Go beyond just flipping properties, flip some land as well! In this episode, Paul Lizell sits down with Jessey Kwong, the founder of REI Conversion, to talk about what land flipping is all about. Sharing his expertise around the area, Jessey discusses the advantages, disadvantages, and costs associated with land flipping. He goes over a few examples and some of the issues that go along with flipping land. Discussing the future of the industry, Jessey also talks about digital marketing and his new project: hosting websites for real estate investors. He explains some of the plug-ins they have that help your real estate investing business run smoothly and easily.
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Flipping Lands And Business Websites With Jessey Kwong
Land Investing And The Advantages Of A Good Website For Your Business
With me is my friend, Jessey Kwong. He’s an interesting investor. He’s a gentleman that’s into land flipping. It’s the first time that I’m going to do a land flipping episode. This is going to be an interesting different episode than what you’re used to. Jessey is also into the information marketing side. What he’s created is website creation. I’ll let him get into that but first, Jessey, why don’t you give us a little bit of background on yourself, where you started in real estate investing and where you’re going with it?
Thanks for having me on the show. I got started in real estate a few years ago. I went to a local meetup and I started off doing some fix and flips out in Indianapolis out there and things didn’t go too smooth. I met a lady by the name of Jennifer Beadles out in the Seattle area. She put me in touch with another gentleman by the name of Seth Williams of the REtipster. That’s when I started learning about land flipping. Ever since then, I’ve gone to land flipping. I was part of several groups and masterminds. I met some people who were getting started and were struggling to get started. I got started fairly quickly in the land space because a lot of it I had to attribute to my background in digital marketing and being able to build websites.
I’ve been building websites and landing pages and studying about conversion rates, copywriting, design for the last a number of years. I come from a digital marketing background as well as a visual marketing background. That all came into play and it worked out well for land. I started helping some other land investors get their websites started to help them get more motivated sellers, leads in the door for them, and then people start knocking on the door. I thought we have something here that I’d like to get into and start building out. That’s what brought us to REI Conversion. We help investors launch their websites and also run a podcast as well.
Your podcast is interesting. I’ve listened to a few of the episodes there and I’ve been on yours now.
I can’t wait to have your episode out. We focused solely on the digital/marketing side of things. That’s where I know where my skillsets are and that’s where it got me. That’s where I want to continue to help others.
That’s the future for people who aren’t tech-savvy. I’m a low-level tech-savvy, to be honest with you. I’m not that high-level. I’m still learning so much of this. I’m into info marketing business as well and I’m still learning so much, but this is the future. It’s important for people out there to learn about what tools you can use to help launch, expand, and organize your business and make things easier for you. What you’re doing there, your website looks incredible. It looks good.
The tech side of things can be quite overwhelming. I work with a lot of investors, some that are in their 70s and 80s, and some in their early 30s. That’s all over the place. Tech can be one of those things that can confuse a lot of people, especially people who want to get started in the real estate area. They want A to Z all set up. My suggestion is it is the feature, but start slow and chip away one thing at a time.
It’s totally baby steps in there when you jump in real estate investing for the first time. It’s slow incremental growth rather than this rapid expansion.
I wish you’d told me that when I first got to real estate. I had a very bumpy start. I’m sure a lot of people do as well. Coming from two people who have done real estate and have been in the realm for a little while, for sure. If you’re starting out and reading this. I couldn’t agree more, it’s baby steps.
It was a learning experience for you. If there aren’t bumps in the road, you’re not learning and growing, so you grew from that. It’s tough. Don’t get me wrong. Nobody wants to learn these lessons, but you need to in order to get to that next level.
That’s such a good point. It’s one that I’ll always want to instill in my kid. I have a 1.5-year-old. Making mistakes is nothing to feel bad about anything. Recognize it and move from there and build off of that. If it weren’t the mistakes that I made early on with real estate investing, the properties that I took on, the people that I trusted too easily, those are the mistakes that have led me to where I am now. You’re right, mistakes are a great thing as well.
Every bad thing can lead to very good things. This pandemic, what this is doing is locking us down. When you think about a lot of smart people sitting at home, I’m anticipating over the next few years some unbelievable technology and things are going to come out of this because these people are sitting home, bored, creating stuff in their mind. They’re in the emphasis of creating things. For me, it’s shifted my business. I’m sure you’re doing more in shifting your business and doing different things there. It can be a good thing.
I think the same way. We’re all hunkered down, but there is a lot of ideas brewing and I see it even with our users too. They’re coming back to the website. They’re beefing up everything and trying different things on the website. It’s a great silver lining.
It is because now they can learn and understand your website’s inside out, and be more comfortable with them. There might be things that your website does that when you’re in the day-to-day grind, you’re busy doing stuff, you don’t always get to learn all those little details. If you’re at home now and you’re learning those details, when things come at you from that day-to-day grind, you’re able to handle them better because now you’re able to put them where they properly belong on the website. You’ll be able to utilize your business and make it run a little bit better and smoother, hopefully. I want to jump into land investing here. What made you get into land investing? Was it from Seth Williams from REtipster? Is that who he was?
Seth and I chatted. I was looking to network with other people. I was excited to be in the industry. I wanted to meet other people. Previously, I had run quite an online education system in the beauty industry with my wife. Believe it or not, there was a lot of overlap between the two. I wanted to see if I could help out somehow and meet others. I knew I needed to network. Networking has been one of the most powerful things for me. I should be doing it more because now I’m hunkered down. I learned land investing through his program and his blog.
He’s got a great blog and I attribute a lot to him. The reason why I started looking into land coming from fixing and flipping and doing a little bit of wholesaling was it was a lot less to worry about. There wasn’t actual physical home on there. It seemed a lot easier to handle and I’m always attracted to things that are not that popular. The land is one of those things that’s not sexy. People don’t think of that as something you can flip. I saw a lot of overlap with the digital marketing side of things. That’s what got me started. This is not any promotion of his program, but at four weeks after his program, I got my first property.
I flipped two of them and they were desert land. I had no faith in it. I didn’t know why anybody would ever want to buy this piece of land. I had three people who wanted to go camp out on it to see how it’s like. It was in the middle of nowhere in Bend, Oregon. I had two parcels out there and miles and miles of nothing. It sold so quickly and I was like, “I think we have something here,” but then like everything, there are always ups and downs. I went through a couple of months of very dry spells. I couldn’t find anything for a while and it steadily climbed up. It wasn’t a magic formula at all but it definitely gave me some motivation to keep going.
One of the reasons I’m excited to have you on here is land investing is something I want to get into. It’s something I’m going to look at while we’re locked in at home during this pandemic. I might reach out to Seth and another friend of mine, Jack Bosch, who’s big in land investing as well. He has been doing it for many years. He’s been doing it since 2004, 2006, somewhere in that timeframe. He’s done extraordinarily well. He told me how well it is, but I never got with the intricacies of what you guys do. Is a lot of what you do direct mail or do you deal with counties and buy? How do you acquire properties?
We do direct mail, the old-fashioned way. We either talked to the county for a list of property owners. Once you get that county list, you have to scrub it and then send out those mailers or there are lists providers like DataTree and AgentPro247. I used to use a system called PropertyRadar, which is not that popular and it’s only for certain counties. At one point in time, I hired a full-on what we call a scraper and he was able to tap into the county records and pull all the data and built me a system for filtering whatever I needed. That was pretty incredible as well. We send those mailers out and that’s the key thing.
A lot of land investors sometimes for whatever reason don’t pull the trigger on sending those mailers out. I think there’s money involved with that. What we send out is an offer to purchase their land and a purchase agreement in there. We wait for that to come back in or you can drive them to your website, which is what I do. I don’t put any offers out there. I’ll tell them, “I want to buy your land for cheap in cash. Come back to my site and submit your property here.” That’s where the art of conversion rate comes in. That’s how I got started. Mailers are the way to go.
Do you ever do terms with them too to get them under contract like an option to purchase?
That’s very popular. Jack Bosch also teaches that as well. It is seller financing or whatever you want to call it or putting on terms. We do that all the time. Most of our users are putting them on terms. People will pay monthly until they own that land. I’ve done it before as well and it works out great.
It’s awesome because you could essentially create a wrap if you get that owner financing and then you sell it to somebody with owner financing. You wrap it. You create that spread for yourself, which is phenomenal. It’s a great way to do business. As far as selling, traditionally we sell houses on Craigslist and Zillow. We market it that way. What is the easiest way to offload these properties with lands? It’s a different animal.
Things have shifted quite a bit. Craigslist used to be a hotspot for land investors. Has it shifted for houses as well?
It has to an extent and we still do well with it, but I’ve got to say it has shifted more.
I do notice that houses seem to do a lot better on Craigslist as well. Our main focus and the lead gen location comes from Facebook Marketplace, also Facebook buys and sell groups within a specific area. I’ve done very well in those groups as well. Make sure you find the buy and sell groups and list them in there. The next best source is your cash buyers list. I can’t emphasize this enough. A lot of people who are getting started aren’t willing to put in the work to get it set up. Honestly, it takes you less than a day to get this set up and automate it. What I mean is when somebody comes to your site, you’re collecting those emails.
When you’re communicating with somebody, you collect those emails. You bring it into your autoresponder whether using something like Mailchimp, MailerLite, or whatever it may be, you have that biases because that thing is gold. We do things like the deal of the week. We’ll discount product properties. I did an episode on the REI Conversion, episode number seven, where I talked to a very successful land investor, Luke Harris. He moves almost half his properties through his email list. It’s incredible and hearing what they’re doing. I’ve cut back a lot on investing because I’m focusing now on REI Conversion. I will come back to it. It’s incredible seeing what people are doing. I’m jealous in a way that I’m not getting in on the action, the pretty cool stuff.
It’s like with wholesalers as well, your buyer’s list is important. That’s something we built into our themes as well in our websites. We went the next step that if somebody came to your property on your website and they’re looking at a specific property, we can uniquely identify which property that they’re looking at. You can give it any unique identifier so that when it goes into your automation system like MailerLite, that’s just an email system. You can add them to a specific list that is looking for properties only in this county or you can run specific automation to them. There are a lot of different things when you can finally capture exactly what they’re looking at. That’s some pretty cool stuff that we’re continuing to help with that.
It’s powerful stuff and it’s the stuff that people need. You can have somebody come to your website but if you don’t know what they’re looking for, what is the use of it there? You want to be able to get tactical with it and see what they’re looking for and hone down on that. That’s tremendous technology and tremendous usage.
That’s the one thing. We do have a lot of cool features that allow businesses and investors to scale. For us to continue to show, “This is how you can do it. This is how you can make use of a tool like this and how you can grow your business.” That’s where we’re also focusing a lot of our time, and with the podcast as well, bringing on guests like you talking about different tools. How can you apply that to your business? How can you grow it? Honestly, during a time like this, we should be able to run our business and we can, which is awesome. I was speaking to a land investor. She’s been in the land investing for a few years. A good half of it, she was bedridden because of a chronic illness. She finally got over it. She’s like, “I was doing it all from my bed. It wasn’t fun. I don’t like being in bed, but I literally was investing in my bed.”
It’s the conveniences of what we have now with technology. It is unbelievable and out of this pandemic is going to be even greater and better. There’s going to be more emphasis on this technology. You focusing on your website and your app version is the smartest thing to do. It’s the best use of your time. It’s what you need to do. Grow that part of the business because that’s going to grow exponentially. From that, you could take some of the revenues and be able to invest back in real estate when you have this honed down exactly the way you want it. You’re smart in a way you’re doing here. I love being able to operate and do what I do from my home office. It’s nothing more convenient than that. I have to go out and drive and I’ll drive to my local rentals like I was telling you, a couple of local ones that I have. I don’t want to leave the office. If I can stay here, look, and find deals online, that’s what I want to do. That’s my bread and butter. I love it. Let’s talk a little bit about what you’re working on and what you have going on. Talk about how good your websites are and what they specialize in. Get into full detail on them.
When I first started, I got started with Carrot at first and then I moved over. I was like, “I can do something pretty similar using my own skill set.” I then started building stuff through WordPress. All of our themes and websites are based on WordPress. Probably a lot of you have heard a lot about WordPress but not sure what it is. WordPress has been around for a long time. The beauty of WordPress is it’s continually evolving and it’s come a long way. The technology of WordPress is pretty incredible nowadays. Both myself and my partner, we both attend WordPress events. My partner is very involved in the global WordPress community and running conventions and stuff like that.
We believe in WordPress, the flexibility that it gives you, and the ease that it can provide you as well. You have the best of both worlds. What we build over at REI Conversion is what we call themes. Once you intake this theme, you install it into WordPress and your site now can do specialized functions because of this theme. Listing to your houses is very easy. You just fill out the fields and it’ll look a specific way. We’ll style it a certain way and you can go in there and change the colors, your logos, your branding, your background. You can do all sorts of stuff with it. It’s the best of both worlds, giving that flexibility but also having that structure there for you.
Another beauty about WordPress is the fact that you have what we call plugins. Plugins are like third-party applications that you can install to your site. Most apps online nowadays have a connection to WordPress and that’s how powerful WordPress is. You can do all sorts of stuff with these plugins from having a little chat bubble on the bottom corner of your screen to running heat map tests, where it’s checking to see what people are clicking on your website. A lot of these different companies are building these plugins, software, or apps for WordPress users so they can use those. We also build plugin specifically for investors. We have things like our Zapier Property Listing, which we launched.
You can go from Podio, Airtable, or whatever CRM and list your property directly from there to your website. We’re always looking for ways to help investors cut time and scale and solve problems for them. Where do we want to spend our time? We know where our skillsets lie at. We don’t need to be doing these tasks. How can we save you time? We have another plugin, I forgot what it’s called. You can list your property on Craigslist in all formats. Whatever you entered into your property, it will format it ready to go for Craigslist with a click of a button. You can paste it into Craigslist or Facebook Marketplace. These are the type of tools that we continue to evolve with.
Those are huge. To me, that’s powerful. I’m looking at Buildium to manage my rentals, which is a well-designed website. You click on Craigslist, you link everything right in there, and you list your properties for rent. It’s super convenient. These plugins are getting more and more powerful and better and better as the day goes on. It sounds like you have the most important ones that you need and it’s designed not just for land flippers. This is designed for house flippers.
We got both sides. We got the health side of things and the land side of things. We first started out on the land side of things and then as our team grew, we moved over into the land. We started to work with house investors, wholesalers, and flippers. It’s pretty cool stuff.
It’s a pretty affordable product too what you have out there. Is there an annual fee on this one?
We have a bunch of plans. We believe in flexibility here. Whether you’re getting started, we have a personal plan, which is $297 a year and it gives you the theme. We have what we call our business plan, which is $497 a year and you get access to everything including new updates and plugins. We also have a plan that if you don’t like subscriptions, we have a lifetime forever plan as well. You pay once, but you continue to receive those updates. We also have a managed plan where we can manage everything for you. We know what it’s like to grow as a business. We want to make ourselves available to those that are starting out and those that are also like, “I know where I need to be. I’ve been investing for X amount of years, just give it to me. I don’t want to keep paying,” type of thing.
I totally understand. That makes total sense. It’s something I’m going to look at too because we have our website. It’s a basic one. I think it is a WordPress site, but yours has many more options here. This is something we may look to switch over to you and convert. I’ve been looking at what you have there and it’s tremendous. It looks good. I think of what we’re going to do and where we’re looking to grow, it’ll make a ton of sense. We may be reaching out to you. I just want to let you know, Jessey.
You’re getting back to the landside now. You’re not doing any direct mail. You’re not moving in that business too much now. You’re focusing on this one here, but for our audience to understand. Tell us what an average deal looks like as far as the purchase, whether it be terms, resale, and timeframe too.
I can talk about my first property. When I first got started, I was nervous as heck because I was literally learning this off the internet. I didn’t know anybody else that was doing this. The community was smaller at that time. There weren’t as many Facebook groups or resources. We’ve got a lot more Facebook groups now. If you’re interested in joining one to learn about the land, you can check out the REI Conversion Community for Land Investors. For my first property, I shot out 500 mailers. I don’t remember how much it cost me. They were postcards telling you, “Come to my website.” It was a high converting website. I knew exactly how to build an opt-in page to make sure people would submit their property if they’re interested. I got a lot of response out of that. I was shocked because I didn’t know anybody that was working out of this area.Nobody wants to learn those hard lessons, but you need to in order to get to that next level. Click To Tweet
It was Bend, Oregon and I got a bunch of leads that came back to me. I ended up purchasing my first property for $500 in cash. I did have a selling website at that point in time. I launched everything at once. A week of listing it, I flipped it for about $5,000. I was shocked. I thought there was a joke and I was working on this with my cousin at that time. I was nervous to do so because I didn’t know much. I had another lead in the same area that was the same thing. It was square and no access. I don’t know why somebody would want it. They wanted a little bit more. I think it was 750. We also flip that exact same size parcel. It was 5, 10 acres or something like that. It was raw desert land with shrubs on there. It was flat. We sold that for another $5,000. It was quick. It was less than a month after literally starting the course.
You can’t be that $10,000 at $1,250.
It was crazy. We then moved on to bigger properties from there. One that I remembered we flipped. We found a piece of property about twenty acres up in the forestry area. This property, we had access to it but it had to go through the neighbor’s properties. It was passing three neighbors. We need a surveyor to take a look at the timber on that property because that could add value to that property as well. It was huge. The whole region was for forestry. The neighbors were ganging up against us and didn’t allow us to get into that property. They had no legal right to do that but we didn’t want to get hairy at all. We purchased the property and we do what we call a neighbor letter. This happens very often.
You will send out letters to the neighbors and be like, “I’m going to list this for very cheap. I’m going to sell it for cash. You’re going to get an unknown neighbor who might cause a ruckus there and might take down all the forests. It’s beautiful around. You’ve got a huge acreage there on the mountainside and you’ve got a giant pond. Are you sure somebody wants to come by?” We have a template for this and sent it out to them and they picked it up. We purchased that property for under $10,000. We flipped it for about $30,000. It was a quick one. The only thing that took long was we finally got our surveyor in there and we were waiting for the right season to properly evaluate that proper property.
It was a nice flip. I’ve done only one seller finance. It depends on what area you’re working out of. You’ve got all these cheap properties out in the desert lands in Arizona and whatnot. Those were a lot of land investors start out in. When you start moving into the regular parceled properties, the prices can fluctuate quite a bit. You can pick up land for a couple of hundred bucks and flip it for 5, 10 times the amount. Typically, I’ll offer about 5% of what I’m going to sell it for. I’ll list it on my site and get it out to my list and then flip it that way.
It’s a whole other type of business that gets into less complexity than houses but still has issues you’ve got to be able to deal with. Is it landlocked? Is it irregular? Will the property perk if you need to put steps, depending on where you are in a country? Desert, you don’t have to worry about that as much. Here in the Northeast where we have a lot more rain and issues, we have to worry about permeability and it could cost $30,000, $40,000, $50,000, and put a sand-mount septic tank in. It’s pricey whereas at West, people are putting them in for $4,000, $5,000.
Another huge thing to be careful of, and this was an early mistake, is to make sure you have somebody check out that property. I was doing everything remotely. I was traveling back here from Seattle to Vancouver in Canada quite a bit. I had a property that was being used as a dumpster. I didn’t know because on Google maps it looked fine. I had somebody who was interested in buying drove-by. He’s like, “It looked like a 747 dump crash-landed here.” He showed me a video and I freaked out. There are different things you have to deal with but it is what it is. It’s a great model. You can move pretty quickly and lightly with it. It’s not as capital intensive. The rewards aren’t as big as flipping a house. You can start stacking your seller finances together, your property that is on terms, and then start making cash with that. If you’re doing a buy and hold, you’ve got to manage that property. Whereas if I’m selling financing, it’s just bare land.
You don’t have anything to do with them. When I’m seller financing my property, it’s great because you don’t have to worry about if they go bad, but then you’re just a bank. You take it back and start all over again or sell it to somebody else. You make it their problem. Seller financing is a great solution. I liked it because it’s reducing risk and headaches that I don’t have to worry about now. If something goes wrong, hand it off to an attorney, let them handle the foreclosure, and redo it again.
There’s one little tip if you’re going to get into the land. We have something that we call a documentation fee. Somebody is going to come to our site to purchase a property. We want to make sure they’re serious buyers. We charge what we call the documentation fee and we’ll charge anywhere from $300 to $500. For some reason, I don’t know why a lot of these people get cold feet after they paid the documentation fee and don’t even communicate with me or the title company. It’s like two of these payments, one of these payments sometimes pay off the property.
They don’t have any communication. They just ghost and this hasn’t happened to me just a couple of times. It’s consistent. They get cold feet. I don’t know what they’re planning to do with the property. It could be in the gray area. Who knows? I’ve got a lot of properties this way that it was paid off by the documentation fee. It is what it is. It’s a nonrefundable documentation fee. It holds them accountable. I know a lot of people say, “I would return it.” This is part of the business. If you’re not ready to commit to it, that will be your loss.Every bad thing can lead to very good things. Click To Tweet
I want to get into the land. I’ve already done two land deals. There were two lots. One was a property I bought in Pittsburgh where the house had burned down. It was a lot. They filled it all in. The other one was the same deal down in Alabama and I was able to sell them both. I make good money and the cost was next to nothing. There is a liability policy pretty much like $7 a month. It is good. I’ve gotten into it and that’s just on the REO side, let alone the direct mail side. It’s something I’m looking more at getting in. I’m hoping that the readers are also looking to get into it and definitely are going to reach out to you. I’ll probably reach out to you with questions that I have as I’m doing it.
I’d be more than happy to.
I appreciate your time, Jessey. Tell us where our readers can reach out to you if they have questions for you or interested in buying a website from you.
First of all, I always tell people to check out the podcast. It gives you a good understanding of what’s involved in running this business virtually. It’s REI Conversion. I don’t push anything on there. There are tons of actionable value in there. Check it out. The next one is our Facebook with the REI Conversion Community for House Investors or Land Investors. We have both, but the Land Investor is way more active as we’re just starting to grow in the house area. You can always check us out at REIConversion.com. We’ve got our blog there. You’ll be able to check out the websites there. You can always book a free tour with me. It’s literally me that tours everybody. The rest of the team focuses on building out the backend stuff. We’ve got a lot of cool stuff coming up and we’re really excited, especially for the land side of things. If you’re interested in land, please come check us out.
Jesse, thanks again for your time here. I’m definitely looking to have you down the road. We’ll have you as a guest again. We’ll talk again and see how everything’s going for you.
If you want to talk about a little more strategic stuff, I’d love to come back and chat with you.
Thanks again for your time. I appreciate you being a guest here.
- Jessey Kwong
- Jennifer Beadles
- REI Conversion
- Podcast – REI Conversion
- Blog – Retipster
- Jack Bosch
- Facebook Marketplace
- Episode number seven – Luke Harris on REI Conversion podcast
- REI Conversion Community for Land Investors – Facebook
About Jessey Kwong
Jessey started out his investing career in land flipping before moving to the digital marketing side of the business and he now helps real estate investors in both the land flipping side and the house flipping side.
“My desire in starting REI Conversion was to empower other real estate investors with the digital tools to help get investors started and grow their business.”