How Land Flipping Works: Buying Raw Land for 30 Cents on the Dollar | Jack Allweil

Jack Allweil (00:00)

I would say, there are a lot of land specific sites like Land.com Landmodo and I would just go hard on Facebook Marketplace because that’s like cheap, it’s free. There’s a lot of eyeballs there. I feel like people sometimes wanna veer towards the things they pay for, but

Facebook if you’re just posting every single day, you will get a sale. I do believe that. I don’t know if you’ll get a cash sale, but you will get a sale.

Dylan Silver (00:56)

Hey folks, welcome back to the show. Today we’re joined by Jack Allweil

An investor and land flipper in North Carolina, although he’s focused in Arizona. Jack, thanks for joining us here today.

Jack Allweil (01:09)

Thanks so much for having me, Dylan

Dylan Silver (01:11)

What types of deals are coming across your desk these days?

Jack Allweil (01:14)

So right now, the last few months, I actually stopped mailing because I purchased a big bundle of parcels in Apache County, Arizona. This is mostly by Petrified Forest National Park and Sanders, Arizona. And it was purchased through a guy that had all of these parcels inside a solo 401(k) And now I’ve kind of just been focused on moving these parcels. So that’s my latest and greatest deal.

Dylan Silver (01:41)

Let’s talk about that conversation. You find this gentleman, I’m imagining you find one of his parcels, and he says, I’ve got a bunch more that are like this.

Jack Allweil (01:50)

I honestly can’t even remember. I did not get in touch with him through a mailer. I think he was actually another investor that was on my email list my email list is up to about sixteen hundred for these like land investors, like land flippers. Cause a lot of times I’m selling my parcels that I buy on mailers in bulk to other wholesalers and then they’re selling them to retail.

So I think he saw one of my emails with my current inventory that had a lot of Apache County parcels. And then he’s like, do you want some more? And I think that’s originally how we got the ball rolling.

Dylan Silver (02:26)

I know when I’m thinking about land, this is again outside perspective looking in. I’m thinking about acreage. a parcel of land can vary. Is there a typical acreage associated with a parcel?

Jack Allweil (02:38)

so most of the parcels that I buy are typically around one acre parcels. a lot of people will call them desert squares. they’re so homogeneous in some ways it makes it easier on the underwriting because I just know in this general area, they’re basically the same parcel. They’re like all like 1.16 acres or one point, six. And so a lot of them are virtually the same. I have bought

I have a twenty acre and then part of that four one K deal, there was a five point six acre also, but the large majority are just around one acre.

Dylan Silver (03:10)

And so he was actually inbound, it sounds like he had seen your other deals and saw that you were active in Apache, calls you get this conversation going one way or another. He says, I’ve got this larger portfolio. I want to look at the other side of this. Acquisitions, dispositions. in most of these cases, are these deals going to builders who are doing new construction?

Jack Allweil (03:33)

I would say the end buyer typically falls in a few buckets. One is just like a recreational user, like they want to drive their four wheelers around, they wanna go camping. There’s some truck drivers that have routes from like California to Texas, and like this they found is like a good place to stop or New Mexico and they kind of want a place to just camp for the night here and there. So it’s kind of like a cheap hotel long term.

So that would be one. Another is a person I would put into more of a libertarian type of bucket where they just don’t want to save in US dollars. they want something as a store of value. for an acre parcel and retail, they might go for about $4K So we’re not talking a lot of money, but the taxes annually are six dollars. So it’s very low holding costs. And so some people just view it as a better store of value than like the US dollar.

Or some fiat currency. Another bucket would be a person that does want to build now. there’s a lot of manufactured homes out there. so that would be, there are those people, not that many, because it’s very rugged terrain, even though it’s close to I forty. there’s not a lot of vegetation in the north part of Apache County. it’s very exposed, high winds, high elevation. So the sun is like really beating down on you in the summer.

I’ve never been sunburned as bad as when I went out there to look at these parcels. And then the fourth bucket would be people that want to build long term. Like they kind of like that idea of, building their own spot, the American dream. I’m gonna go live off grid, get out of the normal system. But I can’t really build anything now, but I kind of want it there in like, five, ten years time. I kinda want the optionality to build something in the future.

Dylan Silver (05:11)

There were several points there that really piqued my interest. Land banking, living off the grid in the desert, essentially. we’ll get to the latter in a moment. land banking, right? This idea that instead of storing my wealth in the stock market or in cash or in gold or silver, I’m going to buy land. When someone is

Purchasing the land, I’m imagining they’re also thinking about, well, how can I sell this? My understanding is that’s not always easy to do. That if you have parcels of land in Arizona, that it’s going to fluctuate based on who’s building out there, what the use case is. how can someone who has land and looking to get market value for their land sell in six months or less?

Jack Allweil (06:05)

you’re probably gonna have to take a haircut, quite frankly. if you really wanted to sell it within six months. Cause typically these parcels sit for longer to the retail buyer than like a typical single family home. and quite frankly, a lot of the real estate agents would not want to work for the commissions typically associated, because some of them wouldn’t even get out of bed for

6% on a 4K transaction. so sometimes you’ll either have to go to an agent, pay them like a flat rate that’s a little higher, that at least makes it worth their while. Otherwise, you’re gonna have to market a lot on probably Facebook marketplace. and I’ll be honest, I have not sold a huge number on to the retail buyers. I’m mostly selling to wholesale. So I focus more on.

building up my investor email list than actually marketing on Facebook. But I do that more so now because I am trying to tap the retail market more.

Dylan Silver (07:00)

for folks who aren’t thinking about land banking, that’s certainly one hurdle that they’d have to overcome. For folks who may not have done this before, as someone who’s in the space, is there anything you would advise, caution, or feedback for folks who are considering land banking?

Jack Allweil (07:18)

I would say just try to have expectations on the ease to sale and kind of getting honest with yourself about the time frame you’re working with. I think if you have a very long time horizon and these parcels in the grand scheme of things are not that high dollar amounts that over a long period it probably will hold the value. But if you’re looking to

buy something just off Facebook and flip it, that might be hard. you really need to get in the group to maybe get a wholesale type of rate or buy a bunch of them in bulk, maybe get a better rate that way. that’s what I would say.

Dylan Silver (07:50)

Going now to off the grid, okay, in many areas, and I’m familiar with Texas, living truly off the grid can actually be challenging, if not impossible. I’m familiar with certain areas, many actually, where if you go and you put a manufactured home on a property, it has to be connected to utilities in the area, even if it’s outside of a major city and seemingly in the country.

it wouldn’t be allowed. Does Arizona allow truly off the grid living without utilities in that capacity?

Jack Allweil (08:25)

the thing that’s been the hurdle in this area where I flip in is to drill a well would just be so prohibitively expensive. The last quote I got and these parcels are about six thousand feet above sea level, and I think the last quote I got for a well was like a $100,000 So a lot of people wouldn’t do that when you’re only buying a parcel that’s four K.

So a lot of people will participate in these water co ops where they drive up there’s a community well essentially and they will fill up their tanks. But other than that, they have their solar panels, they have their battery setups. the water is the biggest hurdle.

Dylan Silver (09:04)

As someone who’s traveled a fair bit, one of the things that I’ve noticed is the system that we have for water in most every major US city is you turn the faucet on and it’s at least drinkable. It might not be the best, but it’s drinkable, right? And we become accustomed to that. Turn the faucet, water comes out. Turn the shower on, hot water comes out. And that leaves us in a way, anything less than that is seen as a

difficult living, right? When we talk about off the grid, and I believe you mentioned water co-op, this ability to share water from a central source. I’m even thinking of other ways just spitballing here, folks wanted to have clean drinking water delivered to them, five gallon jugs, this type of thing. Are you seeing, at least on some level, that catching

wind behind the sails, are you seeing momentum behind that type of water delivery?

Jack Allweil (09:56)

I wish I was a little more pegged in. I know people that have water delivered. I don’t know that it’s this necessarily like the trend is increasing or decreasing. I can’t really gauge that. I don’t have a sense of the trend per se, but I don’t feel like it’s moved one way or the other.

Dylan Silver (10:50)

Using my Texas real estate brain here, I’m thinking about the tiny homes and the rise in manufactured homes and then also talking with so many investors, rise in investor and private equity capital interest in buying mobile home parks. and when I think of where this all comes into play, I think about the affordable housing crisis, honestly, right? And then I also think about people wanting to truly live off of the grid.

and for folks who are doing that, are you communicating directly with those end buyers? Is that something that you will interface with?

Jack Allweil (11:26)

I’ve sold to a couple homesteaders right near Petrified Forest. And I’ve been out to the parcels and I’ve talked with some of the locals. It’s a very different type of life. And a lot of them say it should be very clear when you’re marketing to the end buyer, like how frankly tough it is out there with like the changing landscape with the wind and the sun

it is a rugged life and a lot of people try to move out there thinking Yeah, I’m gonna get off the grid, I’m gonna get out of the system. And a lot of them only make it six months before they head back. So it’s difficult. And that’s why you see a lot of abandoned, trying to convert buses into homes or just these old manufactured homes. now there’s a rule with the zoning. If you want to put a manufactured home, it’s gotta be fifteen years or newer.

So that’s one of the things I think because there were so many of these manufactured homes just left. it is tough. I know people that live out there. it is different. just to give you an example, we don’t really think about how many watts we’re using when we use a certain appliance that we have. And like one of the guys that was living off grid that walked up to me while I was walking on the parcel.

he was like talking in watts. He knew exactly how many watts each appliance used. So he was just cognizant of how much power he was using. you’re kind of getting back to first principles and the basics and you gotta manage on your own.

Dylan Silver (12:44)

there’s so much to break down there and I had thoughts spinning in multiple directions. As you were talking about watts and manufactured homes, we’ve had a lot of folks on this show talking about

Manufactured homes, how a manufactured home is not a mobile home, how then a modular home may sound like manufactured, but it’s something entirely different, build quality and even greater resilience to disaster, manufactured homes that are disaster resilient and so forth. Do you see that in Arizona they’re embracing this rugged mentality, living off the grid, or are they in some ways

maybe permitting it, but long term picture is to expand the urban sprawl of cities and not have this off the grid situation.

Jack Allweil (13:29)

once again, I don’t really have a view whether they’re like encouraging or discouraging it. feels kind of neutral. I will say, from what I can tell, when the lockdowns happened during COVID, that was when a lot of people made the move outside of these cities to at least try. so like a couple of the people I met near Petrified Forest that were actually living there, a lot of them moved during the lockdowns.

for example, one guy was a truck driver from Indiana, didn’t like how the lockdowns were being carried out, wanted a little more autonomy, didn’t want to be told, what to do per se. And he thought moving off grid was the answer. I don’t get a sense that the government is like trying to discourage people per se. that’s what I would say.

Dylan Silver (14:15)

Solar talking in watts. I’ve even seen outside the US two marine like water for boats batteries strapped to a electrical panel in sequence and when the grid would go down the batteries would power an apartment and when the grid would go back up the batteries would be powered and

Seeing this for the first time, I thought, these are two car batteries strapped to a wall. I don’t know how safe that is. But then living in that circumstance and then seeing this be so common in the area that I was in gave me great appreciation for a type of engineering setup, frankly, that we either don’t do enlarge or have believed we have to have something that is more complex, or that at least looks

More you could say, blending in with the home. This is where solar comes in here. Solar, Arizona, Texas, the Sun Belt in general is great, I think, for a lot of reasons. People do find that it can be cost prohibitive, especially when people have these huge solar loans. And as a realtor, realtors have a mixed opinion on this. But if you’re living off the grid and you’re not trying to have an electric bill, is it common for folks to go?

I’m buying the land, I’m buying the manufactured home, I’m buying solar all together. Does this come in phases? Are they buying the land a year ahead, then putting the manufactured home on when they can and then adding solar down the line? What does that look like?

Jack Allweil (15:43)

I would say it is typically not all at once. It is done in stages. I’ll go back to the truck driver from Indiana. He had bought the land originally and over time, I think it took him six, seven months. He actually built his home on it and set up the solar panels. And to give you a sense, he said he was able to build his entire setup, land included for like $50K

And he said his expenses were down to I think it was four hundred a month. It’s some mind numbingly low number in my mind. I remember asking, so you’re not really eating a lot of fruits and veggies, I’m guessing, and he was only going to Walmart once a month. That was like in Sholow, was like 40 miles away. And pretty just calm life. And then there’s some funny things the first couple

weeks when he was living in his home, he thought it was almost like an earthquake. the home was shaking And it was because these grazing cows kept coming up to his home and rubbing up against. So then he ended up putting a fence around to keep the cows out. So there’s just things that you really don’t think about that spot up that you have to address. it’s over stages, I would say typically.

Dylan Silver (17:34)

Pivoting here. flipping land to builders and selling land to builders in general, whether it’s your own land or an assignment of contract, this is something that’s gaining a lot of traction. There’s corporate builders, everyone knows their names and they’re building subdivisions, certainly all throughout the Sun Belt. how

Are you making those connections at this point? Are they finding you when they see your deals? What does that look like?

Jack Allweil (18:00)

I actually have not sold to a single builder. I’ve only sold to investors in bulk basically. And then they’ll sell individually. And it’s a lot of times like these off gridders, land bankers I haven’t really communicated too much with the builders.

Dylan Silver (18:16)

I wanna piggyback off that. You’re in North Carolina. Is there land flipping happening in your neck of the woods?

Jack Allweil (18:22)

I think there probably is. the thing is it was kind of just a momentum thing. So I got into real estate. I house hacked in North Carolina. That’s originally how I got into real estate. And then I bought more rentals where I grew up in Michigan. And then in about 2021 was when I bought my last rental. And then I just thought the rent ratios got out of whack there. And that was kind of my bread and butter area. So then I shifted and that’s when I got into land flipping. And I originally got into Apache County because

it seemed like a very low risk. The parcels were just so cheap and it seemed like there wasn’t a lot of tape. Like I could prepare the deed myself. I could prepare the affidavit myself. I didn’t need a lawyer present. I could prepare all the paperwork and then I could do all the title search on my own through the online recorder. And the Arizona counties seem very good online. And also my wife is Austrian and we spend a lot of time in Austria. So

I was thinking I need to be able to do something that’s a lot of online and I can do on my own when we’re over in Europe, basically. I originally remember looking into Arkansas and the Arkansas land personally, it seemed more attractive. trees and streams, maybe, but the counties I was looking at in Arkansas.

A lot of it was done snail mail. There was no online recording. if you wanted to look up a certain deed, basically had to pay. Like there were some bottlenecks that just seemed slow to me. that’s kind of how I landed on Apache. And once I got into Apache, I kinda liked learning about it. And I’ve just out of momentum have stayed there in some ways and just learned more. I’ve actually gotten more granular because I used to

Send out mailers for like, five acres, twenty acres. And now I’ve gotten very specific, mostly mailing to like the one acre parcel holders that are out of state owners and only in this like northern part of Apache County. I’ve gotten more granular each year. So that’s how it’s transpired.

Dylan Silver (20:21)

Can I ask you questions on a transactional level about how that looks? I don’t want to give away all the gold here. are you doing acquisitions? you’re having it in your name or the name of your company, or are you doing assignments?

Jack Allweil (20:34)

the deed is going into my company’s name. Okay. the deed is going to me and then because typically I do not have the buyer lined up before I buy I’m often sitting on the parcels. I know my email list sounds like a lot. I’m up to like sixteen hundred, but they’re not all interested in Apache County right now. So

they will sit a while so it will be just sitting in my name and then when I find the right match I’ll create a new deed and deed it over the new buyer.

Dylan Silver (21:04)

in your case, what’s a standard hold time for these land parcels?

Jack Allweil (21:09)

The smaller ones sometimes I can turn very quick, two, three months. But some of the bigger one, this 5.6 acre parcel I’ve had it now 13 or 14 months. so that one’s sad a little longer. I got a 20 acre I’ve had that for about five months. the bigger ones, it’s a more niche buyer, I would say, and it takes a little longer to move those.

Dylan Silver (21:33)

Hm, okay.

Do you have any idea how folks who are flipping to builders if that is something where they have that connection with the builder beforehand, or is this such a different realm that, you don’t have feedback on this one way or another?

Jack Allweil (21:47)

I do not personally have much to say, but I’ve talked to other land flippers that do seem to have relationships already in, their funnel with builders. So oftentimes when they’re looking, they will talk to the builder prior to purchasing.

Dylan Silver (22:02)

there’s so many options right now that folks have, and it’s not just now, it feels like it’s been going on for a decade or more, how to get into real estate, right? if we wanted to plug land flipping and why land flipping maybe makes sense for certain operators over wholesale or fix and flip, or over even, building out a rental portfolio, what would be maybe the plug for land flipping?

Jack Allweil (22:26)

well, I can speak comparing to rentals because I have some still. I would say the pros you do have a little more control, I would say. Well, I guess you have more control if you don’t manage it. Cause like I pay a property manager to manage my single families. Like I didn’t really want it, and it’s kind of far away. Like I’m not physically there. so from that perspective, I think you might have a little more control.

And people might view that as good or bad. you don’t have like tenant issues, like them destroying your property because there’s nothing really to destroy on the land. one thing I have seen from other land flippers is when they let people buy or like build on the land prior to them paying you out,

we’re also financing the land to them, but I’m not actually deeding over the property until it’s fully paid off. I make a deal with a retail buyer. Cause if they start building something and then default, I don’t want to have to remove all the stuff they’ve built, because it’s probably honestly more than what the land was worth.

for me, I’ve been much more involved in the land flipping compared to my single families. And that could be viewed as good or bad. the land flipping, depending on the county, you can make it very remote. So if you wanted to go spend time in Thailand or Malaysia or go be somewhere, you could still do it. I’m not saying it’s not impossible.

for single family homes or fix and flippers, but it just seems like it might be a little more difficult to do that abroad. I could be totally off on that, but that’s my sense.

Dylan Silver (23:59)

Does

it help to be a licensed agent to be a realtor? in this case, since you don’t need a realtor, it doesn’t always have to go through the hands of a broker.

Jack Allweil (24:12)

it does not and I make it clear that I’m not an agent. because I think if you’re an agent you have to disclose certain extra things is my understanding. I don’t really know because I’m not an agent, but I remember years ago I looked into it and it sounded like in my eyes it might make it more complicated if I am an agent in some scenario. So I decided against it.

that’s what I would say. I haven’t really met a land flipper that then has decided to go become an agent.

Dylan Silver (24:41)

Yeah, certainly in Texas, if you’re an agent and you’re doing anything related to wholesale, different type of transaction, right? But if you’re doing anything related to wholesale single family real estate, it’s more challenging as an agent because you’ve got to first go in with your investor hat and then go in with your agent hat. You can’t muddle the two, it has to be very, very transparent.

And you certainly can’t say, I’m gonna buy the home and then assign it to somebody and cut get an assignment fee. But you can if you’re not an agent. There’s also, governing body, overseeing you if you’re unlicensed in most cases. However, if you’re licensed, now you’ve got to in Texas report to the Texas Real Estate Commission. So that of course provides another hurdle to jump over. I wanna ask you though.

About this idea of being at the intersection of land banking, of acquisition, and then of selling these deals. So there’s really three buckets here: there’s having that list and that cultivating that connection to those folks that are doing land banking, there’s the acquisition side, and then there’s selling the properties themselves. At this point, when we’re talking end of October, right before Halloween.

is any one portion of those three more challenging?

Jack Allweil (26:02)

Well, quite frankly, it seems like the prices in this specific area have dipped a little bit. So, I think people are just kind of hesitant. I think inflation’s kind of hurting especially the lower income people, which would typically be a lot of the buyers for these types of parcels. not a lot of high in income people buying these parcels. this demographic has been hurt a little more.

with the recent years of inflation. most of my sales are going to other investors, but it seems like they’ve been having harder time moving the parcels. the comps have dipped a little bit and there’s just not as much velocity I would say.

Dylan Silver (26:37)

You’re

selling to investors and what are the investors typically doing with the properties?

Jack Allweil (26:41)

so they might buy, five or ten parcels at a time, and then they might be next to each other, they might be spread out, and then they’ll try to individually market each parcel. sometimes it’s like Landmodo or Land.com or just Facebook Marketplace. There’s a bunch of avenues they can go, and they also have their own buyer’s list and they’re trying to market those parcels and often they’re selling on a terms.

contract and they like kind of being the bank in that respect. I have some terms deals but most of mine I kind of like just getting the cash quick. I’ve always liked the line of fast nickels better than a slow dime. I’ve kind of pivoted if I was giving advice to someone just starting out I would say focus really hard on

the mailers and then building out the investor email list or just buying wholesale and get really good at the marketing. because I think in the beginning I tried to do a little bit of both is just too much. I kind of focus more on the getting good at acquiring the parcels and then bundling and selling them to people on my email list.

Dylan Silver (27:46)

Hypothetical scenario I’m gonna throw at you here. Sure. And you may say, well, this would never happen. So if that’s the case, I’ll have to alter my question here. But let’s say someone new to this, they get a property, raw parcel of land, and it’s thirty percent below

market value and they want to go sell it. They don’t know what they’re doing, but it’s in their name. They purchased it. They did the acquisition correctly. They have the deed and they would like to sell it quickly. What should they do? Who should they reach out to? What do their next couple of weeks look like?

Jack Allweil (28:21)

I’ll kind of frame it in the sense that typically when I’m mailing, I’m offering what I would consider about a third of the market value. So, my perspective is a lot of times I’m buying for like 30 cents on the dollar, and then oftentimes I’m just selling relatively quick at like 50 cents on the dollar. I’m trying to allow the investors to double their money.

So if someone bought or at seventy percent, that’s already a little more than what the wholesaler probably typically buys at. But

I would say, there are a lot of land specific sites like Land.com Landmodo and I would just go hard on Facebook Marketplace because that’s like cheap, it’s free. There’s a lot of eyeballs there. I feel like people sometimes wanna veer towards the things they pay for, but

Facebook if you’re just posting every single day, you will get a sale. I do believe that. I don’t know if you’ll get a cash sale, but you will get a sale.

Dylan Silver (29:16)

The seller financing, it’s gonna range, right? You’ll have everything from higher interest to no interest to half down to 20% down, what’s the range there or what’s common when these investors are seller financing these deals?

Jack Allweil (29:31)

I think, well, in this area, they seem to be very sensitive to the down payment. and I say that because there were some ads I was using for marketing where I would ask for basically like 20% down, but the dollar amount wasn’t working. Like I wasn’t getting enough comments. but when you make it like so attractive, like $100 down.

Those seem to get a lot of clicks, a lot of comments. even if the monthly payments a little higher, that down payment, people seem to be very sensitive to that. that’s what I would say. you gotta be careful on the state, because certain states have maxes on the interest you can charge.

ten percent interest is fairly common for these types of deals.

Dylan Silver (30:10)

Do buyers who are buying from the investors, do they have the ability in Arizona to finance these deals through maybe a more traditional source? I know that can be very challenging to get any type of, more traditional banks to finance land.

Jack Allweil (30:26)

I would say it seems very hard to get it, especially at these prices for the parcel, it’s tough. because like from a bank, a lot of times the bank will do the same amount of underwriting, whether like a home is, a hundred grand versus a million dollars. there’s some fees that are just like flat and

from that perspective are fixed. I have not found anyone or met anyone that has gotten financing from a traditional bank on a parcel like what I’m talking about.

Dylan Silver (30:54)

there’s so much that we could continue talking about. I’m even thinking about right now, what do you think about the future? Where does AI come into play with this? folks who are flippers, what’s that transition like if they want to go from, single family flipping to land flipping, but we’re coming up on time here. any new projects or activities that you’re working on? Also anything you’d like to mention directly to our audience?

Jack Allweil (31:15)

what I’m doing, I’m trying to spend a lot of time kind of just reading on the macro environment. a lot of like personal finance books, a lot of just macro about housing and the trends we’re seeing in affordability and some of those like big macro currents that are sweeping our nation and the world. there’s a lot going on that are a little bit,

out of your control, but it’s helpful to understand them and at least give a sense you have some control in what’s going on.

Dylan Silver (31:45)

Amen to that. Jack, Allweil thanks so much for your time today. Thanks for joining us.