The Land Investing Strategy Most Real Estate Investors Overlook

MICHAEL POGGI (00:00)
So how we make money from a piece of land, once it’s appreciated, let’s say we waited three years or five years or whatever, 10 or 20 years even, we would sell the lot on terms.

That means that we become the bank. That means that our new buyer would make monthly payments at maybe 12 % interest or 11 % interest for five years or seven years.

Cody Crabb (01:55)
Welcome back to the Real Estate Pros podcast. I’m Cody Crabb with Investor Fuel. Today we’ve got Michael Poggi with the Millionaire’s Real Estate Investment Group. Michael built his business around helping investors move out of traditional assets and into strategic land investments. Everything from sourcing buildable lots in high growth markets to structuring deals that can generate long-term appreciation and even cash flow. Michael, excited to have you on and excited to tell people what you mean by lots that can generate cash flow, because I know I was curious.

MICHAEL POGGI (02:02)
you

Thank

you, Cody. I really appreciate you having me on today. It’s an honor to be here. I’ve heard so many good things about you guys and I’m glad to be part of the family finally. Better late than never.

Cody Crabb (02:35)
Of course, yeah.

We’re glad to have you. ⁓ So, all right. ⁓ In the intro here, we were talking, ⁓ you described yourself as a real estate financial planner. I thought that was kind of different and interesting. So, can you give us a little bit of your background and also kind of what you do ⁓ with the ⁓ Millionaire’s Real Estate Investment Group?

MICHAEL POGGI (02:57)
Thank you so much. So as a young man, I got a chance to work downtown Chicago on Wall Street in a stock brokerage firm. And of course I had to make 400 calls a day, find investors and then help them to invest in stocks and mutual funds. And after about five years, I became so good at it and became a top producer that I was offered a franchise to buy my own office. And I went ahead and bought my own brokerage firm, invested in the franchise. And then I trained a couple hundred brokers as well.

to help investors. Well, it was interesting, Cody, because I had lots of wealthy clients that I built up over that first five years, and many of them had an IRA with me at the brokerage firm. And in that IRA, they would have, let’s say, $500,000. But then when I would actually find out what their real net worth is, their net worth was maybe 10 million or 20 million, and they only had $500,000 in the stock market.

And I thought that was kind of odd. I’m like, well, why don’t you put in, you know, 8 million, 9 million? Why not? And they chuckled and they laughed. And as a young guy, you know, I didn’t know why. And they said, Michael, we invest in the stock market for our gambling, for our fun, because it’s too volatile and it’s just not secure enough and returns aren’t good enough. And you can’t even use leverage other than going on some kind of a stock loan. You can’t use leverage like you can with real estate.

So I found that interesting. So I started to spend a lot of time with my wealthiest clients and follow them around. And they took me to their land projects, their vacant land. They took me to their development projects, their apartment buildings, their self storage facilities, their mobile home parks and new construction sites. So I got to learn firsthand from the wealthiest people in my brokerage firm about where the real money goes for the wealthiest. They use.

Cody Crabb (04:51)
Yeah, I’m just hearing,

I can just hear the little bells going off at that age like, ⁓

MICHAEL POGGI (04:56)
Yeah,

⁓ I get it. So I went ahead and finally got a chance after being in the business for nine years I sold my brokerage firm for a lot of money and was able to kind of retire and move to Florida When I got to Florida, of course, you know being alone and not having anything to do is kind of boring and you end up spending money You don’t need to so I decided to go ahead and start to invest my money in real estate alongside with my past clients So my past clients

allowed me to put my money into their apartment buildings and new construction projects and land and I got to learn from them. So I started to start my own construction projects. So I built many homes, but I also started buying vacant lots that I was going to build houses on. And some of them were going up so fast that I decided not to build on them. I decided to just hold those lots and those lots were going up about 20 % a year. And what I learned Cody was that there’s

a place to buy lots and there’s places to not buy lots. Just like anything else, you know, can make mistakes from choosing the wrong locations at the wrong time and for the wrong amount, etc. So know what I mean by that.

Cody Crabb (06:50)
Yeah, so I think ⁓ the thing that calls out to me is lots. This is not the typical strategy you hear when you talk to real estate people. I mean, I’ve had a lot of these conversations and I think this is the first time that’s ever come up. I would be curious to know what, what, why, why, why, why does this work? What is it, what is happening there?

MICHAEL POGGI (07:13)
Yeah, so vacant lots are a very unique niche where there’s not much competition. Not that many people are going after vacant lots, especially using my specific narrow criteria. So over the years of me becoming very successful at doing this, 25 years now, I’ve been able to make millions of dollars by buying quarter acre buildable vacant lots in fast growing resort communities. And it didn’t come from

Starting there, I started with the wrong lots, meaning in Florida where they were too expensive or maybe the taxes were too high or they didn’t have any lakes or golf courses into subdivision, things like that. So as time went on, I started to narrow my focus and narrow my criteria down to so specific that I feel like I’ve got a winning combination, which is very narrow, which is only quarter acre buildable lots, not five acres, not 10 acres.

Never on the lake, never on the golf course because they’re too expensive. When you go to sell them at a double, it’s harder to sell a hundred grand lot at 200 compared to selling a 10 grand lot at 20 grand. So we figured that out. Then we decided that we want to be in subdivisions that are at the beginning of construction, not at the end. So we never go into a subdivision that’s almost finished where the lots are 80 grand. We only buy vacant lots that are around 10 grand.

as much as 20 at the top. So between 10 and 20 grand, they must have 10 % or less construction in the subdivision, meaning not brand new. It can’t be in the middle of the desert. It can’t be in the middle of Arizona or someplace where there’s no internet, no roads, no pharmacies, no Walmart, you know, that kind of stuff, no schools. It must be in an area where it’s got a proven track record and proof of concept that that subdivision is growing.

It has to have low taxes because Florida is not a place to buy vacant lots. The taxes are too high to carry them. It must have low carrying costs, meaning I don’t want to spend 70 bucks every two weeks on grass cutting. So we don’t, we don’t buy any vacant lots that have grass. We only buy lots that have trees. So that saves me about $140 a year in carrying costs. And we only buy lots that have low taxes. So again, that eliminates Florida. That eliminates California, Chicago, New York.

Cody Crabb (09:26)
Mmm.

MICHAEL POGGI (09:40)
And that would be more like Carolinas or Texas or Arkansas. Those are the areas that I focus on. And ⁓ when I did my research to start this venture of being that specific, I had to find the fastest growing subdivisions in America that are growing at 20 % a year. Because if I don’t, that means that I’m going to buy a piece of land and grow at maybe 5 % a year. And I could just put it in gold or silver and probably beat that and have a little volatility.

The good thing about vacant lots, Cody, is that they probably will never go down unless we have some kind of nuclear problem here. But other than that, vacant lots hold their value.

Cody Crabb (10:17)
Don’t

speak, don’t jinx it, don’t say the words out loud.

MICHAEL POGGI (10:21)
I know, I know.

So vacant lots hold their value because no one rushes to sell a $10,000 lot, you know, in panic, where if they have a house for 400 grand and they’re trying to relocate or the market’s coming down, people will lower the price and lower the price and lower the price just to get out. It doesn’t happen like that with vacant lots. I never lose any money by holding lots. Either they go up or they don’t go up because of like COVID or something like that. Other than that,

my lots that I buy have proven to at least go up 20 % a year on average. And I love that because why would you want to be in stocks or mutual funds when the volatility is terrible? You could lose half your money, you know, like it’s no big deal and just from one news announcement. At the same time, the upside on stocks and mutual funds is maybe 8%, 10%, if you’re lucky 12%. So I stay away from stocks and mutual funds and I stick with safer.

Tangible assets like vacant land and then the best part is that we talked about Cody was how do you make land cash flow? It’s a very unique idea and a lot of people think that you cannot make land cash flow Well, the truth is you can make land cash flow and I don’t mean with a tenant on the property You can’t put a tenant on a quarter acre in a resort community. They would throw them right out

Cody Crabb (12:17)
Yeah, I’m pretty

sure everyone’s picturing a parking lot right now, yeah.

MICHAEL POGGI (12:20)
So no parking lot. We’re talking about a quarter acre buildable lot with trees on a paved road with sewer and water churches, schools, banks, know, marinas, restaurants, golf courses, and they don’t allow any riffraff. So no campers, no tents.

So how we make money from a piece of land, once it’s appreciated, let’s say we waited three years or five years or whatever, 10 or 20 years even, we would sell the lot on terms.

That means that we become the bank. That means that our new buyer would make monthly payments at maybe 12 % interest or 11 % interest for five years or seven years.

And that means that you don’t have a tenant, you have a buyer. That buyer gives you the cashflow of $300 a month per lot or $500 a month per lot for five years or seven years coming in on ACH autodraft from their account into your account. And the best part is

What happens, Cody, if they don’t pay you? What is the risk?

Cody Crabb (13:22)
I it’s not your risk, I suppose. Yeah.

MICHAEL POGGI (13:26)
No risk at all because I

still keep the deed or an investor would keep the deed and the deed does not get transferred until the last payment comes in. So right now, as I sit here, I have lots of passive income coming in from people that have bought lots from me that I’ve held for a while that I made 300 % or 400 % return over 10 or 15 years and I sell them on terms. So that.

Passive income comes into my account with no tenant, no toilets, no repairs, no phone calls, no maintenance, nothing to do and not even grass to cut. So it’s the easiest form of passive income that I’ve ever found. It’s similar to an automobile loan. When you buy a car, Cody, and you put down 10 grand on a car and you owe the bank 30 or 40 grand, you don’t get the title to that car until you make your last payment. Once you make your last payment, then the lender

sends you your title and then you own the car. But until then it isn’t your car. And if you don’t make a payment or two or three, they come and take the car. Same thing with make it last. So it is the safest thing that I’ve ever done and the easiest and the least amount of stress. And it takes the place of stocks and mutual funds. So many of my clients, investors and family and friends have sold off mutual funds that are risky, that have volatility, that only make 8 % or nine or 10.

Cody Crabb (14:26)
Yeah.

MICHAEL POGGI (14:47)
and they have shifted their money even in a self-directed IRA or an IRA at Schwab or Fidelity, they would make it self-directed with us. So we help them roll over and then they go in and they get lots which are safer on the downside and have typically 10 to 20 % upside. It’s been normal for me.

Cody Crabb (15:46)
Wow, wow, okay, so I’m gonna push back a little bit. I’m gonna ask you, people hearing this are going, this is the perfect thing.

the catch? What is the, because you said there’s no risk, so I wanna know, what is the actual downside to this? Why wouldn’t everybody do this?

MICHAEL POGGI (15:56)
But when you go to South Eastern land…

I

think that when you go to sell any real estate, you put it for sale, whether it’s through a realtor or on Facebook or wherever you’re going to put it, it doesn’t sell right away. So anything that I’m ever going to sell to make passive income doesn’t sell within a month. Usually it takes three to six months to sell a lot and maybe as much as eight or nine months possibly, right? So where if it was stocks or mutual funds, you could sell them the same day. So as far as liquidity goes, that’s only thing you’re losing is

immediate liquidity because it’s pretty tough to sell a lot instantly where you could do that with stocks and mutual funds. aside from that, ⁓ I don’t see any downside. mean, really, again, unless there’s some kind of big problem with our United States, I don’t see any big problem because everyone’s buying land, meaning all the wealthy billionaires are buying land and even China is buying land in our country like crazy.

Cody Crabb (16:58)
That’s

true, yeah.

MICHAEL POGGI (16:59)
You’ve got

Bill Gates and all the other gurus buying land left and right. Jeff Bezos, they’re all buying land as fast as possible. Land is a very good commodity to own and they’re not making any more of it. And every time houses get built around your vacant lots, it forces appreciation. So owning land is ⁓ one of the top things in most investors’ lists right now is to own as much land as possible. ⁓

That could be used for crops later if necessary. mean, obviously in a resort community, you’re not gonna put crops on there, but if you had land and you had to plant stuff on it to survive, well then there you go. You can’t do it if you live in a condo. So, you you get the idea.

Cody Crabb (17:41)
Yeah, well, so this is really interesting to me because I feel like ⁓ I’m always looking for the hook, the trick, but what it kind of seems like is really the trade-off is liquidity, but for a lot of this type of investing where you’re looking for very safe, low-risk investments, that’s kind of what you’re going for anyway. ⁓

MICHAEL POGGI (18:01)
The same as a rental

property, a duplex, I you name it. If you had a self-storage facility and you wanted to sell it, it would take maybe six months to a year. If you had apartment building, same thing. So any real estate of that sort isn’t something that’s going to sell the same that you put up for sale unless you sold it too cheap or, you know, it’s a fire sale. Other than that, that’s the problem is just liquidity. But most people are not looking to sell something immediately anyway. So if someone was turning 60 or seven years old,

Cody Crabb (18:27)
Yeah.

MICHAEL POGGI (18:30)
and they were gonna sell their vacant lots for 50 grand a piece by that time, and they had 10 of them or 20 of them or 50 of them, then they just sell them as they sell and they continue to improve their cash flow every month by having more of these lots sell on terms.

Cody Crabb (18:47)
Yeah, wow, okay, so just a couple more questions. I know you went into this a little bit, but ⁓ before someone goes and buys ⁓ a vacant lot at the bottom of their subdivision, ⁓ you said you look for really, really specific criteria. ⁓ And without kind of having to rehash all of those criteria, I’d love to know kind of just the reasoning behind those, because I know obviously you’re gonna have better appreciation in higher end neighborhoods and things. But that’s…

MICHAEL POGGI (19:09)
Yeah.

You nailed it.

Cody Crabb (19:15)
But I know that it’s gotta be more than that because otherwise it would usually be buying every $5,000 lot that you could find.

MICHAEL POGGI (19:21)
Well, remember this, the cheaper the lot when you buy it, when it doubles, it’s still cheap for the next person. So if you buy a lot at 10 and you go to sell it at 20, which is a hundred percent return, it’s easy to sell lots at 20 grand compared to buying a lot at a hundred grand and trying to sell it for 200 grand. A 200 grand lot, you would have to find a luxury buyer, which takes more time. There’s less of them, but a cheap lot in a resort can be bought by any investor and it’s not.

just where it’s a husband and wife looking to build a house. So if you’re in a regular boring old subdivision and there’s no amenities, then the typical buyer is gonna be a husband and wife are gonna look at the lot to build their house right now. Where if you have a lot in a resort, 99 % of all my buyers are people that wanna buy the lot for investment and to use the amenities, which is a huge difference in the size of the market. The size of the market is 10 times bigger.

if you have a resort lot compared to a boring subdivision, you know, where there’s no amenities, nothing to do, and it’s just a lot to build a house on. So that was a very important criteria. So same thing with five acres or 10 acres, you know, I like five acres for myself, but when you’re thinking as an investor, then you would want quarter acre because it’s like cookies, you know what mean? You’re basically selling cookies rather than selling a whole pie, for example. So.

Cody Crabb (20:48)
Yeah.

MICHAEL POGGI (20:48)
It’s easier

to sell quarter acre lots than it is to sell five or 10 or 20 acres or even a farm for that matter. And they get lots that are cheap for you would still be cheap for the next person. And if they can appreciate 10 or 20 % a year, that’s all I ask for is to be able to beat mutual funds and stocks. So I liquidated all of my stock portfolio years and years ago. And I had stocks, had mutual funds, John Hancock, Templeton, all of the name brand mutual funds.

Didn’t do that great. I’d be lucky if I made 8 % a year. And then when we had bad news, they would drop in half. So I’m thinking, wait a minute, 50 % on the downside, but 8 % on the upside? No, no, no, no, no, not the way to go. And there’s no reason to do that. And that’s how everybody does it, Cody. You know as well as I do that we all learn from our parents or our stockbroker or our banker or our accountant. Open up a 401k plan, open up an IRA, and put your money into stocks and mutual funds.

Cody Crabb (21:30)
Yeah.

Yeah.

MICHAEL POGGI (21:46)
and hope that when you turn 60 or 70, that you’ve got enough to retire on. That’s a bunch of baloney because it’s just what happens if 20 years go by and your stock and mutual funds are still the same as what you bought them at, meaning they came down and they never went up. You can’t go back and change your mind from your 20 years ago. It’s too late. So being in real estate has so many advantages. And it’s the same thing to Cody with you cannot take a mutual fund and sell it on terms and make 10 or 11%.

with a piece of land, I can turn around and put it for sale and I can use my secret weapon. Listen to this, my secret weapon. This is what made me a millionaire. This exact sales ad. acre, buildable lot for sale in fast growing resort community, paved roads, utilities, churches, schools, banks, and ⁓ amenities. And then zero down payment, 100 % financing.

Cody Crabb (22:26)
listening very closely now.

MICHAEL POGGI (22:45)
no credit check, everyone approved. That ad, which took me years to perfect, instead of saying 20 % down, must have good credit, blah, blah, blah, none of that was good. And I learned the hard way. So when I would list it, whether it’s a house or a piece of land at zero down, 100 % financing, no credit check, everyone approved, I got 80 phone calls in two weeks from that kind of an ad. And I didn’t have enough lots to sell. So that made me…

My head spin, I’m like, holy cow, if I would have had just 10 or 20 more lots, I could have sold them all at zero down. Now what happens if that person doesn’t pay me? So what? I have the deed. So all I care about is do they have a job and can they make a monthly payment of 500 a month or 300 a month? And if they can, then I’ll accept them as a borrower and I’ll sell them the lot, which means I hold that lot. And when the last payment comes in, five years later or 10 years later,

then the deed gets transferred into the new buyer’s name and then they own it free and clear. Now what’s the advantage to them? If they’re paying me 10 % interest but the lot’s appreciating at 10 or 20 % return, that means that they’re controlling real estate that they couldn’t afford to buy in the first place. So that’s how people get ahead is using leverage in real estate, whether it’s land or houses, where you cannot do that with stocks or mutual funds. When you buy stocks or mutual funds, it’s dollar for dollar. 100 grand in the mutual funds is 100 grand.

and you get stuck buying it and the day you buy it you’re down the commission already.

Cody Crabb (24:16)
Wow, wow, just that’s wow. I think the thing that strikes me the most is the more I think about it, the more genius this is. You’re picking a place that self-selects who is even gonna shop there because of what it is. And then from there, it’s very clear that you’ve iterated this many, many times over the years. So ⁓ yeah, kudos, that’s brilliant. ⁓ Well, as we’re kinda closing up here, I would just ask ⁓ just a few more things here.

MICHAEL POGGI (24:28)
Correct.

Thank you.

Cody Crabb (24:44)
If somebody is is looking to I mean what’s like the minimum like is there is there like a is there a world where someone buys a $10,000 lot and they can really profit off of that or do you have to kind of? Accumulate this for this to be worth it

MICHAEL POGGI (24:58)
It doesn’t matter. started off with one lot 25 years ago. So, and for me, that lot went from at the time it was five grand and it went from five to 10 in five years. So I made 20 % a year and I didn’t even have the money to buy that lot for five. I put $500 down and I paid the seller $200 a month. And at the end of five years, my loan was up and a lot was doubled. So that’s just an example of how I can help someone. So if someone is listening to this and they say, Mike, I don’t even have 10 grand.

I would then be your bank. I would finance you to buy a piece of land where you put maybe, I don’t know, three grand down or five grand down on a $10,000 lot and make monthly payments, no prepayment penalty. And then if you pay it off early, pay it off early. And then the deed transfers and then you control it from then on out. So we can help anyone at any, even a smaller level. ⁓ And you can use your old 401k plan. You can borrow from your current 401k plan.

You can use your IRA at Schwab or Fidelity and do an IRA rollover to a self-directed IRA, which we call a real estate IRA, and or your stock brokerage account where you can liquidate some stocks or mutual funds and move that into safer assets and better upside, in my opinion.

Cody Crabb (26:12)
Wow,

yeah, I mean, I’m definitely gonna be looking into this. Definitely gonna be looking into this. ⁓ But yeah, thank you so much for, I love when we have people on that kind of share something that we never would have found out about. It is such a specific little niche that you found here. So thank you so much for getting in touch with us. So how can someone find you online if they wanna get in touch? I believe you kind of mentioned a little bit, but just how can someone get in contact?

MICHAEL POGGI (26:25)
Yeah.

Thank you, Cody. I appreciate your questions,

Yeah, so www.michaelpoggi.com So it’s

m-i-c-h-a-e-l-p-o-g-g-i.com And on that page it’ll show many testimonials of people like you and I, Cody, video testimonials of people that I have helped to buy 10 lots, 20 lots and so on to go into their IRA or their LLC or their name and ⁓ you’ll find that very credible.

and never been sued. So we do good business. In other words, we don’t have a syndication where we raise money and pool everybody’s money together. They own the land. They have the title in their name, and it’s very safe to do something like

Cody Crabb (27:09)
That’s a good sign I suppose.

Well again, thank you so much and thank you listeners for for joining us today if you got something out of this and I’m sure you did go ahead and do a like and subscribe and comment and all the things and Please please make sure you follow us so you don’t miss more tips like this Michael. It’s been a pleasure. Thank you so much for joining us today

MICHAEL POGGI (27:28)
I guess.