Episode 509

Land Flipping: Unforgettable Lessons from Ray Zhang's Journey to Success

Ray Zhang is a skilled entrepreneur who discovered his passion for flipping various items. Starting with free stuff and cars, he soon ventured into the realm of real estate. For the past four years, Ray has immersed himself in the world of land flipping. In his first year, he primarily focused on buying and selling inexpensive plots of land, making a modest profit. However, his expertise has evolved, and he now specializes in flipping infill lots located near bustling urban areas. Ray's ability to identify lucrative opportunities in the real estate market has established him as a successful land flipper. He continues to thrive in his current role, constantly seeking out new opportunities to maximize his profits.

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Key Topics and Bullets

Ray Zhang's Journey into Land Flipping

  • Ray Zhang's experience with flipping various items before stumbling into land flipping
  • His initial focus on flipping cheap land in the first year
  • Transitioning to flipping infill lots near cities

Strategy and Market Focus

  • Targeting land near growing cities
  • Avoiding markets that are losing people, such as New York and New Jersey
  • Open to focusing on any growing market

Progress and Projections

  • Been involved in land investing for around 4 years
  • In 2022, completed approximately 100 deals with a net profit of 900,000
  • 2023 projections include buying around 330 land pieces and selling them after posting for sale

Challenges and Apprehensions

  • Mentor advised selling some land due to holding a significant number of properties
  • Despite potential appreciation, mentor emphasized the importance of selling for instant cash
  • Noting a slowdown in the market, with longer turnaround times for offers and sales

Previous Real Estate Ventures

  • Attempted wholesaling, virtual wholesaling, and apartment investing before finding success with land flipping
  • Acknowledges the difficulty of wholesaling, especially when done virtually
  • Perceived lack of funds as a barrier to apartment investing

Mentorship and Mindset Shift

  • Recognizing the value of seeking out mentors who have achieved success in the desired field
  • Investing in mentorship as an essential aspect of success
  • Emphasizing the importance of changing from a poor mindset to a rich mindset for success

Overcoming Homelessness

  • Sharing the experience of being homeless and living in a car for several months
  • Flipping free items as a means to generate income and initially invest in land flipping
  • Realization of mentorship's power through a car flipping mentor's guidance

Note: This summary covers the main topics discussed in the text, providing an overview of Ray Zhang's journey, strategy, progress, challenges, previous ventures, mentorship, and overcoming homelessness.

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"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - Jack

Transcript
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We have Ray Zhang with me here today.

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Ray, I really appreciate you joining me.

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We're going to be talking about some land flipping today, which I know is

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few and far between when we do that.

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But this is always such an interesting topic.

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So thank you so much for joining me here today.

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Thank you so much, Jack, for letting me come here.

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Hopefully I can help someone.

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We were not going to spend a ton of time on your background and

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how you got into this, but this is such an interesting niche.

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I think we are going to spend just a little time.

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So could you give us the truncated version of how you found your

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way into this niche of land?

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So

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I was always into flipping stuff, right?

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So I flip free stuff, I flip cars.

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And then I was like, is there anything else I can flip?

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And then I stumbled into land.

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That's what I do right now for about four years.

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My first year flipping land, I just flipped cheap land.

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I didn't have enough money.

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I buy land for 1, 000 and sell it for 2, 500.

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I did a couple hundred there in the first year.

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Right now, I just flip more like infill lots.

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So there's lots that are rural land.

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There's land that are infill lots.

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That near the cities that's what I do right now.

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So there, it's land near the cities that are likely going to be people

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expanding into as the city grows.

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Is that the goal

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there?

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Absolutely.

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So the about 30 to 90 minutes from the major growing city.

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Are there certain markets that you're focusing on?

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No, whatever markets that are growing, I'm interested.

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I'm not interested in New York or New Jersey or California.

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Those people are losing people, right?

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Those states are losing people.

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I'm not really into those markets.

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But other than that, I'm pretty interested in.

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How long have you been doing this now?

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Did you say two, three years?

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About four years as far as land investing.

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Yeah.

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And how have you found it to grow?

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Like where are you at right now?

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Are your projections for 2023?

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So last year we did about a hundred deals on that.

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And the net profit is About 900, 000 this year, quite a slowdown, quite a bit.

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And I bought about almost three 30 land this year so far, but I

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haven't post them for sale yet.

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I just post my very first one this year.

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But the deal we bought is very cheap already.

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So I'm assuming when we sell it for cheaper and that we

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can get it sold as well.

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Do you just find it, it's the current market conditions, everything's

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slowing down or what's causing your apprehension to start?

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My mentor told me to sell it.

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Otherwise I wouldn't really want to sell it because those land are very good land.

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For example, I bought some land near Las Vegas near the golf course.

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There are like nice store to the golf course.

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I bought it for 10, 000.

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If I can get about 40, 000.

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But the realtor told me you can hold it for more like potential.

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But my mentor said, you keep so many land right now, you got to sell some.

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So I started to sell some right now and land business is like that.

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So you don't sell your money by appreciation and when you sell,

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you also earn by the instant cash.

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Over the past year how frequently or how, what was your turnaround

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time from acquisition to sale?

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Last year was pretty quick.

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When we posted for sale in the morning, sometime we got offers in the

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afternoon, so it's that quick, right?

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This year, all my friend has been seeing a slow down about a couple of weeks,

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sometime, even a couple of months.

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Just just so we don't forget to call this out.

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If you want to follow Ray you can find him on virtual, on Instagram and

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Tik TOK, look for virtual flip land.

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And I'll make sure to try to have those links direct clickable in

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the show notes for everybody.

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Thank you, Jack.

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up until now, were you doing any other real estate investing?

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I tried about six years, actually, before I do line investing.

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It was pretty hard for me because I live in Hawaii, used to live in Hawaii.

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I try to do wholesaling there.

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It didn't work out very well.

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I tried a virtual wholesaling houses.

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I thought it would be much easier, right?

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But it turned out to be much harder than the local ones.

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And that didn't work out very well.

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And I tried apartment investing.

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But I feel like I don't have the money to do that.

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So I fell halfway too.

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So about six years, I've been trying a lot of different things and spent so much

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money on the tuition and the mentorship.

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But nothing really came out where I get until I find land.

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And then mentorship a couple of times.

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Is that something you sought out?

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Right off the bat, or did you try to do this on your own?

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Yeah, so I have launched a lot of business myself.

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None of them failed.

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So it's not me that super smart.

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As always, first step, I would try to find someone who has results.

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If I want to do houses, I would find Jack, right?

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So you find a mentor who already done deals in a massive scale

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and you hire him as a mentor.

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So you save a lot of time and money.

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And there will be a, most likely you'll be success.

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That's one of the taglines to the show.

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You can either put in the 10, 000 hours and become an expert or find

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somebody who's already made that investment and learn from them.

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It's, it is a pretty important part of this strategy.

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Absolutely.

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Much easier.

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Did you find, was there any kind of mindset shift that had

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to occur to see that aspect?

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Finding a mentor as much of an investment as you do the land?

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Yeah when I was poor one time, I was homeless one time.

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To be, to change it from the poor mindset to the rich mindset is really the hardest.

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The method you're making, it's not land investing or it's not houses

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investing it, the house investing or land investing is a vehicle,

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but the mindset is the core of it.

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So how do you change from the poor mindset to the rich mindset?

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It's very important.

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So you got to think as, education.

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For example, one of the rich mindset is rich people seek out for mentorship.

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They're not afraid of spending money, hiring people who they

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admire or want to be, and then just pay them, and they read books.

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You go to any rich people's house and tell me they don't have a bookshelf.

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Maybe they got a, they got the house from from lottery, not from what they did.

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So all rich people read books, all rich people try to learn something

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new and they all pay mentorship.

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So you mentioned that you at one point were homeless.

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Did you somehow find your way into this business and did that help you?

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Through that time, or is it, how did you find your way out of that

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situation?

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I was living in the car for three months and then I, got to flip

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something because I don't have income.

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My car even broke down.

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My alternator fired up.

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So I was like, I got to do something.

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So I pick up the free stuff online.

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You go to Craigslist, there's a free section.

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So I start to flip free stuff.

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And then I got some initial investment, some money and a couple of thousand

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dollars, and then I start to flip cars.

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So after I flip some cars, I see all the real estate people.

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I have a.

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Mentor for my car flipping, by the way.

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So he has done that and he's taught me everything about it.

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And that's when I realized all the power of mentorship.

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I paid a lot of money to do the houses, apartments.

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It didn't work out very well.

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And then I pay another guy about 80, 75, 000 to do the land flipping.

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And what he taught me, it wasn't really useful, but I changed the method.

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Everything started to work pretty well after that.

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Let's talk about that.

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You said you changed a few things.

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It looks like you're focusing on the land around a developed area.

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How are you assessing the values today regarding that?

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Yeah, so first of all, we need to make sure that land is good to buy.

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So if a land is a landlocked or wetland, that's typically

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not our favorite thing to buy.

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And if there's nothing wrong with that, I would just look

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at what's sold in your buy.

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If everything was sold for 10, 000 and for the similar size, I would probably

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offer less than 5, 000 for that lot.

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Besides that, I have to see the for sale price.

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If everything is for sale for 5 grand and right away, you're not gonna.

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Post it for more for sale and to get it sold.

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So our strategy is post for less.

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You've got to post it for 4, 000, but how much are you going to offer, right?

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About at least half of that.

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Do you send blind offers as your initial volley or do you, is

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there some other type of mailing or how do you find these sellers?

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Yeah, I try to, yeah.

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Good question.

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So I try to.

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Make the process really simple easy.

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So I don't have to work a lot.

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So I send blind offers.

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So a lot of blind offer is a offer with a price on it.

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When people call me back, they already know how much I'm offering.

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So there are somewhat motivated.

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Of course, there are some people.

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Call me and just getting so angry.

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So sometime I don't deal with them, but if I have a lot of stress, I

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release the stress on them too.

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But when I'm happy, I let them go and I'm talking to the motivate

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seller and then I negotiate again on top of that offer price.

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So I got a kind of a double kill.

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You got a good, very good deal after that.

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So how many mailings do you send out on a regular basis?

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Is that on some sort of.

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Regular cadence at this point.

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Yeah, I try to send out about 25, 000 a month.

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I started with a couple thousand, and then I wanted to do bigger,

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so I did about 10, 000 to 15, 000.

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And recently I talked to a friend of mine, he is sending out 150, 000 a month.

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So I was like, I got to do a little bit bigger.

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Right now about 25, 000.

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So you're going to find you're going to have to keep up with your buddy.

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But he's doing houses.

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So the response rate on houses is much slower than land.

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He's, Oh, is

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it?

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That's new information.

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It, you get a better response rate.

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Much

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better.

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About at least 40 times better.

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Yeah, at least for him, he got respond rate, he told me is 0.

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025.

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He is in a very hot market.

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So you got to send out 4, 000 letters to get one response.

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But for me, it's about one to 5%.

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So that's really high already.

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Yeah, that's actually closer to what we experience in my market.

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But but that's interesting.

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So for the most part though, you, when you get somebody who raises their hand.

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How do you take these phone calls yourself or do you have

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some assistants to help you out?

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I have an assistant doing the list and get the offer ready.

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But I mainly take the calls right now.

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I'm trying to hire someone but I really enjoy the process to negotiate.

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That's a phenomenal one.

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You can bring down the price so low, you feel very good.

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So for example, we bought a land for a couple of thousand for 1000 bucks

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and the offer price was 14, 000 and the land worth about 27, 28, 000.

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So that's a great way to do to do land flipping because you can

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do whatever you want when you can buy a land for a thousand bucks.

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Yeah.

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So just to remind everybody, look for Ray at virtual flip land on TOK and see some

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of the content and some of the direction he's, it sounds like you're being very

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transparent and open on those social net social networks regarding what's going on.

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Yeah.

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I try to share something.

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And honestly.

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The information is very transparent on the internet.

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The way we do business right now is very different than maybe

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20 years ago, 20 years ago.

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You don't wanna share you all your secret because we are pretty local.

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Very local as far as business.

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If you share it with other people, everyone wants to start to do that, right?

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But right now, go to YouTube.

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You can find anybody to share everything.

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So while you keep, if you keep your secret, you're not going

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to survive so far so long.

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So can you share like your biggest win so far when it comes

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to one of these properties?

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Share a story.

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I think the biggest win is actually I can do this with Any like where,

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wherever I am, I can do this business.

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I think that's the biggest win as far as the deals.

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I bought a deal for about 68, 000 and then we sold it for 160, 000.

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And I did about 30 minutes work on that.

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Just negotiate.

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That's about all the work I've done.

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It sounds impossible, but it's definitely doable with land because people don't

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have emotion attached to their land.

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They don't know how much their land is worth, but with houses,

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that's completely different.

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They always have emotion attached to their land, house.

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And they always know how much their house is worth.

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So when somebody calls and upset, and you said that they typically

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don't have a ton of emotion involved.

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There seems to be some emotion driving those angry calls.

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Yeah, those are not emotion attached to the land.

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They're emotion attached to me because I offer too low.

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Maybe there, you know that you see all the people, angry people

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always get angry no matter what.

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You sometimes you just have to let them go or angry back.

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Did you ever turn any of them around?

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They called and they were all upset.

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And the next thing they've sold you their land.

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Yeah.

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It's hard to teach a pig to fly, right?

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So it cannot really change them.

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All we can do is accept them.

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Or let them go.

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Yeah.

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So have you done some A B comparisons regarding some of

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the mailings that you send out?

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Do you find some strategies working better than others?

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I think the strategy is, it really depends on who you are

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and what's the size of your team.

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You have, if you have 10 acquisition managers, I would suggest you to

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do neutral letters, meaning there's no offer price on the letter.

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You just send it out and whoever call you back and ask you how

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much you want for this land.

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You ask them each one of them, see if you can get deals.

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Of course you can get more deals that way.

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But for me, I don't want a big team and I don't want to spend a lot of time.

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So what how should I do this?

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The only way is I sign out blind offers and they either have a

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choice to accept that, and then.

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Or they reject it and call me.

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So there are only two ways to do that.

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But for me, I think this is, works best for me.

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Yeah.

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You've mentioned your time a couple times.

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It sounds like you, you tried to make the most of your time as much as possible.

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In fact, I think I read.

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Based on some information that you work, what, three, four hours a

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day or is that more valuable than growing the business at this point?

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Yeah,

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about two or three hours a day doing line flipping.

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And of course, I have the education right now.

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I have about 100 students.

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Students I had to teach them how to do this land flipping.

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So they took a lot of time out of my life, but I don't mind that.

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I love it.

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It's a good feeling where you can actually share something.

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But as far as the land flipping, I don't spend a lot of time,

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maybe two or three hours a day.

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So I just return calls.

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That's all I do.

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You said you got a hundred students right here at this point.

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Yeah, about a hundred students.

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So it's interesting that you do, are you doing most of this through your

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contacts through TikTok and Instagram?

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Yeah,

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about, just a daily sharing and people love it.

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And they want to know more.

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That's when come to the mentorship and the one on one coaching.

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I try to keep the process simple.

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It's not that hard to flip land anyways.

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So if somebody was looking to get into land flipping for the first time, where

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do you think they should start outside of following you at virtual flip land?

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Yeah, they should hire me as a coach, but just kidding.

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But if you don't want to hire any coach, here's the first thing you need to do.

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You need to choose a market.

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First of all, don't choose the girl in.

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Major crazy markets like Austin or Dallas.

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You can get a deal of course, but you need to mail a ton and

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you have to offer a lot more.

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But if you do just the area surrounding those very good hot market, you will

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make a bank out of those market.

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You'll make a lot of money.

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So choose a major growing city.

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That's the first step.

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And the second step is try to look for areas nearby that has a

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lot of activities as far as sold.

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You see a lot of people want to buy it there and very convenient

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to go to work in the main area.

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That's probably the first step.

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Okay.

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With all that being said, I'd be curious as to understand a little bit more

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regarding the blind offers you send out.

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You have somebody that does that for you today, where, how do they pull

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their list and how do they assess the value that they should be sending out?

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Yeah.

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I pulled all the lists from this source.

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I think it's the most accurate data and we can get about 80 percent off.

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If anyone interested, just message me on Instagram.

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But we're paying about 3.

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5 cents each name.

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And then when I got the list, my VA step in and start to make offers.

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Based on a formula.

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So the formula goes like if everything sold in this subdivision,

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we go to straight to subdivision level, not zip code, not city.

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So in this subdivision, we want to see how much price sold per acre.

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So remember the keyword is sold, not for sale.

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So it has to be sold.

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And let's say per acre size.

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And the average sole per acre is 10, 000 and I would offer the entire subdivision

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for about 40 to 55 percent of that price.

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And the magic here is in the last three months, if it doesn't

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have any sold in that particular subdivision, we don't even mail there.

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So we gotta be, have a proven concept right here.

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So if there is no activity in the last three months in that subdivision,

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we don't even mail it there.

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So we want to make sure that our money is safe at the first place.

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And then we can talk about profit.

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It sounds like building out that list is quite a manual process,

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or am I misunderstanding?

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Very manual, but for a 10, 000, for example, 10, 000 mailing list, you

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won't spend more than two hours on that.

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Yeah.

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Very simple.

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Yeah.

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And where do you have your assistants today?

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He's out of nowhere.

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I don't know where he is, but he's not in the States.

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I pay him 2 an hour and some people don't believe that and they tell me lying.

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So I keep thinking that, but I do pay him 2 an hour and he's very happy.

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That's interesting.

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Did you find him through some sort of service or did you find him directly?

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Yeah, I find him through Upwork.

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It's UP.

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W O R K dot com or freelancer dot com.

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Okay.

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Yeah.

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So did you have to do a lot of training on that end or how did you find the right

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person to make sure it was a good fit?

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So as the, first of all, I will send them, for, I'll start with the job description.

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So when you post a a job.

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And I have three requirements.

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Speak good English, preferably better than Ray.

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I have an accent.

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And the secondly is you got to follow the details, be very detail

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orientated do whatever I say.

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So the third one is can accomplish the work right promptly, do it faster.

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And then.

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Another line I add on the job description, I think is the key is if you are

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interested in this job, put the word data or whatever words you choose, put

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the words data array when you apply.

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So a lot of people, they don't look at.

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Those content at all.

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And they just click apply to different jobs.

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So those kind of guys, you don't want to hire them because they just want money.

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They don't care about what you do.

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But if you put that and you look at, Oh, whoever put that worse

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in the first application, and then you sort them by rating.

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And find the highest rating and see what how much they apply for

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and just choose the cheapest one.

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So that's how I find them.

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That's a really neat strategy.

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Put a little detail in the job description.

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Yeah.

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To give them a small task and see who follows through on it.

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Absolutely.

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And the, those are people are pretty detailed around it.

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And they actually follow orders.

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So how long has this person been with you?

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About two years and he's very good.

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Yeah.

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Yeah.

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And you said it doesn't sound like a lot at 2 an hour, but wherever

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he's located to stick around for two years, it must be just fine.

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Absolutely.

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Yeah.

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So I have friends right now.

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I've come from China, right?

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My friend right now, they earn as low as 300 per month.

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In China, how do you live 300 a month in America, but they can't.

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So you never know.

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Yeah.

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Just to remind everybody, look for Ray at virtual flip land in Instagram Like

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I said, I'm going to make sure to have those direct links in the show notes.

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So check there.

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But Ray, I was hoping we can wrap some things up here with some rapid fire

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questions if you're ready for them.

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All right, let's fire.

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So first of all, Is there a real estate investing myth

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that you'd like to bust today?

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Investing myth is you got to have money to make money.

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I totally don't believe that.

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And you got to have courage to find a deal and then you can have money.

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And for example, if you don't believe that, try to find, let's

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say a piece of land, right?

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The land worth a hundred thousand and you happen to put it under contract for 40

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grand, you think nobody will go fund it?

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Think again, right?

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There will be people going in and please you, beg you for that deal.

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And you got a cut, maybe a finder's fee or whatever you

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try to sell it to the investors,

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Is it fair for me to add a little caveat to that?

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Oh yeah, of course.

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So the, I've heard people say this type of thing before.

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The thing where we seem to lose people is that the fact that you find

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the deal and the money will come.

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However, I also think that it's important to build your network

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and find those potential buyers as, as fervently as you are the land.

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Because Unfortunately I've found people who get a property under contract

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and then now what they haven't taken any moment to build a network or

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to know what to do with it at that

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point.

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Yeah.

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My mentor, Tom Crow and he has a program, used to have a program called

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wholesaling Inc wholesaling houses.

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The, one of the first step is find cash buyers.

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So the more cash buyers you have.

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The bigger, the better and the more money you can earn.

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What book would you recommend everybody checking out or what

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are you reading right now?

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With the caveat, you cannot say rich dad, poor dad, or think you grow rich.

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I was going to say that, but no yeah, so the, I think the old time.

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Favorite for me is a very short book called the science of getting rich.

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That's a book behind the movie, the secret, if you have watched it,

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but that book helped me so much

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cleaner and listen to that book every day.

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And then that changed my mindset so badly.

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So goodly so that I changed my mindset from the poor mindset to the rich mindset.

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That book I recommend to everybody.

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So it's the science of getting rich.

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Correct.

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Okay.

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That's actually surprisingly that's a new one.

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I haven't had anybody recommend that one yet.

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Yep.

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That's what I come for.

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What is your biggest business mistake you've made and

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what did you learn from it?

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I think my mentor, Tom Crowe, like to say whenever you do new things,

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there'll be three D's come to your way.

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For sure.

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The first D is a disappointment.

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You'll feel disappointed somehow.

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The second way is doubt, you start to doubt yourself, if you can do this.

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And the third one is really work hard on me.

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It's called distraction.

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So when I was trying to do something, that's the nature of entrepreneur.

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They always find things they want to improve.

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They want to do.

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And this new thing is always better.

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It can do it faster and earn more money, right?

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That's a formula, magic formula of distraction, more

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money and a shorter time.

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But I feel like myself distracted all the time.

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I want to do this.

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I want to do that.

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Let's do houses and inside houses, rental.

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There is a buy and sell.

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There is a wholesaling in apartments.

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Maybe I do that thing a little bit.

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Let's see how it works, right?

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Let's do a house and land at the same time.

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Let's see what works better.

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So this way, if you're doing that right now.

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You're not going to do anything.

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So focus on one thing and then just go deep into it.

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And guys, what, no matter what you do in the real estate niches, choose

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one, and there's people getting rich inside that niche for sure.

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So choose one, don't get distracted.

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And try to get, go as deep as possible.

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If you could go back in time and give your younger self one piece

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of advice, what would that be?

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Play less games.

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So I was a professional game player.

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I played Counter Strike, like the shooting game, when I was very young.

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When I was your age.

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Just kidding.

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But when I was like, you gotta be

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a lot younger than I or at least you look it

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Yeah, just kidding.

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Yeah, so I was like 18 to 22 that four years.

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I completely wasted I play games like crazy.

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I have I've seen people die playing games.

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So I went to the, in China we have this internet bar, you can go inside,

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there's tons of computers, right?

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I went there on Monday morning, my mom thought I was going to

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school, and I came out about Saturday morning or Friday night.

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So I didn't have shower, I didn't have much food, I just play all the time.

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So my friend, some of the people inside that bar died, they just exhausted, right?

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So unfortunately I was, I survived, and then...

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I wish I didn't spend that much playing games.

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Yeah.

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That's one of those things I've heard of online, people playing until they

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actually die but you actually, that's, I always thought that was just a story,

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not that you actually saw that happen,

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huh?

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Yeah.

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Yeah.

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So this guy, he plays so much and his blender blow up because he

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holds so much and he don't want to go to the bathroom for a minute.

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Wow.

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Okay.

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Interesting choices.

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Yep.

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Okay, I'm going to give you 60 seconds.

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This is the only one I'm going to time you on, but you're going to

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give everybody one piece of advice that they can implement today that

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they can implement in their business.

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What would it be?

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As far as the line business, that's what I specialize in.

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So the first step is market selection.

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The second step, get your mail out.

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By planning off a blind offers or neutral letters.

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And the third step is how do you value the land?

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I know exactly how much that land worth look at the salt comps see

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how much you're going to offer.

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And the next one is negotiate on top of that.

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Send your deals to the title company to close that.

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That's the whole process of line flipping.

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It's very easy and they don't overthink that.

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That's one of a lot of things, a lot of people, has an

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overthinking mindset, right?

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So progress is not perfection.

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Yeah.

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With as many students as you have, you probably run into

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a lot of analysis paralysis.

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What have you done or is there any strategy you've found to get them?

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Moving.

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I forced them.

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So I tell them, today you got to give me three markets.

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I don't care what you do.

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I already taught you how to do it.

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So today, give me that three markets today.

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Otherwise, we will not go to the next lesson.

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You paid the whole course.

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You waste all your money.

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They will find it.

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Yeah.

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Have you found anybody who wasn't willing to make that next step?

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Very

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rarely if they pay the whole course.

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That's why, that's why I suggest you hire a mentor, they can rush you, right?

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Ray just one last time, virtual Flipland on Instagram and TikTok.

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But is there a question or concept you wish we would have covered here today?

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No, I think we covered all and you guide us, you guide me very well.

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Jack, thank you very much again.

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Yeah, I appreciate it.

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I hope you come back again sometime.

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I will.

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Thank you very much, Jack.

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Real Estate Investing with the REI Mastermind Network

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Jack Hoss

We gather amazing stories from leaders in Real Estate Investing. In each episode, our guests will tell you what they are doing that works, what they tried that failed, and best of all you'll learn actionable steps to take your real estate investing to the next level.