Hello everyone! Hope you all have had a good weekend thus far. I am planning to go nomad next year, and wanted to get a general sense of how long it takes for a land business to become profitable. How long it take your business to become predictably and consistently profitable? Any advice and suggestions would be helpful. Thank you.
@theivyleagueceo i’m guessing everyone will have their own story and we’ll all use different criteria, but assuming I understand the spirit of your question, here’s my brief answer:
important to note, like a lot of us here, land flipping is a side gig for me. if it was full time, this timeline would look different, for what that’s worth
spent the first 6 months being committed to research, mailing, setting up structure, getting coached, networking, asking for help and operated at a loss.
the profit picture turned around in 6-12 months and by the time i was at 18 months, I realized i’d be making 6 figures a year in profit if i’d keep consistently doing the basics.
so based on the very limited data set of my own experience:
6-12 months of intense learning and set up----operate at a loss then transition to profitably
12-24 months finding your groove and refining your business model----stay profitable and establish a steady revenue stream
24-36 months: commit to scale and take profitably to six figures
if you’d like more specifics or want to ask questions: [email protected]
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@theivyleagueceo just building on @Sean-Callahan’s comments (he has some great points), if we’re just talking about profitability, most land flippers make a profit on their first deal or two (if you’re buying at the right price, it’s not hard to make a profit).
In terms of consistency, that has a lot to do with the consistency of your direct mail and keeping all of the wheels turning (not just sending mail, but also getting properties researched, closed, listed, and resold).
As a one-person business (where most of us start in the beginning), it can be surprisingly hard to keep EVERYTHING moving at the same time. A lot of people will take a shot at one campaign and then work the leads, which leads to a month or two with big influxes of cash, and then when it’s all finished, they start over with their next direct mail campaign. Things aren’t consistent, they’re cyclical.
If you get into seller financing, that can add some consistency to your cash flow, but that has its set of drawbacks too (it’s not a silver bullet per se).
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@sean-callahan @retipsterseth
Thank you both for your responses! Yes, it can be difficult to keep everything in the air at once. Nice to know it’s not abnormal to not see success yet. Thank you.
Seth offers some great guidance, as usual.
For anyone looking to get into land investing, I would highlight what this business is not. It isn’t a “get rich quick” gimmick, it isn’t passive income (at least not in the first year), and it certainly isn’t a 4-hour work week.
Just one man’s experience - I started in 2016. In my first full year, 2017, I closed a few, small, profitable deals, but lost money that year due to startup costs, expenses, etc.
In 2018, I figured it out and became cash flow positive. In 2019, I quit my job. The land business became my career, and full-time job. (I work a lot.)
This is a business. Like every business, you are always juggling cash flow, deal flow, sales, marketing, vendors, etc. But with hard work, commitment, time, and diligence, it can be profitable. ….but probably not in the first year.
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@jay-b Hi Jay. Thank you very much for your response! Your responses have also helped me keep things in perspective. I’m so glad that I have a career and that this isn’t yet my full-time gig.
Thank you all for your help!