Reverse Wholesaling Explained: The Strategy Behind Successful Land Flipping

Adam Dupuis (00:00)
people are people, right? Like if you can kind of talk to talk and you can walk the walk. as long as you have a decent cultural understanding of what it is, generally you’ll you’ll find success. with guys that were on my team, the ones that struggled were the ones that had like more northern accents. So they were from like New England, say. And when you would call somebody in a southern state, like that disconnect is picked up on right away. It’s not difficult to overcome.
Dylan Silver (01:56)
Hey folks, welcome back to the show. Today we’re joined by Adam Dupuis, an investor in Louisiana and co-owner of Kingmaker Solutions, specializing in creative finance solutions, land flipping, and co-living investments. Adam, thanks for joining us here today.
Adam Dupuis (02:14)
Thanks for having me, Dylan.
Dylan Silver (02:16)
Now land flipping, this is something that has been very hot recently and ⁓ more and more people seem to be interested in. Are you primarily flipping land to developers who are building out subdivisions?
Adam Dupuis (02:28)
Yes, we focus on kind of like reverse wholesaling by building a buyer’s list of both small buyer, small developers and small like niche ⁓ boutique builders. So we’re selling anywhere from a single lot up to usually about two hundred acres.
Dylan Silver (02:45)
Now, when you’re doing the smaller deals and the larger deals, these are two different types of end buyers, of course, right? Do you have the end buyer in mind before you lock the deal up, or are you locking these deals up and then you know really ⁓ finding the buyer to match that deal?
Adam Dupuis (03:02)
Yeah, so a lot of people like in single family will do the opposite, right? They’ll find the house, they will get the house under contract for what they think is a good discount, and then they will try to find the buyers. We’re actually doing it in reverse, which is why some people call it reverse wholesaling. We’re going directly to the buyers and asking, Hey, what would you pay for this? We’re getting their buy boxes and then we’re going and finding and making offers on land from there.
Dylan Silver (03:26)
Now, once you’re finding the buyers, right, th this relationship is nuanced, of course, because you’re locking these properties up contingent upon, you know, they have to be the the end buyer for these deals here. So are they giving you a very specific buy box and and are they basically saying like, hey, if you find something like this we’re buying, how does that relationship look?
Adam Dupuis (03:51)
It can be contentious to kind of like manage. And I’ll tell you why. Because when you first reach out to those buyers, they they want to give you very vague buy boxes because they don’t really want to be held to one standard or the other. They’ll tell you, Yeah, I’m I’m buying anywhere from, you know, a single lot up to a hundred acres. And you’re like, Well, that’s very, very wide range. Is there anything that like, do you have a price per acre that you’re paying right now? And most of them will just tell you, Hey, send me whatever you have. It doesn’t matter.
big or small, whatever whatever you have, send it to me and I’ll I’ll give you an idea. ⁓ now occasionally you can get them to kind of narrow it down to a range. You might get like, I don’t know, say thirty-five to forty five thousand per acre is what we’ll traditionally pay as long as it has sewer or as long as it has sewer and water. Like you can kind of get the usually the bigger, more ⁓ more robust like
D.R. Horton and things like that, they will, they are very formulaic and they will tell you, we need these utilities or we need no utilities, we need to be at this price in this range. It’s the more you niche boutique buyers that they tend to be a little bit more fluid with what they will, what they will and will not accept and what they will and won’t tell you up front. Once you start to build that relationship, you’ll get a very, very good sense of what they will and won’t do though.
Dylan Silver (06:01)
Now, when you’re working with these corporate buyers, ⁓ is it an easier process or is it a more challenging process ’cause there’s more steps and maybe more eyes and more scrutiny? Or is it, you know, their buy box is so defined and they have their systems in place that it’s easier to deal with?
Adam Dupuis (06:19)
I think depends on how you define difficulty, right? Because on the front end, like getting to the right person when you’re first building that relationship is more difficult. You’re not calling ⁓ ABC Concrete, who is the niche builder, you’re calling D.R. Horton and you’re trying to get to the right person. There could be 15 or 20 people at work in that local office. So on the front end, I would say it’s more difficult, but
It’s just like navigating any other kind of corporate buyers. Once you have the established relationship and they answer your phone calls and they answer your emails, then I would say it’s probably easier to navigate. There’s just, you know, it’s just getting in.
Dylan Silver (07:02)
Right, right, and establishing that r relationship. When you’re when you’re looking at the smaller deals, is there anything in particular that presents a a specific challenge for someone who may be looking at let’s say an infill lot or, you know, not building out a subdivision but a couple of homes?
Adam Dupuis (07:21)
Yeah, there there can be a few different challenges with with building and with selling to these smaller boutique people. ⁓ ’cause you know, there there’s several different filters that they’re looking at your parcel through, right? So they’re looking at is it landlocked? They’re looking so they’re looking at access, they’re looking at slope and flood zone. And they’re also typically looking at the utilities like we mentioned.
So you want to have as much of that information on the front end so that way you can have them and be properly informed. Cause otherwise that’s only gonna make your deal really difficult to go through in the long term.
Dylan Silver (07:59)
Right, right. And I can imagine that, you know, especially if they are potentially even a newer developer and th they may be someone who came from, let’s say, a fix and flip background, that they may be you know, somewhat picky in terms of which types of projects they want to take on and you could find something that on surface meets their buy box to the T, but they might still pass on it.
Adam Dupuis (08:23)
Very much so. You gotta remember these smaller developers where at once they were GCs, maybe they were a niche contractor that was a subcontractor that became a G C or th they might have a fix and flip background like you mentioned. ⁓ and so they’re not always as well funded. That’s a whole other thing, right? It’s like you really want to prioritize your quick to close buyers because that’s gonna make your life easier. a buyer today is not necessarily a buyer tomorrow. They could have spent
that cash that they would use to close on your land on something literally yesterday. You you don’t know. ⁓ so the bigger buyers tend to have more capital available and they can the ones that can tell you that they can close in two weeks or thirty days, those are the ones that we usually try to reach out to first.
Dylan Silver (09:11)
Now pivoting here, you are also active in Alabama, right? and we were talking in the green room about, you know, jobs that are coming to Alabama. What’s that ⁓ situation look like down there?
Adam Dupuis (09:23)
Yeah, so NASA and the FBI are both expanding their offices into northern Alabama. And so we have two counties in particular that we are ⁓ scraping all of our leads from. And that is that’s the whole goal, right? Is that we’re ⁓ we also have one of my partners is over there. He’s like in in the the area. So we’re scraping ⁓ two two counties.
prioritizing like three zip codes within those two counties. And we’re just going to all the buyers that are building where where the houses are being built. And we’re saying, hey, look, we’ve got something and it we think it fits what you would buy or what you have bought previously. ⁓ and we’ve scraped two lists. We scraped people that are buying or have bought in the LLCs, as well as people who’ve bought five plus parcels in their LLCs.
Dylan Silver (10:52)
Now, ⁓ if we can get a little granular here, ⁓ Adam, without giving away all the gold, but maybe a gold nugget for our audience, when we are establishing these relationships, even you know, you mentioned potentially out of state, right, or across state lines and into areas where you not necessarily yourself on the ground, but maybe you have some boots on over there, but there is some degree of separation, right? Is there anything that presents a particular challenge and certain things that you have to do right or differently?
when making these types of relationships versus relationships that are, you know, potentially closer to home or in your backyard.
Adam Dupuis (11:29)
Yes, and no. So people are people are people, right? Like if you can kind of talk to talk and you can walk the walk. ⁓ as long as you have a decent cultural understanding of what it is, generally you’ll you’ll find success. We with guys that were on my team, the ones that struggled were the ones that had like more northern accents. So they were from like New England, say. And when you would call somebody in a southern state, like that that disconnect is picked up on right away. It’s not difficult to overcome.
But if you’re not aware of it, it’s something that could be ⁓ could be a little bit more challenging for you in particular. I would say in general, like understand your audience, understand your market. Like I have more of a southern blue-collar background. And so I can talk with these contractors as if I am one of them because I grew up like one of them. ⁓ and just kind of know that and understand that you may you may find some little tonality tweaks that you can make that will
r vastly improve your conversion rates when it comes to talking to people.
Dylan Silver (12:33)
That is such a good ⁓ insight and something that I don’t think has ever been discussed on our show here. If you’re ⁓ in a market where your accent is out of place or presents you as someone who’s not from that state, that can be a significant barrier. And it’s funny because you wouldn’t think that that would be such a deal breaker, but certainly in the sun belt it does seem to be the case, and I’ve experienced that.
being from the East Coast and then doing deals in Texas where I’m licensed as a realtor, you see it all of the time, especially when you’re dealing with ⁓ positions, you know, for investors or sellers. Because now in in many cases you’re going, you know, direct to seller and you have to have a conversation with someone who’s speaking to you almost off the cuff, right?
Adam Dupuis (13:25)
Definitely. And it works on both ends, right? It works on your buyer end and it works on your sellers and like the sellers you’re gonna have a little bit more of a difficult time building the trust with. But also the same thing with the buyers. Like everybody is kind of wary now of the term investor in the market. If you call a seller and you tell them, hey, I want to buy your house because I’m an investor, they have automatically associated that now with just a low ball offer because investors now become the
synonymous replacement for wholesaler in in a lot of places. So you just have to like you have to be aware of these things. You have to be aware of just human psychology in general and know how to navigate it and to build trust and you know, you have to be genuine at the end of the day. If some all this is great, but if you don’t genuinely apply it with some level of authenticity, you’re not gonna get anywhere anyway.
Dylan Silver (14:18)
When we talk about ⁓ a capital stack for land ⁓ investing, land developing, are most of these developers, you know, paying cash for this land or do they have some type of financing set up where ⁓ a bank or institution will come in and fund these deals for them?
Adam Dupuis (14:40)
So I have a good friend who does ⁓ big land development deals in Nashville. And they have very big, intricate capital stacks because they’re doing the land there, like that twenty acres could be several million dollars. You know, it could be a twelve million dollar deal, depending on how close it is to downtown Nashville. And so they are generally doing very big, complex capital stacks with private investors, with institutional funds, with ⁓
credit sponsors, maybe even a liquidity partner, just to like really give the deal the whole picture that it needs in order to get through. Now, with what we’re doing, since we’re flipping it to developers, like they’re basically paying cash. Now, they’re not telling us what they have on the back end, but they could they could be well funded. They could be ⁓ you know institutionally funded. They could have lines of credit, but
In general, if as far as you’re concerned, if you’re flipping it to them, they’re paying cash. Just like you would, right? If I bought a a house from you, I would pay cash, but I got a loan on my end.
Dylan Silver (16:31)
What do the ⁓ earnest money deposits as a wholesaler look like when you’re flipping or assigning these ⁓ land deals, I should say. I mean, are you coming out of pocket thousands and thousands of dollars to put these properties under contract each time?
Adam Dupuis (16:48)
⁓ it varies fa state to state. Like Louisiana actually does not require EMD, and that is being slotted to talk about soon that could change here in the near future. In general, where we’ve done wholesale deals across the Gulf Coast, EMD is usually around one percent of the value on like a single family property. but with land it’s more or less the same. It’s usually one percent. ⁓ and we we have money that we we can borrow.
To to cover that, just to get the deal through and get it closed.
Dylan Silver (17:20)
You know, it’s interesting because there’s a lot of people that are looking at things like land flipping and creative finance, which you know you’re involved in both sides of this. But there’s intricacies involved here where it’s not necessarily so simple because you can’t just go from a straight, you know, single family home background into ⁓ land flipping, or if you’re, you know, doing straight cash deals, it’s
maybe challenging to go from that to a SubTo deal or to a seller finance deal. And so since you’ve done, you know, all of those and and then some, are there any tweaks that you’ve had to make when going from one acquisitions ⁓ and disposition strategy to another, right?
Adam Dupuis (18:06)
Yes, the tweaks are rel relatively minor. They’re not as difficult to to to ⁓ cross that that chasm as you would think they are. Because in traditionally you only have like four different kinds of deals when it comes to single family, right? You’ve got seller finance, you’ve got SubTo, you’ve got hybrid, which is a combination of the two, and you’ve got cash. And cash is pretty straightforward. Dylan, I am giving you this much money, give me your house. You know, seller finance is
the opposite end of that spectrum, like I might not have that money. So let’s you and I work out a contract together where I pay you this much down and we pay this much over time. Maybe there’s a balloon, maybe there’s not. ⁓ those are my favorite deals because you can structure them however you want and whatever’s most meant mutually beneficial to you and said seller. ⁓ SubTo is very straightforward. It’s probably the most risky because there are
elements that if you do it wrong, you could be tied up with mortgage fraud and you know, you could also put the seller’s credit score at risk, their their livelihood at risk if it’s done incorrectly without the proper securities andor loan servicing. And then the hybrid is SubTo with a seller finance component, which usually just involves a loan servicing company that would also pay the SubTo payment.
paying the seller directly a payment of whatever amount you agreed on monthly straight out of escrow. So the the complexity there is not incredible. And actually I think going from I think single family to multifamily is more complicated, but I think single family to land is actually simpler because of a few different things. One, your seller’s not emotional. They’re not sentimentally tied.
To the land the same way that they are tied to the house that they grew up in or that they’ve owned for however long it’s been their rental portfolio, whatever. ⁓ the only thing that really changes with land is on the lending side, they usually will do like LTC, which is loan-to-cost instead of loan-to-value, because there is no established value, like nothing’s built there. So you usually will get lower ⁓ total principles offered to you when it comes to lending and
Development space. But you know, the the mass is pretty much the same. You’re just instead of price per square square foot, you’re typically doing price per acre. You can do price per square foot on small lots that are less than acre. But even still, like it’s usually just price acre in LTC. That’s about the only real language change, I would say, between land and single family.
Dylan Silver (20:53)
Now you work of course a lot with ⁓ developers as someone who ⁓ is in land flipping. Are developers as a whole finding their deals through, you know, wholesalers and through back channels and through a handshake deals versus going on on market, on the MLS, right, or on these other platforms like a a Crexi, for instance. Where are developers as a whole finding, you know, raw land to develop?
Adam Dupuis (21:23)
So it it depends. It depends on the size of the developer. But I’ll tell you a little story I think will put this in perspective. When I first I had a friend of mine come to me and say, Hey, you should help me find land. I have somebody that’s buying across like North Mississippi, North Alabama, and into like central Tennessee. And I said, okay, that sounds great. And so I started sending him things that we were finding on market because I was like, Maybe we can go on market in which is something you can do with sellers, right? You can
For properties, you can go on market and you can still get it locked up beneath the ARV. And so I’m sending them these listings. I’m like, you know, maybe this would be a good way for us to at least get started. We can start on market, we can get them locked up beneath what the value of it is, and then we can send it to developers and then we can wholesale it that way. And finally he stopped me one day. He’s like, Look, man, he’s like, I got news for you. If it’s on market, these guys have seen it already. You you’re gonna go off market. Like
The developers don’t have the time to do all the work that the wholesalers would do. So if it’s on market, they’ve seen it. And if they’ve seen it and they’re interested, they’re buying it. As opposed to, you know, if you’re a wholesaler and you genuinely add value and you genuinely bring something that they don’t see and they don’t have access to, totally different vibe. And they they’ll buy it up right away as long as it’s within their criteria.
Dylan Silver (22:44)
We are coming up on time here, Adam. Any new projects that you’re working on? And then also anything you’d like to mention directly to our audience?
Adam Dupuis (22:54)
Yeah, listen right now we are just pretty much focusing on the land flipping. ⁓ I do do some operations consulting on the side so people can reach out to me directly. And ⁓ if they want some free game, they can find our podcast too, Kingmaker Leadership Series is on all of the audio platforms as well as YouTube.
Dylan Silver (23:13)
Adam, thank you so much for joining us today. Thanks for your time.