How to Start Flipping Land
- Craig Kaiser
- Jan 2
- 9 min read
Updated: Jan 21
Learning how to start flipping land can open the door to a lucrative side hustle, or even a full-time business, without the headaches of traditional real estate. But before you jump in, it’s crucial to understand the key steps, legal considerations, and common questions that come with buying, improving, and selling land for a profit. In this guide, we’ll break down everything you need to know to get started with confidence and avoid costly mistakes along the way.
What is Land Flipping?
Land flipping is a real estate investment strategy where an investor buys a piece of land at a lower price and then sells it for a profit, usually within a relatively short period of time. This real estate investment strategy isn't as well-known as house flipping, but offers unique advantages. Unlike house flipping, land flipping typically doesn’t involve building or renovating structures- profit comes mainly from buying undervalued land, improving its marketability, or taking advantage of market trends.
Pros and Cons of Land Flipping
Land flipping can be attractive because it usually requires less upfront capital, lower maintenance, and fewer headaches than flipping houses, but it also comes with risks like longer sales cycles, market fluctuations, and legal considerations.
Benefits of Land Flipping
Land flipping can be a relatively low‑cost and straightforward way to invest in real estate. With no buildings to maintain and fewer headaches than traditional property, it offers faster closings, scalable opportunities, and the potential for strong returns in the right markets.
Lower upfront and holding costs: Land usually costs less than developed properties and doesn’t require ongoing maintenance or repairs. You can start with a relatively small investment and gradually scale up, diversifying your portfolio.
Simplicity: Without buildings or tenants to manage, land investments are generally easier to handle than urban real estate investments.
Faster closings: Land deals can often close quicker than other types of property acquisitions since there’s no renovation or construction involved.
Scalable opportunities: Lower-cost parcels make it easier to invest in multiple properties at once. Similarly, buying undervalued land in the right location can yield strong returns when sold, and the market for vacant land is often less saturated, offering more opportunities to find undervalued pieces.
Disadvantages of Land Flipping
On the flip side, land flipping carries risks like a smaller buyer pool, market fluctuations, and limited control over increasing a property’s value. Holding costs, zoning restrictions, and environmental or title issues can also make selling more challenging than anticipated.
Limited value control: Unlike houses, you can’t add significant improvements to increase a land parcel’s value when you flip land.
Smaller buyer pool and holding costs: Vacant land attracts fewer buyers, which can make selling take longer. Property taxes, insurance, and other carrying costs accumulate while you wait to sell.
Market and zoning risks: Land values can fluctuate, and zoning or regulatory changes may limit what can be done with the property.
Potential legal or environmental issues: Problems like unclear titles, soil contamination, or flood risks can complicate a sale.
How to Start Flipping Land
To start flipping land, you must start by conducting thorough market research to determine the location that you'd like to purchase land in. After picking an area, you can search for land for sale and find properties that check your boxes and fit within your budget. Then, conduct due diligence on land you're interested in purchasing to determine your land flipping strategy (whether you'd like to sell the property quickly or hold on to it for long-term appreciation).
1) Research the Market and Conduct Due Diligence
The first step in any successful land-flipping venture is thorough research and analysis. Start by identifying regions where land is undervalued but has the potential for appreciation. This might include areas on the outskirts of growing cities or places with upcoming infrastructure projects. Evaluate the market and look for trends in land prices, demographic changes, and economic indicators that could signal growth.
Once you've pinpointed a promising area, analyze the specific properties available. Consider factors like zoning laws, accessibility, and proximity to amenities. Due diligence will help you avoid costly mistakes and ensure that the piece of land you buy has good resale potential. Understanding a property’s risks can make or break the potential for it to be flipped. For example, if you are interested in a property that is located in a flood zone, potential buyers might be less interested.
Tools like MLS listings, county records, and online real estate platforms can provide valuable data. LandApp’s marketplace is one example of free resource that you can use to find land for sale across the U.S. LandApp's marketplace offers a wide range of filters to help narrow down the potential options for land for sale. Each land listing is enhanced with data and analytics, including proprietary Value and Risk Index Scores, allowing you to conduct due diligence at a glance.
A tool you can use to research properties is LandApp's property reports. With LandApp, you can view the different types of risks associated for any property across the country using its proprietary risk index scores that rate different man-made and natural risks on a scale of 0 to 100. LandApp's proprietary risk index scores include oil & gas contamination risk, electricity blackout risk, drought risk, wildfire risk, earthquake risk, flood risk, and more. Simply find a parcel on LandApp's map to create a free property report and see its potential risks, or upgrade to LandApp Pro to create unlimited property reports.
2) Secure Financing to Purchase Land
The second step to flip land is to secure financing, which is also one of the key challenges. Unlike homes, vacant land doesn't generate immediate income, making traditional bank loans harder to obtain. However, several other financing options can help you get started with flipping land, like private lenders, seller financing, and partnerships.
Private lenders: These individuals or companies specialize in real estate investments and are often more flexible than banks. They may charge higher interest rates, but the approval process is quicker.
Seller financing: In this arrangement, the seller agrees to accept payments over time rather than a lump sum. This can be beneficial if you have limited upfront capital but can manage monthly payments.
Partnerships: Pooling resources with other investors can provide the necessary capital and spread the risk. Just make sure to have a clear agreement outlining each party's responsibilities and profit shares.
If you are interested in generating land deals or are looking for a profit margin, think about renewable energy lease opportunities. Many renewable energy developers are constantly searching for sites to build solar farms or wind turbines and these leases, on the right property, can bring in a lot of revenue opportunities. Additionally, if you enter a renewable energy lease, you can sell those lease payments for a lump sum and use the money made from that to purchase another property that has a high value for solar or wind all while avoiding taxes through a potential 1031 exchange.
3) Negotiate and Acquire the Property
Acquiring land for land flipping purposes involves several steps, each requiring careful attention to detail. Start by negotiating with sellers. Effective negotiation can result in significant savings, allowing you to buy land below market value. Building relationships with local real estate agents can also be advantageous. They often have access to listings before they hit the market and can offer insights into the local land market. Once you've agreed on a price, ensure a smooth transaction by conducting a thorough title search. This will confirm that the seller has the legal right to sell the property and that there are no liens or disputes. Consider hiring a real estate attorney to review the contract and handle any legal complexities. This step might seem like an added expense, but it can save you from potential legal issues down the road.
4) Determine Your Strategy: Hold, Sell, or Develop
After acquiring the land, you'll need to decide whether to develop it, hold it for future appreciation, or sell the property quickly. Each approach (quick turn or long holding) has its pros and cons, depending on your financial goals and market conditions. Developing the land can significantly increase its value. This might involve subdividing it into smaller lots, adding utilities, or even constructing buildings. While the land development process requires additional time and investment, the potential returns can be substantial. On the other hand, holding the land can also be profitable. If you anticipate that the area's value will increase, simply holding the land and reselling it later can yield a good profit with minimal effort. This strategy is less risky and involves fewer upfront costs.
5) Market and Sell the Property
After you have found and purchased land to flip, it's time to market and sell the property for a profit. Effective marketing is crucial to selling your land quickly and at a good price. Start by creating compelling online listings. High-quality photos and detailed descriptions can attract potential buyers and set your property apart. Social media is another powerful tool. Platforms like Facebook and Instagram allow you to reach a broad audience at a low cost. Join real estate groups and forums to share your listings and connect with interested buyers. Similarly, local advertising shouldn't be overlooked. Consider placing ads in community newsletters, attending local real estate events, and even putting up signs in the area. Word of mouth can also be incredibly effective, so don't hesitate to tell friends and family about your land for sale.
The Importance of Due Diligence for Land Flipping and FAQ's
When it comes to flipping land, understanding the legal and regulatory landscape is crucial to avoid costly mistakes. Investors need to research zoning laws, land use restrictions, and environmental regulations that could affect the property’s value or limit how it can be developed. Additionally, verifying clear titles, easements, and access rights is essential to ensure the land can be legally sold. Failing to address these considerations upfront can lead to delays, legal disputes, or even loss of investment, making due diligence one of the most important steps in a successful land flip.
During our "Due Diligence for Land Investing Webinar," we hosted land investing expert Jonathan Haveles from The Land Method to discuss the proven frameworks for success when it comes to flipping properties. This session went beyond theory and got into how investors evaluate different property types, identify red flags early, and rely on data-driven research instead of guesswork. Catch the full-length recording below:
Is it Profitable to Flip Land?
Yes, it can be very profitable to flip land. Land flippers can achieve impressive returns, sometimes even earning over 100% ROI solely from the sale price. On top of that, they can generate an additional 15% annual interest. It’s also common for them to recover 80-100% of their initial investment through the down payment alone.
Do You Need a Real Estate License to Flip Land?
No, a real estate license is typically not necessary to flip land. Since you're buying and selling land for your own purposes and not acting on behalf of a third party, a license is not required. However, obtaining a real estate license can offer valuable advantages for land flippers. It provides access to the Multiple Listing Service (MLS) and could help save on agent commissions, making the process more efficient and cost-effective.
What Type of Land is Most Profitable?
Farmland is generally considered to be the most profitable type of land to invest in or flip. Land can qualify as farmland if it boasts fertile soil, access to a reliable water source, and ease of tilling. Buying farmland can yield significant profits quickly, often with minimal effort. It can be resold for a profit or leased to farmers.
How to Find Land to Flip and Run Due Diligence with LandApp
Land flipping offers a unique and lucrative opportunity for real estate investors, but the key to success is thorough research and due diligence. Take the time to understand the market, analyze potential properties, and plan your investments carefully. Finding the right land to flip and running proper due diligence doesn’t have to be overwhelming- LandApp makes it simple. With tools that let you research property boundaries, zoning, topography, and ownership history all in one place, you can quickly identify promising parcels and make informed investment decisions. By leveraging LandApp, you save time, reduce risk, and increase your chances of turning a profitable land flip, all while staying organized and confident throughout the process.
Property reports: With LandApp, you can create 3 free comprehensive property reports that assess land features, hidden value, and potential risks on desktop or on our free mobile application (Apple and Google Play stores). By upgrading to LandApp Pro for $6/ month, you can create and export unlimited property reports to research land nationwide.
Proprietary risk scores: LandApp has appended its proprietary risk index scores to over 150 million parcels nationwide. You can see the risk index scores for any property within a free property report, or you can upgrade to LandApp Pro to create unlimited reports.
Nationwide data layers: With a free LandApp account on our mobile app, you can access Nationwide map-based data layers for free, like flood zone maps, contaminated site maps, and more. Environmental risks can derail an investment, so it's important to understand the property and it's surrounding area before purchasing a property.
*Nothing in this blog is intended to be legal or financial guidance. Anyone seeking legal or financial guidance should consult a licensed attorney or accountant.*