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Big Money on Little Deals: Buy for $500, Sell for $19,900?

SHOW SUMMARY:

In this episode, Larry shared about big money on little deals that he has been doing more of recently. In fact, he has 4 deals going on right now. It's about buying lots and Larry explained more about this.

SHOW HIGHLIGHTS:

  • Share sponsor winner
  • 3-day event
  • Deal of the week
  • Buying lots
  • No way to increase value
  • Closing cost
  • Running ads in the local newspaper
  • Advantages:
  • - Low taxes
  • - Dodd Frank does not apply
  • - When selling unimproved land, you are not considered a dealer

RESOURCES AND LINKS FROM THIS SHOW:

SHOW TRANSCRIPT:

Hello, hello, hello. Welcome to today’s BRAG’s show. Thank you guys so much for being on. Kandas is not with us today. Kandas had an appointment with her daughter that she had to be on so unfortunately she was not able to be here. Thank you guys for being on. We got a lot of stuff to cover today. Here we go. So guys please be sure to share this video. Share it with your feed right now. You can click on the link right now and share this video. Yabadabadoo! Dawghearts in the house. What’s going on. How have you been? That’s great. So please share this. I’m going to give away a Real Estate Day Trading Jumpstart. It’s right here. These in the house. Be sure and follow these. She builds some awesome homes. She’s a great designer. A great builder. I used to get to work with her. She is awesome. This is what we’re giving away. Please share this video with your list or followers or whatever, friends. Share it on your page. Hi Mia! How are you doing? Maria from Foxborough, Mass. Alright. That’s awesome. Kevin’s in the house. Mike’s in the house. We got almost 30 people on here already. That’s awesome. Steve in the house. Cool. Cool.

So, last week’s share sponsor winner is Surreal Estate Deals. Surreal Estate Deals, here’s what you need to know. You need to email customerservice@larrygoins.com with all your contact info. Kenny Culver in the house. What’s going on? Kenny Culver in the house. What’s happening? So, email customerservice@larrygoins.com and Kandas will mail you a copy of the Real Estate Day Trading Jumpstart. Surreal Estate Deals, that is your facebook name, right?

Raffy’s in the house. Nazia is in the house. Mia also. We got a lot of people on here today. Wow, we got like 20 to 28 people on so far. That’s cool. Alright, so, we have a 3-day event. The 3-day event is LarryGoinsLive.com. That’s Larry Goins Live dot com. I mean, Payton’s here, right? How are you doing? Go to LarryGoinsLive.com. You’ll see all kind of information about our three day.

We used to travel all over the country, now people come to me. I only do four events a year, and all four of them are in the Charlotte area. All four of them are in the Charlotte area. Look, Edith is in the house. Chris Farmer is in the house. Oh, we got a lot of people on here. That’s awesome.

Go to LarryGoinsLive.com to check it out and find out a lot more information about it. Guys, it’s a 3-day event. We charge a $97 seat reservation fee. $97 seat reservation. You get that back when you attend, right? I teach all three days. You’ll meet Kandas. She’ll be there. My team and I will be there. We’ll be doing deals and teaching you for three full days. Now, if you want to know more about… Tammy survived. That’s awesome. I love it. So if you want to learn more about partnering with us in our local market, go to LarryGoins.com/apply. That’s Larry Goins dot com forward slash apply. You can apply to work with us on a one-on-one basis where you are doing deals in your own local market. Okay? Your own local market. Alright? So yes, there you have it.

So next, let’s talk about the deal of the week. The deal of the week. I’ve already bought one house today. Today, I got another house under contract this morning. I don’t think that’s going to be my deal of the week, but I think the deal of the week is going to be Angel deal. Look. Kandas and Matthew liked our video. So even though Kandas is at an appointment with her daughter, she is on here liking the video, right? That’s funny. Anyway, the deal of the week is the deal that Angel got. It’s a little house over in Rock Hill. It’s a little brick ranch house. We picked it up for 26,000 dollars. Okay? 26,000 dollars. It was occupied. It was occupied and we did a one-time showing. We brought a bunch of people through it and we already have it sold for 42,000 dollars. Literally, in less than two weeks from getting it under contract, it’s already sold and we have a closing coming up. It’s either later this week or the first of next week. One of the two. I can’t remember if it’s this week or next week. So, I think I wanted to use that one as the deal of the week. We’ve got a few more deals this week but that was the one I want to use. That was one of Angel’s deals, one of his first deals that he did actually on his own.

Next, big money on little deals. Big money on little deals. I wanted to share this with you guys because this is something that I’ve been doing more of recently. In fact I have four of these deals going on right now. Really five, but four of them. I’ll talk about four of them. One of them is two side by side. So what these are is buying lots. Okay? We’ve been getting a lot of inquiries lately from people who wanted to buy or who have lots for sale. I got to tell you when you’re buying lots, you can’t really pay a whole lot for them because number one, there’s no way you can really increase the value, right? I mean, what are you going to do to increase the value, right? Unless it’s add water, add sewer, something like that, right? Quite frankly, most of these lots, they’re in an older neighborhood and the neighborhood, a lot of them are rental-type houses, low-priced houses, and who wants to come in and build a brand new house on an old lot that is either never was built on or used to have like a little two bedroom, one bath house built in the 30s to 40s. Nobody wants to do that. In fact, that’s what we tell them on the phone. Look, I can give you a whole lot for it because there’s really just not a market for it. Most of the time, these lots are going for 200, 300, 400, 500 dollars. If you want to sell it, if you’re just tired of paying taxes, the last time you thought about this lot was the last time you got the tax bill, then I can probably give you 500 bucks for it and we’d be done. I might have to sit on it for two or three years or whatever. So, it’s not hard to buy these. I have five going on right now. I have two that are side by side, and I’m paying 1,000 dollars. So I’m paying, buying two lots side by side for 1,000 dollars and then I’ve got three other ones that I’m buying for either 500 or 600 dollars a piece. I can’t remember exactly which but I think I have a couple for 600 and a couple for 500 or something. Anyway, pick up these lots for 500 bucks. Now guys, the closing cost is going to cost you more than you’re paying for the lot, right? I mean, if I buy a lot for 500 bucks, I’m going to have probably a total of about maybe 12 or 1500 or something like that in it. Okay? So the closing cost will cost you more than you’re actually paying for the lot. Alright?

So here’s what we do. We’ve tried to sell them for cash. They’re very difficult to sell for cash, right? It takes a long time to take a $500 lot and sell it for $10,000 or $15,000, right? It takes a long time to do that. So here’s what we do. We run ads in the local newspaper. I don’t care where you are. We run an add in the local newspaper. Like I’ve got some in Hickory, some in Newton and I’ve got one in Albemarle. I believe right now. North Carolina. So what we do is we run an ad that says, building lot for sale with owner financing. Building lot for sale with owner financing and with a reasonable down payment, and then I talk about the lot. It might be a quarter of an acre or a third of a acre, or half an acre, but I talk about the lot and I say, you know, it’s a building lot. It was water, sewer or well and septic, or needs well and septic or whatever. It’s in an older established neighborhood but owner will finance 99, that’s 20,000, 19,000, 900 dollars with a reasonable down payment. You try to get at least this much down as you have in lot. Right? At least, you 1500 dollars. Right? Get at least 1500 dollars down and then what we’ll do is we set the payments up to where they’re about 60 months, and their payment is around 300 dollars a month. Think about this guys. I mean, give it your feedback. Let me know what you think. Give me some questions here. So you buy this lot, you got 1500 dollars in it with closing cost and then you turn it around and you get 1500 dollars down, then you got 300 dollars a month coming in.

Now, there’s a few advantages to this over doing this with houses. Number one is you don’t have to worry about, are they keeping the property up or if they’re fixing it up, are the taxes being paid, because the taxes on these little lots will be about to be $50 a year. It might be $80 a year. It’s not like they’re paying $300 or $400 a year in taxes. The taxes are very, very, very, very low. Okay?

Second thing is, this does not… Jamdare in the house. What’s going on, buddy? Second thing is, Dodd-Frank does not apply to this because they’re not living in the house. There is no house for them to live in. So Dodd-Frank doesn’t even apply at all. So that’s the second advantage right there, right? There is no house for them to have to fix up or whatever and also it doesn’t apply to Dodd-Frank. Dodd-Frank is a relevant, as far as having to comply with it. The third thing is if there’s a vacant lot and you do not improve that lot and you sell it with seller financing, it’s my understanding that you won’t check with your CPA. I can get you the RC for this, but it’s my understanding that you will not be considered a dealer. In other words, you can take what’s called the installment sale and pay your taxes as you get it. Each year, you’ll report the income that you receive for that year in the 300 dollars plus whatever down the first year and then 3600 dollars for next year, and the next year, and the next year, until you’re paid and that’s how much you’re going to report on your income tax for that year. In other words, when you’re selling unimproved land that you do anything to it, then you can take the installment sale regardless of how many of them you do, you will not be considered a dealer. So, how do you like this strategy? Do you like that strategy? Is that pretty cool or what? You buy a lot for 500 bucks and you turn around and sell it for 99. That’s 20,000 dollars and you get a 1,000 dollar. Sometimes you’re getting 2,000 or 3,000, right? Like I said, I’ve got five of these going right now. How many 300 dollar a month cheques do you need to be able to replace your current job? Right? How many of those do you need to be able to replace your job? You know, it doesn’t take a whole lot. It doesn’t take a whole lot of money at all, right?

So guys I hope you enjoyed that big money on little deals. Big money on little deals. So, do you guys get a lot out of that? So, please share this video. If you don’t mind, share it on your page and you’ll have a chance to win a Real Estate Day Trading Jumpstart. I’ll pick a share sponsor every single week so please share this. Hope you guys got a lot out of this video. Thank you so much for watching and we really, really, really appreciate you guys following us. I appreciate you watching. Thanks a lot. Let’s do more of them. LOL. That is Kandas right there. That’s awesome. Joel, sorry it’s freezing. I don’t know what it is. Hopefully it’s not on my end. Nobody else is saying anything about that. But thank you guys so much for watching. We really, really appreciate it and we’ll see you next week.

Now, Kandas and I are going out of town. Kandas and her husband and myself and about 25 or 26 other people are going to be in Las Vegas next week, so if we can, we’ll do the Facebook live at 2 o’clock on wednesday. If we can. I’m not really sure exactly what we’ll be doing or where we’ll be at 2 PM eastern, next wednesday. We’re actually going to do some tactical training which should be a lot of fun, right? So Steve says the tax info is pretty cool. Yes, lots are exempt from dealer status when doing these installment sale. So, thank you guys so much for watching. I really appreciate it. Hope you guys have an awesome, awesome week.