Are you interested in making extra money in real estate investing but don't want to commit too much capital or take on too much risk?
Getting into land acquisition where you learn how to add value to raw land is an attractive and profitable real estate side hustle that can significantly open up incredible opportunities for you and your future.
Now, you might be thinking, “Isn't raw land acquisition complex and difficult for newcomers?”
Well, it can be for some. But luckily, at VestRight, we've done all the heavy lifting for you.
We've combined over 20 years of experience, knowledge, and trial and error, to perfect a proven three-step process in land acquisition and entitlements and teach it to dedicated entrepreneurs and real estate professionals like you.
The raw land acquisition model we teach is great for those looking for a reliable way to generate income on the side.
Raw land acquisition has incredible opportunities with fewer costs compared to traditional real estate development.
Why Raw Land is a Great Real Estate Investment Opportunity
Whether you’re a real estate agent, entrepreneur, or someone who is just looking for a way to generate extra income and be seen as successful, raw land acquisition is a great real estate investment alternative.
Raw land acquisition offers a low barrier to entry, meaning you don’t need to invest much of your own money, or become a real estate agent, or even get a real estate license.
It also has unlimited potential for growth, which allows savvy professionals to capitalize on the ever-changing landscape of the real estate market.
And as a land acquisition specialist at VestRight, we teach you the entire process—from prospecting to entitlements, and then selling it to a home developer—so you know how to put together highly-profitable land deals, with very little risk and very little investment.
Raw land acquisition is one of the best real estate side-hustles out there for those who are willing to put in the work and research necessary for success.
Low Barrier to Entry
Raw land acquisition—where you identify vacant land with potential for development and add value—is a side hustle business that is relatively easy to get into.
This real estate side hustle has a low barrier to entry because it has:
- Lower costs: As a land acquisition specialist, you typically won't invest much, if anything, upfront. Developers cover most of the costs associated with the acquisition process, which means you can get started with little to no money down, compared to other real estate costs such as purchasing a developed property.
- Little risk: The amount of risk you take with raw land depends on your comfort level. With our model, you have control over the level of risk in your real estate side hustle and you have options to protect yourself. You're simply holding onto land until the right developer wants to build on it.
- Flexibility to work from anywhere: As long as you have access to the internet and basic research tools, you can do this business from anywhere in the world! With raw land transactions being entirely virtual, it's easy to start building wealth on your own terms and around your own schedule.
Starting a real estate side hustle with raw land is a great way for entrepreneurs and professionals looking to make extra income without huge upfront risks. And a low barrier to entry isn’t the only reason it’s a great side hustle…
Unlimited Potential for Growth
Finding off-market, raw land with development potential for homebuilders has unlimited growth potential as a real estate side hustle. As one of the key benefits, that endless potential might be just what you need to earn extra cash in your real estate endeavors.
- Untapped blue ocean market with little competition: Raw land is a blue ocean of opportunity with low competition in the industry. You can find off-market land in areas with high growth potential without worrying about bidding wars or overpriced properties as most real estate agents or professionals do.
- Opportunity to earn high profits: You can leverage your expertise to find raw land in areas where growth and development are anticipated, getting the land through entitlements and approvals, and later selling them to homebuilders – giving you substantial profit potential.
- Diversify your real estate business: Adding raw land prospecting as a side hustle to real estate allows you to diversify your knowledge and lower your risk. If one area of your business isn't performing well, you have another opportunity to fall back on.
Now if you want to learn more about how to go into raw land acquisition for homebuilders as your next real estate side hustle, let’s dive into the process.
The Process of Finding Off-Market Raw Land & Adding Value
When looking to grow your wealth, whether you’re a full-time job as a real estate agent, property manager, real estate investor, or entrepreneur, or you have absolutely no real estate experience…
Then acquiring raw land is a great go-to side hustle.
But how do you turn a profit?
The secret to profiting from raw land deals lies in adding value to the land. Here’s a quick overview of the three components we teach at VestRight to add value to raw land.
1. Bring Value to the Seller
The first part of the process is to bring value to the seller by paying them a market value for their land. To offer a fair price, it's important to understand the demand for real estate properties, particularly by knowing how to value raw land and follow real estate market shifts.
Learn How to Value the Land
Valuing raw land can be more challenging than valuing existing properties because it lacks a structure and can involve more variables. This valuation phase involves analyzing the various factors that may affect the land’s closing sale price, including its location, zoning, accessibility, and topography.
To perform this valuation, we teach the specialized knowledge needed for land acquisition specialists to identify the right pieces of land that have development potential.
Follow Local Market Shifts
The real estate market is constantly changing, and understanding how to follow market shifts is essential for adding value to raw land. By monitoring trends in the real estate industry, you can determine whether the market favors buyers or sellers, and adjust your valuation strategy accordingly.
For example, during a buyer's market, where demand for raw land is low, sellers may need to price their land more competitively to attract buyers. In contrast, during a seller's market, where demand for raw land is high, sellers may command a higher price for their land.
By staying up-to-date on these real estate market shifts, you can offer your seller a fair market value and acquire the land at a reasonable price, which increases your chances of making a profitable return on investment.
2. Bring Value to the Buyer
When adding value to raw land, the second piece of the puzzle is bringing value to the buyer by obtaining an approved development plan. Getting land approvals involves going through the land entitlement process.
This process means working with local authorities to obtain the necessary permits and approvals for development, including zoning and building regulations.
Doing this makes the land more valuable to potential buyers because they can start developing immediately with minimal hassle and delay.
Understand Zoning Regulations
Land zoning is one of the most critical aspects of the land entitlement process. Zoning is a set of regulations that dictate how the land can be used in a specific area.
Land zoning determines what housing types can be built, the height and size of buildings, and the distance between structures. Understanding the zoning laws in a specific area is essential for land acquisition specialists to add value to raw land for home developers.
Zoning laws can vary greatly from city to city and state to state, so it's important to research the regulations and understand the requirements for housing development. In some cases, you may need to apply for a zoning variance or rezoning of the land.
Secure Permits & Approvals
Once you understand the regulations and requirements in a specific area, you’ll need to obtain the necessary permits and approvals for development. Completing this land entitlement process is critical to adding value to raw land for residential development.
If you’ve already gone through the required land entitlements, developers can begin construction on their housing assets as soon as they buy the land from you.
3. Bring Value to the Land
The third part of the process is to bring value to the land itself by preparing the land for construction, such as by grading, forecasting costs to lay infrastructure such as roads and utilities, and obtaining additional permits.
Clear & Level the Land
Clearing and leveling the land helps maximize its development potential. This process involves removing trees, rocks, and other obstacles, and leveling the terrain to make it suitable for building. By performing these land preparations, you can create a more functional parcel ready for homebuilding.
In addition to maximizing the development potential of the land, clearing and leveling the land can also improve its aesthetics. A cleared parcel offers a blank canvas for potential buyers to envision their development plans.
Add Utilities & Amenities
Forecasting the cost to add utilities and amenities to the land is essential in improving its potential. This step can include installing utilities and adding roads, sidewalks, and landscaping.
You might consult with engineers, contractors, and local real estate agents to determine the most cost-effective methods for installing water, electricity, gas, and internet. It's also important to consider any necessary permits or regulatory requirements for utility installation.
In addition to utilities, adding roads, sidewalks, and landscaping can also help increase the land's value. Roads and sidewalks provide access to the land, while landscaping enhances its aesthetics, making it more visually appealing.
In some cases, it may be possible to partner with local utilities or government agencies to share the costs of installing utilities or infrastructure. This partnership can reduce the overall cost of the improvements and make the land more attractive to potential buyers or developers.
Selling the Land for Maximum Profit
Once you know and understand the process to add value to raw land, then it's time to sell it to a developer. There are several strategies we teach that can help you close a profitable deal with a homebuilder looking to purchase your property.
Creating a Strong Presence
Cultivating a prominent presence in the local real estate market is key to selling raw land to homebuilders. Talk with everyone involved in your deal. Build personal connections, so you can ensure everyone's goals are being met and make the deal a success.
One way to do this is by networking with housing developers in the area. Attend industry events, join local real estate associations, and make connections with other real estate professionals.
Building genuine relationships with people in the industry can help you stay up-to-date on trends and market conditions, and get insider information on potential investment opportunities.
Another strategy is to befriend the owners of the raw land you're prospecting. By establishing a positive relationship with the landowner, you can gain their trust and potentially negotiate a better deal. They may also be able to provide you with valuable information about the property that could help you sell it to a home builder.
Closing the Sale & Profiting
When it comes to closing a successful deal with a home developer and profiting from your raw land investment, there are several exit strategies to consider:
- Exiting a deal at the execution of the contract, usually within the first 6-to-8 weeks. It can be a good option if you need to generate extra money quickly in real estate.
- Completing the feasibility study on the property and exiting the deal in around three months. This is a good option if you have extra capital to spend on the study. By investing your own money, you drag the process to a steady pace that guarantees a positive outcome and motivates everyone else involved to do the same.
- Waiting until the deal is closed to get paid has the highest risk, but also the highest reward. If you hold out all the way until Construction Drawing Approvals finalize before accepting payment, you could receive a return similar to that of a developer.
At VestRight, we’ll help you through your exit strategy depending on your goals and needs. Whether you're looking to generate extra income through real estate side hustles or save money on your next investment, we can help you develop a strategy that works for you.
With these strategies in place, it's just a matter of time before you close a successful deal and reap the rewards of your raw land investment.
Tap Into the Best Real Estate Side Hustle
Raw land is one of the best real estate side hustles out there, allowing you to start investing without much risk or even real estate experience, and earn some serious side income.
With the right resources and support, anyone can tap into the potential of raw land and start earning. Learn more about the process and download our free Raw Land E-Book.