time was, "I'll just pay you 10% of the money whether I borrow it for one day or one year. I'll pay you 10%." $19,950. And if I keep it for longer than that, I'll pay you 10% annually up to five years of unpaid principal balance. So I wanted the option to sell it on owner financing. And so I, I don't want to pay them every month. So I'm just going to pay them annually. So that's my program. It's very simple. If I borrow your money, so this deal was easy to fund. We only kept it for a couple three months and I paid them $1,950. So their annual return is annualized is way better than 10%, right? Promissory note, my office prepares a title for the title company to complete, recorded deed of trust and closing, um, wiring instructions to be determined. We, at the time, we were using Closeline. I don't use them, they're frustrating. Okay. That's, that's simple, easy peasy, lemon squeezy. Talk about your deals with friends and Facebook groups. Um, I did a podcast here with a guy named Rick Powell. And, um, you can watch this video we did together. If you just go to, this is a good little podcast I did, Raising Private and Building Credibility with Private Investors. Um, this is such a good podcast. I've only had 244 views, but I'm going to put a link to this in the, uh, Zoom chat. Check that out. And, um, in there also, we had a, um, he gave us a credibility kit. So I'm going to share this link with you guys in the Zoom chat. George, yes, it's on YouTube. Okay, cool. Now, on, if you go to just that YouTube, do a search for this video right now. And you can see right here, there's a link, JAL.com/credibility. And when you go there, you put in your name and email, and we'll send you that credibility kit. That I just sent to everybody in the Zoom chat. It's a good interview. Uh, I talked about Pete Reese here. Oh, here's something that, um, what's interesting. He does this thing where he has a website, at least he used to, where he lends money or he borrows money from private investors. And, um, yeah, so if you go to lender.turningprofit.com, which I thought was interesting, lender.turningprofit.com. What Pete does is, so like, he, he lends money out on deals. It's not his own money. He's borrowing private money from other land investors. Sometimes it's his own money, um, but what he does is he explains what it is. So every loan that he gets, he pays 12% interest only per annum plus two points origination fee. Private lender would fund each deal separately to directly to the title escrow company. These funds would be secured by a first position deed of trust or mortgage on deeply discounted most acquisitions are 30 to 50%. Most purchase prices are in the range of $50 to $200,000. Um, interest would only accumulate and be paid off at the closing resale. Average repayment period is, uh, three to six months or less. Sometimes it's much quicker. All right. So anyway, uh, I like this because it's just, um, a real simple page. Hey, if you're interested, get me some. You just submit your information up here. Now, I don't know if he's, you know, if he's, um, he might only be looking to work with accredited investors. Again, I'm, I'm not an attorney, so you need to make sure that you're, you're checking this out, okay?
A lot of people are asking me, "How do I get the replays of this?" They'll be in the Inner Circle membership area, but I'm also streaming this to YouTube, so it's in my YouTube channel. Okay, cool. All right. One more thing here. I'm going to give you guys, uh, access to a friend of mine put together a course called How to Raise $500,000 in 30 Days. It's a challenge. And if you go to this link right here, I'll put this in the Zoom chat. Um, if you just go to 500kchallenge.com, c-j, 500kchallenge.com, c-j, put in your name and email. And the cool thing is, um, this is normally $100. You can get it for free. You put in your name and email in here. And normally he drips out the content every day for 30 days. But I said, "Hey, bro, can we just give it all to them now?" And he said, "Yeah, okay." So you can, if you sign up here, um, you'll get an email to get in. And, um, you get access to all 30 days right up front. So Bill Allen's a good friend. Um, and he's a great guy. Look him up on YouTube. He does a lot of good stuff out there, okay? So again, warning, there are a lot of rules and regulations about raising private money. Make sure you get professional training and legal advice.
You can also get, um, some business credit cards. Um, I did a podcast with a guy named Joe Lawrence. Joe Mcall. Joe Lawrence. And this was, yeah, I streamed this a year ago, about 40 lbs ago. And, um, if you just go, again, "How to Get Simple Credit for Your Business with Joe Lawrence," just Google that on YouTube. I'll share this video with you guys in the Zoom chat. We give a lot of good resources in there. And we have a link in here as well. There it is. JoeMcCall.com/funding. JoeMcCall.com/funding will redirect you to Joe Lawrence's website here. And every couple weeks, he does a five-day challenge about getting, um, approved funding. And it was really good. Some really good stuff he gives you in there. And yeah, check that out. I'm trying to think somewhere. I thought I had some resources. Maybe not. Okay. Also, few resources for you. Um, no, I'm not going to talk about that right now. I don't know if this link still works. Okay.
Um, I'm going to show you something here, here, that you can get for two payments of $49. Or, if you're a member of my Inner Circle, you get it for free. It's included.
If you go to freedoubleclose.com, freedoubleclose.com, and there's a special thing that he does. It's a partnership with a friend of mine named Cam Dunlap. And that link should redirect. Should. There it is. It'll redirect to this thing. It's called the One-Day Flip. And if you can get it, you can get it right now for $49 bucks and then another $49 in 30 days. And what it includes is, um, free transactional funding up to $600 grand for one deal and free proof of funds letters.
Doubleclose.com, which is what is this? Ah, so yeah, these guys, they charge too much money. But if you're a member of Inner Circle, we offer free transactional funding, so you don't have to pay the $49. But, and we do it with Cam Dunlap, and we give you a free proof of funds letter. Does that make sense?
So I'm not going to log into the, um, the, my, my, uh, membership site right now. But if you, if you're inside of Inner Circle, which most of you are, you get access to. Again, we don't charge you. So if you, what is transactional funding? Basically, when you double close on the same day and you need the funds to double close. So you have to use your money to close the A to B while you turn around and sell to the B to C. And if you need proof of funds letters, they'll give that to you, and they're legit.
Okay, so I'm going to show you one more thing here real quick. I have this spreadsheet that I was just playing with the other day, and it was super cool. This is from my land course. And I have this spreadsheet called the Cash Flow Strategy for Land Investors. Um, one of the best resources for private money for your land deals is the seller themselves. The sellers, many times, will lend you money on their deals. You basically give them two options.
Number one, Mr. Seller, let's say it's worth $50 grand. I'll pay you $25 grand cash. Or, if you want to get more with payments over time, I'll pay you $50 grand with owner financing. What would you prefer? $25 grand cash or $50 grand with owner financing? Now, you're thinking, how on earth are you going to pay the seller full price and make any profit on this deal? Well, let me show you.
This is a spreadsheet that I'm going to share with you inside of the Zoom chat right now. And if you're watching this on, um, excuse me, if you're watching this on YouTube, just, um, comment in the comments and I'll get you this spreadsheet. Just say, uh, "Cash flow spreadsheet" in the comments. Okay? Do we still have people? Yeah, we got a lot of people here watching from the YouTubes. What's up, guys?
So I call this the BURR strategy. Now, BURR stands for, I, I always get this messed up, um, Buy, Renovate, Rent, Refinance, Repeat. Now, with interest rates the way they are, they've doubled in the last year or two, um, it's almost impossible to do that anymore, right? So this is a way now that you still can with land. Let me explain this. This is about how to get monthly cash flow using none of your own money. And to put this to kind of into something you maybe can get excited about.
Let's say the average mortgage payment in the United States is $2,200 bucks, right? I did a bunch of, uh, scientific research and I went to Google. And if it's on the internet, it must be true. So the average mortgage payment in the United States is $2,200. How would you like to live rent-free, mortgage-free? What if you just did a few of these deals that I want to show you how to do, where you buy it with seller financing, or you pay a private investor interest every month, and then you sell it with owner financing? So buy with financing, sell with financing. We're not using banks. We're using either private investors or hard money lenders or the sellers themselves.
How many houses would you, or how many vacant lots would you need to cover your mortgage payment every year, every month? $2,200 bucks? Well, let's just say as an example deal. Thanks for the comments, guys. Appreciate it. Okay, again, type if you want the spreadsheet, just type in, um, "cash flow spreadsheet" and I will reply to the comments. Okay?
Um, and you can also, let me see if I can, hold on one second here. I just put a link in the YouTube comments. Do you guys see that? SimpleLandKit.com. That'll get you this. SimpleLandKit.com. It's free.
Let's say the property is worth $40,000. I'm going to make a cash offer, usually about 50% of that. So I'm going to have about $2,000 in closing costs and pictures and stuff like that. And so I'm going to be all-in the deal about $22 grand. And I'm going to turn around and sell the deal maybe at 110%. So I'm going to bump it up a little premium because I'm going to sell it on owner financing. Now, I'm not, let's just say I'm paying cash. I'm just going to walk you through this deal here. I'm paying cash and I'm going to borrow money from a hard money lender, somebody that charges a lot of interest, or I'm going to be collecting from a private investor, whatever. So I need, I'm all-in for $22 grand on this deal. It's worth $40. I'm going to sell it for $44. And I need $22,000. I don't want to use any of my own money.
So I'm going to get a loan from a hard money lender, a private investor, at 15% a year. Now, the pro, I've ran into this problem before. Excuse me. When I, let me get a drink of water here real quick. I've ran into problems before where I told them 50% and they said, "Oh, that sounds too good to be true. It must be a scam." It's not.
All right, I'm getting more and more questions. "Hey, this is so good. Where's the replay?" Uh, it's going to be on the YouTube. Go to my YouTube channel, JoeMall.com, or JoeMall YouTube, JoeMall.top. Okay. Uh, all right. So you need $22 grand. You're going to pay a private investor 15% and I'm going to pay them over five years. That's ridiculous, right? Now, really, you could probably do 12%, but we're only talking a difference of $30 bucks a month, about $35 bucks a month difference between 12% and 15%. But you know what? 12% is a lot more believable to a lot of private investors. So let's just say I'm going to pay them 15%. You serious? Yeah, I'll pay him 15%. $523 bucks a month to buy this property for $20 grand that's worth $40. But I'm going to turn around and sell it with owner financing.
So can you see this? These numbers? I'll zoom in a little bit more. So I'm going to sell it for $44,000 bucks. I'm going to get about a $2,000 down payment. So I'm financing $41,800. I charge about 10 to 11% interest over five years. Well, guess what? My monthly payment is $908. So guess what my cash flow is? $385 a month without using any of my own money. In fact, I get to pocket a little bit of money from that down payment. And you know what else? I don't have to worry about vacancies, maintenance, management, repairs, hot water heaters, broken leaky faucets and toilets, termites, tenants, trash. I don't need to worry about any of that stuff. This is almost 100% free, um, cash flow.
Now, my profit in this deal, $25,000 profit. If my average mortgage payment is $2,200 bucks and I'm cash flowing $385, I only need six of these deals. And if I did one of these deals a month, I could get, I could pay for my mortgage payment in six months. If I did two of these deals a month, in three months, I could be living for free, not paying my mortgage payment.
All right, so what if now instead I tell the seller, "Okay, I'll pay you $20 grand in cash, or I'll pay you $40,000 with payments over time." How does that work, Joe? Can you really make any money on that? Now, I'm not saying you should. Probably what I would recommend is make an offer at, you know, maybe 40 cents on the dollar and 80 cents on the dollar. Okay?
So let's say I offer the seller, I'm going to buy it for $40 grand. I'm still going to sell it for 110%. I'm not going to give the seller any down payment. So it's either price or terms. I tell the seller, "I'll give you this full price, but on my terms, which is 0% interest, a down payment, and 0% interest." So I'll pay the seller $700 a month, principal only payments. And it's actually going to be, well, so my payments will be $667 a month.
"Joe, how do you make your money on this?" Well, I'm collecting $98 a month. My cash flow is $242 a month. Giving seller full price. My total profit in this deal is $16,730 bucks. Now, if I did two of these deals a month, within five months, I'd be living mortgage-free. It'd be covering my mortgage payment.
Now, I don't recommend offering the sellers. You could, let's say, you know, you say, "All right, well, I'll pay you, um, let's do 85%." So I'll pay you cash, I'll pay you either $17,000 cash or $34,000 with owner financing, zero down, 0% interest. Now my cash flow is $342 a month. I can live mortgage-free in three or four months.
Let's say the seller says, "Well, you know, I need a down payment." So how much do you want? If we, if I gave you a down payment, could we do this deal today? "Yeah, sure." "Well, how much down payment do you want?" "10%." "All right, so I could do 10%, but the price is going to have to go down. Is that all right?" "Uh, yeah, sure." Okay.
So 10% down. Now, instead of maybe 85%, I'm going to do 75%. So it's worth $40. I'm giving them an offer for $30,000. But it's not a dollar for dollar. So I'll give them a down payment. I'll put $3,000 down. I can borrow that from a private investor pretty easily. But the price goes down. And let's say they want an interest. I say, "All right, well, how much interest do you want?" "Well, I want 5% interest." "Okay, well, if I did 5% interest, could we do the deal today?" "Yeah." All right.
Now, remember I said it's price or terms. So I could give you 5%, but I can't do any money down. Or you could say, "What if I gave you 10% down payment and 5% interest?" "Would you want to do a deal today?" "Yeah." All right. So this is what we'll do. I change it to 65%. I'll buy the property. Here's my cash offer of $14,000. And I'll do owner financing for $26,000 with 10% down, 5% interest. Now, what's my cash flow? $418. I'm still making a lot of cash.
Well, you get, you can, the great thing about cash deals, I'm, well, one of the drawbacks with cash only offers is you can only negotiate one thing, that's a price. When you're negotiating owner financing with the seller, you can negotiate price down, payment, how long the payments last, interest rates, when the payments start, a lot of things. You can negotiate four or five different things with the sellers. So it's price or terms. And you can just give the sellers options. If they want more money down, then the price goes down a little bit. If they want more interest rate, you know, maybe the price goes down a little. You can give them full price with zero down, zero interest, principal only payments. You see the power of this?
It's a simple little spreadsheet. You know, I'm sure there's better ways to present this or or show it. But, um, you know, if the seller, maybe I'd start with, it's worth $40 grand, okay? I'd offer them $36,000 with zero down and maybe, you know, they got, they want some interest. I'll give them 3% interest. I'm still cash flowing $260 bucks. Now, maybe that I want at least $300 cash flow. All right, so play with this a little bit. I'll do 85%. Oh, I'm right there, almost right. Let's do 80%. Now I'm cash flowing $334 bucks.
The other thing you could do is you could say, "All right, well, now I'm getting way technical here." Um, no, never mind. I'm not even going to talk about that. It's just too confusing. Do you see the power of this? Now, when you're doing this, why I love cash flowing land, when you're buying with financing and selling with financing, is you cover your mortgage payment in six months or less. You get money every month. You sell land in the way that people that lets people pay you a little bit every month. You don't need to fix up anything. You can start without much money. You make more money over time. You're the boss. You can grow this big. And you can actually help people.
Yeah, I'm looking at my notes here. No, never mind. Cool. This was a little promotion I did, and I'm not offering this anymore. And let me delete cells, shift left. Hang on here.
[Music]
Guys, any questions before we wrap this up? Um, Darren, how much were you paying the hard money lender? Um, I was, you know what? I'll tell you in just a second. I have it right here. I haven't talked to this guy in about eight months, so he should still be good. Um, this hard money lender wants 18%. Would the numbers still work at 18%? Yeah, they would. Let me share my screen with you. Oh, where'd it go? Hold on here. I didn't close it. Yeah, here it is. All right, let me, uh, share my screen. Is that small enough for you?
All right, so this private, this hard money lender will charge, what did I say? 18%? Like, oh my gosh, how can you make any money paying 18%? So that's where I'm going to buy the deal at 50%. It's worth $40. I'm going to buy it for $20. I need, uh, I'm going to borrow $22 grand. I'm going to sell it for $44. Um, and so I'm going to pay the private hard money lender 18%. I'm going to pay him $57 for five years a month. Well, well, yeah, but I'm going to collect $98 a month. So my cash flow is still $400 a month paying a hard money lender 18%. Now, you need to make sure you're in it at least 50%. This is how you do it. Now, how many of you think you could find a private investor that will let you pay them 18% of their money? Doesn't have to be a hard money lender.
All right, Louise. Um, no, not going to share my hard money lenders. There are, they are in my course. If you're a land flipping student in my course. Any other questions here? That $500k link? Sorry, Karis, just rewind your video and it's in there. You'll see it there. All right, thank you, Elizabeth. Joe's dropping mad insane value. Also, um, some of these things I gave away, I give away in my land flipping, my SimpleLandKit.com. It's free. Go check that out. Good stuff. Thanks for sharing. Thank you, Darren. Appreciate it.
All right, let's wrap this up. Appreciate you all very much. And, um, take care. Have a good one. I don't know what that's coming up there. Have a good one, guys. We'll see you. Bye-bye.