Latest / Real Estate Investing with RealDealCrew / Land Flipping Explained: Why It Beats Wholesaling w/ Sumner Healy

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Land Flipping Explained: Why It Beats Wholesaling w/ Sumner Healy · Real Estate Investing with RealDealCrew

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Most people start real estate with wholesaling or fix and flipping and spend
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a year getting their teeth kicked in.
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My guest found a model where a dollar in marketing comes back as 30 with almost
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no competition.
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Sumner Healy has done over 700 land deals and built the software that runs
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his whole business. Here you'll learn why land flipping beats wholesaling
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on the marketing math.
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the mid market sweet spot where the average deal closes twenty five grand
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in profit and how he picks a market before spending a single dollar.
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Build your systems at RealDealCrew.com.
0:39
Let's get started.
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Sumner Healy joins me here today.
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We're going to be talking about land investment.
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You can learn more at landinsights.co slash light to take advantage
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of the software platform there to run comps and get an idea of what you're what
1:00
you're dealing with. And then there is a school community.
1:03
So head over to SKOOL.com slash LIA slash about.
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I'll have both as links in the show notes.
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Really appreciate your time here today,
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Sumner.
1:14
Yeah, Jack, thank you for having me on.
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I'm excited for this conversation,
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Well,
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you hit me at the right time because this week has been riddled with those horror
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stories about tenants and termites and everything in between.
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Like, what got you into land investing?
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It sounds like heaven here today.
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Yeah.
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Yeah, I the grass is always greener.
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But in terms of like a flipping model,
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like an active income model, I would argue it is the best in real estate.
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And I'm sure we'll unpack that today.
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But for context, I still do have tenants and invest in properties.
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And that kind of ticks a different box.
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Yeah, I think that the kind of hero's journey,
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if you will, is I've always been entrepreneurial.
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Like I really do think it was in my
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I started building businesses when I was six and selling candy in
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the schoolyard and that whole story.
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But when I was 24, was living in North County,
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San Diego.
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And I just had this weird itch to get into real estate.
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I was listening to Bigger Pockets and kind of brainwashing myself for a year that,
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maybe real estate's the path. And I think,
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like a lot of folks, I started with door knocking and trying to wholesale deals
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or writing letters and trying to wholesale or fix and flip.
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And I was just going after the ugly houses in North County,
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San Diego, which is a brutally competitive market.
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I was 24, that was 2019, and I just got my teeth kicked in for about a year,
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like zero traction, zero, zero traction.
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And just kind of slowly tripped and stumbled my way into finding
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a tax delinquent list in Elko County,
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Nevada that, do you know where Elko County is?
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It's middle of nowhere. Okay, very,
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No, I don't, but...
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very rural county in northern Nevada.
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It's pretty much just vacant land out there.
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And ended up sending about 50 handwritten letters.
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My girlfriend helped me write these.
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And started getting calls back from people that own land that,
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like, dude, I haven't seen this thing in 25 years.
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Just take it off my hands. And that was kind of the gateway drug.
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I actually didn't get a deal from that campaign.
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But I sent another campaign to Nye County,
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Nevada, another very podunk count.
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This time I sent about 1,000 letters.
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actually used a real mail house and bought a little infill lot
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for right around 1,000 bucks. was like $1,027.47 or some bizarre number like that.
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And sold it on Facebook Marketplace for 2,400 bucks two weeks later.
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Now the deals that we do today look nothing like that anymore,
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but that was the proof of concept moment.
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then...
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Yeah, since then we've done 700 plus deals and they look very,
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very different today than they did back then.
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But that's the origin story.
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700 plus deals since then huh?
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Yeah. Yeah. Yeah.
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You know we're gonna get into the second half of show and we'll
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be talking about your operations and scaling and and the like but
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I appreciate you spending so much time chatting about your Your hero journey there
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like you mentioned it's it's It's always kind of interesting how we kind
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of find our way into a particular niche
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But in the end, did you find that once you did find that niche and you niche down,
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that's when things started to explode.
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Yeah, yeah, was like, almost feel,
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think humans have free will, but I think we also have a bit of destiny that almost
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feels like I was destined to be in this business.
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It just leveraged all of the little skill sets I had developed over
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the years and maybe some unique traits.
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And so it was just like a key going into the right lock.
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I was just like, my god, this is the thing for me.
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And for context, Jack, I grew up in Big Sur,
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California. I don't know if you know where that is either.
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It's the middle of nowhere in California.
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I lived two hours away from civilization,
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essentially.
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big grocery stores, things like that.
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And so where I grew up owning land was like a pride of ownership thing.
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That was like you made it in life,
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was being self-sufficient and having your goats and your chickens
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and your horses and living off the land.
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And so there was that side of me.
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And then there was the other side of me where as a teenager and as a early adult,
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I was always finding arbitrage businesses.
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I was arbitraging textbooks and random physical products and selling them
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on Amazon like since I was 18,
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essentially. And so I had that kind of
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arbitrage thinking and so just paired these two perfect skill sets.
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I think you know beyond just niching down I think the thing is like you've
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got to find games.
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That because it's all a game right it's a fun game to play but it is just
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a game but you've got to find games that you're just uniquely suited for like
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if you can find games that feel easy for you to play and then everyone outside
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looking in it's like I don't know how you do that looks really hard
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I think that's like that's the moment where really folks can't compete with
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you and you have this unique advantage and so as an entrepreneur I think
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it is part of our job to figure out what is that thing you know maybe
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for you it's podcasting or tenants or what have you and if you're listening
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to this podcast and you might hear I was talking about numbers
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landflipping or there might be a case study that piques your interest.
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I always tell people just do a gut check with yourself though before
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you get baited in with numbers like would you actually enjoy this before
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you jump ship and go all in because a lot of folks see the headlines obviously they
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don't have the full context of what it takes to do these deals so yeah.
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It sounds like that concept of leaning into your personal genius
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or whatever you want to call it.
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Yeah,
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yeah, yeah 100 % absolutely
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Yeah. So based on what you experienced,
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though, would you, like, new to real estate investors,
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I think a lot of people make the mistake.
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Frankly, I think it's kind of a mistake.
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We've kind of told a lot of people wholesaling is the place to start.
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Get into real estate investing,
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no money down. Would you advise otherwise?
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I would I would I think that most people when they come into real estate like
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if we take the average Would be could be real estate investor.
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I Mean, of course they might be alert by the idea of passive income
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or maybe some folks are looking for depreciation against their taxes
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But I think most people are saying financially I'm here and financially I want
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to be up here and if you want to do that in a relatively short time frame
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You need a model that's active like it's the same thing applies like
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the birth strategy if you're just starting out and you want to
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make substantial money is probably not the best place to start,
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but it poses other benefits. And so I think you have to start looking
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at active models. And it's like,
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OK, well, what could we do? Well,
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we could sell note wrap deals.
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We could wholesale, fix, flip.
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Or we could flip land. And I just don't think there's a model that even comes close
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to flipping land. like kind of like the canary in the coal mine that I look at,
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because in all of these real estate flipping businesses,
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it comes down to, at the end of the day,
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what does it cost to acquire a contract?
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And what does a contract
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make us. We're just arbitraging that marketing math.
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Depends on the marketing channel,
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of course. In this business we run direct mail,
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cold calling, cold texting. Some people do RVMs,
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I kind of the usual suspects for marketing.
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But on the absolute low end you might be getting a 7 to 10 X return
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on every dollar that you spend in marketing.
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And then we have some marketing channels in our business that are 25,
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30 X. So $1 in, $30 out.
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When you have a ROAS machine that's that efficient,
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which household sailing is not,
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you can just compound and scale your money and scale your business substantially
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faster. On top of that, there's just hardly anyone doing it.
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My best guess, Jack, it's tough guess and it's not easy because I don't have
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the hard data on this, but I would estimate there's something like 2,000 active,
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somewhat serious land investors that are doing a deal a quarter and then people that
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are really making a lot of money,
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like 300, 400, 500 maybe. You look at that versus
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I was wholesaling or fixing, flipping.
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don't know what you think, but 50,000,
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100,000 people, I think pretty easily,
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maybe even 500,000 people. And so it's just a much easier game.
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And then of course you have the aspect of you're just buying a piece of dirt.
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There's just way less that can go wrong there.
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So for that reason, I love it.
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And the last thing I'll tack on to that,
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my story looks like starting this business and doing tiny,
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what do they call like little peanut deals.
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Buy for 1,000, sell for 3,000.
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Buy for 1,000, sell for 2,000.
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And it's hard to build a big business off of that.
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Like at the peak of running that model,
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I was doing like 240 deals a year,
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which is insane. Now we do much larger deals,
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but much, much fewer. But you can ratchet up.
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You can develop the skill set on a tiny deal and ratchet it up to big deals.
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And it's the same exact model.
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And so there's just like a lot of growth that you can go through.
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That's very hard to hit a glass ceiling in this business.
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And dirt is the foundation. If you can learn how to control dirt,
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it also
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opens up so many other options in real estate investing beyond just flipping
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the dirt.
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Well, you started things out. You said,
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buy something for $1,000, sell it for $3,000.
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You're talking about some magic numbers there,
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because a lot of people, when they're getting into real estate investing,
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it's kind of daunting. You're buying houses that are hundreds
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of thousands of dollars. You've to come in with 20%.
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If you're talking about
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buying a land piece of land for $1,000 and hope and hopes to sell it for three.
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That's just way more it's an easier entry point.
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I agree. think a lot of would-be real estate investors sit on
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the sidelines forever because they're just scared to roll the dice
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and take the risk. And so this is a great way to dip your toe in the pond super
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low stakes. And again, if you can learn the mechanics on that thousand dollar deal
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and Jack, I've literally bought properties for a dollar before.
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mean, you could go very cheap.
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There are properties in America that people are essentially giving away.
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But if you can do one of those deals,
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you can eventually do a big deal.
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It's just the same exact mechanics.
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You know, I have peers in this space that do single deals that make them three,
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four, five million. I've even had a friend of a friend of a friend make
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$10 million on one deal. Like,
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you can really ratchet this up to a pretty crazy scale.
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Yeah.
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Well, you know, you mentioned that there's not a lot of people doing it.
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Well, it's kind of obvious why.
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I mean, you don't see this type of business on TLC or some
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of these television shows. You know,
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there's not a lot of drama here.
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It's you're selling dirt.
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It's not the sexiest business ever for sure.
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I also think that, I could be wrong here,
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but I think one of the things that keeps people...
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away from the land business is land is very ambiguous.
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Like all parts of land are very ambiguous because at the end of the day,
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if we're flipping real estate,
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we need to very clearly know what something's worth and we need to know what
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we should pay for it. And with a house,
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like if you have this house and you've got your neighbor's house and it sold
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a year ago, like you're going to be able to comp it pretty easily,
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especially if it's similar square footage,
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et cetera. Lands don't really like that.
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Like oftentimes we'll have a piece of land and the closest comp is five
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and it's completely different property and they have different attributes.
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Our property has a stream, a third of it is covered in timberland.
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I mean, it's just like really,
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really ambiguous and very subjective.
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And that's why think one of the actual,
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like the biggest crux of this business that makes or breaks someone's success
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is do you know how to underwrite a deal?
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And this is kind of tying into what we talked about in the beginning.
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But in 2023, I launched a software company around this because it started
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off with comping and market selection.
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It's grown into something much more substantial.
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It's kind of become the operating system for us.
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But there is so much manual minutiae in the land business.
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And then again, it's just very ambiguous.
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We have to make decisions with incomplete information.
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And I find for some people, they're like,
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that's not me. I can't do that.
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I don't want to do that. So I think that's part of it.
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Houses are a little more black and white,
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clear cut. We even see that with realtors.
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Realtors would rather sell a house than sell a piece of land for the same reasons.
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Yeah, I was going to actually ask you that my next question
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was regarding that software platform because it sounds like you were solving your
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own problem.
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Yeah, Yeah, I think that like very quickly in this business you recognize,
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know, to get a deal from start to finish,
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there's like 30 to 50 pretty heavy lifts that we have to do
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or boxes that we have to tick to move that deal.
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What I call it a conveyor belt to move the deal across our conveyor belt
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in our business. Everything from selecting the market to then aggregating
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the ownership data to then skip tracing that data to then lead scoring that data
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to then marketing and
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on and on and on on and on
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Yeah, I that was just a pain point for me for years.
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And so what it initially started as was a market selection platform where
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we tracked the movement of every county and zip code and broke down
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the prices of land in those markets and broke down sell through rates
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and demand and supply levels and all of that jazz.
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And then it's really ballooned to taking over every part of the business.
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There's not one part of the business that the software doesn't touch.
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We have right under a thousand users on it.
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So it's become pretty large. ~
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Of course we do have some beginners on there naturally as well.
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So not everyone is ramped up doing huge volume.
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But what's interesting is this will kind of give you a scope of
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how profitable the land business is.
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So we launched a feature last month,
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it's probably about five weeks now.
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It's called Deal Flow. So all of the deals that we sell move through the MLS.
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So we select a land specific agent.
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We build out the marketing packages.
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We list on the MLS. so inside the platform,
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it shows us the strongest agents in the market.
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And then we actually have a patent pending on a feature called instant drone photos.
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So virtually within a couple minutes,
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it builds out the drone photos of the property.
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Then we list it. Now DealFlow tracks everything in our disposition pipeline.
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In our business, we might have 30 properties actively listed at any time.
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It tells us when to reprice them.
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tells them how to list the properties,
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how to write the copy, et cetera.
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So we released that about five weeks ago.
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We've only had...
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maybe 60 some odd users that have actually moved their listings onto that platform,
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taken their existing pipeline and moved it over.
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The adoption is not 100 % number users yet.
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And in five weeks we have had 80 plus million dollars of land listed through
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the platform and about 40 million dollars plus of profit on those deals moving
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through the Dealflow platform.
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And that's again, it's a sliver of our user base but I think that gives
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a scope of like, wow, okay, there's
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actually a lot of money being made here and it's kind of under everyone's radar.
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So yeah, long and short of it,
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this is a very manual business.
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Land Insights automates the manual just in a very simple sense.
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And just remind everybody, you can learn more about what the software platform
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at landinsights.co slash LITE.
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I'm going to have that as a clickable link in the show notes,
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as well as a link to the school community.
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You can find that LIA slash about.
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I'll have that as a link as well.
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If you found some value in what we're chatting about so far,
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do us a favor, share this with one of your friends.
15:08
If you're watching us on YouTube,
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give us a like and subscribe.
15:12
So I always think it's interesting.
15:15
This is a big lift, building out a software platform like this.
15:19
What was the biggest hurdle or surprise you experienced in that project?
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Oh man, I'm gonna continue to be surprised every day to be honest.
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And it's grown to be a pretty substantial business.
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It's grown to, have a really large team behind it now and to be clear,
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like it wasn't, I'm not a software developer.
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And so what it looked like was partnering with great people.
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And what's really interesting is I got into the land flipping business in 2019.
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And then September of 2022, I launched our community.
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And I think we've had 650 or I think actually about 700 people that have gone
15:52
through our paid program, which was like a 12-month group coaching program.
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And through that process, I just started meeting a lot of really cool people.
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And we became connected through the community.
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And so one of our earliest and actually most successful students was
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a guy named Rylan Lowe.
16:05
him and I partnered up initially and we built out the V1 of this software.
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We were 50-50 partners. We started by going and recruiting software engineering
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talent that was in college but on summer break.
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We started building out the property like Q2 of 2023.
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Our V1 was built on top of Tableau.
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That was the database. was built on top of.
16:26
There was no UI. There was no UX.
16:28
It was honestly not a great product,
16:30
but there were
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still a lot of value in the data that we had aggregated around all
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of the counties and zip codes in America.
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Because the interesting thing about this business is you can work anywhere.
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We buy land sight unseen, we make no improvements,
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we rarely even have to inspect the property.
16:44
But with that level of optionality,
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you then have to figure out, if I have infinite options,
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what market should I work in? What is the best market?
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And in this business, the best market is changing every month,
16:54
frankly. And so we have to stay on top of where that demand is.
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And then I ran my first in-person event.
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It was in Las Vegas that year,
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2023. We had about 100 people come to our event.
17:05
And most of them were members from our community.
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I met a guy there named Kyle Martin.
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And he ended up becoming our CTO.
17:11
He's the technical lead. And so we all partnered up.
17:13
And he really elevated the product.
17:16
I mean, it's...
17:16
It's a far cry from where we started.
17:19
So Ryland's mainly on kind of the day-to-day operations.
17:22
And I would argue, I guess I'm more of the face of the brand distribution,
17:26
things like that. And so it's been a wild ride.
17:28
What I've learned is the land business as a contrasting point does
17:32
not require partnership. You don't need a partner to run a land business.
17:35
It's a very simple business. But with that simplicity,
17:37
there's almost no enterprise value.
17:39
You're
17:39
to sell a land business, it's just an arbitrage business.
17:42
With a business as complex as building a software company,
17:45
I would argue you need partnership unless you have a war chest of capital.
17:48
And we still started with a quarter million dollars plus to seed the thing.
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But if you don't have that and you don't have partners,
17:54
we're talking about millions and millions,
17:55
even in the age of AI. So yeah,
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long story short, it's been a wild ride.
17:59
But it all came down to partnering with the right people.
18:01
I know, well, I don't know if you've looked into what we do at Real Deal Crew,
18:05
but you're speaking my language regarding AI and processes
18:09
and automations and everything else.
18:10
Nice man, yeah.
18:11
So you're right. It still needs some skilled people to do what you're doing.
18:17
mean, it's pretty crazy what you can do,
18:19
but there's a lot of, to build out to the level that you have.
18:20
Yeah.
18:24
That just seems very daunting,
18:26
especially now you're kind of,
18:29
the more information you collect,
18:30
the richer that platform is going to become.
18:32
Yeah, any other interest? mean,
18:34
we have a...
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Now a pretty large and frankly very expensive development team.
18:38
It's moved well beyond our CTO and the interesting thing is that to kind
18:42
of watch how things have unfolded with AI.
18:44
So the first pass of our code does move through Claude code,
18:49
but it doesn't ship stuff that's production worthy.
18:52
So there is still a lot of human work that goes through getting the code
18:56
to be ready to be put in the platform.
18:58
I would actually argue that the biggest lift that we've seen kind
19:02
of with this because we started in 2020.
19:04
I mean, AI looked very different then than it does now.
19:06
Mm-hmm.
19:06
That's just evolving so fast.
19:07
The biggest thing that we've,
19:08
yeah, and in this kind of new wave,
19:11
especially with Claude, what we've seen that's monumental is
19:14
the Claude design features. So where you get a ton of value is like UI UX design.
19:20
We had a UI designer on staff that we actually just let go of that saved
19:25
us 60 plus grand a year. And now it goes through Claude and frankly,
19:29
it's better than what she was producing.
19:31
And it's essentially instant. that's been the biggest
19:33
But of course, there's a gazillion other ways that we use AI from sales,
19:37
from marketing, and even some of the features that we build inside
19:41
of Land Insights are built on top of AI as well.
19:44
And so some of that's getting tokens from Claude or ChatGP,
19:48
et cetera. So it's got its fingerprints all over the app,
19:51
honestly. And I think that, just sorry to go on a rant here,
19:53
but the last thing I'll say about AI.
19:55
God, Jack, I think that this is the best time to be a real estate investor.
19:58
Like truly, if you can be an early adopter with AI and you can merge these
20:04
two worlds, antiquated real estate investing or flipping,
20:07
AI revolution, I think you've got five to 10 years of like golden days.
20:12
Like go and make hay while the sun is shining.
20:13
Mm. Yep.
20:14
And the thing that I always think about is,
20:17
my dad, for example, runs a construction business.
20:20
He doesn't even have a website.
20:21
Like there's still so many people that aren't even using web 1.0.
20:25
So I don't think the adoption to AI is overnight.
20:26
Mm-hmm.
20:28
And if you're on the cutting edge,
20:30
I think you do have a huge leg up.
20:31
Yeah, I think it surprises a lot of people that you're actually still early in this.
20:37
And if people, you I talk to people every single day when it comes to AI,
20:42
most people are still just chatting with it.
20:44
It's not being used beyond more of a search engine than anything else.
20:49
So you have the software company and your land flipping business.
20:53
It sounds like you also have some other real estate activities going on.
20:58
I'd be curious, what do you do to ensure you're not chasing another rabbit
21:03
but staying focused enough so that there's value there and something
21:08
is actually going to grow?
21:09
Yeah, I mean, think that that's my,
21:11
that's one of my biggest problems.
21:12
I love building things and creating things.
21:15
I love going from zero to one.
21:17
Like, I think that's my gift.
21:18
Going from one to two or one to five is not my favorite thing.
21:21
And so as I've matured as an operator,
21:23
I've realized that I need people there.
21:26
And I either need people that I give equity to or that I just hire from that
21:30
one to two to two to five phase.
21:32
And so my genius is ideating and building and getting traction.
21:36
And this even applies to my real estate investing.
21:38
And then bringing on someone that wants to be in the day-to-day and taking it over,
21:41
essentially. So right now, on the business side,
21:44
it's our land business.
21:45
It's our coaching business and it's obviously the software company from
21:48
a real estate investing aspect God,
21:50
I was really slow to the party.
21:52
You know, I was I don't know if it was I think it was honestly paralysis analysis
21:56
to get started like Just buying rental properties Frankly,
21:59
I should have started years ago,
22:01
but I think everything happens for a reason I guess that focus was able to
22:04
go to my land business But the crux of it is that land is amazing from
22:08
an active income perspective phenomenal
22:11
can pull huge cash flow from the business,
22:13
but you need somewhere to go and allocate that money and let it compound
22:17
and work for you. And also you do get taxed through the nose on this stuff.
22:21
It's not a tax advantage business.
22:23
So for me, the way I break up my investing is we pull a lot of profits from
22:27
our land business every year, seven figures plus.
22:30
I go and take about 30 % of that.
22:32
I put it into index funds. I take about another 30,
22:35
40 % of that and I sprinkle it into different asset classes.
22:39
I've got an Airbnb, I've kind of dipped my toe in the Airbnb world.
22:42
for.
22:43
So it's not my favorite model.
22:44
That's where I started, but mainly for the depreciation and with
22:47
my real estate investing, that's the core focus.
22:49
I don't really care about anything else.
22:50
just want accelerated depreciation essentially year one.
22:53
Mobile home park. So I'm under contract to buy actually at my first mobile home
22:57
park, although it's like my third that I've been under contract on over
23:00
the last couple of months and they've all fallen through in the due diligence phase.
23:03
This one looks like it's all things clear.
23:06
Obviously a great asset class for depreciation.
23:08
I partnered with a good friend of mine and actually one of
23:11
our coaching members buying Section 8 rentals and so we have
23:14
a partnership essentially acquires a deal runs a deal does all that jazz
23:18
and then investing into kind of
23:21
LP deals, syndication deals, things like that.
23:24
And so that's how I sprinkle it out.
23:25
But pretty much with all of those,
23:27
I have great people running pretty much the full cycle of it.
23:31
Minus me having the idea and going to put rubber to the road.
23:34
I couldn't do it if I was doing everything.
23:36
There's just no way. I think right now what I'm experimenting with though,
23:40
there's obviously a lot of diversity in those assets.
23:42
I'm trying to find what is the asset class for me?
23:46
Because I've only been investing in buy and hold properties for a couple years now.
23:49
I want to find that niche and then go all in.
23:51
So I'm just figuring out what that is.
23:53
Jack, I think I have a personal question for you as well.
23:56
I know you were talking about tenants beforehand and it sounds like that's kind
24:00
of your bread and butter. What do you invest in and for someone like me,
24:03
what would you recommend from your experience?
24:06
Well,
24:07
I'm pretty biased on some of this.
24:09
We flip houses, and then we also buy and hold.
24:13
If we buy and hold anything now,
24:16
was hard lessons learned. I'm just not a single family home rental guy.
24:21
fact, that's one of those things that I think that's another bill of goods that
24:25
I think people have been sold.
24:27
to be frank, is the concept that one thing goes wrong,
24:30
could be an air conditioner or a furnace,
24:33
and you're wiped out any kind of cash flow for the year.
24:37
And frankly, I find that a multifamily,
24:40
it's almost the same amount of work.
24:42
And now you've got multiple doors that kind of help with that type of issues.
24:47
Yeah. Yeah, yeah, yeah. So that's your bread and butter
24:48
~
24:51
multifamily.
24:51
Well, it's primarily the flipping.
24:53
Yeah. And then I got the real deal crew,
24:54
and for this
24:56
of course, where we're helping people with operations.
24:58
Yeah.
25:01
These multifamily properties, are you buying them with the sole intention
25:04
of cash flow or is it more of an appreciation game where you just want
25:07
the tax write-off?
25:07
Yeah, it's
25:08
in the end, it's the cash flow associated with them.
25:11
And then of course, we get the benefits of the depreciation schedule just
25:15
on a bigger scale. We've also found that when you're dealing with people with larger
25:19
properties like that, they are more receptive to creative financing.
25:24
Like they're used to it. They might have purchased the property themselves
25:24
Mm-hmm, interesting.
25:29
in that way. So it's a bit more common.
25:30
Yeah.
25:33
Yeah. Yeah.
25:33
I was going to ask
25:34
you regarding the land flipping.
25:36
Like, do you actually like, it's like a cash transaction,
25:39
you kind of finance yourself out completely?
25:42
Or is there, do you carry back a note to yourself and see some passive income?
25:45
Yeah. Yeah.
25:48
So yeah, it really depends on the deal.
25:51
And I'll kind of explain our model.
25:53
Now, I've worn a lot of different hats in the land space,
25:56
because there's a lot of different ways to skin the cat to make money.
25:59
So I was initially a small deal flipper,
26:01
buy for $1,000, sell for $3,000.
26:03
And then I was a note flipper.
26:05
So I was buying land just to build out a note portfolio.
26:09
That still does about 25 grand plus or minus a month for us.
26:13
At its peak it was in the high 30s,
26:15
so we sold hundreds of properties on terms.
26:17
These were mainly small dollar properties.
26:20
There's a whole slew of problems that come with that,
26:22
but it is an interesting model for sure.
26:24
Then after that I moved into the model that we take part of now.
26:29
We've kind of coined this phrase,
26:30
is what I call mid-market land flipping.
26:32
If you look at a lot of land folks,
26:34
focused on that small end, those cheap properties.
26:37
The mid-market, in my opinion,
26:38
is the sturdiest asset class in land.
26:41
These are deals that are worth $25,000 to about $300,000 to $250,000
26:45
as a list price. They're big enough to be meaningful.
26:48
Our average deal brings in 25 plus grand in gross profit,
26:52
so every deal is meaningful. These deals are big enough to bring in outside capital,
26:56
so most land investors aren't self-funding their deals.
26:59
Inside of our community, I would
27:01
would say 99 % of people aren't funding their deals.
27:03
I do fund our own deals just to,
27:05
I like to keep the additional spread on the deal.
27:07
And I don't really enjoy using other people's money.
27:09
It kind of stresses me out for some reason.
27:11
And these deals typically present multiple exit strategies.
27:14
So that's the thing. Some properties nowadays,
27:16
we will still sell them on a note.
27:18
It's not our main focus though.
27:19
I'd say it's 3%, 5%, something like that.
27:23
another minority of our deals,
27:25
maybe 10 to 20%, yeah, probably about 20%,
27:29
we'll do some kind of value add strategy.
27:31
So mainly this is gonna be what's called an exemption-based subdivide,
27:34
where we're finding in that county,
27:36
what are the plat exemptions to subdivide this property,
27:39
the path of least resistance? We survey it and we sell it,
27:42
and then sometimes we'll make physical improvements like brush hogging
27:45
or putting a rodent, et cetera.
27:47
And then outside of that, everything's pretty much a flip.
27:49
Now when we're flipping deals,
27:50
we look at it from two main angles.
27:52
look at as a cash flip, buy it for 20,
27:54
sell it for 40. On a cash flip,
27:56
you're always looking to double our money.
27:58
That's the golden rule in this business.
28:00
Buy for 50, sell for 100. That's just always the golden rule.
28:03
And that's what any outside funder is going to want to see.
28:06
If we don't have that kind of spread and the margins compressed,
28:09
then we'll double close the property or do a novation or whatever you want
28:13
to call it.
28:13
So from a flipping perspective,
28:15
for us, we're a slight majority to cash,
28:17
and then about 40 % or so of our deals are gonna be a double close.
28:21
And we do some creative acquisition strategies.
28:23
We will acquire and owner finance and things like that,
28:27
but typically only when there's a value-add angle will we deploy something more
28:31
creative. Last thing I'll say too is if you're gonna do monster deals,
28:34
like multi-seven-figure deals,
28:36
most folks at that point are gonna raise debt through a bank.
28:38
That's gonna be most common.
28:40
Do you have any particular insights you can share regarding location?
28:44
You mentioned some of those first stabs were out in the middle of nowhere,
28:48
Nevada, maybe even in the desert.
28:50
Are you just outside of city limits?
28:52
Are you looking at farmland? Are you looking at hunting land?
28:56
What does that look like?
28:56
Yeah.
28:57
Yeah, it's a good question. think it kind of flies in the face of what
29:00
the old guard in the land space would teach you.
29:03
There's a few educators that have been around here for decades,
29:06
right? And I'm kind of like the new guy on the block,
29:09
if you will. Their adage has always gone,
29:12
go find areas that have a high concentration of rural land that's not being used.
29:17
That's mainly in the southwest.
29:18
You have these subdivisions that were built in the 50s,
29:21
60s, 70s. No one lives out there.
29:23
They're just kind of throw away lots,
29:25
but you can buy them.
29:25
cheap and then you can sell them to some unsuspecting person
29:29
on a Facebook marketplace or whatever.
29:31
I think that's a terrible model.
29:32
Land is very illiquid so it is a hard asset to sell if you're in the wrong market.
29:36
So you have to be keenly aware of like,
29:38
where is there demand for land?
29:39
And that's why the first feature in land insights was the market selection platform.
29:43
So the long and short of it, kind of the framework of the process that
29:46
we created inside of Leah is what I call sell through rates.
29:49
So we look for markets that have at least 100 % sell through rate in
29:52
the last 12 months. What that means is 100 % of that active inventory
29:56
is turning over every 12 months.
29:58
So 50 active listings, 50 sold in the last 12 months.
30:00
That's a really simple baseline to work off of.
30:03
more nuanced, but it's a great place to start.
30:05
We want to see that that trend is even and consistent,
30:08
so no huge peaks and troughs as much as possible month to month.
30:12
And then kind of the weird one that a lot of folks don't suspect is that
30:16
the supply level, we also have tolerances for that.
30:19
So when I'm looking at a market,
30:21
which a market is a county in our language,
30:23
I'm looking at active supply levels as a low end at 25 active and as a high
30:28
end 250 active. Of course, rules can be broken a little bit,
30:32
but approximately is what we're looking for.
30:34
If we're too low on supply, the sell through rate numbers can get really wacky.
30:38
one property listed and one sold in last year,
30:41
looks like a strong market percentage-wise,
30:43
but it's absolutely not. So we need enough data for the percentages to be reliable.
30:48
And then the other thing is if we are in a market that's low on supply,
30:51
once you start generating leads,
30:52
you're gonna get a seven and a half acre property,
30:55
you're gonna go look to underwrite it,
30:56
and there's not one comp in that market.
30:58
So you say, how the heck do I value this thing?
31:00
There's just not enough data to underwrite the deal,
31:02
which is, again, kind of the crux of what we do.
31:04
Now if you're too high, if you have too much supply,
31:07
because we move like 99 % of our inventory through the MLS,
31:11
that's where we sell our deals the fastest and that's where we get the most money.
31:14
There's just too much new inventory hitting the scene every day or every week that
31:17
your listing kind of gets forgotten about.
31:19
And so it's that Goldilocks zone.
31:21
And the cool thing is like when we do this right,
31:24
I like, I live and breathe this stuff,
31:26
all the stuff I talk about inside of Leah is exactly what I do in my business.
31:29
But when we do this stuff right,
31:31
land moves faster
31:32
than a house in some cases. So this is pretty crazy.
31:35
Our average days on market for selling a deal in 2026 for the whole year
31:40
so far is 21.75 days.
31:43
from listed to signed contract.
31:46
That's like lightning quick. mean,
31:47
a lot of house people aren't at that level,
31:49
and yet we're doing it with rinky dinky land.
31:52
Now, the last thing I'll tack on is that most of our properties
31:54
are what's called rural recreational land.
31:57
It's like five acres to infinite acres.
31:59
There's kind of three core categories.
32:00
You've got rural recreational,
32:02
rural infill, five acres to about half an acre,
32:05
usually outside of city limits,
32:06
but still close to a city. And then you've got infill that's obviously half
32:10
an acre below.
32:11
in a city one use case which is to build on it.
32:14
Yeah, that's really interesting.
32:15
I appreciate you going into that level of detail.
32:18
You know, we'll probably have to jump into the rapid fire and start closing
32:22
out this episode here shortly.
32:24
But before we do, is there anything else that we should have tried to hit on?
32:27
man, I mean, God, there's so much we could hit on.
32:31
This is a simple business, but there are a lot of moving parts to it.
32:35
And so when folks are getting started,
32:37
I think that there's like a tidal wave of overwhelm,
32:39
because it's like learning a new language.
32:41
And so what I tell people is that this is very much a skill-based business.
32:46
Like you first have to become a skilled land investor,
32:49
which is like, that's gonna take you six months,
32:51
at least if you're educating every day.
32:54
It's a real learning curve. Even Jack,
32:55
if you got started from flipping houses,
32:57
it's still gonna be a learning curve.
32:58
It's a very weird business. And then six months to 24 months,
33:02
or whatever the timeframe is, you gotta build your skills as a business owner.
33:05
Because once we master the skill of land investing,
33:08
we then have to build leverage.
33:09
around that skill and that usually looks like hiring people and that's
33:11
a whole nother skill set. But very much this is a people business.
33:15
But where I'm going with that is that if you're listening to this
33:18
and this peaks your interest, awesome.
33:19
But understand that you are going to have to pay the price of six months
33:23
of showing up every day and seeing essentially no results.
33:27
Like this is a lagging business.
33:29
Even if you start marketing early,
33:30
you're not gonna get deals overnight,
33:32
you're not gonna get paid overnight.
33:33
And so just come into that with the expectation and skills ultimately pay the bills.
33:38
You just have to become very skilled.
33:40
I think the reason that we do better than most other land investors
33:43
is I've just gotten really good at this.
33:45
I've trained my team for years and years and years,
33:48
and we're just skilled at it. But I find a lot of people don't want
33:51
to pay that price.
33:52
But if you could build a business to where you could spit out year one,
33:56
a quarter million dollars in free cash flow,
33:58
year two you could do 500K or a million and just on and on and on again.
34:02
Why would you not pay that price?
34:04
People are so.
34:05
I short-sighted in some cases.
34:07
So just expect that if this is a path that you end up going down.
34:10
Last thing I tack on is if this has tickled your fancy and you're like,
34:14
yes, I'm willing to pay that price,
34:16
I would recommend go to that school link.
34:18
If you pop inside the community,
34:20
my team and I will build out a full roadmap for you.
34:22
So we'll outline and show you what every month looks like in this business.
34:25
We'll give you the KPIs, the targets you have to hit every month.
34:28
And that community is built on top of my business.
34:31
There's not one thing.
34:32
I haven't documented and built case studies and content around it.
34:36
It's everything. There's really just no secrets anymore.
34:38
You just have to put rubber to the road.
34:40
Yeah, sure. It seems like it's kind of like the favorite destination right
34:43
now for education is the school community.
34:46
Yeah, yeah, so this is like our kind of low ticket beginner product.
34:50
It's super, super affordable and it's just a monthly subscription.
34:53
And so yeah, I think for something like that,
34:55
is, I think it is the best place.
34:57
It's just very clean, everything's organized,
34:59
it's familiar to people. I don't know if I would run like an ultra high ticket
35:04
program on there, but I think it's great for more of like the entry level kind
35:08
of beginner. Yeah.
35:09
Sure.
35:11
Just to remind everybody, I'll have a link to the school community.
35:14
It's school.com slash L-I-A slash about.
35:18
~
35:19
Jack, you know what, I'll give you
35:20
one more thing. It's funny, I actually haven't released this anywhere,
35:24
so this would be the first place that I do,
35:26
and I don't mean that as hyperbole,
35:27
I really haven't. So I built out something kind of interesting,
35:30
it's totally free if your community wants to try it out.
35:34
I built this interesting challenge,
35:36
so I call it the seven day deal challenge,
35:38
and the way it works is every single day you and I are going through...
35:43
lesson that's going to, in the best case scenario,
35:46
get you to doing your first deal in seven days.
35:49
Now, that's super aggressive. It does require you to pick up the phone
35:52
and call people, so just be warned.
35:54
But I break down everything that you would need to do to make that happen.
35:57
Now, will it happen? Some people,
35:59
yeah. Some people, no. There's an element of luck when you have such a small window.
36:03
And by no means is this going to teach you every moving part of the business.
36:07
But you could go and get a win off that.
36:09
You could go. We've had people that have gone and
36:11
and done similar challenges and made 20 grand and they just used their iPhone
36:14
and called people. And so every day you get one module dripped out to you.
36:18
You can't go through it in one sitting.
36:20
It's every day and then you will actually have to work through the homework in it.
36:24
So I'll put that in the chat for you too.
36:26
I think that might be cool for the audience.
36:27
I've never shared it anywhere.
36:28
We just released it. It's landinvestor.co slash seven day challenge.
36:33
We'll put it in the show notes or something.
36:34
Yeah.
36:35
Yeah, that'd be awesome. I definitely
36:37
appreciate you sharing that. I feel honored that you shared that new one
36:40
on my show for the first time.
36:42
Yeah, absolutely.
36:42
Well, if you're ready, Sumner,
36:45
we'll jump into the rapid fire and close out this episode.
36:47
So the first one is,
36:48
do it.
36:50
what lie do real estate investors often tell themselves?
36:54
God, great question. What lie to real estate investors often tell themselves?
36:59
Shucks, there's so many, frankly,
37:01
there's two that really come to mind.
37:03
I'll go with I'll go with the first one.
37:05
This is more a beginner appropriate lie that people tell themselves and that is
37:09
I need a lot of money to start.
37:10
And this is true for any real estate niche.
37:13
There's always like, I gotta save more,
37:15
maybe down the line when I have more money.
37:17
That is frankly just a lie that you're telling yourself.
37:20
Whether it's raising capital from people or it's finding deals that
37:24
you can acquire creatively or fill in the blank.
37:27
You know, in our business, we've talked to tens and tens and tens
37:29
and tens of thousands of property owners that own land,
37:32
but a of times they own other assets.
37:33
And we don't even always buy the deals they're trying to sell us,
37:36
but like, you can just structure deals however you want.
37:39
I mean, there's people that are like,
37:40
no money down, and then you're just gonna pay the mortgage,
37:42
or yada yada yada.
37:43
And so real estate is like this really cool canvas where if you
37:47
are resourceful and you're creative,
37:49
there's essentially no limitations beyond that.
37:52
And even in the land flipping space,
37:54
we've had people where their first deal makes them $200k or $250,000
37:58
and they didn't put a dollar into the deal.
38:01
And even in terms of cost of marketing,
38:04
if you have a phone, you can go and get deals.
38:06
You can use Land Insights for free and literally just skip trace people
38:09
in the platform.
38:10
and call them. And when I was first getting started,
38:12
Jack, one of the things that I did is I did a little mini challenge with myself
38:16
years and years and years ago where I just called people for one month from
38:19
my iPhone in San Bernardino, California.
38:22
It was actually out in Joshua Tree,
38:24
little vacant five acre lots. And in 30 days,
38:26
I got two deals and we made something like $20,000 between the two deals.
38:31
And I was only making 100 dials per day.
38:33
And so I think resourcefulness is kind of the key.
38:35
You don't need a lot of money.
38:37
In scaling your business, what was your first hire?
38:39
Yeah, well, my first hire was like the classic like hire a virtual assistant
38:44
and it ended in flames because there was no clear role I was hiring for.
38:48
I knew nothing about hiring. And so I brought this person in to be the guy
38:52
to do a whole smorgasbord of things in the business with no SOPs,
38:56
no documentation, no clarity. He was also a very strange dude as well.
39:02
So that one burned in flames. My next hire is
39:06
actually the gentleman that is our COO in our land business,
39:09
which is a crazy full circle story.
39:11
We've been working together for four years.
39:13
His name is Newman. And we brought him in for a very,
39:16
very clear role. I think that's part of the reason that...
39:20
He's done so well in the business and he's grown into a much more substantial role.
39:23
He actually lives here with me in Bali,
39:25
Indonesia, different house, but he moved to the same place to work together.
39:29
He started off managing the disposition side of things,
39:32
so actually helping us sell the properties.
39:34
So the way it used to work when it was just him and I,
39:37
I was the guy pulling the data,
39:39
sending the marketing, talking to sellers and closing the deals.
39:42
He was the guy selling the deals to the buyers.
39:44
And so that was our dynamic.
39:46
Nowadays what we tell people inside of the business inside of Leah's we have
39:49
a role called the generalist VA It's like a mini COO kind of operator person That's
39:55
the first hire we usually tell folks to hire for and we have it all broken down
39:58
in terms of what their work is Second hire would be an acquisition manager.
40:02
So I'm going to close the deals on the phone with sellers.
40:04
I mean ultimately that's where the values created
40:06
If you could go back in time and give your younger self a piece of advice,
40:09
what would it be?
40:10
Yeah, it's a good question, Jack.
40:12
I think if I could give myself one piece of advice is I would say that beliefs
40:16
are everything. The beliefs that you hold about yourself and your worldview,
40:20
they dictate everything in your life,
40:22
frankly. From your behaviors to the results in your life,
40:25
everything comes from what do I think is true?
40:28
And a lot of us are telling ourselves,
40:30
things that aren't true or maybe they are true but they're just not worth harping
40:33
on and believing in. And I see this in terms of our coaching program.
40:37
Some folks prevail and win big and some don't.
40:40
Some give in and it's like, what's the difference?
40:42
Well, when we do an exit interview with someone who's thrown in the towel
40:45
on the business, their beliefs are just dog crap,
40:48
sorry, but they're just not good.
40:49
Like both about themselves and the world.
40:51
And so hard times don't end businesses,
40:54
recessions, things like that. That doesn't end a business.
40:56
What ends a business is a hard time stressing that entrepreneur's belief
41:00
to where they believe that I can't do this,
41:02
and they throw in the towel. so belief is everything.
41:06
And I think that I had a bit of a bumpy childhood growing up,
41:09
and I held a lot of really not great beliefs about myself.
41:13
I was put in special need classes.
41:14
I had a really bad speech impediment.
41:16
I was really shy. was da-da-da-da-da-da.
41:18
And so that stuff followed me around from my early 20s and I had to let go of that.
41:21
And naturally my life changed when I did.
41:24
What single process or tool have you implemented that has had
41:27
the biggest time saving impact?
41:29
Well, I'm biased here, but it really is God's honest truth.
41:31
It's land insights. Like if we look at even all of the different roles
41:35
in our land business, we have something like 17 or 18 people in that business.
41:39
And there's a ton of different use cases and different roles
41:42
use different aspects of that platform.
41:45
But we're looking at something like two to three hours per day per role saved.
41:50
through the leverage that the platform creates.
41:52
And for some team members, it's substantially more than that.
41:55
Some people, we've essentially bought back the majority of their day.
41:58
And so it's just, to me, it's not even close.
42:00
There's just nothing out there that's even 1 100th as powerful.
42:03
I think it's partially because this is such a small niche,
42:06
no one's really innovating.
42:07
And for context like our CTO Kyle prior to this was building autonomous buses buses
42:13
that don't have drivers for these municipalities in America.
42:16
So we're talking about tier one engineering talent brought to a very small niche.
42:21
And so there's a lot of innovation there but it's not even just about time savings
42:25
as well. I some of this stuff is truly just a force multiplier
42:28
by giving us visibility into data that you otherwise couldn't get.
42:32
One of the things that we run all of our data through is a product called
42:35
seller IQ that we built in land insights.
42:38
And so for every record that we're going to market to,
42:40
it looks at something like 100 plus data points.
42:43
And we've gone and back tested all of our deals and a bunch of other land investors
42:47
deals to find those triggers and those patterns that make someone likely to sell.
42:51
And so it removes about 20 % of our data.
42:54
That removes 20 % of our marketing.
42:55
And then we're having more productive conversations.
42:57
So some of that stuff goes beyond time savings.
42:59
Well, I really appreciate your time Sumner.
43:01
I'm going to have all of the links that we chatted about in the show notes.
43:05
Hope you'll consider coming back again sometime.
43:07
I guarantee you we've just tip of the iceberg here.
43:08
Yeah.
43:11
Yeah, yeah, yeah one thing to all
43:12
So.
43:15
say obviously there's a lot of folks that are you know allergic to wanting
43:20
to invest in themselves or coaching or they had a bad experience and
43:24
I can never again and so that if that's you that's totally fine.
43:27
I've been
43:27
I've been making YouTube videos for a couple years.
43:29
I think I've made like 1,000 YouTube videos or something ridiculous.
43:32
And I really try to not hold back.
43:34
Just like in this conversation,
43:35
I really try to be very generous with information.
43:38
And so it's a great jumping off point.
43:39
Just search my name, Sumner Healy,
43:41
tons of videos if you guys want to learn more about this business.
43:43
But yeah, Jack, thank you for letting me ramble.
43:45
I would love to come back. If this episode does well,
43:48
I'd love to do a part two with you.
43:49
No, I love that. It was great to meet you.
43:51
Yeah, nice to meet you too, Jack.
43:52
Thank you so much.