What is Land Arb?

LAND ARB (AKA - Land Arbitrage) is a fancy name for a simplistic concept. Most of us, no matter how new you are, have learned about wholesale. Well, LAND ARB is just buying wholesale except with a lot less money committed up front.

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The standard agreement and expectation between land investors when buying and selling wholesale or land arb is that each person involved doubles their money.

 

As an example, to illustrate this arrangement, let’s say we find a 1-acre piece of property that is worth $4,000 to a retail buyer. 

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I would purchase this property from the seller for a maximum price of $1,000. In turn, I would wholesale it to you for $2,000, and you will sell it for a minimum of $4,000.

In this example everybody makes 2x their money.

 

We bought a property for $1,000 from the seller and sold it for $2,000 to another investor.

The second land investor purchased it from us for $2,000 and then sells it for $4,000 at retail.  Once again the second land investor is able to double their money as well.

 

Land Arb is the same concept however instead of paying me $2,000 cash up front, you would purchase it on terms that we both agree upon.

Here is an example of how a Land Arb deal could look using the previous 1-acre property above. The 1-acre property is worth $4,000 at retail. Recall, the most I can charge another investor is $2,000 in total, regardless of if they pay cash up front or make monthly payments over several years.

 

Terms may vary widely based on several factors, but below is a sample of Land Arb terms:

• $25 doc fee

• $150 down payment

• $51.38 per month for 36 months

 

Typical fees that will also be added on each month are:

• $5 per month: Note servicing fee for using GeekPay and Stripe or Actum to process monthly payments.

• Estimated annual property taxes charged monthly.

• Monthly HOA dues (if applicable)

*NOTE: all of the additional fees listed above should be passed along to the retail buyer.  So these won't actually be a cost. In fact, I know several land investors who will charge $10-$15 note servicing fee to a retail buyer instead of just $5.