AI transcript
0:00:06 how to earn 10 to 100 times returns in a really surprising flipping niche. What’s up? What’s
0:00:11 up, Nickel over here. Welcome to The Side Hustle Show, part of the Entrepreneur Podcast Network.
0:00:16 It’s the business podcast you can actually apply. And have I got a side hustle for you today? We’ve
0:00:20 talked about flipping products for a profit in the past. We’ve talked about real estate
0:00:26 investing in the past. We’ve even talked about land investing. But never like this. My guest
0:00:32 specializes in finding these unloved, unbuildable parcels. Maybe they got no sewer, no septic.
0:00:37 Maybe they got title issues. And he specializes with dealing with that red tape at City Hall to
0:00:44 overcome those issues and then reselling those new and improved parcels for big, big gains. We’re
0:00:49 talking 10x your investment or more. He’s been doing this for decades as a repeatable and teachable
0:00:57 process from junklandintogold.com. Wayne Seminoff. Welcome to The Side Hustle Show. Hey, good morning.
0:01:01 Good morning. Yeah, thanks for inviting me. You bet. Excited to chat. Excited to dive in.
0:01:06 Wayne is a neighbor of mine. It turns out that we’re locals here in the northwest.
0:01:10 So stick around in this one, recovering the best ways to find these so-called junkland
0:01:15 parcels near you, even if you live in an expensive area. Maybe even better if you live in an expensive
0:01:20 area. He’s opening up his playbook on how to fix the various issues that you’ll encounter,
0:01:25 get them ready to resell for a big profit, and of course, the risks and mistakes to avoid along
0:01:31 the way. Wayne, I want to start off with this, turning $1,000 into $400,000. I think that’ll
0:01:38 get everybody’s attention. I can take $1,000 buy a piece of junkland at a tax auction, fix the
0:01:44 goofy little problems that are wrong with it, turn it from junk into buildable, and then sell it
0:01:52 as a buildable lot for $400,000. And I can do that over and over and over again. That’s what I do.
0:01:58 It varies in different sequences, but sometimes I buy a lot for $1,000, not only sell it for $10,000,
0:02:04 but sometimes $50,000, sometimes $60,000. Every once in a while, I hit the home run and I sell
0:02:11 them for $400,000. I’ve done over 100 properties, maybe 300 properties probably. Wow. Do it over
0:02:17 and over again. The key to it is pretty simple. Generally, junkland is junk because you can’t
0:02:25 build on it. But I found there was like seven tools you can use to change junkland into buildable
0:02:33 land. One is like variances. You get a variance from the building code, or let’s say you need a
0:02:39 boundary line adjustment. There’s tidal problems. Whatever the problem is on the property, if you
0:02:45 can isolate that problem and then correct it, your value dramatically increases 100 times.
0:02:51 I mean, like literally 100 times. I’ll give you an example of that. I bought a property a year ago
0:02:59 in Issaquah, which is a really hot area, about a half acre lot with water, sewer, power, road
0:03:05 access right across from Target. And I paid $1,000 for it. And then the reason I bought it for $1,000
0:03:11 is the guy who’d owned it for like 20 years couldn’t sell it to anybody because they had a tidal
0:03:16 problem. He couldn’t get clear tidal from a tidal insurance company. So he was going to let it go
0:03:22 in the tax sale. So I called him before the tax sale and I said, “Hey, are you going to let it go
0:03:26 in the tax sale?” And he says, “Yes, I’m going to let it go in the tax sale.” And I go, “Well, I’ll buy
0:03:31 it from you and don’t let it go in the tax sale.” And I said, “I’ll give you $500 for it.” And he
0:03:36 goes, “No, no, no, no, no, no. You think I’m crazy?” And I said, “Well, how much do you want for it?”
0:03:44 He goes, “I’ll take $1,000 for it.” I need to pause and say like, you know, any piece of land is
0:03:50 given the path of development in this area is worth significantly more than even $1,000. So you’re
0:03:54 thinking he’s like, “Hey, dude, don’t lowball me. Come on. I know what I’m sitting on.” But he’s
0:03:57 like, “I didn’t really want that much more.” It always shocks me. And I always come back, do that
0:04:04 lowball thing. And they always come back with low, low counter offers. And so he said, “If you
0:04:10 write, if you send me $1,000, I’ll sign over the deed to you.” And so him and his sister owned it.
0:04:15 So I got his sister and him to sign it. And we did it. I just sent him the deed electronically.
0:04:21 And then I venmoed him the money. So he had the money immediately. And then he just sent it back
0:04:28 to me. And I had a deal. So then I took this gorgeous piece of land. Right now it’s owned for one unit.
0:04:37 In that area, one unit of land is worth $500,000, one housing unit. And so I went to my attorney.
0:04:41 And I said, “I need to do a quiet title on fear of this title.” And I looked into what the problems
0:04:46 were in the title. And I found some supporting data to give to the attorney to make the title,
0:04:51 quiet title action, go smoother. And it took him four and a half months. And at the end of four
0:04:56 and a half months, he gave me a clear title. And I got a title report that says, “I’m the sole owner
0:05:04 of the property and nobody else can challenge it.” And now, today, that $1,000 property is worth $500,000
0:05:07 right now. Yeah. So you have $1,000 into it plus some legal fees.
0:05:15 Yeah. It cost me $15,000 for the clearing the title. So for $16,000, I’m going to
0:05:22 make $500,000. Right. Wow. That sounds pretty good, right? That’ll get people on their toes,
0:05:28 right? But that’s not enough. Okay. So this lot is subdividable. So I’m applying for a short
0:05:34 subdivision. I’m going to split the lot in two. And two lots in that area are worth $1,000,000.
0:05:41 So in four months from now, when the short subdivision is over in Issaquah, I’ll have two
0:05:47 separate lots and I’ll have $1,000,000 worth of land. For about $25,000 total investment,
0:05:53 I’ll have a $1,000,000 property. Well, there’s a lot to unpack here from
0:05:58 the title clearing process to how to even know that this was coming up for a tax sale in the first
0:06:04 place. But maybe we start with the confidence early on. Take me back to like 40 years ago,
0:06:11 Wayne, to say, “You know what? Even if it has a junk title, I can figure this out and for $1,000,
0:06:19 I’m willing to roll the dice.” I don’t know. I guess it’s relatively low risk. You got the
0:06:23 purchase price and the legal fees. If the owner couldn’t figure this out with theoretically,
0:06:30 he had the same million dollars to gain from doing it. Why would he sell it so cheap? And then
0:06:34 for you to have the confidence to say, “Well, shoot, I can clean this up. I can figure out the
0:06:40 legal red tape that needs to happen.” I teach people to buy from don’t wanters. Don’t wanters.
0:06:47 People who don’t wanters are people who own this property. They were the kids that inherited
0:06:54 from their dad. Their dad was a real estate guy like me. He could figure stuff out. But the kids,
0:06:59 they don’t know how to do it and they don’t care to learn how to do it. It’s just something they
0:07:04 got, this extra stuff. It’s like, they’re called don’t wanters. They don’t want the property.
0:07:07 It’s hard to imagine anybody not wanting an extra million dollars.
0:07:12 But they don’t know it’s worth a million because any barrier to them is a final barrier.
0:07:18 They don’t see beyond the barrier. They are very short-sighted. But the main thing is they
0:07:26 don’t have the desire to look beyond the barrier. Don’t wanter people just don’t want it. They
0:07:34 don’t want to mess with it anymore. There’s a divorce and the wife gets the husband’s property
0:07:37 and she hates the husband. She just doesn’t want the property. She just wants to get rid of it.
0:07:43 She doesn’t care if you can make more money off. She wants to dump it. The famous story of the girl,
0:07:51 the wife got that guy’s Corvette and sold it for 50 bucks just out of spite.
0:07:57 They just want to get rid of it and whatever. But I run into this a lot and people are very
0:08:03 short-sighted about their properties. These tricks that I have, they’re not up front. You call the
0:08:08 city and you say, “Hey, how do I make this lot buildable?” Nine times out of 10, they’ll say,
0:08:14 “No way. You can’t build on it ever.” The clerk guys at the low levels, they don’t even know them.
0:08:16 They don’t care. They don’t even care about looking up the rules.
0:08:21 They’re authorized to say no. But all of a sudden, they stick in their neck out to say,
0:08:23 “Yes.” It’s like, “Well, what did you just approve?”
0:08:29 Yeah, right. These guys, they tried to give it to the city of Issaquah and the city
0:08:33 wouldn’t take it because the title was screwed up. They were going to give it to them for free,
0:08:39 for zero, for nothing. The city said, “No, we don’t want it.” Even the city in its short-sightedness
0:08:44 didn’t know that it was a buildable lot that they could do something with or whatever.
0:08:49 What’s this process like to clear that title?
0:08:54 You call a title company and you ask for a title report. They send you a title report and it shows
0:09:01 you all the problems on the property. They’re all unique. Each report is different. On this one,
0:09:06 what it was is in the chain of title, that means from everybody who deeded the property to everybody
0:09:15 who owned it during all the years, there was a gap. About 50 years ago, these guys’ picking
0:09:21 brothers deeded it to this guy, and that deed, although it was a real deed and it really happened,
0:09:26 never got recorded in the title company’s records. Who knows why, but it never got there.
0:09:32 But he took possession of the property, thinking he owned what he paid for, and then he deeded it to
0:09:37 these other guys, the other guy, and then he died and went to his kids. The title company says,
0:09:43 “Well, since there’s a gap, we can’t give you title to it because I bought it from the kids.”
0:09:49 They say, “The kids don’t have title to it.” So what I did is I found out who this guy was,
0:09:55 the missing link deed. He was still alive, which is rare because it was like 50 years ago,
0:10:00 and I called him. He says, “Yeah, I bought the property and it’s a real deal,” and I recorded it,
0:10:06 but there’s no record, I guess. He wrote me a little statement saying, “I’m the guy, I got it,
0:10:11 I bought it, I recorded it,” and then we gave that to the judge. When we went to court, we said,
0:10:16 “Well, here’s a statement from the guy who actually bought it,” and then I asked the court,
0:10:22 and my attorney asked the court to give us clear title against everybody. So when you clear title,
0:10:27 you’re clear against the whole universe. So it’s not just him, but anybody who has a claim to it.
0:10:31 It’s a beautiful thing because it gets rid of any title issue.
0:10:36 Interesting. What would happen to have that guy be dead? You weren’t able to track him down.
0:10:42 What would happen then? That’s the front door. The side door is his heirs. If he dies, legally,
0:10:47 his ownership right goes to his heirs, and they don’t even know they own it. So I’d call them up,
0:10:51 you know, their kids, and I tell them the story, and I say, “Give me a quick claim deed. I’ll send
0:10:55 you a couple hundred bucks for your time in trouble,” and they give me a quick claim deed,
0:11:00 and then I use that, and I give that to my attorney, and then we go to court.
0:11:04 Do you ever have the kids come back and say, “Whoa, whoa, whoa, whoa, whoa, wait a minute,
0:11:08 you want to give us a couple hundred bucks for this half a million dollar parcel here?”
0:11:13 People who inherit stuff are don’t wanters. They didn’t even know they inherited it.
0:11:18 It’s like an illusion. They go, “Oh, really? You mean my uncle Joe gave me this property,
0:11:22 and I never even knew I owned it?” Yeah, when he died, he got the ownership,
0:11:27 and they go, “I’ve never had him say, you know, give me a big chunk of money.” I’ve always had
0:11:32 good luck with that. How funny. I mean, this is 10 minutes from our house. We drive past this
0:11:36 all the time, and it’s a prime kind of up on a little hill, like nothing,
0:11:39 not a ton built around it, but it is right across the street from Target, this huge shopping
0:11:46 development. How did you come into the Intel that it was going to be going up at the tax sale?
0:11:53 Okay. Every year, the county, King County, where I’m at, posts a list of all the properties that
0:11:59 are going to be foreclosed on. What I do is, before the tax sale, I call the owners to see
0:12:04 if they’re going to let it go in the tax sale, because if they are, then I offer to buy it from
0:12:09 them. These are Target properties that I really like. It’s not all the properties, just the ones
0:12:15 that really look good to me. Okay. In advance of the foreclosure auction and the tax sale,
0:12:19 the county is publishing this list. Hey, here’s everybody who is the link winner. Here’s what’s
0:12:26 coming up on our docket, and so that gives you a chance to go track down the existing owners and
0:12:31 try and make an offer in advance of that so you don’t get into a bidding war with other investors,
0:12:37 other buyers. Correct. Yeah. Once you go into the auction, then prices go up. Crazy people bid at
0:12:44 the auction. It’s online, so you can bid if you live in New York. This is all public record type
0:12:50 of stuff. Is it similar in other areas of the country? Most areas of the country have tax sales.
0:12:54 Some, they have different law systems like in Philadelphia and stuff. It’s a whole different
0:13:01 animal, but majority of the country has tax sales. Some areas have tax title sale, which is a whole
0:13:06 different animal, but I don’t deal with those. I remember going to some seminar and it was tax
0:13:11 lien investing, where you buy the– Yeah, tax lien investing, yeah. Buy the lien on the property,
0:13:15 and every now and again, you end up getting the deed because you’re one of the first lien holders,
0:13:21 and oh gosh, it was the whole thing. Yeah. You can make money at that. You might make maybe
0:13:25 two or three times your money, but in my game, you can make 100 times your money.
0:13:30 And the best bet is, let’s say you pick 10 properties and you’re successful, maybe one or two,
0:13:35 and eight of them, nothing happens. You just can’t make it happen. But on the two that are
0:13:41 successful, you make so much money that you pay for all the ones you bought, and you have enough
0:13:47 money to buy brand new ones. Got it. Is that a typical success rate? Not everything is going to be
0:13:55 a 100x home run, but you cast a wide enough net, you place enough bets that
0:13:59 enough of them work out to erase all the losses and then still make a profitable living.
0:14:04 It’s like the 10 to one rule. Basically, if you do 10 deals, you’ll make a killing on one.
0:14:10 And you might make some money on two or three, and then you’ll make no money on the rest.
0:14:15 And you might even lose on one of them. Helpful to know, right? Buy, write, minimize your risk,
0:14:21 all that stuff, but aim for the ones that have a big, big upside potential.
0:14:25 More with Wayne in just a moment, including how you might find these unwanted parcels near you
0:14:28 and the playbook for resolving issues on them right after this.
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0:15:47 See Mint Mobile for details. Being an entrepreneur and being able to work remotely definitely has its
0:15:53 perks. I’ve recorded podcasts everywhere from Vietnam to Italy, drafted newsletters from Japan,
0:15:58 hosted mastermind meetings from Spain, ended up being the middle of the night to get to U.S.
0:16:04 business hours, and outlined courses in Mexico. The common thread of all of these trips, though,
0:16:10 is Airbnb. We love being able to get exactly what we’re looking for in a place to stay and have a
0:16:15 more local experience than staying in some giant hotel chain. And you know me, I’m always thinking
0:16:20 about the next side hustle idea, the next income stream, right? And one that’s at the top of the
0:16:24 list is hosting our place on Airbnb while we’re traveling. That way, the house doesn’t have to
0:16:30 sit empty. We could use the income to help pay for the trip. And we’ve heard from several successful
0:16:35 Airbnb hosts on the show. And what’s interesting is a lot of them started with almost that exact
0:16:41 strategy, renting their place or even a spare room while they’re out of town. Taking inspiration from
0:16:46 that, you might have an Airbnb right under your nose. In fact, your home might be worth more than
0:16:55 you think. You can find out how much at Airbnb.com/host. That’s Airbnb.com/host to find out how much
0:17:03 your home is worth. Starting at this county level, pre-tax sale, if there is such a list,
0:17:10 that’s available and trying to contact those owners in advance. And the ones that say, “Yes,
0:17:14 I’m going to let it go to the auction,” will say, “Well, let me make a deal with you in advance of
0:17:19 that.” Or, “What would it take to part with it before that?” Yeah, I say, “Yeah, what would it
0:17:26 take?” And invariably, nine out of 10 guys that contact, if they’re going to let it go in the
0:17:33 sale, they’ll take pennies on the dollar. I got one good example. I bought a beautiful ski chalet
0:17:39 in Stephen’s Pass there. And it’s gorgeous. It’s right on top of a hill. And it’s newer.
0:17:46 And it’s all in perfect shape. I called the guy and he said, “Yeah, we used to use a lot and
0:17:50 everything.” And he says, “But I’m just getting too old. I don’t go there anymore.” And I said,
0:17:58 “Well, you know, we take $1,000 for it. It’s worth $180,000 right now, as is.” And he goes,
0:18:04 “No, no, I’ll take $8,000 for it.” And I said, “No, no, I’ll give you $2,000.” And so we settled
0:18:12 the $2,000. He says, “All right, I’ll take $2,000.” So I bought this $180,000 ski chalet for $2,000.
0:18:16 Because it’s just that they owe back taxes and they don’t want to deal with it.
0:18:24 And the side on this was he owed $6,000 in back taxes. I actually paid him $8,000 for the chalet.
0:18:28 Okay. Clear the back taxes and take ownership of the property.
0:18:30 You have to clear the back taxes. Yeah.
0:18:33 Why not just sell the place for $180,000? It’s just…
0:18:39 He’s a don’t wanter. You’re talking about you are a rational person and not a don’t wanter.
0:18:44 I’m a rational person, not a don’t wanter. But there are people out there who are not rational,
0:18:49 they’re in the don’t wanter category. When they don’t want it, that means they don’t care to do
0:18:52 anything on it. They don’t even want to call a listing agent and say, “Hey,
0:18:58 see if you can get for it.” I mean, they don’t want to lift one finger on it to do anything.
0:19:01 And it’s a beautiful thing because without those people, I would be out of business.
0:19:07 That’s the meat of my business is all those don’t wanters out there who just don’t care about their
0:19:12 properties. All right. Another site that I found was starting at the county level.
0:19:18 Actually, King County pointed me to a site called bidforassets.com, the number four assets.com,
0:19:22 which appears to be kind of a nationwide type of database.
0:19:28 Bid for assets. King County used bid for assets to sell at auction their properties once a year.
0:19:33 They don’t use them anymore. But it’s a really good site because it shows you,
0:19:37 you can go on the site and see which properties are in the auction.
0:19:41 And it has a diagram of the property. It also has a title report, which is very critical.
0:19:45 And it also tells the stats on the property, you know, if it’s wet or whatever.
0:19:50 It’s a really good site. The one that King County is using now is called real auction,
0:19:53 or EAL auction. That’s where it is going to be this year.
0:19:59 They have the title reports and they have it. It’s a nice informational site tells you what the
0:20:03 minimum bid is, which includes all the penalties and stuff for the back taxes.
0:20:10 And typically the cheapest thing you can buy is around $1,500 to $2,000 for a lot.
0:20:19 I did buy a lot for $667 last year. I bought one property for $600.
0:20:25 It seems to be like it’s almost like a Warren Buffett type of situation where it’s like,
0:20:29 I don’t need to be making deals every week. I just got to wait for the right one to come along.
0:20:34 And that could be my year. That could be my two years worth of income here.
0:20:39 Well, what I do is this has been like my hobby, because I love it so much.
0:20:45 And once a year, the tax sale comes up. So once a year, I’ll buy 10 properties or approximately
0:20:48 that. And I spend the rest of the year working on those properties.
0:20:53 Yeah, trying to fix them up and deal with whatever they need and all the work.
0:20:58 And typically by the end of that year, I’ve sold one or two cheaply.
0:21:03 And the ones that I get a lot of money for, I have to wait maybe two or three years to
0:21:06 actually get the big money. Okay. And you may want to, right?
0:21:10 You’ll got to hold on to it 12 months, at least for long-term capital gains or something, maybe.
0:21:13 Yeah. Did you have a background in real life?
0:21:17 How do you get into this? This is just such a random side business.
0:21:21 I think I’m the only guy that really does this stuff here in King County the way I do it.
0:21:27 I got into it. It’s really a good story. 40 years ago or 45 years, maybe 50 years ago now.
0:21:32 I went to, I didn’t know how to make money, but I thought, “What the hell? I’ll go to an auction.”
0:21:37 So I looked in the paper and it said auction dead people’s effects by King County morgue.
0:21:43 I went to this auction and you buy all the jewelings that they cut off the bodies.
0:21:45 Oh my God. Okay. That’s morbid. Okay. Geez.
0:21:49 Yeah. I know. Eyeglasses and false teeth and rings and earrings.
0:21:55 And this other guy was competing against me in the auction.
0:22:00 And he stopped me in the middle of the auction. He says, “Hey Wayne, we’re the only two main bidders.”
0:22:04 He says, “Why don’t you and I agree to partner up and we’ll just buy everything
0:22:08 and then we’ll split it up after the auction. We’ll just do one minimum bid.”
0:22:13 And that’s what we did. So we got a minimum bid. We bought everything.
0:22:19 And so we went to Denny’s and we put everything on the table and the big pile of air, all this stuff.
0:22:21 And we said, “Okay, one for you, one for me, one for you.”
0:22:26 And the most valuable thing were watches. They had some really nice watches.
0:22:31 And so he’d get a watch and I’d get a watch. But the bottom line on this is this guy
0:22:38 owned 1,000 pieces of junk property that he’d been buying at the tax sales for like 10 years.
0:22:43 And I’ve been working real estate at that time and I knew how hard it was to
0:22:47 fix properties when they have problems. And I know there’s no way and he can manage
0:22:53 1,000 properties with them saleable. So I said to him, I said, “Tell you what,
0:22:59 I know how to fix problems in real estate. If you give me half of the profit on every
0:23:04 property I fix and sell, we can be partners.” He says, “I’ll do it.”
0:23:07 At that point, I became a half owner in 1,000 properties.
0:23:12 And that’s where I really honed my skills on fixing stuff up.
0:23:19 I had 1,000 chances to learn how to get in the back door to fix properties. And since then,
0:23:25 I’ve learned that basically there’s about eight major tricks. And they’re all solid,
0:23:29 really good tricks that you can do to fix junk property and make it saleable.
0:23:33 Yeah. You’re getting in a lot of reps. You do it almost on a performance basis.
0:23:37 Like, “Hey, if it doesn’t make a profit for you, you don’t owe me anything,” kind of thing.
0:23:45 And this guy, Bill Looney, he was the third largest land owner, partial land owner in Washington,
0:23:48 below the state of Washington and the federal government.
0:23:52 He had more parcels of land than anybody else.
0:23:56 But they weren’t buildable. They needed a little TLC.
0:24:00 Yeah. Most of them were not buildable. I mean, basically not buildable.
0:24:04 He had some that were prime pieces, but the prime pieces I didn’t help with because he
0:24:08 could sell himself. So, I just got the junk ones.
0:24:13 All right. Let’s talk through some of these tools in your toolbox and maybe even sorting that
0:24:18 list of 1,000. Well, that’s pretty daunting. Which ones am I going to tackle first?
0:24:24 Is it these title issues like the Issaquah property? Is it sewer or septic? Is it trying
0:24:31 to get a variance? Where do you even begin? Or do you have a game plan?
0:24:36 Yeah. Right. I’ll tell you how I do it. I get the list from King County and I print it out
0:24:42 and I put it down in front of me. The first thing I do is I look for all the cheapest,
0:24:47 it has the values. And I look for all the ones that have the least amount of money that’s owed
0:24:52 on back taxes. So, I work from the bottom up. I don’t go with the ones that have the highest value.
0:24:57 And I’ll look at each one. The first thing I do, I look at it and I say, “Where is the owner?
0:25:04 Is he a local owner or is he living in Iowa?” And my list has where they’re located. And if
0:25:09 they’re out of state, I know that they’re probably a don’t want her. Is this like free public records?
0:25:15 Just go find on the county website. Yeah. Right. It’s all available. Okay. And then the next thing
0:25:21 I do is I’ll look at a picture of the land. I’ll go to IMAP in King County, which is their site for
0:25:27 looking, examining properties and shows the property lines. And I’ll see what the lot looks like.
0:25:33 When I look at the lot, I have these seven or eight tools. And I say, “Which of these seven or eight
0:25:39 tools applies to this lot?” Okay. And I do a quick scan. And you know, one, I look at this one, maybe
0:25:44 needs a boundary line adjustment or maybe this one needs a variance or whatever. And I can tell
0:25:50 visually for most what it needs. And then there’s some other things you want to check on, which is
0:25:56 does it have sewer? That’s a big one. If it doesn’t have sewer and it’s a small lot, then you have a
0:26:02 problem because you need a big lot to put a septic system in. Yeah, for your drain field. Okay.
0:26:08 I know how to take a little lot and make it perk and put a drain field on it, even though it’s too
0:26:15 small for the normal approval. So most people don’t know how to do that, but I can do that.
0:26:22 It’ll have a checkbox. Like, is there sewer or sewer plumbed? That’s just a public, again,
0:26:28 public impression. If you go to IMAP in King County here, you can actually see all the
0:26:33 particulars on the property. You have a picture of it. And then you can also push a button and it
0:26:40 says everything about it. It’s got water, sewer, power, access. If it’s got steepness or wetness
0:26:46 or whatever, it says all that stuff. Okay. Got it. And so you’re shorting by least amount of
0:26:51 back taxes owed. Any other filters that you try and apply? Because I imagine some of them are going
0:26:56 to be pretty… Some of them are not going to be at the $1,000 rate. Some of them are going to be like,
0:27:00 well, it’s a half a million dollar parcel because it’s in the center of Bellevue or like right in
0:27:05 Seattle. Yeah, I know. And believe it or not, I buy a lot of parcels that are in really high rent
0:27:10 areas like the center of Bellevue. Yeah. I’ve got two parcels in downtown Bellevue. I think I paid
0:27:16 $2,000 for one and I paid maybe $1,000 for the other one. And we’re working with the city now.
0:27:22 If we can get those approved, those two lots are worth $2 million. Right. They’re worth a million
0:27:27 a piece. And they’re just little teeny scraps of land. They’re very small, but they’re buildable.
0:27:31 Well, they weren’t buildable when I bought them, but they’re going to be buildable when I’m done
0:27:37 with them. What did you do to have to make them buildable? Well, this one right off Bellevue Way,
0:27:44 it doesn’t have an access. It was landlocked. Oh, okay. It’s only 20 feet wide by 300 feet long.
0:27:49 So it’s really long and skinny. And there’s a driveway that connects it. It goes right past
0:27:54 the front of it and connects it to… It goes to some guy’s house a few hundred yards beyond.
0:27:59 Okay. So it’s right on the driveway, but you can’t legally use that driveway because you
0:28:04 don’t have a legal right to it. So what I did is I went to the guy next door on the driveway and I
0:28:10 said, “Hey, if you’ll give me an easement, I’ll give you $10,000.” And he says, “I’ll tell you what.
0:28:14 If I give you the easement, I want you to give me what your lot’s going to be worth,
0:28:19 and you know, market value a lot.” And at that time, I told him a lot was worth $500,000 with
0:28:26 an easement. He says, “If you’ll give me $400,000, I’ll give you an easement. You make $100,000
0:28:32 and I make $400,000.” You know, it’s like I can see where he’s coming from. It’s still a win,
0:28:36 but yeah. Yeah, it was a win. So easement would just be like making a part of the public record
0:28:41 that the owner of this lot could use your driveway basically. Yeah. Okay. You know, it’s like falling
0:28:45 off a rock for him to give me an easement because it doesn’t interfere with him at all. Yeah. There’s
0:28:52 no way. You know, all he does is let me drive my car 50 feet and turn left. The driveway is 200
0:28:57 feet long. Yeah. Okay. But he went born yesterday. He wants a piece of the upside, sure. So then,
0:29:02 I went to plan B, which is you can actually sue for access if you have landlocked property.
0:29:09 And I brought a lawsuit against him to sue for access on his driveway. And it’s a long story,
0:29:14 but basically I won the lawsuit. Not only did I win the lawsuit, I got the easement for free,
0:29:19 and he has to pay me $10,000 in attorney’s fees. Oh, geez. He fought me so hard on it.
0:29:26 So he has to pay me $10,000 and give me the easement for free. And now my lot’s worth a million
0:29:33 dollars. Now, why is that? Why would the city force him to let you use his private road?
0:29:40 The law allows that. The law supports taking fallow land and making it viable.
0:29:46 That’s federal. It’s called common law. Federal common law says they want to enhance use of land.
0:29:53 And if your lawn’s landlocked, they wrote laws to allow you to sue to get access to your lot
0:29:57 if your neighbor is a real jerk and won’t give you a road. You’re like, “Hey,
0:30:04 you should have just taken the $10,000, buddy.” Huh. Okay. So that was that one. And the other one,
0:30:11 we have an issue with the lot is 2,800 square feet. It’s a little triangle, but it’s buildable.
0:30:18 And the building code says if the lot’s 3,000 square feet or less, you can’t build on it.
0:30:23 I’m wrestling with the city to see if we can get them to roll over. It’s only like a 120 foot
0:30:31 difference between what the law is or the route, the regulation is and our lot. We’re seeing if we
0:30:37 can convince them to give us the approval for that right now. And what we did is we found
0:30:44 a bunch of case law. We studied all the case law in Washington that supports that type of request.
0:30:49 And we sent them all these lawsuits that were where people sued the cities because they wouldn’t
0:30:53 give them the buildable right of their property because it was short by a few hundred feet.
0:31:00 Well, that means if the city refuses to give us this right, we can sue the city and force them to
0:31:06 give us the right to build on the lot, even though their code says you can’t. Okay. So you find,
0:31:10 so you’re making your case. Like, look, there’s some precedents for this. On top of that, there’s
0:31:16 a housing shortage. Like, we’re trying to turn this otherwise unoccupied, useless thing into
0:31:20 something that could actually help people. And we just need you to sign on the dotted line.
0:31:23 That’s exactly right. It’s all for good cause. You know, I make money. You know,
0:31:29 creates a new building site. The city gets more revenues. Also, the cities are real. They force
0:31:35 you to pay for all their roads and sidewalks and sewers. They don’t pay for it. You pay for it.
0:31:42 I pay for it. When I build a property out, no matter what city it is, they make you pay for
0:31:46 everything. So they don’t pay any, you don’t pay for the road. You don’t pay for the site.
0:31:52 I pay for the sidewalks. The city doesn’t pay for it. I got a lot in Renton. The lot’s only worth
0:31:59 $100,000 and it’s got a building permit on it. The city wants me to pay $150,000 worth of sidewalk
0:32:04 and road improvements on top of everything I’ve paid for that lot, on top of it. You know.
0:32:06 What do you do in that case? Hunt.
0:32:08 Let it go to the tax auction or do you say like, now you got a…
0:32:14 No, no. Actually, what I’m doing in this case is, and I’ve only got one-tenth of the block,
0:32:19 I would be the only guy putting a sidewalk and improving the road on the entire block. It’s
0:32:25 a thousand feet long and I’ve got a hundred feet. Yeah. And so I’m going to go to the mayor’s office
0:32:32 and ask them if they’ll support. Let’s see, overriding their requirement for the sidewalk
0:32:36 because it just doesn’t make sense. So, this is something else to be aware of. Just like these
0:32:43 taxes and permitting fees. When we were looking to move back up here, we found this vacant
0:32:48 property. We’re like, well, if you can’t find a house, maybe just build your own house. Well,
0:32:54 what’s that realistically look like? And some of those permits and fees, it was like $28,000
0:33:00 for like, you know, traffic impact study or something. It was like two cars. That’s the
0:33:04 traffic impact. I’ll give you the answer. You don’t need to spend $28,000 on this. It was out of
0:33:10 control. Yeah. So, cities make a lot of money off what I do. So, they actually do want you to build
0:33:15 on this stuff because the more they give you more permits, the more money they make. Right. So,
0:33:20 they’re really on your side. More with Wayne in just a moment, including his best practices for
0:33:27 dealing with City Hall and his most expensive loss right after this. Lots of scrappy side hustlers
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0:35:40 wherever you listen to podcasts. What’s your best practices for finding the bureaucracy
0:35:45 decision makers who can actually give you that stamp of approval? Because it seems
0:35:52 intimidating as a total outsider, total newbie to roll up to City Hall or even try and find
0:35:57 the right department and get transferred around a bunch of places. Oh, I don’t know. I don’t want
0:36:03 to touch that with a 10-foot pole. That’s obviously where the value at is here and where the money’s
0:36:09 made. Cities can be your friend or your enemy, depending on your attitude. It’s up to you.
0:36:14 And if you look at them as a friend, which I do, I go in there and I ask people to help me
0:36:20 and I say, “Hey, I’ve got this unbuildable piece of property. Is there any way I can build on this?”
0:36:27 And if they say no, then I say, “Well, if they’re lower-level people.” I say, “Can I talk to your
0:36:33 boss?” And maybe he’s got an idea. Maybe he can find a way. And then I go and talk to the boss
0:36:38 and I ask him the same question. And then if he can’t find a way, I say, “Can I talk to your boss?”
0:36:43 And I work my up to the top guys, the planning director. Typically, those guys have all the
0:36:47 really smarts. They’re really together, the planning directors. And they know all the tricks.
0:36:52 And then they’ll come up with stuff you never even heard of. That’s where I learned a lot
0:36:58 of my tricks is from these guys. I said, “I got this lot. Everybody says I can’t build on it.
0:37:03 How could I do it?” And then they show you, “Well, if you do this, you do that, you can build on it.”
0:37:07 Okay, you’re working your way up the chain of command. You don’t want to take no for an answer.
0:37:09 There’s got to be something creative we can come up with here.
0:37:14 My philosophy is if they’re saying no to you, they’re lying to you. If they say yes,
0:37:18 they’re telling you the truth. Right. It’s just a matter of finding what’s it going to take here.
0:37:23 Once you have that stamp of approval for building, that’s the primary value add.
0:37:30 How often are you proceeding with that building yourself or saying, “I don’t want to deal with
0:37:35 contractors and instruction and doing all this stuff. I’d rather just make my quick paperwork
0:37:41 flip here and be done with it.” Most times, I’ll either get it ready for a building permit
0:37:46 or get the building permit and then sell it. Occasionally, I’ll build it out. I’ve only built
0:37:55 out two or three houses. Okay. It’s quite difficult and it’s lengthy and it’s time consuming. You get
0:38:00 more money, but to me, it’s not really worth it. I’d rather roll the property as soon as I get a
0:38:05 permit or get the property where the city says they will give you a permit. I’ll sell it then,
0:38:10 too, if they’ll just say, “Okay, we’ll give you a permit,” even though you haven’t applied for it.
0:38:15 At that point, I’ll sell the lot. Let’s say it’s worth $500,000 with the permit.
0:38:20 I’ll sell it for $400,000 at a discount if you buy it right now because it’s without the permit.
0:38:24 Got it. It’s still a big gain for you. Everybody’s happy. Everybody wins.
0:38:34 Is that process just a typical MLS listing? Is that a special land brokerage? How do you
0:38:39 do the listing side of it? I have an expert broker that I use over and over again because he’s very
0:38:46 talented. You have to shop around to find somebody who really knows raw land because
0:38:52 you’re selling junk land. The first look, people could go, “That looks like junk.” You have that
0:38:56 somebody who can say, “No, it’s not junk. You can actually put a 10-story building on it.”
0:39:04 It takes a special salesman to sell that. The average salesman, they’re house salesmen,
0:39:10 and they don’t know anything about land. Got it. Tell me about something that, despite your best
0:39:18 efforts, it just would not polish into gold. It was inexpensive. I’ve lost some deals. I had one
0:39:25 on Mercer Island. It was a long, skinny lot with a view of the lake. It’d be worth a lot if I could
0:39:33 build on it. Then it just needed a variance. For setbacks from the property line or something?
0:39:38 Yeah, it needed some setbacks because it was narrow. It was narrow. It was long enough. It was
0:39:44 like 150 feet long, but it was only 40 feet wide. With the setbacks, it really crunched the house
0:39:50 down. I asked for five-foot setbacks instead of whatever they were. I had a beautiful house
0:39:56 designed on it. It would be great. Then the neighbors there got up and arms against me
0:40:02 and pressured the city to deny my variance. At that point, I lost. Then I thought, “Okay,
0:40:09 I’m going to do it again.” I applied for a variance again. I went out again, hoping to
0:40:17 change things a little bit to make it work. I lost the second time too. In the end, what happened is
0:40:22 the owner who lived next door talked to his title company and they found that they had
0:40:30 deeded him that property by mistake 20 years earlier. They screwed up. They had to give him
0:40:35 money for my property. Instead of doing that, they brought a lawsuit against me for a partition,
0:40:40 which it’s called a partition sale. It was adverse possession and partition.
0:40:46 By doing that, they forced the sale of the property and I ended up with $85,000.
0:40:52 I paid $1,000 for the property, but in fees over the two years, I probably spent $150,000.
0:40:58 So, I probably lost $75,000 on a deal. That was a failure.
0:41:04 Appreciate you sharing. Not just the upside, but there’s things that could go wrong with
0:41:10 these legal procedures and neighbor disputes and battles with the city and everything else.
0:41:17 It’s a 10-to-one thing. That’s why I buy 10 lots and I’ll go out 10 of them. One or two will be
0:41:23 absolute home runs. I’ll make 100 times the money or like the one at ISCO. I’m making like 500 times
0:41:31 my money. I mean, it’s crazy. But on others, maybe I make double and some of me maybe lose
0:41:38 money on. Now, I lose money on two or three. But my investment is so low on the ones I lose,
0:41:43 what I lose is $2,000. Right. As long as you’ve minimized your downside,
0:41:50 it sounds like where the major costs come in is in legal fees, attorney fees, studies and surveys
0:41:57 and everything else. Yeah. You generally need a survey a lot of times on property and that’s
0:42:03 two to three to four to 5,000. So you have to think about that. A lot of times you need a survey.
0:42:10 Wayne, this is a fascinating business. I love that you have been at it diligently for years and
0:42:14 years and years. I don’t mean any offense by this, but you’re not a young guy. What do you want to
0:42:19 take this thing? What’s next for you? Well, this is the deal. I just turned 81 this year and I’m
0:42:24 starting to lose my brain because even you get old, things start falling off you and your
0:42:31 brain gets weird. And I want to give all this knowledge to young people or whoever and let them
0:42:38 learn how to become financially independent and just become wealthy on their own and not have to
0:42:44 suffer. When I was young, I could never pay all my bills. Every month the bills came and I could
0:42:50 never pay. I never enough money to pay my bills. And this way, if I started this when I was really
0:42:56 young, that would have changed everything. So I just want to share my knowledge with people.
0:43:01 That’s my goal. Give them everything I’ve learned before I can’t think anymore. And so that’s why
0:43:06 I did the program and I wrote a book and trying to get all that knowledge out of my head into some
0:43:12 sort of form that people can utilize. That’s right. Wayne sent me his book, “Junkland into Gold.”
0:43:17 You can check it out. It was a lot of fun reading through, maybe more fun because it was all like
0:43:21 local stories. I was like, “Oh, I know where that is.” That’s really cool. Are you still
0:43:26 doing the annual auction? I’m going to do this as long as I can because it’s fun.
0:43:32 It’s my hobby. It’s my hobby. I do it because I love it. It’s fun. It’s not really to make money.
0:43:38 It’s just to have a good time. Other people like to play games online and stuff. I go to the auction
0:43:44 once a year. It’s my vacation. Yeah. You think about people who are into fixing junk cars. I’ve
0:43:48 always got a project car going in the garage or doing the furniture flipping thing and sanding
0:43:54 and painting. It’s kind of similar. It’s just doing it with Junkland instead. I don’t know.
0:44:00 Super interesting. But junklandintogold.com, you can find Wayne over there. He’s offered a side
0:44:08 hustle show listeners 25% off his Junkland Into Gold program with promo code FUNN. No
0:44:12 affiliation there, but be sure to use that if you want to dive deeper. I’ll link up the book
0:44:17 as well. Let’s wrap this thing up with your number one tip for side oscillation. It does not have to
0:44:22 be land investing related, just whatever entrepreneurial wisdom that you’d like to impart.
0:44:30 Most important thing you need to do is to mistake your way to success. What that means is you have
0:44:36 to keep trying to succeed, failing at what you do, and not letting it damage your ego at all.
0:44:42 I call it a mistake your way to success. What that means is in this business, my business,
0:44:47 you’re going to make a lot of mistakes. Each time you make a mistake, you have to learn to
0:44:53 laugh at yourself, realize that you’re taking one more step closer to winning. If you don’t make a
0:44:58 lot of mistakes, you’re not going to win because that’s how it is. Most people, they make a mistake
0:45:05 and their ego forces them to give up. If you never give up and you just keep going and you laugh at
0:45:10 it and say, “Well, I’m mistaking my way to success,” then you’ll win. You’ll always win.
0:45:16 Yeah. I’ve never heard a phrase that way. There’s always like, “Every no gets me closer to a yes,”
0:45:23 but I never heard a phrase. Mistake your way to success. It’s so true in so many fields. We took
0:45:30 the kids out to the driving range, golf driving range this weekend. Those first few, it’s like,
0:45:34 the risks are going every which way and you’re like, “Well, why are you moving your feet so much?”
0:45:40 But then by the end of the second bucket, it’s like, you’re actually making contact now. It’s
0:45:45 like, you had to do it the wrong way first. It’ll mistake your way to success. I like that one.
0:45:49 Wayne, thanks so much for joining me. A couple takeaways before we wrap up. You got to be a
0:45:56 problem solver. These cities have an incentive to let you build on these lands, but you got to
0:46:02 show them the way. You got to really work and massage the deals and make it a win
0:46:06 for everybody. You got to be willing to solve some problems and you got to
0:46:11 be willing to do the work that the don’t wanters don’t want to do. That’s probably the big thing
0:46:15 here. Then it’s buying right. It’s keeping your risks low because not everything is going to be
0:46:21 a home run. You can’t get overexposed, overpay for the property where you might have a game
0:46:26 plan in mind, but you don’t know the outcome. You got to keep that downside risk low.
0:46:31 I guess, worst case, you just resell it to the next person like Wayne who wants to come around
0:46:35 and to see, “Well, maybe if you couldn’t fix it, maybe I could fix it.” But if you’ve minimized
0:46:40 your upfront costs, I think that’s a good way to go. If you are new to the Side Hustle Show,
0:46:45 welcome. Thank you for tuning in. Even if you’re not so new, I want to invite you to grab your
0:46:52 personalized Side Hustle Show play list. These are a handful of hand-picked episodes specifically
0:46:56 for you. Well, how do we do it? Well, you go to hustle.show. You answer a few short multiple
0:47:01 choice questions about your Side Hustle interests, your goals, and it’ll spit back out that
0:47:05 custom curated recommended playlist based on where you’re at and where you want to go.
0:47:11 That’s hustle.show. Give it a try today. Plug those episodes into your earbuds.
0:47:15 Next, big thanks to Wayne for sharing his insight. Big thanks to our sponsors for
0:47:20 helping make this content free for everyone. You can hit up sidehustlemation.com/deals
0:47:24 for all the latest offers from our sponsors in one place. Thank you for supporting the
0:47:30 advertisers that support the show. It really does make a difference. That is it for me.
0:47:33 Thank you so much for tuning in. Until next time, let’s go out there and make something
0:47:38 happen. I’ll catch you in the next edition of the Side Hustle Show. Hustle on.
0:00:11 up, Nickel over here. Welcome to The Side Hustle Show, part of the Entrepreneur Podcast Network.
0:00:16 It’s the business podcast you can actually apply. And have I got a side hustle for you today? We’ve
0:00:20 talked about flipping products for a profit in the past. We’ve talked about real estate
0:00:26 investing in the past. We’ve even talked about land investing. But never like this. My guest
0:00:32 specializes in finding these unloved, unbuildable parcels. Maybe they got no sewer, no septic.
0:00:37 Maybe they got title issues. And he specializes with dealing with that red tape at City Hall to
0:00:44 overcome those issues and then reselling those new and improved parcels for big, big gains. We’re
0:00:49 talking 10x your investment or more. He’s been doing this for decades as a repeatable and teachable
0:00:57 process from junklandintogold.com. Wayne Seminoff. Welcome to The Side Hustle Show. Hey, good morning.
0:01:01 Good morning. Yeah, thanks for inviting me. You bet. Excited to chat. Excited to dive in.
0:01:06 Wayne is a neighbor of mine. It turns out that we’re locals here in the northwest.
0:01:10 So stick around in this one, recovering the best ways to find these so-called junkland
0:01:15 parcels near you, even if you live in an expensive area. Maybe even better if you live in an expensive
0:01:20 area. He’s opening up his playbook on how to fix the various issues that you’ll encounter,
0:01:25 get them ready to resell for a big profit, and of course, the risks and mistakes to avoid along
0:01:31 the way. Wayne, I want to start off with this, turning $1,000 into $400,000. I think that’ll
0:01:38 get everybody’s attention. I can take $1,000 buy a piece of junkland at a tax auction, fix the
0:01:44 goofy little problems that are wrong with it, turn it from junk into buildable, and then sell it
0:01:52 as a buildable lot for $400,000. And I can do that over and over and over again. That’s what I do.
0:01:58 It varies in different sequences, but sometimes I buy a lot for $1,000, not only sell it for $10,000,
0:02:04 but sometimes $50,000, sometimes $60,000. Every once in a while, I hit the home run and I sell
0:02:11 them for $400,000. I’ve done over 100 properties, maybe 300 properties probably. Wow. Do it over
0:02:17 and over again. The key to it is pretty simple. Generally, junkland is junk because you can’t
0:02:25 build on it. But I found there was like seven tools you can use to change junkland into buildable
0:02:33 land. One is like variances. You get a variance from the building code, or let’s say you need a
0:02:39 boundary line adjustment. There’s tidal problems. Whatever the problem is on the property, if you
0:02:45 can isolate that problem and then correct it, your value dramatically increases 100 times.
0:02:51 I mean, like literally 100 times. I’ll give you an example of that. I bought a property a year ago
0:02:59 in Issaquah, which is a really hot area, about a half acre lot with water, sewer, power, road
0:03:05 access right across from Target. And I paid $1,000 for it. And then the reason I bought it for $1,000
0:03:11 is the guy who’d owned it for like 20 years couldn’t sell it to anybody because they had a tidal
0:03:16 problem. He couldn’t get clear tidal from a tidal insurance company. So he was going to let it go
0:03:22 in the tax sale. So I called him before the tax sale and I said, “Hey, are you going to let it go
0:03:26 in the tax sale?” And he says, “Yes, I’m going to let it go in the tax sale.” And I go, “Well, I’ll buy
0:03:31 it from you and don’t let it go in the tax sale.” And I said, “I’ll give you $500 for it.” And he
0:03:36 goes, “No, no, no, no, no, no. You think I’m crazy?” And I said, “Well, how much do you want for it?”
0:03:44 He goes, “I’ll take $1,000 for it.” I need to pause and say like, you know, any piece of land is
0:03:50 given the path of development in this area is worth significantly more than even $1,000. So you’re
0:03:54 thinking he’s like, “Hey, dude, don’t lowball me. Come on. I know what I’m sitting on.” But he’s
0:03:57 like, “I didn’t really want that much more.” It always shocks me. And I always come back, do that
0:04:04 lowball thing. And they always come back with low, low counter offers. And so he said, “If you
0:04:10 write, if you send me $1,000, I’ll sign over the deed to you.” And so him and his sister owned it.
0:04:15 So I got his sister and him to sign it. And we did it. I just sent him the deed electronically.
0:04:21 And then I venmoed him the money. So he had the money immediately. And then he just sent it back
0:04:28 to me. And I had a deal. So then I took this gorgeous piece of land. Right now it’s owned for one unit.
0:04:37 In that area, one unit of land is worth $500,000, one housing unit. And so I went to my attorney.
0:04:41 And I said, “I need to do a quiet title on fear of this title.” And I looked into what the problems
0:04:46 were in the title. And I found some supporting data to give to the attorney to make the title,
0:04:51 quiet title action, go smoother. And it took him four and a half months. And at the end of four
0:04:56 and a half months, he gave me a clear title. And I got a title report that says, “I’m the sole owner
0:05:04 of the property and nobody else can challenge it.” And now, today, that $1,000 property is worth $500,000
0:05:07 right now. Yeah. So you have $1,000 into it plus some legal fees.
0:05:15 Yeah. It cost me $15,000 for the clearing the title. So for $16,000, I’m going to
0:05:22 make $500,000. Right. Wow. That sounds pretty good, right? That’ll get people on their toes,
0:05:28 right? But that’s not enough. Okay. So this lot is subdividable. So I’m applying for a short
0:05:34 subdivision. I’m going to split the lot in two. And two lots in that area are worth $1,000,000.
0:05:41 So in four months from now, when the short subdivision is over in Issaquah, I’ll have two
0:05:47 separate lots and I’ll have $1,000,000 worth of land. For about $25,000 total investment,
0:05:53 I’ll have a $1,000,000 property. Well, there’s a lot to unpack here from
0:05:58 the title clearing process to how to even know that this was coming up for a tax sale in the first
0:06:04 place. But maybe we start with the confidence early on. Take me back to like 40 years ago,
0:06:11 Wayne, to say, “You know what? Even if it has a junk title, I can figure this out and for $1,000,
0:06:19 I’m willing to roll the dice.” I don’t know. I guess it’s relatively low risk. You got the
0:06:23 purchase price and the legal fees. If the owner couldn’t figure this out with theoretically,
0:06:30 he had the same million dollars to gain from doing it. Why would he sell it so cheap? And then
0:06:34 for you to have the confidence to say, “Well, shoot, I can clean this up. I can figure out the
0:06:40 legal red tape that needs to happen.” I teach people to buy from don’t wanters. Don’t wanters.
0:06:47 People who don’t wanters are people who own this property. They were the kids that inherited
0:06:54 from their dad. Their dad was a real estate guy like me. He could figure stuff out. But the kids,
0:06:59 they don’t know how to do it and they don’t care to learn how to do it. It’s just something they
0:07:04 got, this extra stuff. It’s like, they’re called don’t wanters. They don’t want the property.
0:07:07 It’s hard to imagine anybody not wanting an extra million dollars.
0:07:12 But they don’t know it’s worth a million because any barrier to them is a final barrier.
0:07:18 They don’t see beyond the barrier. They are very short-sighted. But the main thing is they
0:07:26 don’t have the desire to look beyond the barrier. Don’t wanter people just don’t want it. They
0:07:34 don’t want to mess with it anymore. There’s a divorce and the wife gets the husband’s property
0:07:37 and she hates the husband. She just doesn’t want the property. She just wants to get rid of it.
0:07:43 She doesn’t care if you can make more money off. She wants to dump it. The famous story of the girl,
0:07:51 the wife got that guy’s Corvette and sold it for 50 bucks just out of spite.
0:07:57 They just want to get rid of it and whatever. But I run into this a lot and people are very
0:08:03 short-sighted about their properties. These tricks that I have, they’re not up front. You call the
0:08:08 city and you say, “Hey, how do I make this lot buildable?” Nine times out of 10, they’ll say,
0:08:14 “No way. You can’t build on it ever.” The clerk guys at the low levels, they don’t even know them.
0:08:16 They don’t care. They don’t even care about looking up the rules.
0:08:21 They’re authorized to say no. But all of a sudden, they stick in their neck out to say,
0:08:23 “Yes.” It’s like, “Well, what did you just approve?”
0:08:29 Yeah, right. These guys, they tried to give it to the city of Issaquah and the city
0:08:33 wouldn’t take it because the title was screwed up. They were going to give it to them for free,
0:08:39 for zero, for nothing. The city said, “No, we don’t want it.” Even the city in its short-sightedness
0:08:44 didn’t know that it was a buildable lot that they could do something with or whatever.
0:08:49 What’s this process like to clear that title?
0:08:54 You call a title company and you ask for a title report. They send you a title report and it shows
0:09:01 you all the problems on the property. They’re all unique. Each report is different. On this one,
0:09:06 what it was is in the chain of title, that means from everybody who deeded the property to everybody
0:09:15 who owned it during all the years, there was a gap. About 50 years ago, these guys’ picking
0:09:21 brothers deeded it to this guy, and that deed, although it was a real deed and it really happened,
0:09:26 never got recorded in the title company’s records. Who knows why, but it never got there.
0:09:32 But he took possession of the property, thinking he owned what he paid for, and then he deeded it to
0:09:37 these other guys, the other guy, and then he died and went to his kids. The title company says,
0:09:43 “Well, since there’s a gap, we can’t give you title to it because I bought it from the kids.”
0:09:49 They say, “The kids don’t have title to it.” So what I did is I found out who this guy was,
0:09:55 the missing link deed. He was still alive, which is rare because it was like 50 years ago,
0:10:00 and I called him. He says, “Yeah, I bought the property and it’s a real deal,” and I recorded it,
0:10:06 but there’s no record, I guess. He wrote me a little statement saying, “I’m the guy, I got it,
0:10:11 I bought it, I recorded it,” and then we gave that to the judge. When we went to court, we said,
0:10:16 “Well, here’s a statement from the guy who actually bought it,” and then I asked the court,
0:10:22 and my attorney asked the court to give us clear title against everybody. So when you clear title,
0:10:27 you’re clear against the whole universe. So it’s not just him, but anybody who has a claim to it.
0:10:31 It’s a beautiful thing because it gets rid of any title issue.
0:10:36 Interesting. What would happen to have that guy be dead? You weren’t able to track him down.
0:10:42 What would happen then? That’s the front door. The side door is his heirs. If he dies, legally,
0:10:47 his ownership right goes to his heirs, and they don’t even know they own it. So I’d call them up,
0:10:51 you know, their kids, and I tell them the story, and I say, “Give me a quick claim deed. I’ll send
0:10:55 you a couple hundred bucks for your time in trouble,” and they give me a quick claim deed,
0:11:00 and then I use that, and I give that to my attorney, and then we go to court.
0:11:04 Do you ever have the kids come back and say, “Whoa, whoa, whoa, whoa, whoa, wait a minute,
0:11:08 you want to give us a couple hundred bucks for this half a million dollar parcel here?”
0:11:13 People who inherit stuff are don’t wanters. They didn’t even know they inherited it.
0:11:18 It’s like an illusion. They go, “Oh, really? You mean my uncle Joe gave me this property,
0:11:22 and I never even knew I owned it?” Yeah, when he died, he got the ownership,
0:11:27 and they go, “I’ve never had him say, you know, give me a big chunk of money.” I’ve always had
0:11:32 good luck with that. How funny. I mean, this is 10 minutes from our house. We drive past this
0:11:36 all the time, and it’s a prime kind of up on a little hill, like nothing,
0:11:39 not a ton built around it, but it is right across the street from Target, this huge shopping
0:11:46 development. How did you come into the Intel that it was going to be going up at the tax sale?
0:11:53 Okay. Every year, the county, King County, where I’m at, posts a list of all the properties that
0:11:59 are going to be foreclosed on. What I do is, before the tax sale, I call the owners to see
0:12:04 if they’re going to let it go in the tax sale, because if they are, then I offer to buy it from
0:12:09 them. These are Target properties that I really like. It’s not all the properties, just the ones
0:12:15 that really look good to me. Okay. In advance of the foreclosure auction and the tax sale,
0:12:19 the county is publishing this list. Hey, here’s everybody who is the link winner. Here’s what’s
0:12:26 coming up on our docket, and so that gives you a chance to go track down the existing owners and
0:12:31 try and make an offer in advance of that so you don’t get into a bidding war with other investors,
0:12:37 other buyers. Correct. Yeah. Once you go into the auction, then prices go up. Crazy people bid at
0:12:44 the auction. It’s online, so you can bid if you live in New York. This is all public record type
0:12:50 of stuff. Is it similar in other areas of the country? Most areas of the country have tax sales.
0:12:54 Some, they have different law systems like in Philadelphia and stuff. It’s a whole different
0:13:01 animal, but majority of the country has tax sales. Some areas have tax title sale, which is a whole
0:13:06 different animal, but I don’t deal with those. I remember going to some seminar and it was tax
0:13:11 lien investing, where you buy the– Yeah, tax lien investing, yeah. Buy the lien on the property,
0:13:15 and every now and again, you end up getting the deed because you’re one of the first lien holders,
0:13:21 and oh gosh, it was the whole thing. Yeah. You can make money at that. You might make maybe
0:13:25 two or three times your money, but in my game, you can make 100 times your money.
0:13:30 And the best bet is, let’s say you pick 10 properties and you’re successful, maybe one or two,
0:13:35 and eight of them, nothing happens. You just can’t make it happen. But on the two that are
0:13:41 successful, you make so much money that you pay for all the ones you bought, and you have enough
0:13:47 money to buy brand new ones. Got it. Is that a typical success rate? Not everything is going to be
0:13:55 a 100x home run, but you cast a wide enough net, you place enough bets that
0:13:59 enough of them work out to erase all the losses and then still make a profitable living.
0:14:04 It’s like the 10 to one rule. Basically, if you do 10 deals, you’ll make a killing on one.
0:14:10 And you might make some money on two or three, and then you’ll make no money on the rest.
0:14:15 And you might even lose on one of them. Helpful to know, right? Buy, write, minimize your risk,
0:14:21 all that stuff, but aim for the ones that have a big, big upside potential.
0:14:25 More with Wayne in just a moment, including how you might find these unwanted parcels near you
0:14:28 and the playbook for resolving issues on them right after this.
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0:15:47 See Mint Mobile for details. Being an entrepreneur and being able to work remotely definitely has its
0:15:53 perks. I’ve recorded podcasts everywhere from Vietnam to Italy, drafted newsletters from Japan,
0:15:58 hosted mastermind meetings from Spain, ended up being the middle of the night to get to U.S.
0:16:04 business hours, and outlined courses in Mexico. The common thread of all of these trips, though,
0:16:10 is Airbnb. We love being able to get exactly what we’re looking for in a place to stay and have a
0:16:15 more local experience than staying in some giant hotel chain. And you know me, I’m always thinking
0:16:20 about the next side hustle idea, the next income stream, right? And one that’s at the top of the
0:16:24 list is hosting our place on Airbnb while we’re traveling. That way, the house doesn’t have to
0:16:30 sit empty. We could use the income to help pay for the trip. And we’ve heard from several successful
0:16:35 Airbnb hosts on the show. And what’s interesting is a lot of them started with almost that exact
0:16:41 strategy, renting their place or even a spare room while they’re out of town. Taking inspiration from
0:16:46 that, you might have an Airbnb right under your nose. In fact, your home might be worth more than
0:16:55 you think. You can find out how much at Airbnb.com/host. That’s Airbnb.com/host to find out how much
0:17:03 your home is worth. Starting at this county level, pre-tax sale, if there is such a list,
0:17:10 that’s available and trying to contact those owners in advance. And the ones that say, “Yes,
0:17:14 I’m going to let it go to the auction,” will say, “Well, let me make a deal with you in advance of
0:17:19 that.” Or, “What would it take to part with it before that?” Yeah, I say, “Yeah, what would it
0:17:26 take?” And invariably, nine out of 10 guys that contact, if they’re going to let it go in the
0:17:33 sale, they’ll take pennies on the dollar. I got one good example. I bought a beautiful ski chalet
0:17:39 in Stephen’s Pass there. And it’s gorgeous. It’s right on top of a hill. And it’s newer.
0:17:46 And it’s all in perfect shape. I called the guy and he said, “Yeah, we used to use a lot and
0:17:50 everything.” And he says, “But I’m just getting too old. I don’t go there anymore.” And I said,
0:17:58 “Well, you know, we take $1,000 for it. It’s worth $180,000 right now, as is.” And he goes,
0:18:04 “No, no, I’ll take $8,000 for it.” And I said, “No, no, I’ll give you $2,000.” And so we settled
0:18:12 the $2,000. He says, “All right, I’ll take $2,000.” So I bought this $180,000 ski chalet for $2,000.
0:18:16 Because it’s just that they owe back taxes and they don’t want to deal with it.
0:18:24 And the side on this was he owed $6,000 in back taxes. I actually paid him $8,000 for the chalet.
0:18:28 Okay. Clear the back taxes and take ownership of the property.
0:18:30 You have to clear the back taxes. Yeah.
0:18:33 Why not just sell the place for $180,000? It’s just…
0:18:39 He’s a don’t wanter. You’re talking about you are a rational person and not a don’t wanter.
0:18:44 I’m a rational person, not a don’t wanter. But there are people out there who are not rational,
0:18:49 they’re in the don’t wanter category. When they don’t want it, that means they don’t care to do
0:18:52 anything on it. They don’t even want to call a listing agent and say, “Hey,
0:18:58 see if you can get for it.” I mean, they don’t want to lift one finger on it to do anything.
0:19:01 And it’s a beautiful thing because without those people, I would be out of business.
0:19:07 That’s the meat of my business is all those don’t wanters out there who just don’t care about their
0:19:12 properties. All right. Another site that I found was starting at the county level.
0:19:18 Actually, King County pointed me to a site called bidforassets.com, the number four assets.com,
0:19:22 which appears to be kind of a nationwide type of database.
0:19:28 Bid for assets. King County used bid for assets to sell at auction their properties once a year.
0:19:33 They don’t use them anymore. But it’s a really good site because it shows you,
0:19:37 you can go on the site and see which properties are in the auction.
0:19:41 And it has a diagram of the property. It also has a title report, which is very critical.
0:19:45 And it also tells the stats on the property, you know, if it’s wet or whatever.
0:19:50 It’s a really good site. The one that King County is using now is called real auction,
0:19:53 or EAL auction. That’s where it is going to be this year.
0:19:59 They have the title reports and they have it. It’s a nice informational site tells you what the
0:20:03 minimum bid is, which includes all the penalties and stuff for the back taxes.
0:20:10 And typically the cheapest thing you can buy is around $1,500 to $2,000 for a lot.
0:20:19 I did buy a lot for $667 last year. I bought one property for $600.
0:20:25 It seems to be like it’s almost like a Warren Buffett type of situation where it’s like,
0:20:29 I don’t need to be making deals every week. I just got to wait for the right one to come along.
0:20:34 And that could be my year. That could be my two years worth of income here.
0:20:39 Well, what I do is this has been like my hobby, because I love it so much.
0:20:45 And once a year, the tax sale comes up. So once a year, I’ll buy 10 properties or approximately
0:20:48 that. And I spend the rest of the year working on those properties.
0:20:53 Yeah, trying to fix them up and deal with whatever they need and all the work.
0:20:58 And typically by the end of that year, I’ve sold one or two cheaply.
0:21:03 And the ones that I get a lot of money for, I have to wait maybe two or three years to
0:21:06 actually get the big money. Okay. And you may want to, right?
0:21:10 You’ll got to hold on to it 12 months, at least for long-term capital gains or something, maybe.
0:21:13 Yeah. Did you have a background in real life?
0:21:17 How do you get into this? This is just such a random side business.
0:21:21 I think I’m the only guy that really does this stuff here in King County the way I do it.
0:21:27 I got into it. It’s really a good story. 40 years ago or 45 years, maybe 50 years ago now.
0:21:32 I went to, I didn’t know how to make money, but I thought, “What the hell? I’ll go to an auction.”
0:21:37 So I looked in the paper and it said auction dead people’s effects by King County morgue.
0:21:43 I went to this auction and you buy all the jewelings that they cut off the bodies.
0:21:45 Oh my God. Okay. That’s morbid. Okay. Geez.
0:21:49 Yeah. I know. Eyeglasses and false teeth and rings and earrings.
0:21:55 And this other guy was competing against me in the auction.
0:22:00 And he stopped me in the middle of the auction. He says, “Hey Wayne, we’re the only two main bidders.”
0:22:04 He says, “Why don’t you and I agree to partner up and we’ll just buy everything
0:22:08 and then we’ll split it up after the auction. We’ll just do one minimum bid.”
0:22:13 And that’s what we did. So we got a minimum bid. We bought everything.
0:22:19 And so we went to Denny’s and we put everything on the table and the big pile of air, all this stuff.
0:22:21 And we said, “Okay, one for you, one for me, one for you.”
0:22:26 And the most valuable thing were watches. They had some really nice watches.
0:22:31 And so he’d get a watch and I’d get a watch. But the bottom line on this is this guy
0:22:38 owned 1,000 pieces of junk property that he’d been buying at the tax sales for like 10 years.
0:22:43 And I’ve been working real estate at that time and I knew how hard it was to
0:22:47 fix properties when they have problems. And I know there’s no way and he can manage
0:22:53 1,000 properties with them saleable. So I said to him, I said, “Tell you what,
0:22:59 I know how to fix problems in real estate. If you give me half of the profit on every
0:23:04 property I fix and sell, we can be partners.” He says, “I’ll do it.”
0:23:07 At that point, I became a half owner in 1,000 properties.
0:23:12 And that’s where I really honed my skills on fixing stuff up.
0:23:19 I had 1,000 chances to learn how to get in the back door to fix properties. And since then,
0:23:25 I’ve learned that basically there’s about eight major tricks. And they’re all solid,
0:23:29 really good tricks that you can do to fix junk property and make it saleable.
0:23:33 Yeah. You’re getting in a lot of reps. You do it almost on a performance basis.
0:23:37 Like, “Hey, if it doesn’t make a profit for you, you don’t owe me anything,” kind of thing.
0:23:45 And this guy, Bill Looney, he was the third largest land owner, partial land owner in Washington,
0:23:48 below the state of Washington and the federal government.
0:23:52 He had more parcels of land than anybody else.
0:23:56 But they weren’t buildable. They needed a little TLC.
0:24:00 Yeah. Most of them were not buildable. I mean, basically not buildable.
0:24:04 He had some that were prime pieces, but the prime pieces I didn’t help with because he
0:24:08 could sell himself. So, I just got the junk ones.
0:24:13 All right. Let’s talk through some of these tools in your toolbox and maybe even sorting that
0:24:18 list of 1,000. Well, that’s pretty daunting. Which ones am I going to tackle first?
0:24:24 Is it these title issues like the Issaquah property? Is it sewer or septic? Is it trying
0:24:31 to get a variance? Where do you even begin? Or do you have a game plan?
0:24:36 Yeah. Right. I’ll tell you how I do it. I get the list from King County and I print it out
0:24:42 and I put it down in front of me. The first thing I do is I look for all the cheapest,
0:24:47 it has the values. And I look for all the ones that have the least amount of money that’s owed
0:24:52 on back taxes. So, I work from the bottom up. I don’t go with the ones that have the highest value.
0:24:57 And I’ll look at each one. The first thing I do, I look at it and I say, “Where is the owner?
0:25:04 Is he a local owner or is he living in Iowa?” And my list has where they’re located. And if
0:25:09 they’re out of state, I know that they’re probably a don’t want her. Is this like free public records?
0:25:15 Just go find on the county website. Yeah. Right. It’s all available. Okay. And then the next thing
0:25:21 I do is I’ll look at a picture of the land. I’ll go to IMAP in King County, which is their site for
0:25:27 looking, examining properties and shows the property lines. And I’ll see what the lot looks like.
0:25:33 When I look at the lot, I have these seven or eight tools. And I say, “Which of these seven or eight
0:25:39 tools applies to this lot?” Okay. And I do a quick scan. And you know, one, I look at this one, maybe
0:25:44 needs a boundary line adjustment or maybe this one needs a variance or whatever. And I can tell
0:25:50 visually for most what it needs. And then there’s some other things you want to check on, which is
0:25:56 does it have sewer? That’s a big one. If it doesn’t have sewer and it’s a small lot, then you have a
0:26:02 problem because you need a big lot to put a septic system in. Yeah, for your drain field. Okay.
0:26:08 I know how to take a little lot and make it perk and put a drain field on it, even though it’s too
0:26:15 small for the normal approval. So most people don’t know how to do that, but I can do that.
0:26:22 It’ll have a checkbox. Like, is there sewer or sewer plumbed? That’s just a public, again,
0:26:28 public impression. If you go to IMAP in King County here, you can actually see all the
0:26:33 particulars on the property. You have a picture of it. And then you can also push a button and it
0:26:40 says everything about it. It’s got water, sewer, power, access. If it’s got steepness or wetness
0:26:46 or whatever, it says all that stuff. Okay. Got it. And so you’re shorting by least amount of
0:26:51 back taxes owed. Any other filters that you try and apply? Because I imagine some of them are going
0:26:56 to be pretty… Some of them are not going to be at the $1,000 rate. Some of them are going to be like,
0:27:00 well, it’s a half a million dollar parcel because it’s in the center of Bellevue or like right in
0:27:05 Seattle. Yeah, I know. And believe it or not, I buy a lot of parcels that are in really high rent
0:27:10 areas like the center of Bellevue. Yeah. I’ve got two parcels in downtown Bellevue. I think I paid
0:27:16 $2,000 for one and I paid maybe $1,000 for the other one. And we’re working with the city now.
0:27:22 If we can get those approved, those two lots are worth $2 million. Right. They’re worth a million
0:27:27 a piece. And they’re just little teeny scraps of land. They’re very small, but they’re buildable.
0:27:31 Well, they weren’t buildable when I bought them, but they’re going to be buildable when I’m done
0:27:37 with them. What did you do to have to make them buildable? Well, this one right off Bellevue Way,
0:27:44 it doesn’t have an access. It was landlocked. Oh, okay. It’s only 20 feet wide by 300 feet long.
0:27:49 So it’s really long and skinny. And there’s a driveway that connects it. It goes right past
0:27:54 the front of it and connects it to… It goes to some guy’s house a few hundred yards beyond.
0:27:59 Okay. So it’s right on the driveway, but you can’t legally use that driveway because you
0:28:04 don’t have a legal right to it. So what I did is I went to the guy next door on the driveway and I
0:28:10 said, “Hey, if you’ll give me an easement, I’ll give you $10,000.” And he says, “I’ll tell you what.
0:28:14 If I give you the easement, I want you to give me what your lot’s going to be worth,
0:28:19 and you know, market value a lot.” And at that time, I told him a lot was worth $500,000 with
0:28:26 an easement. He says, “If you’ll give me $400,000, I’ll give you an easement. You make $100,000
0:28:32 and I make $400,000.” You know, it’s like I can see where he’s coming from. It’s still a win,
0:28:36 but yeah. Yeah, it was a win. So easement would just be like making a part of the public record
0:28:41 that the owner of this lot could use your driveway basically. Yeah. Okay. You know, it’s like falling
0:28:45 off a rock for him to give me an easement because it doesn’t interfere with him at all. Yeah. There’s
0:28:52 no way. You know, all he does is let me drive my car 50 feet and turn left. The driveway is 200
0:28:57 feet long. Yeah. Okay. But he went born yesterday. He wants a piece of the upside, sure. So then,
0:29:02 I went to plan B, which is you can actually sue for access if you have landlocked property.
0:29:09 And I brought a lawsuit against him to sue for access on his driveway. And it’s a long story,
0:29:14 but basically I won the lawsuit. Not only did I win the lawsuit, I got the easement for free,
0:29:19 and he has to pay me $10,000 in attorney’s fees. Oh, geez. He fought me so hard on it.
0:29:26 So he has to pay me $10,000 and give me the easement for free. And now my lot’s worth a million
0:29:33 dollars. Now, why is that? Why would the city force him to let you use his private road?
0:29:40 The law allows that. The law supports taking fallow land and making it viable.
0:29:46 That’s federal. It’s called common law. Federal common law says they want to enhance use of land.
0:29:53 And if your lawn’s landlocked, they wrote laws to allow you to sue to get access to your lot
0:29:57 if your neighbor is a real jerk and won’t give you a road. You’re like, “Hey,
0:30:04 you should have just taken the $10,000, buddy.” Huh. Okay. So that was that one. And the other one,
0:30:11 we have an issue with the lot is 2,800 square feet. It’s a little triangle, but it’s buildable.
0:30:18 And the building code says if the lot’s 3,000 square feet or less, you can’t build on it.
0:30:23 I’m wrestling with the city to see if we can get them to roll over. It’s only like a 120 foot
0:30:31 difference between what the law is or the route, the regulation is and our lot. We’re seeing if we
0:30:37 can convince them to give us the approval for that right now. And what we did is we found
0:30:44 a bunch of case law. We studied all the case law in Washington that supports that type of request.
0:30:49 And we sent them all these lawsuits that were where people sued the cities because they wouldn’t
0:30:53 give them the buildable right of their property because it was short by a few hundred feet.
0:31:00 Well, that means if the city refuses to give us this right, we can sue the city and force them to
0:31:06 give us the right to build on the lot, even though their code says you can’t. Okay. So you find,
0:31:10 so you’re making your case. Like, look, there’s some precedents for this. On top of that, there’s
0:31:16 a housing shortage. Like, we’re trying to turn this otherwise unoccupied, useless thing into
0:31:20 something that could actually help people. And we just need you to sign on the dotted line.
0:31:23 That’s exactly right. It’s all for good cause. You know, I make money. You know,
0:31:29 creates a new building site. The city gets more revenues. Also, the cities are real. They force
0:31:35 you to pay for all their roads and sidewalks and sewers. They don’t pay for it. You pay for it.
0:31:42 I pay for it. When I build a property out, no matter what city it is, they make you pay for
0:31:46 everything. So they don’t pay any, you don’t pay for the road. You don’t pay for the site.
0:31:52 I pay for the sidewalks. The city doesn’t pay for it. I got a lot in Renton. The lot’s only worth
0:31:59 $100,000 and it’s got a building permit on it. The city wants me to pay $150,000 worth of sidewalk
0:32:04 and road improvements on top of everything I’ve paid for that lot, on top of it. You know.
0:32:06 What do you do in that case? Hunt.
0:32:08 Let it go to the tax auction or do you say like, now you got a…
0:32:14 No, no. Actually, what I’m doing in this case is, and I’ve only got one-tenth of the block,
0:32:19 I would be the only guy putting a sidewalk and improving the road on the entire block. It’s
0:32:25 a thousand feet long and I’ve got a hundred feet. Yeah. And so I’m going to go to the mayor’s office
0:32:32 and ask them if they’ll support. Let’s see, overriding their requirement for the sidewalk
0:32:36 because it just doesn’t make sense. So, this is something else to be aware of. Just like these
0:32:43 taxes and permitting fees. When we were looking to move back up here, we found this vacant
0:32:48 property. We’re like, well, if you can’t find a house, maybe just build your own house. Well,
0:32:54 what’s that realistically look like? And some of those permits and fees, it was like $28,000
0:33:00 for like, you know, traffic impact study or something. It was like two cars. That’s the
0:33:04 traffic impact. I’ll give you the answer. You don’t need to spend $28,000 on this. It was out of
0:33:10 control. Yeah. So, cities make a lot of money off what I do. So, they actually do want you to build
0:33:15 on this stuff because the more they give you more permits, the more money they make. Right. So,
0:33:20 they’re really on your side. More with Wayne in just a moment, including his best practices for
0:33:27 dealing with City Hall and his most expensive loss right after this. Lots of scrappy side hustlers
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0:35:40 wherever you listen to podcasts. What’s your best practices for finding the bureaucracy
0:35:45 decision makers who can actually give you that stamp of approval? Because it seems
0:35:52 intimidating as a total outsider, total newbie to roll up to City Hall or even try and find
0:35:57 the right department and get transferred around a bunch of places. Oh, I don’t know. I don’t want
0:36:03 to touch that with a 10-foot pole. That’s obviously where the value at is here and where the money’s
0:36:09 made. Cities can be your friend or your enemy, depending on your attitude. It’s up to you.
0:36:14 And if you look at them as a friend, which I do, I go in there and I ask people to help me
0:36:20 and I say, “Hey, I’ve got this unbuildable piece of property. Is there any way I can build on this?”
0:36:27 And if they say no, then I say, “Well, if they’re lower-level people.” I say, “Can I talk to your
0:36:33 boss?” And maybe he’s got an idea. Maybe he can find a way. And then I go and talk to the boss
0:36:38 and I ask him the same question. And then if he can’t find a way, I say, “Can I talk to your boss?”
0:36:43 And I work my up to the top guys, the planning director. Typically, those guys have all the
0:36:47 really smarts. They’re really together, the planning directors. And they know all the tricks.
0:36:52 And then they’ll come up with stuff you never even heard of. That’s where I learned a lot
0:36:58 of my tricks is from these guys. I said, “I got this lot. Everybody says I can’t build on it.
0:37:03 How could I do it?” And then they show you, “Well, if you do this, you do that, you can build on it.”
0:37:07 Okay, you’re working your way up the chain of command. You don’t want to take no for an answer.
0:37:09 There’s got to be something creative we can come up with here.
0:37:14 My philosophy is if they’re saying no to you, they’re lying to you. If they say yes,
0:37:18 they’re telling you the truth. Right. It’s just a matter of finding what’s it going to take here.
0:37:23 Once you have that stamp of approval for building, that’s the primary value add.
0:37:30 How often are you proceeding with that building yourself or saying, “I don’t want to deal with
0:37:35 contractors and instruction and doing all this stuff. I’d rather just make my quick paperwork
0:37:41 flip here and be done with it.” Most times, I’ll either get it ready for a building permit
0:37:46 or get the building permit and then sell it. Occasionally, I’ll build it out. I’ve only built
0:37:55 out two or three houses. Okay. It’s quite difficult and it’s lengthy and it’s time consuming. You get
0:38:00 more money, but to me, it’s not really worth it. I’d rather roll the property as soon as I get a
0:38:05 permit or get the property where the city says they will give you a permit. I’ll sell it then,
0:38:10 too, if they’ll just say, “Okay, we’ll give you a permit,” even though you haven’t applied for it.
0:38:15 At that point, I’ll sell the lot. Let’s say it’s worth $500,000 with the permit.
0:38:20 I’ll sell it for $400,000 at a discount if you buy it right now because it’s without the permit.
0:38:24 Got it. It’s still a big gain for you. Everybody’s happy. Everybody wins.
0:38:34 Is that process just a typical MLS listing? Is that a special land brokerage? How do you
0:38:39 do the listing side of it? I have an expert broker that I use over and over again because he’s very
0:38:46 talented. You have to shop around to find somebody who really knows raw land because
0:38:52 you’re selling junk land. The first look, people could go, “That looks like junk.” You have that
0:38:56 somebody who can say, “No, it’s not junk. You can actually put a 10-story building on it.”
0:39:04 It takes a special salesman to sell that. The average salesman, they’re house salesmen,
0:39:10 and they don’t know anything about land. Got it. Tell me about something that, despite your best
0:39:18 efforts, it just would not polish into gold. It was inexpensive. I’ve lost some deals. I had one
0:39:25 on Mercer Island. It was a long, skinny lot with a view of the lake. It’d be worth a lot if I could
0:39:33 build on it. Then it just needed a variance. For setbacks from the property line or something?
0:39:38 Yeah, it needed some setbacks because it was narrow. It was narrow. It was long enough. It was
0:39:44 like 150 feet long, but it was only 40 feet wide. With the setbacks, it really crunched the house
0:39:50 down. I asked for five-foot setbacks instead of whatever they were. I had a beautiful house
0:39:56 designed on it. It would be great. Then the neighbors there got up and arms against me
0:40:02 and pressured the city to deny my variance. At that point, I lost. Then I thought, “Okay,
0:40:09 I’m going to do it again.” I applied for a variance again. I went out again, hoping to
0:40:17 change things a little bit to make it work. I lost the second time too. In the end, what happened is
0:40:22 the owner who lived next door talked to his title company and they found that they had
0:40:30 deeded him that property by mistake 20 years earlier. They screwed up. They had to give him
0:40:35 money for my property. Instead of doing that, they brought a lawsuit against me for a partition,
0:40:40 which it’s called a partition sale. It was adverse possession and partition.
0:40:46 By doing that, they forced the sale of the property and I ended up with $85,000.
0:40:52 I paid $1,000 for the property, but in fees over the two years, I probably spent $150,000.
0:40:58 So, I probably lost $75,000 on a deal. That was a failure.
0:41:04 Appreciate you sharing. Not just the upside, but there’s things that could go wrong with
0:41:10 these legal procedures and neighbor disputes and battles with the city and everything else.
0:41:17 It’s a 10-to-one thing. That’s why I buy 10 lots and I’ll go out 10 of them. One or two will be
0:41:23 absolute home runs. I’ll make 100 times the money or like the one at ISCO. I’m making like 500 times
0:41:31 my money. I mean, it’s crazy. But on others, maybe I make double and some of me maybe lose
0:41:38 money on. Now, I lose money on two or three. But my investment is so low on the ones I lose,
0:41:43 what I lose is $2,000. Right. As long as you’ve minimized your downside,
0:41:50 it sounds like where the major costs come in is in legal fees, attorney fees, studies and surveys
0:41:57 and everything else. Yeah. You generally need a survey a lot of times on property and that’s
0:42:03 two to three to four to 5,000. So you have to think about that. A lot of times you need a survey.
0:42:10 Wayne, this is a fascinating business. I love that you have been at it diligently for years and
0:42:14 years and years. I don’t mean any offense by this, but you’re not a young guy. What do you want to
0:42:19 take this thing? What’s next for you? Well, this is the deal. I just turned 81 this year and I’m
0:42:24 starting to lose my brain because even you get old, things start falling off you and your
0:42:31 brain gets weird. And I want to give all this knowledge to young people or whoever and let them
0:42:38 learn how to become financially independent and just become wealthy on their own and not have to
0:42:44 suffer. When I was young, I could never pay all my bills. Every month the bills came and I could
0:42:50 never pay. I never enough money to pay my bills. And this way, if I started this when I was really
0:42:56 young, that would have changed everything. So I just want to share my knowledge with people.
0:43:01 That’s my goal. Give them everything I’ve learned before I can’t think anymore. And so that’s why
0:43:06 I did the program and I wrote a book and trying to get all that knowledge out of my head into some
0:43:12 sort of form that people can utilize. That’s right. Wayne sent me his book, “Junkland into Gold.”
0:43:17 You can check it out. It was a lot of fun reading through, maybe more fun because it was all like
0:43:21 local stories. I was like, “Oh, I know where that is.” That’s really cool. Are you still
0:43:26 doing the annual auction? I’m going to do this as long as I can because it’s fun.
0:43:32 It’s my hobby. It’s my hobby. I do it because I love it. It’s fun. It’s not really to make money.
0:43:38 It’s just to have a good time. Other people like to play games online and stuff. I go to the auction
0:43:44 once a year. It’s my vacation. Yeah. You think about people who are into fixing junk cars. I’ve
0:43:48 always got a project car going in the garage or doing the furniture flipping thing and sanding
0:43:54 and painting. It’s kind of similar. It’s just doing it with Junkland instead. I don’t know.
0:44:00 Super interesting. But junklandintogold.com, you can find Wayne over there. He’s offered a side
0:44:08 hustle show listeners 25% off his Junkland Into Gold program with promo code FUNN. No
0:44:12 affiliation there, but be sure to use that if you want to dive deeper. I’ll link up the book
0:44:17 as well. Let’s wrap this thing up with your number one tip for side oscillation. It does not have to
0:44:22 be land investing related, just whatever entrepreneurial wisdom that you’d like to impart.
0:44:30 Most important thing you need to do is to mistake your way to success. What that means is you have
0:44:36 to keep trying to succeed, failing at what you do, and not letting it damage your ego at all.
0:44:42 I call it a mistake your way to success. What that means is in this business, my business,
0:44:47 you’re going to make a lot of mistakes. Each time you make a mistake, you have to learn to
0:44:53 laugh at yourself, realize that you’re taking one more step closer to winning. If you don’t make a
0:44:58 lot of mistakes, you’re not going to win because that’s how it is. Most people, they make a mistake
0:45:05 and their ego forces them to give up. If you never give up and you just keep going and you laugh at
0:45:10 it and say, “Well, I’m mistaking my way to success,” then you’ll win. You’ll always win.
0:45:16 Yeah. I’ve never heard a phrase that way. There’s always like, “Every no gets me closer to a yes,”
0:45:23 but I never heard a phrase. Mistake your way to success. It’s so true in so many fields. We took
0:45:30 the kids out to the driving range, golf driving range this weekend. Those first few, it’s like,
0:45:34 the risks are going every which way and you’re like, “Well, why are you moving your feet so much?”
0:45:40 But then by the end of the second bucket, it’s like, you’re actually making contact now. It’s
0:45:45 like, you had to do it the wrong way first. It’ll mistake your way to success. I like that one.
0:45:49 Wayne, thanks so much for joining me. A couple takeaways before we wrap up. You got to be a
0:45:56 problem solver. These cities have an incentive to let you build on these lands, but you got to
0:46:02 show them the way. You got to really work and massage the deals and make it a win
0:46:06 for everybody. You got to be willing to solve some problems and you got to
0:46:11 be willing to do the work that the don’t wanters don’t want to do. That’s probably the big thing
0:46:15 here. Then it’s buying right. It’s keeping your risks low because not everything is going to be
0:46:21 a home run. You can’t get overexposed, overpay for the property where you might have a game
0:46:26 plan in mind, but you don’t know the outcome. You got to keep that downside risk low.
0:46:31 I guess, worst case, you just resell it to the next person like Wayne who wants to come around
0:46:35 and to see, “Well, maybe if you couldn’t fix it, maybe I could fix it.” But if you’ve minimized
0:46:40 your upfront costs, I think that’s a good way to go. If you are new to the Side Hustle Show,
0:46:45 welcome. Thank you for tuning in. Even if you’re not so new, I want to invite you to grab your
0:46:52 personalized Side Hustle Show play list. These are a handful of hand-picked episodes specifically
0:46:56 for you. Well, how do we do it? Well, you go to hustle.show. You answer a few short multiple
0:47:01 choice questions about your Side Hustle interests, your goals, and it’ll spit back out that
0:47:05 custom curated recommended playlist based on where you’re at and where you want to go.
0:47:11 That’s hustle.show. Give it a try today. Plug those episodes into your earbuds.
0:47:15 Next, big thanks to Wayne for sharing his insight. Big thanks to our sponsors for
0:47:20 helping make this content free for everyone. You can hit up sidehustlemation.com/deals
0:47:24 for all the latest offers from our sponsors in one place. Thank you for supporting the
0:47:30 advertisers that support the show. It really does make a difference. That is it for me.
0:47:33 Thank you so much for tuning in. Until next time, let’s go out there and make something
0:47:38 happen. I’ll catch you in the next edition of the Side Hustle Show. Hustle on.
How do you turn a “junk land” — a seemingly worthless piece of land — into a profitable investment?
We’ve talked about flipping products for a profit or real estate investing before. We’ve even talked about land investing.
But never like this.
Wayne Seminoff from JunkLandIntoGold.com specializes in finding unloved, unbuildable lots — then he fixes the issues — before reselling these new and improved lots for up to 10x his initial investment.
Tune in to Episode 629 of The Side Hustle Show to learn:
- how Wayne flips junk land into profitable property
- how to clear title issues and solve access problems
- how to turn unbuildable lots into valuable assets
Full Show Notes: Turning Junk Land Into Gold
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