How to Invest in Land for Total Beginners with Dan Haberkost
One of the youngest real-estate investors we had, and his name is Dan Haberkost. Dan talks about his journey in real estate at the young age of 16. In this episode, we dive deep into understanding his real estate portfolio, journey and challenges in the industry. He further expounds on how to invest in real estate without having big budget and shares useful advices to new investors, the do’s and don’t and must know.
Dan Haberkost (Land Investor)
Dan started managing rentals at the age of 16. It started with a job in high school, where he managed a farm. The owner of that farm would travel to Aruba for a good portion of the year and Dan would help to manage his rental properties. That was his first experience in real estate investing. In college, Dan developed a skill set that not many people had at this age. He then started reading about equities and different businesses he could get into and learn about the things he could invest in.
After reading Rich Dad Poor Dad he thought of real estate. Thereafter he bought a duplex while he was still in college. He was 21, his first house hack, he moved across the country from Ohio to Colorado and bought another house. By that time, he own 2 properties and had the intention of expanding his rental portfolio to generate a substantial income from his venture. This gives him a stepping stone to start his land investment venture.
Building A Passive Real Estate Portfolio
Dan aims to set up his active business to be more passive than it has been. His portfolio includes:
A new building closing in about two months, where he has invested 8 to 10 hours into, making close to six figures.
A recent house he bought in Colorado Springs. He moved upstairs, and the basement has a kitchenette. The purpose is to own the unit and rent that out.
5 other properties, 2 of which are rented by the room. Those houses function like 4 complexes, 5of which are in Colorado Springs.
A duplex in Ohio.
Overcoming Fear
Throughout the podcast, we have learnt that Dan has the personality type that will jump off the cliff and build a parachute on the way down. He keeps his financial situation and decisions in a cautious and conservative way. This is also when he advises to only do incremental progression. This would allow him to get into bigger deals easily over the years.
Transitioning To Land Development
After purchasing his second rental, he realized he wanted to buy more and make more money. There are low and no money down strategies, but owning property is a cash-intensive venture. If things go wrong, one need to have reserves. So he started some sort of active business when real estate market was uncertain. He then met a developer who had been building houses, buying and selling land, subdividing lots. Little did he know, that was when he get introduced to land development and investment.
About Buyer Sell Notice
After being introduced into subdivision of land, Dan got into business with a mentor who had 40 years of experience in the field work. He got overwhelmed by doing too many different things at the same time and decided to ground himself and focus. A friend of Dan was putting out a course about buying and selling land, he was one of the first students who bought the land shark course. Dan started implementing his systems and processes, scaled the buying and selling of land, which also feeds the business.
Dan gave an example of a lot he bought last year at $15,000 including closing cost. He managed to get such a discount due to the tax lien list, the owner was going to lose the lot to an investor because he had not paid his taxes in years. He said, here's a person that'll give me something for it to pay off the taxes instead of losing it for $0. So he gets a chunk of capital back and he was sold for the property. He then sells it for $38,000 and makes the down payment from the seller which was $15,000, with the $23,000 being financed as a remainder.
Selling on notes is the same thing that bank does. You act as the bank, they pays you every month, and over five years, they pay off that lot. So Dan has a note and a deed of trust against that property.
The property is now in their name, but if she tries and sells it, any title company that does the transaction is going to say, there is this lien, and they're going to contact Dan and get the information on it and make sure that Dan is paid out because he has a deed of trust against the property.
How Does Real Estate Market Look Like Now?
Dan focus on migrating with market and has realized high demand of real estate in Southern part of America. He intends to invest in those areas that are largely populated with baby boomers who have money to invest
Dan expects the market to slow down and a lot of lower-end buyers to get squeezed out. He states that anyone who owns businesses or has a decent amount of money or is above middle class, are still buying and waiting for any drop in prices to go buy more. He will continue to buy real estate but do so cautiously while having a control in his personal financial situation.
Final Advices
Learn about the venture you want to get into, but also find a way to get involved in that niche. A great way to get started but pick something and stick with it.
Know what you're trying to do. Understand, that two very different things constantly get conflated on podcasts and in books. There's investing in rental properties, which can be mostly passive, and they're starting an active business, are you trying to do both, one or the other?
Reach Out to Dan Today
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