Ep 30: Why Everybody Seems to Want Raw Land with Adam Southey and Justin Silva
With the sheer demand out there for even the most unattractive parcels, the raw land side of real estate seems too good to be true. Justin Silva and Adam Southey are two seasoned land professionals, and we sit down with them today to hear what they have to say about this hands-off money churner. Adam has got over 15 years of experience in different sides of real estate, but when he made 400% profit of a few 2.5-acre plots a few years back, he switched to land for good. Justin got sold on the idea from Adam, and together the two left their Amazon business never to look back again. While the pair are both in the land game, they don’t work as partners, and today we get into their different approaches to the business, what types of deals each prefer, and how easy it is for them to stay out of each other’s hair.
They talk about how they like deals with what they call a ‘bass boat’ quality: pretty plots that carry the charm of a weekend toy and cost the same too, the difference being you can sell them again for a huge markup. We hear about how little effort the land game seems to require, with both of our guests using a mass mailer strategy that brings in deals by the dozen to be handpicked and sold off again at a leisurely pace. If you enjoyed our chat with Mark ‘The Land Geek’ Podolsky you should definitely tune in for this one too for some more perspectives on this untouched asset class that just keeps giving.
Key Points From This Episode:
How Adam and Justin got into buying land after running an Amazon company together.
What convinced the team to go into land full force: the 400% profits that parcels can earn.
Doing business separately and different deals Adam and Justin prefer: flips vs big cash flow.
Different types of land assets and the team’s preference for ‘bass boat’ properties.
The surprising saleability of even the ugliest plots of land due to high demand.
Adam’s approach to finding and selling land using mailers and searching by state, not county.
Different price points per acreage depending on development and other variables.
The effectiveness of sending vast amounts of mail to acquire property stock for the year.
How impersonal some deals can be, where the entire transaction is handled over email.
The team’s use of attorneys to help them close deals that are far off.
Whether site assessment-related legal documentation features strongly in the land game.
How helpful Google Earth is in providing visuals of change trajectories of land parcels.
The fact that fears of buying faulty land are mediated by its cheapness and saleability.
Brilliant returns to be made from as little as one deal a month.
Monthly expenses faced by land companies: mapping systems, mailers, and data.
Strategies to use while scaling: title companies and realtors.
The value of doing things oneself and learning how to do them properly.
Why land is downturn-resistant: it is cheap so can always be resold at a higher price.
The use of land contracts with promissory notes and deeds of trust to protect sellers.
Worst-case scenarios in the land buying game: when properties end up being gated.
“There’s always someone looking to buy no matter what. The first properties I bought, I swear I thought I would have never been able to resell them. They were so ugly, and I don’t even know if you could have got to them, but they sold almost immediately.” — Adam Southey [0:09:54]
“At the beginning of last year I think I did 70,000 pieces of mail by April or May, and I had enough property to last me through the year. I did 121 deals that year.” — Justin Silva [0:14:35]
“The properties I have held the longest were because they were inaccessible.” — Justin Silva [0:34:00]
Links Mentioned in Today’s Episode:
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