Why This 27 Year Old Quit House Wholesaling to Make $2M Flipping Land | Caleb Milobsky

The MORE Show

In this episode of The MORE Show, host Justin Colby interviews Caleb Milobsky, a 27-year-old real estate investor who transitioned from hous

Key takeaways

• Land wholesaling has fewer variables than house wholesaling, reducing due diligence complexity.
• Using Zillow comps to determine fair market value allows for quick, scalable offer creation.

Main topics

• Land vs. House Wholesaling: Key Differences
• Using Zillow Comps for Land Valuation

Notable quotes

"I built a seven-figure land business comping land on Zillow. I don't downplay it. I'm very sure about it."

Conclusion

Caleb Milobsky demonstrates that land wholesaling is a scalable, low-complexity path to seven-figure

Transcript preview

Speaker 2 (0:00) I built a seven-figure land business comping land on Zillow. I don't downplay it. I'm very sure about it. I don't try to overcomplicate things because I like to talk about the simplicity of the business and how simple it is to get started because I literally just make offers based on Zillow comps. So I basically found a path to scaling my wholesale business to seven figures, just doing way more volume of deals. And obviously the way that I do it specifically, the way I source my deals, my spreads are actually much larger than what I was making when I was wholesaling houses. Speaker 1 (0:34) What is up, The Moore Show family? We are talking all things about how to maximize opportunities in real estate. My guest today is a 27-year-old who is earning seven figures a year and is not wholesaling. You're not wholesaling houses. And I have someone who takes a twist on this industry. And I want to dive into why he thinks land flipping is the play. Caleb Malofsky is here. What's up, dude? Speaker 2 (0:57) What's up, man? Thanks for Speaker 1 (0:58) having me. I appreciate it. So I think most people sit here and watch podcasts, watch YouTubes and it's wholesale this wholesale that, you know? Yeah. And while I've wholesaled thousands of homes myself in my career, you've decided to flip it and realize there was an actual better path to your real estate journey. Talk to us what you were up to today. Yeah. Speaker 2 (1:20) So again, thanks for having me. But yeah, I mean, I like, like you mentioned, I pretty much only wholesale land. I used to wholesale houses. I saw a path to scaling my real estate business with wholesale, with land, and much easier just because it was, again, like I mentioned, there's not as many variables when it comes to land compared to houses. You've wholesaled many houses. You know how it is. When you get a house under contract, you are setting up a showing. You are asking how old the roof is, how old is the foundation, how old is the AC, how old is the heater, well, is there a crack in the foundation, all of these. The list goes on and on when it comes to houses. And so with land, Essentially, all of that due diligence can happen before you're even under contract. You can check if there's wetlands. You can check if there's a floodplain. And so I basically found a path to scaling my wholesale business to seven figures, just doing way more volume of deals. And obviously, the way that I do it, specifically, the way I source my deals, my spreads are actually much larger than what I was making when I was wholesaling houses. So that's kind of like the main reason why I switched over in the first place and how I was able to build that. this real estate business to doing over $2 million a year just with land deals. Speaker 1 (2:28) So for those that aren't familiar, let's break down land deals because I think a lot of people are so accustomed at least to single family and you pull a list from whatever list provider you want to pull and you call them or you text them or you send direct mail. How do you even know what land? I mean, there's land. All throughout Florida, right? And so I say that only because you brought up wetlands and marshes. Not all land is created equal. How do you even figure that part out? Yeah, for sure. I mean, I'm personally Speaker 2 (2:55) doing deals in about 15 states right now. So I'm Florida, North Carolina, Georgia, Tennessee, Virginia, South Carolina. Arizona, California, I'm doing them all over. And obviously the best part is you don't have to actually be in the same state to do it. So, I mean, the way that, I mean, obviously traditional wholesaling goes is most people would just use PropStream. I'm sure you know what that is. Go to PropStream, a hundred bucks a month, pull your list, blast them with tags, blast them with calls. But for me, there's actually a lot of really great softwares out there that I use. I'm going to plug LendInsights because that's what I personally use. They're a great software. And basically what that does is it shows you a heat map of the entire country, just aggregates all the land data. And so you can go county by county and just see the average median purchase price per acre, what the sell-through rate is, how many lots are listed on the market. And then basically, I have a full-time data guy, but you just go through and you select the counties that basically look strong, high property values. and high sell-through rate, which is nice because you can see how many lots are actually selling that are listed. And so basically just selecting those counties based on that. And then I personally just do SMS just because I found it's the best ROI for me. I have great systems, great processes in place that basically maximize my outreach with texting. So it's also the cheapest in terms of when you're at scale doing about a million texts a month. It's just the cheapest for me. And so, yeah, I mean... You basically are just looking at these lots when you're sourcing them from the landowners. A lot of people have owned them for a long time, not really doing anything with it, just a money pit. Obviously, land is not income-producing by nature. as a lot Speaker 1 (4:27) of Speaker 2 (4:27) other of these asset classes are. So when you're looking at it, you can hop on Land ID, which is another software that I use, 10 bucks a month, great software. Before Speaker 1 (4:35) we dive in, I want to talk to you about LFS Capital. If you're looking to build passive income through multifamily real estate, LFS gives you access to exclusive apartment investments that aren't available to the public. If you want to diversify beyond stocks and create real cashflow, visit lfscapital.com to learn more and to get on the investor list. I personally invest with LFS Capital. and they have been incredible to work with. Their team is top notch. I get passive cashflow distributions to my bank account every month, and I'm always in the loop with what's happening with the apartments I'm invested in. The best thing is I don't have to worry about managing tenants or dealing with repairs. The team at Ellevest handles absolutely everything, and my income is 100 % passive, and that's just the way I like it. So if you want to build wealth and passive income without all the work and additional risk, visit Ellevest.com. Now let's get to the show. Speaker 2 (5:28) And you can just filter through. You can see if there's wetlands on a property. You can see if there's marsh. You can see what the topography is, if it's really sloped. And this all happens before you get under contract. So you can pretty much determine the buildability of the lot before you're under contract. Obviously, there's things like a perk test for septic system, all these things that you know. that need that cost money that you won't find out until you're actually your buyers doing due diligence. But essentially, you can save a lot of time up front because if you if you text someone and their lot is 100 % covered in wetlands, and they're like, Yeah, I want 100 grand for it. Well, sorry, buddy, it's, you know, your lot's not buildable. So it's like you can kind of avoid all that BS, like once you're under contract, by just doing some some pretty easy preliminary due diligence before going under contract. Yeah. Speaker 1 (6:10) So unlike single family homes that usually are going to underwrite for performance or remodel budget and all these other things that go into the numbers, land is typically raw, right? You might come across some stuff that has some infrastructure, but how do you underwrite this? Yeah. So that's kind of like the Speaker 2 (6:27) tricky part. It's not really difficult, but it's, it's funny because land is really, you know, it's really undervalued. I think most of the time, and it's also really inefficient. A lot of people don't really understand it. The people that do make a lot of money. I'm definitely not the richest land guy out there. I don't do entitlements. I've never done an entitlement deal in my life. That's how you make... That's like if you want to entitle 100 acres, that's what the biggest guys are doing. I kind of just stick to what I know. But for me, I literally just use Zillow. I built a seven-figure land business comping land on Zillow. And I'm not trying to... I don't downplay it. I'm very sharp about it. I don't try to overcomplicate things because I like to talk about the simplicity of the business and how... easy and not really easy, but how simple it is to get started because I literally just make offers based on Zillow comps. So like I'm, if I'm looking at a quarter acre lot in the middle of Georgia or the middle of South Carolina, I'm just going on Zillow and I'm seeing which other quarter acre lots, what they're selling for. And generally like, I'm just, you know, I'm making offers just depending on, on, you know, how expensive it is, you know, 40, 50, 60 % of the market value of what I'm seeing they're selling for on the market. And obviously there's different factors that go into, you know, sometimes already a septic system in place or something like that. And you pay attention to that and listing descriptions. But it's really, really easy when it comes to actually valuing like small lots, obviously infill lots. The larger parcels gets a little more complicated, but just really just using Zillow just to see what things are. Speaker 1 (7:50) Do you only focus on smaller lots or do you go after larger parcels? Yeah, I do. I Speaker 2 (7:54) do five acres and under. To be honest, I just sold a deal actually up in the panhandle. That was 12 acres. But I generally don't do large parcels just because I like to stick to what I know. I've tried. I've done these goose chases for these builders. I'm looking for 100 acres here or there. For me, it's never really panned out. And the way that I look at it, for me, it's like, okay, well, if I'm doing 5 to 10 infill closings per month, that makes me anywhere from $150,000 to $250,000 every single month. Well, why would I then go and specialize in... Switch my business model to entitling 50 acres or 100 acres, which maybe I'll clear 100, 200, 300K on one of those deals. But that takes 18 months, 12 to 18 months to do the full entitlement and the sale. And it costs you a ton of money to do the entitlement. So I know what my costs are. I know what my business model looks like. I know what my margins are. So I know if I just keep doing what I'm doing, I'm going to keep making the money that I'm making. I don't really want to spread out and focus my energy in those other areas. Speaker 1 (8:54) Oh, 100%. I mean, you're doing this. I mean, not that you don't know that, but a lot of people start going down. I don't believe in bigger is better. Right. So if you're bringing in 150 grand a month, 200 a month and you're like, OK, now I want to go chase a rabbit. That isn't what I'm really good at. Yeah. But wouldn't you agree what you're really good at? You're not even scratching the surface of the opportunity that's out there in what