KSS 44 | Opportunities In Land Investment

 

We are in the land of opportunities. All we need is to dp to seize them is to go beyond our comfort zones. Known as “The Land Guy,” Jack Bosch is someone who made use of the opportunities he saw with real estate, developing land, and flipping. Jack is here on the show to tell his story, starting with migrating from Germany with nothing to skyrocketing to $1 million in his real estate niche. Today, he shares a formula he figured out that placed him on top together with his wife, Michelle. Focusing on land rather than properties, Jack talks about how they stumbled upon this niche and why they decided to go for it.

Listen to the podcast here:

Opportunities In Land Investment with Jack Bosch

As you probably read in my last blog, we are changing the name. The name is going to be Real Estate Without Renters and that is reflective of my book, number one bestseller on Amazon. Check that out. My guest also has a book out. While you’re buying mine, buy his as well. He is the number one bestselling author of the book, Forever Cash. Make sure you take a look at that. A couple of dates here before we get going. The Orlando Training is coming up. I’ll be doing the training here in Orlando on the 8th of September. I’ll be sending out details if you’re on my mailing list. If you’re not on my mailing list, go to KevinShortle.com and scroll down to the bottom and get on that mailing list. I will also be out at The NoteWorthy Convention and that’s going to be September 20th through 22nd in Arizona where my guest also happens to be from. 

My guest is Jack Bosch and he is also known as “The Land Guy” and a very interesting story. He migrated from Germany and came over with nothing. Together with his wife from Michelle, they have gone from zero to 4,000 transactions and making a lot of money in the meantime, going on and helping other people learn the same formula that he has figured out in this niche of real estate. One of the things I love about doing this show is bringing on people with different ideas, sharing those with you and learning at the same time. Jack, welcome to the show. 

Thank you very much for having me. 

I’ve got to know a little bit more about the story first of all. I know it’s something you probably tell a lot quite often. Coming over here from a different country and having to learn the system of how we operate, which I’m sure is different than Germany and then finding a niche that you can participate in and do so at a very high level is very intriguing to me. Can you give us some background on that? 

I’m originally from Germany. I came over here in 1997 to finish my college degree. I had my job lined up in Germany, but then as it happens, I came across two things. One was this country. I’d never been in the United States before and I loved it. I’m blown away by the friendliness of the people, by the kandoo attitude that exists here in the US versus Germany. I love Germany, but it has a lot of skepticism. Do they first look at why doesn’t it work? Instead here in the US, people look at how does it work and why does it work and how can we make it work? I also met a girl here as it often happens. This girl is now fastforward my wife of eighteen years and we’re happily married and have an eleven-year-old daughter turning twelve very soon. 

We decided to stay here. I got lucky. I believe that it was meant to be because there were ten colleges doing an exchange program, finishing college degree. All ten wanted to get jobs and I was the only one who found a job. I don’t know if they’re coincidences, they’re meant to be. Perhaps I was meant to stay here. I stayed here, we then got married and got a job. The job allowed me to obtain green card for the matter of five and a half years. I don’t know if you know that works. Once you end that H1B visa that I had, you are tied to a company and you can’t leave that company. If you leave, quit or get fired, your visa expires with that separation. 

You can’t just go, you don’t have a fiveyear visa and you can jump around jobs. Your visa says, “This visa is sponsored by this company.” It’s almost like modern slavery. You get paid for it but you get paid less. It’s not slavery because you can quit or you can go back, but in this company, you work 60 to 70 hours a week. I traveled 100% and I hated it after a while. That wasn’t my idea and they didn’t pay me well. It turned out four years into it. They needed to give me a 20% raise to even qualify for the green card. They underpaid me by 20% compared to all my American colleagues, but it’s fine, I got my green card. 

Thank God, I love this company. They made it happen for me but the point is I worked so hard then I didn’t make much money that I realized that I needed to get out of that. That’s the trigger. This unsatisfaction with a status quo, this non-satisfying being in that situation drove me to look around and said, “I’ve got to get out of there.” I can’t quit so I’ve got to find plan B. By the time I have the green card, I can make immediately plan B, my plan A and quit. That’s essentially what we did. We’ve looked at all kinds of real estate and then we develop land flipping as a method and one of the first ones out there to do this with any scale. We started to skyrocket and we went to $1 million in eighteen months. 

There’s opportunity in every corner. What happens is that most people are in this painful comfort zone. Click To Tweet

That’s interesting and intriguing. For people here that come up with excuses of why they’re not active or why they’re not investing in real estate or picking up at least a property here or there, land, note, whatever it is within real estate. It‘s refreshing to hear stories like that where there is opportunity. 

This is the land of opportunity. There’s an opportunity in every corner. What happens is that most people are in this painful comfort zone. I have to work painful to it because it’s a comfort zone where you can pay for your bills mostly. You can’t pay for a little vacation here and there. You can’t pay for the Christmas gifts, but the pain of leaving that is heavier than the pain of staying where you are, so they’re not moving. The way to get out of there is by having a big enough reason why or big enough pain. We combined that, we built big reasons why and we built huge emotional triggers that made us move out of that and do whatever it takes to get out of that painful situation and towards the more pleasant situation. 

That’s how people are motivated. You recognize real estate as an opportunity for you. I don’t know if you’ve done other things within real estate. That’ll be one part of the question that I’ll ask you as I have. We have very similar models in the fact that it looks like we both are triggered by longterm cashflow without dealing with tenants and issues such as that. I’m in the note space and I think you are as well. 

I’m in the note space too. I create my own notes. 

I think that’s the best way to go. You focused on land rather than properties and such. Was it just geographic or you happen to live? Did you notice some opportunity? What drove you to that of real estate? 

What drove me to that was coincidence. I had no plans to go into the land. What we did is what everyone does. We bought educational materials. We bought it off an infomercial even. We bought books and tapes. Back then, there were literally still tapes. 

KSS 44 | Opportunities In Land Investment

Forever Cash: Break the Earn-Spend Cycle, Take Charge of your Life, Build Everlasting Wealth

I remember the days when they were literally cassette tapes. When you’ve got cassette tapes that were glued in the front of the free binder manual that you bought. 

That’s the first package we got plus a cassette tapeWe did what everyone does and what everyone should do, we bought education. You educated yourself because it would be stupid to go into something without knowing what you’re doing. We started this stuff and all the information we found was about houses. We went through a housing area. We did driving for dollars. We tried to find places and we did find a place a triplex. That’s when we realized that this house in terms of actively rehabbing, flipping or wholesaling wasn’t the right place for us with the houses because I was traveling 100%. 

We did that at the weekend. We walked through it and it looked like it needed a bunch of repairs. Coming from another country and not having any real estate experience, we didn’t have any idea of what it would take to repair that place. We slapped a number on it and figure it out. Comparable properties in the area would be worth about $100,000-something and it was not a very good area of town. We put it on the market for $50,000 and we had 32 people look at it and nobody bought it. Obviouslywe either we did something wrong so the next step we looked at, “What if we rehab it ourselves? We select, “No, let’s back out.” We backed off the contract and probably was the best thing we’ve ever done because we had no idea how much it would cost. 

Back then, we didn’t know if it costs $1,000 or $10,000 to remodel a kitchen. The same for the bathroom, for a roof, for foundation issues or for mold remediation. In reality as I know now, this triplex needed absolutely all of these pieces. We didn’t do any house deals. We bought our own housea starter home. That’s the only house we touch. We came across tax liens and tax deeds, and then the tax lien and tax deed area, it blew our mind that there are people that let their properties go for tax sale. It didn’t make any sense to us. Why in the world wouldn’t they go and market the property? Why wouldn’t they go and sell it?  

The reality is Goldman Sachs made a study and they had come up with the number of $5 billion off properties going to tax sale every year. We’re like, “This is interesting. We attended some of those and again we failed because we’re outbid all over the place. We bought some tax liens that were redeemed three weeks later and we made $3.82 and interest. We flew over to California, me and my wife and attended the tax deed auction and was outbid left and right. We couldn’t get anything. Those $2,000 starting bids mean nothing in comparison to what they have but the properties ended up selling for $80,000 and we came there with $4,000, totally newbie thinking, no idea. Then we have the thought, If somebody doesn’t want that property, apparently why doesn’t anyone contact them directly versus waiting to the auction? 

We developed a letter and we figured out where these people live. We got through public records and got their mailing address and we sent them a letter. Interestingly, everyone that called us back didn’t own a house. They owned land. There go your questions. He was like, “What do we do with that stuff now? We have no idea what to do with that.” The first guy said, I’m moving to Colorado. I don’t want the property. I don’t care about it. If you want it, you can have it. We were like, “How about $400, would you take that?” He’s like, “Yes, I’ll take it. We set up a contract and he sent us the contract back and then we went over to the property. It was in Arizona because we thought we had to see them. 

We haven’t seen a property that we flipped for many years but at the beginningwe thought we had to see them. We put the sign on the property and the neighbor bought it on the spot for $4,000. There was like, “$400 to $4,000? It’s ten times our money. I like that. Two weeks later, the next land deal came in for $500 that resulted to $10,000 and then a deal came in we already made $30,000 on the deal and it started snowballing. After about 50 deals we’re like, “Let’s not even look at houses anymore because they only have hassles.” There are tenants, toilets, termites, molds and repairs. I’ve got to be there. I can’t be there. I’m traveling 100%. I can’t even meet the sellers unless it’s under weekend, so forget about the house stuff. Let’s do this on land. 

Nobody goes off after land. Nobody contacts these owners. These owners are willing to sell for $0.10 on the dollar. Because it can be all done by mail, send them a letter, they call you, you can take the phone call or you can use a call center for that. You may do your research. I can do my research anywhere where I’ve intranet access. While traveling, I can do my research and then we send them an offer in the mail because we don’t have to rush it. There’s nobody else fighting for that property. We sell online and we sell it to websites like Zillow and Facebook Marketplace. We do it entirely virtually and I can do this. 

It would be stupid to go into something without knowing what you're doing. Click To Tweet

That’s how we started doing those deals and we stopped looking at houses. We didn’t look at the house until 2009 when the market was in shambles. We still continued doing our land flips. When the market crash, we just bought them cheaper and sold them cheaper. Our margins are smaller. We didn’t make $30,000 anymore. We made $10,000 on those same deals, but we continued to flip deals all through the recession, all on the way up. We added in 2009 when the housing market was in shambles. We started buying houses and as large quantities that we could afford it because at that point the numbers made sense. If I could buy a house for $40,000 that rents at $1,000, the numbers make sense whichever way you skin that cat and we do that. In the process, while flipping land, we started also realizing that we can create our own notes. We can offer seller financing on these deals. If you buy something for $0.10 and sell it for 100% of market value, we’ve got a 15% down payment. We already have more money back than what being paid for the property and we get cashflow for it without any tenants. 

I want to delve into that topic with you a lot more, but from that same story. I think I understand it. You have beginning investors that are looking to get into real estate and their definition is probably what they see on TV. You see all these fixing shows. 

That’s exactly what they see. 

It’s not real life, it’s all scripted and it’s all played out. I think so many people see that and they think that’s the only way to do real estate. You were mentioning education. You pay for it one way or another. You will learn it and invest in courses and training and such or you learn it the hard way. A lot of times the hard way is a lot more expensive. A lot of people get turned off. I think until people find out these other niches, I think there’s more money easier to be made in the niches of real estate, which are rising to a full real estate status. The days of fixing and flipping, you’ve got to be sensitive to the market. Because I’ve done a lot of similar things where I did a lot of rehabs but I did it for a period of time where that made sense. It didn’t make sense and I was into lending money and then that started not making sense because as you were saying, when the crash came about, who do I lend to? There was nobody left to lend to anymore because everybody was taking a beating on the investment properties. 

I got back into the paper side of the business and what I do a lot and what my audience does is we buy notes that have already been created. It is a lot of inventory for them but the future, absolutely no question is it’s combining the best of real estate skills which you have with the best of notes. Because when you get into that paper space, that’s where that lifetime type of income comes in. That’s where you get your money over and over again and notes can pay you multiple times versus one time on a flip. I‘m 100% in agreement with you. A vacant land maybe because I’ve never got into a vacant land in my business, but I’m intrigued by it. I’m intrigued especially the fact that you can buy these things anywhere. The vacant land for you is fairly easy play. Do you still focus on preforeclosed land? Are you looking within subdivisions? Are you looking out in the rural area? Do you look everywhere? Is it just a mass mailing? How do you find the best opportunities if I’m looking to buy land and seller finance? 

We started out early with the taxdelinquent properties where the owners hadn’t paid property taxes. What we very soon realized that in many casesthey had just forgotten to pay the taxes. By the time we bought the property, they had already caught up. We also came across counties where it was hard to get the tax delinquent list. We’re like, “Just give me the list of land and let’s see what happens. We realized that we’re getting flooded by phone calls, literally flooded in the sense that we send out a thousand letters and we get 100 to 150 phone calls. This is ten, fifteen times more than what the house flippers get. We started realizing that the tax delinquent ones are willing to sell a property here. 

The property is worth $30,000. The taxdelinquent owner might be willing to sell us the property for $3,000. The nondelinquent one sells it to us for $4,000. Yes, it’s a little bit more money, but it’s still both our tremendous no brainer deals. Very quickly, we started abandoning the tax delinquent model and instead, we go after all properties that are land. Our sweet spot is usually between about $5,000 or $10,000 and a $100,000Those properties where a lot of owners are like, “No, this property not worth my time. They have inherited it, the property taxes, they’re getting older and they don’t want it. Their kids don’t want it or they need the money and they’re willing to let those properties go for anywhere between $0.05 and $0.25 on the dollar. 

KSS 44 | Opportunities In Land Investment

Opportunities In Land Investment: The outdoors industry is a multi-billion dollar industry.

 

Wgo after all that land and then we have a few filtering criteria. If we know a certain subdivision is good, then we go after that subdivision. Usually, the way it goes when we are going to this new business, we do a shotgun approach in one county. We pick a county, we get a sample list, we send out about 500 to 1,000 letters then we see what the response rate is. Very quickly within that county, we identify pockets or where the best deals are possible. Where we can buy a deal for $2,000 and sell it for $25,000 quick on a cash deal and make $23,000 or where we can buy properties for $500 and sell it for $12,000 through seller financing and create a note where we get $2,000 down and $400 a month for three to four years. That would be a nice note too. It’s basically first shotgun and then you become very targeted within those counties to look for properties. We do this all over the country. We have done deals in nineteen states, over 100 counties, from Hawaii all the way to Florida. 

They’re not all subdivisions. You get a response rate and you look at the deal as an individual at that point based upon the response. If you can make it work, make it work. 

There’s a part of the question I hadn’t answered and that is we have identified overtime the three kinds of properties work particularly well for us. Number one, these are infill lots. Infill lots are basically in the city. Every city has thousands of empty lots. If you think about it, 35 houses and one empty lot. If the house area is $300,000, $400,000 areas above then this lot are probably worth $60,000 to $80,000. We don’t get that cheap. We usually pay about $0.40 $0.50 on the dollar on those, but then we flipped into a builder at full market value over a slight discount and we make $30,000. Those are good deals. The second kind of deals is the ones in the outskirts of big cities, also called the path of growth. This is usually undeveloped, unzoned or marginally zoned land. It might be zoned residential, commercial but usually it’s just land. You can go to the counties likeI would like to put a factory on here,” and they’ll probably give you permission on it or, “I would like to put a subdivision on here. They’ll give you permission to it. 

We have an idea of what they want to see there. The bottom line in this path of growth, it’s a great area. We get probably a good half of our lots from that because it’s lower priced land, lower means between $10,000 and $50,000 for a couple of acres. It’s anywhere between one and ten acres. There are two kinds of buyers. The buyers for that kind of property is either a financial investor that says, I looked at the city, the city keeps growing. This is five miles out of the city. I’ll buy this now. Twenty years from now, the city’s going to be all around. If I buy this now for $30,000, it will be worth $300,000 in twenty years. Tenfold increase in twenty years. That’s a good return on investment. Let’s do that. 

The second kind of buyer are people that are in their late 40s, 50s and they are realizing that at the current path of their life is taking, they won’t have enough money to retire properly in the city. It’s a sad situation but there are millions of people in the United States that face that. They’re looking at it and they’re saying, “I still own $250,000 on my $300,000 house. By the time I retire, I have some equity but I still have a ton of debt. I won’t be able to service that debt anymore. I won’t be able to live there with the costs of living. Let me go and pay in monthly payments. Let me go do a seller financing deal. Let me find the property a few miles outside that is within ten, fifteen, twenty minutes I’m at the doctor, at the grocery store, at the movie theaters, at the restaurants. I can buy this now and then later on, I can either build a small house on there or can put a mobile home on there. I can retire on the $2,000 Social Security I’ll have at that point. At the same time, I have a debtfree property and a debtfree house. 

There are a lot of people that they like to buy seller financing. Those are the two buyers for that property. The third kind of property we like to go after is the larger acreage in more rural areas, an hour or two hours away from the city. In the fun areas, in the hills with the woods next close to a lake where the RV people go, the ATV people, the hiking, the dirt biking and the mountain biking. All these kinds of stuff are available there and lots of people love that. Obviously, the outdoors industry is a multibillion-dollar industry and people have RVs standing there. They don’t want to camp in RV campgrounds where the neighbor is six feet over. They want to sit on ten acres, twenty acres. They want to take their friends who also have RVs and all go on their 40acre parcel and do bow and arrow shooting, gun shooting, bonfires and have a blast out there. Those are typically more affluent buyers, 50% by cash, 50% by seller financing. 

You take half down and finance the other half for them. 

What I mean is half of the buyers are pure cash buyers. They write you a check. The other one is give or take. The nice part is there are many areas in a country where even a 40-acre parcel is only worth $80,000 or $50,000. You pick them up for $15,000 or $20,000. You sell them to somebody, get a $15,000 or $20,000 down payment and $800, $1,000 a month payment for the next ten or fifteen years. Within a year or even with the down payment, you have your money back and then you have a no money deal with massive cashflow for the next ten to fifteen years. We have built the cashflow side of that up to over $70,000 a month coming into our pocket, which literally all $70,000 every month is profits because we usually get our money back within a few months of selling the property. 

Everyone in the housing world and the land world is online. Click To Tweet

I love that model. It parallels to something that a lot of my audience is already doing. By the way, to learn moreyou can see Jack’s website at JackBosch.comHe also does training on this particular topic. I got a couple more questions for you. Jack, I’ve got an audience that are sending out direct mail pieces to people who own notes, that have sold their home with seller financing. It‘s a similar process that you’re doing is applying direct mail, finding people with land and fishing for deals. You’re getting a high response rate. A lot of our folks are getting high response rates as well. I see this as something very easy for them to add to their portfolio into their practice. The cherry on the top is selling it with seller financing. The other side of the equation, finding the people fairly easy, public records, direct mail. It’s very handsoff, very passive, which I like. Your phone rings, you have a warm prospect already, then advertising to sell these. Finding those people who like to go to the outdoors. Is that as simple as the old signage or is it online? I’m assuming you build in the buyers as you’re starting to build in the sellers. 

The old style of marketing always works. It will never go out of business. People still look at the newspaper if you want to advertise there. The signs work well but the biggest and most scalable way to do this is online. We moved into a house, beautiful 7,000 square foot custom home and we are selling our other 5,400 square house. Every single person, even in the housing world that comes watchers that house, they even tell their agent which house they want to see. They have information about what the houses are available. It’s almost the same time as the agent has. Sometimes the agents get to see it a little earlier, but they go look at it, “There are five houses I want to go see. Call the agent, show me those houses. 

Everyone in the housing world and the land world is online. When we started, that wasn’t the case. There were still some people who were having dialup lines and you have to literally send them a physical package in the mail about the property. It’s all online. We use the website the simplest way to sell it. There are two answers to your question. The simplest way to sell your first few properties is to piggyback on already existing websites. You don’t have to figure out how you can get thousands of people to see your property. You don’t have to build up a website and drive traffic to it. That’s complicated. Nobody wants to do that. 

Instead, piggyback on already existing websites like Craigslist. I have properties through Craigslist. Craigslist is easy to use and it’s free. You can submit the properties on Zillow and it’s free. If you have a real estate license in the state or area that the properties are, you can submit it to the MLS and that it gets propagated to all these other websites. If not, our agreement that we have with the seller because a lot of people do assignments or they do double close. They market the property before they own it. Our agreement with the seller allows us to remarket the property. Therefore with that agreement, you can go to some of the things like BrokerlessMLS.comand for $99 you can submit it to the MLS in that area and then it gets propagated to the different pieces. 

The big thing is what works well are Facebook, Facebook Groups and Facebook Marketplace. It’s free again. All the different place is free. The difference is that in order to sell these properties quickly, your listing needs to look a certain way. Obviously, we teach that because it’s saddening to see how many crappy listings are out there, particularly these listings are put together by realtors. That’s the people we buy properties from sometime down the road because somebody says like, “I’ve had this property for fifteen years, I don’t want it anymore. What do I do? They want to sell the property. They go to the neighbor who is a realtor and they’re like, “Can you list this property for me?” The realtors are like, I know nothing about land. I don’t care.” 

I’ve seen that hundreds of times. The realtor goes to Google Earth, take a screenshot from their computer and puts it on Zillow or the MLS with a twoliner, “This property is for sale. It’s a great property. Call me to buy it. That’s the listing. Who in the world wants to buy something like that? Who is inspired by that? Nobody. As a result, this property sits there for six months, doesn’t sell. They said like, I’m sorry, I couldn’t sell the property. The owner thinks his property is worthless. Our letter arrives and they sell it to us for pennies on the dollar. All we do is take that property and create a beautiful, appealing listing with pictures and arrows on the pictures and value anchoring and nice flow of it psychologically makes the people want to buy this property. The properties in many cases sell in a matter of a week. 

Its marketing and you’re right. I do have a real estate broker’s license but I tell people all the time in my training, Getting a license doesn’t mean that you know anything about real estate. You knew how to pass a test. You have the basics there, but it also doesn’t mean you know how to market. We’re not picking on real estate agents in general but there are some. 

I have a real estate license myself. 

KSS 44 | Opportunities In Land Investment

Opportunities In Land Investment: People don’t necessarily care about the interest rate. What they’re looking at is the payment.

 

It’s something that an agent would have to take on themselves. I tell people all the time, you have to market these notes. If you’re looking to attract investors, you have to market the particular deals that you’re looking at. This is the same extension and makes it where people are appealed by it. You’ve done your homework on it. You know the neighborhood. It’s perfect. Can you share with us some typical terms that you do when you do the seller financing? You’ve acquired the land one way or another and you’re selling it, you’re offering terms, do you offer cash and term offers? What does a particular term that you would create for a note? 

This is the other beautiful thing in notes. Land automatically allows you to demand higher interest ratesEven if you go to the bank, if that’s an unapproved piece of land, if they even give you a loan because that’s the thing. They lend on land if you have an established relationship, a track record, a building and developing. The lot is already in the city then they lend on land. Other than that, in combination with the construction, but even there, they want you to put a bunch of down to buy mostly the land for cash and then they’ll give you a construction loan. Banks don’t like to lend on land and let alone in the outskirts of town or in the rural areas. 

If you find the lender that does that, send them over to me because I haven’t seen many. Therefore, when you sell the seller financing, if somebody needs seller financing, they don’t have traditional lending after disposal. They have to come to you. What we do is a no qualifying. We don’t even check their credit records. I know that’s scary for you, but we asked for a decent enough down payment to make sure that, that people don’t default. We have found out that if they put smaller end deals of $10,000 or below, if they put at least $1,000 down, they don’t default. On a higherend, it’s $2,500 or $5,000 down. If you send them $100,000 deal, we want at least $7,500 down. If we do that, they don’t default because they’re not going to let that money go to. 

We do a noqualifying loan but we’re charging 12.9% interest from the get-go on our loan. We do a 10%, 15% down then we charge a document fee $500. We go to the title company. Obviously, that pays for some of that or we use a land contract a lot. Land contracts are harder to sell to note buyers. You shouldn’t do them. Texas is a little about them. Other than that, most of the country you can use them. In some states, they are extraordinary well to use. For example, Nevada and Arizona, you can foreclose on them if the right parameters happen within 21 days and it costs you $50. 

We do sliding scale in terms of payments at 12.9% interest. The scale varies between three years and fifteen years. Where we put them is based on how much we lend them, how much the loan amount. Of course, these are not unsellable alone. Nobody’s going to buy a $3,000 loan, but if the loan amount is very small, only $3,000 it might be a property you get. You focus on one property, they have three cheaper properties and you take them all. You get $100 a month for three years to sell this thing. We do the loan amount for three years so that the monthly payment is at least $100, $150. If the loan amount is $100,000, I don’t want to do three years because the monthly payment would be $3,000 plus. I’m going to do ten, twelve, fifteen years on that so that the monthly payment becomes affordable to the person.  

What most people overlook is they, “12.9% is cool.” What you’re getting is 12.9% on the full balance. Let’s say you buy something for $20,000 and you sell it for $120,000 and you get a $20,000 down payment, you have $100,000 loan that you have no money in and you’re getting $12,900 at least in the first year or close to that as it draws down. $12,000 or so in interest on a loan that you have no money in it. Let’s say if you took out the $20,000, what is your true yield? Your yield on the deal is let’s say $12,000 in interest on $20,000 invested. You’ve got a 60% return on that property. That’s not even taking consideration of the principal because in this scenario, the principal is profit too because you’ve got your money back already. If this thing is a $1,500 a month loan, you got $18,000 on a $20,000 investment that the down payment already paid you the $20,000 back. You’re getting a 90% return on your investment every single year. 

You’re using the term as the gauge to work with the payment. Because ultimately you and I know and most of my audience know that people don’t care necessarily about the interest rate. What they’re looking at is what’s the payment? Can I afford that payment? Because eventually, I’ll own it or I’ll do this with it, sell it, improve on it or whatever it is. It makes sense. 

How much down? How much per month?” is all they ask. 

Land automatically allows you to demand higher interest rates. Click To Tweet

You’ve got your interest rate pretty much set. You’ve got a range which within people can put down payments. You’ve got the longer range of, “Is this a 3year, 30-year or a 50-year?” 

We do use the down payment as a negotiation tool. We explained to our buyers that you can buy this right now for $2,000 down in smaller deal. $2,000 down at 12.9% interest. Let me show you how much interest you’ll pay over the course of the loan. If you’d like to reduce that, we can do that. If you put down an extra $3,000 in down payment, we can reduce your interest rate to 10%. You’re saving this and your payment is the same or lower. You’re doing this in less time all of a sudden they’re like, “That makes sense. I’m saving a bunch of money. Let me put down the extra $3,000.” All of a sudden, they find them. You can work with that particularly if you paid $5,000 for the property and you sell it with the $2,000 down payment to get closer to what you actually paid for the property. 

I love the model that you’re working within and I’ve learned some things myself. Jack, where else can people reach out to you? 

We have another website called LandProfitGenerator.comThere are a few videos there. Also for the book that you mentioned upfront, the book is sold out. You can buy it on the secondary on Amazon, but we still have a few copies. That one, you can get that at ForeverCashBook.net. You can get the book for $6 or $7. We have a Facebook group and that’s probably the easiest thing because if you’re reading this and you think, “Those numbers sound too good to be true. Join our Facebook group. It’s called Land Profit Generator Real Estate InvestingThere’s only one group that should be out there that has the word land profit generator in there because that was copyrighted by us. When you join that group, it’s free. This is the group where a lot of our successful students are hanging out there and sharing deals on a daily basis and helping each other. You scroll around there and you see deal after deal with the yields and the profit margins that I talked about. 

It was a pleasure of getting to know you through this format. I hope I see you when I’m out in Arizona at some point and coming out there. 

I‘ve been at The NoteWorthy Convention. I’ll put it on my calendar. I might be able to show up there myself. 

Thank you so much. I’m going to check out the Facebook group my myself and the book. I like what you’re doing. Land has been one area I haven’t focused on. I don’t have an excuse of why, but it makes a lot of sense. I do appreciate it. 

Thank you very much for having me. 

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About Jack Bosch

KSS 44 | Opportunities In Land InvestmentJack Bosch (a.k.a “The Land Guy”) is an experienced business owner, entrepreneur, real estate investor, respected industry leader, speaker, educator, and perhaps most importantly a parent and husband. He’s the author of the bestselling financial literacy book “Forever Cash” and the creator of the Land Profit Generator real estate without hassles system.

Jack immigrated to the United States from Germany in 1997 with just 2-suitcases and a bunch of student debt and since 2002 Jack and co-founder Michelle Bosch have purchased and sold over 4,000+ properties.

With his Land For Pennies investment method Jack and Michelle went from zero to a million in just 18-months and from that built a real estate investment empire that spans multiple areas of real estate including, land flipping, financing/ notes, tax-delinquent real estate, home rentals, commercial, multi-family investments, and education.

In 2008 after seeing the devastation in the housing market Jack and Michelle set out on a mission to transform lives by sharing with others the land investment techniques and strategies that have made them a success.

As a result, this simple little-known Land for Pennies real estate niche has provided thousands of people with the opportunity to get into the real estate game without the hassles of traditional real estate investing and Jack and Michelle continue to spread the message with the mission to create 1,000 millionaires and impact the lives of many more.

 

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