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How to earn 10 to 100 times returns in a really surprising flipping niche. What's up? What's up? Nick Loper here. Welcome to the Side Hustle Show, part of the Entrepreneur Podcast Network. It's the business podcast you can actually apply. And have I got a side hustle for you today. We've talked about flipping products for a profit in the past. We've talked about real estate investing in the past. We've even talked about land investing.

but never like this my guest specializes in finding these unloved unbuildable parcels maybe they got no sewer no septic maybe they got title issues and he specializes with dealing with that red tape at city hall to overcome those issues and then reselling those new and improved parcels

for big, big gains. We're talking 10x your investment or more. He's been doing this for decades as a repeatable and teachable process. From junklandintogold.com, Wayne Semenov. Welcome to the Side Hustle Show. Hey, good morning. Good morning. Yeah, thanks for inviting me.

You bet. Excited to chat, excited to dive in. Wayne is a neighbor of mine. It turns out that we're locals here in the Northwest. So stick around. In this one, we're covering the best ways to find these so-called junk land parcels near you, even if you live in an expensive area. Maybe even better if you live in an expensive area. He's opening up his playbook on how to fix the various issues that you'll encounter, get them ready to resell for a big profit, and of course, the risks and mistakes to avoid along the way. And Wayne, I want to start off with this turning point.

$1,000 into $400,000. I think that'll get everybody's attention. I can take $1,000, buy a piece of junk land at a tax auction, fix the goofy little problems that are wrong with it, turn it from junk into buildable, and then sell it as a buildable lot for $400,000.

And I can do that over and over and over again. That's what I do. It varies in different sequences, but sometimes I buy a lot for $1,000. Sometimes I sell it for $10,000, but sometimes $50,000, sometimes $60,000. Every once in a while, I hit the home run and I sell them for $400,000. I've done over 100 properties, maybe 300 properties probably. Wow. Do it over and over again. And the key to it, it's pretty simple. Generally, junk land is...

is junk because you can't build on it. But I found there was like seven tools you can use to change junk land into buildable land. And one is like variances. You get a variance from the building code.

or let's say you need a boundary line adjustment, or it's tidal problems, or whatever the problem is on the property, if you can isolate that problem and then correct it, your value dramatically increases 100 times. I mean, like literally 100 times. I'll give you an example of that. I bought a property a year ago in Issaquah, which is a really hot area, bought a half-acre lot,

with water, sewer, power, road access right across the street from Target and I paid $1,000 for it. And then the reason I bought it for $1,000 is the guy who had owned it for like 20 years couldn't sell it to anybody because they had a title problem. He couldn't get a clear title from a title insurance company. So he was going to let it go on the tax sale.

So I called him before the tax sale and I said, hey, are you going to let it go 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 it from you, you know, and don't let it go in the tax sale. And I said, I'll give you $500 for it. And he goes, no, no, no, no, no. You think I'm crazy? And I said, well, how much do you want for it? He goes, I'll take $1,000 for it. I need to pause and say, like, you know, any...

You know, piece of land is given the path of development in this area is worth significantly more than even a thousand dollars. So you're thinking he's like, hey, dude, don't lowball me. Come on. I know what I'm sitting on. But he's like, I didn't really want that much more. It always shocks me. And I always come back, do that lowball thing. And they always come back with low, low counteroffers.

And so he said, if you send me $1,000, I'll sign over the deed to you. And so him and his sister owned it. So I got his sister and him to sign it. And I just sent him the deed electronically. And then I Venmoed him the money. So he had the money immediately.

And then he just sent it back to me and I had a deal. So then I took this gorgeous piece of land. Right now it's zoned for one unit. In that area, one unit of land is worth $500,000, one housing unit.

And so I went to my attorney and I said, "I need to do a quiet title and clear this title." And I looked into what the problems were in the title and I found some supporting data to give to the attorney to make the quiet title action go smoother. And it took him four and a half months. And at the end of four and a half months, he gave me clear title and I got a title report that says, "I'm the sole owner of the property and nobody else can challenge it."

And now, today, that $1,000 property is worth $500,000 right now. Yeah, so you have $1,000 into it plus some legal fees. Yeah, it cost me $15,000 for clearing the title. So for $16,000, I'm going to make $500,000. Right. Wow.

That sounds pretty good, right? That'll get people on their toes, right? But that's not enough. Okay, so this lot is subdividable. So I'm applying for a short subdivision. I'm going to split the lot in two. And two lots in that area are worth a million dollars. So in four months from now, when the short subdivision is over in Issaquah, I'll have two separate lots and I'll have a million dollars worth of land for about $25,000 total investment.

I'll have a million dollar property. Well, there's a lot to unpack here from the title clearing process to how do you even know that this was coming up for a tax sale in the first place? But maybe we start with the confidence early on. Take me back to like 40 years ago, Wayne, to say like, you know what? Even if it has a junk title or, you know, I can figure this out. And for a thousand dollars, I'm willing to roll the dice. It's like, where is...

I don't know. I mean, I guess it's relatively low risk. You got the purchase price and the legal fees. It's like if the owner couldn't figure this out, theoretically, he had the same million dollars to gain from doing it. Why would he sell it so cheap? And then for you to have the confidence to say, well, shoot, I can clean this up. I can figure out the legal red tape that needs to happen. I teach people to buy from don't-wanters.com.

OK, don't wanters. People who don't wanters are people who like own this property. They were the kids that inherited from their dad. Their dad was a real estate guy like me. He could figure stuff out. But the kids, they don't know how to do it and they don't care to learn how to do it.

It's just something they got. It's extra stuff. It's like they're called don't-wanters. They don't want the property. It's hard to imagine anybody not wanting an extra million dollars. But they see they don't know it's worth a million because any barrier to them is a final barrier. They don't see beyond the barrier. They're very short-sighted. But the main thing is they don't have the desire to look beyond the barrier.

don't want her people just don't want it they don't want to mess with it anymore you know this it's sort of like you know there's a divorce and and the wife gets the husband's property and she hates the husband she just doesn't want the property she wants to get rid of it you know she doesn't care if she can make more money off just she wants to dump it the famous story of the the girl the wife got that guy's corvette and sold it for 50 bucks you know just she

Just out of spite. Yeah, just, you know, they just want to get rid of it and whatever. But I run into this a lot and people are very short-sighted about their properties. And these tricks that I have, they're not upfront. You know, you call the city and you say, hey, how do I make this lot buildable? Nine times out of 10, they'll say, no way, you can't build on it ever. Right.

The clerk guys at the low levels, they don't even know and they don't care. They don't even care about looking up the rules. They're authorized to say no, but it's, you know, all of a sudden they stick in their neck out to say yes. Like, well, what did you just approve? Yeah, right. So and these guys, they tried to give it to the city of Issaquah and the city wouldn't take it because the title is screwed up. They were going to give it to him for free, for zero, for nothing.

And the city said, no, we don't want it. Even the city in its short-sightedness didn't know that it was a buildable lot that they could do something with or whatever. So what's this process like to clear that title? You call a title company and you ask for a title report and they send you a title report and it shows you all the problems on the property.

And they're all kind of unique. So each report is different. But on this one, what it was is in the chain of title, that means from everybody who deeded the property to everybody who owned it during all the years, there was a gap. About 50 years ago, these guys, Pickering Brothers, deeded it to this guy. And that deed, although it was a real deed and it really happened, never got recorded in the title company's records.

Who knows why, but it never got there. But he took possession of the property thinking he owned it, he paid for it. And then he deeded it to these other guys, the other guy, and then he died and it went to his kids. The title company says, well, since there's a gap, we can't give you title to it.

because I bought it from the kids. They say the kids don't have title to it. So what I did is I found out who this guy was, the missing link deed. He was still alive, which is rare because it was like 50 years ago. And I called him. He said, yeah, I bought the property and it's a real deal. And I recorded it, but there's no record, I guess. He wrote me a little statement saying, I'm the guy, I got it, I bought it, recorded it. And then we gave that to the judge and

When we went to court, we said, well, here's a statement from the guy who actually bought it.

And then I asked the court, my attorney asked the court to give us a clear title against everybody. So when you clear title, you're clear against the whole universe. So it's not just him, but anybody who has a claim to it. It's a beautiful thing because it gets rid of all the, any title issue. Interesting. What would happen to have that guy be dead? You weren't able to track him down. What would happen then? That's a front door. The side door is empty.

his heirs. If he dies, legally, his ownership right goes to his heirs. And they don't even know they own it. So I'd call them up, you know, their kids, and I'd tell them the story. And I'd say, give me a quitclaim deed. I'll send you a couple hundred bucks for your time and trouble. And they'd give me a quitclaim deed. And then I'd use that, and I'd give that to my attorney, and then we'd go to court. Do you ever have the kids come back and say,

Whoa, whoa, whoa, whoa, whoa. Wait a minute. You know, do you want to give us a couple hundred bucks for this half a million dollar parcel here? People who inherit stuff are don't wanters. They didn't even know they inherited it. It's like an illusion. They go, oh, really? You mean my uncle Joe? He gave me this property and I never knew I owned it. You know? Yeah. When he died, you know, he got the ownership. They go, I've never had him say, you know, give me a big chunk of money. I've always had good luck with that.

How funny. I mean, this is 10 minutes from our house. We drive past this all the time. And it's like, yeah, it's a prime kind of up on a little hill, like nothing, not a ton built around it. But it is right across the street from Target, this huge shopping development. How did you come into the to the intel that it was going to be going up at the tax sale? OK, every year, the county, King County, where I'm at, posts a list of all the properties that are going to be foreclosed on.

And what I do is before the tax sale, I call the owners to see if they're going to let it go in the tax sale. Because if they are, then I offer to buy it from them.

And these are target properties that I really like. It's not all the properties, just the ones that really look good to me. Okay. So in advance of the foreclosure auction and tax sale, the county is publishing this list. Hey, here's everybody who is delinquent or here's what's coming up on our docket. And so that gives you a chance to go track down the

existing owners and try and make an offer in advance of that so you don't get into a bidding war with other investors, other buyers. Correct. Yeah. Once you go into the auction, then prices go up. People, crazy people bid at the auction. You know, it's online so you can bid if you live in New York, you know. And so this is all public, public record type of stuff. Is it similar in other areas of the country? Uh,

Most areas of the country have tax sales. Some, they have different law systems like in Philadelphia and stuff. It's a whole different animal, but majority of the country has tax sales. Some areas have tax title sale, which is a whole different animal, but I don't deal with those.

I remember going to some seminar and it was, you know, tax lien investing where, you know, you buy the... Yeah, tax lien investing. You buy the lien on the property and every now and again you end up getting the deed because you're one of the first lien holders. Oh, God.

Oh, gosh. You know, it's the whole thing. Yeah. And you can make money at that. You know, you might make, you know, maybe two or three times your money, you know. But in my game, you can make 100 times your money. And the best bet is let's say you pick 10 properties and you're successful, maybe one or two and eight of them. Nothing happens. You just can't make it happen. But on the two that are successful, you make so much money.

that you pay for all the ones you bought and you have enough money to buy brand new ones. Got it. Is that a typical success rate? Like not everything is going to be a, you know, 100x home run, but...

You know, you cast a wide enough net, you place enough bets that enough of them work out to erase all the losses and then still make a profitable living. It's like the 10 to 1 rule. Basically, if you do 10 deals, you'll make a killing on one. And you might make some money on two or three, and then you'll make no money on the rest. And you might even lose on one of them.

Helpful to know, right? You know, buy right, minimize your risk, all that stuff. But, you know, aim for the ones that have a big, big upside potential. More with Wayne in just a moment, including how you might find these unwanted parcels near you and the playbook for resolving issues on them right after this.

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Starting at this county-level pre-tax sale, if there is such a list that's available, and trying to contact those owners in advance. And the ones that say, yes, I'm going to let it go to the auction, say, well, let me make a deal with you in advance of that. Or what would it take to part with it before that? Yeah, I say, yeah, what would it take? And invariably, nine out of ten guys I contact...

If they're going to let it go on the sale, they'll take pennies on the dollar. I've got one good example. I bought a beautiful ski chalet in Stevens Pass there, and it's gorgeous. It's right on top of a hill, and it's newer, and it's all in perfect shape. I called the guy, and he said, yeah, we used to use it a lot and everything. And he says, but, you know, I'm just getting too old. I don't go there anymore. And I said, well, you know, we take $1,000 for it.

It's worth $180,000. Sure. You know, right now, as is. And he goes, no, no, I'll take $8,000 for it. And I said, no, no, I'll give you two. And so we settled it, too. He said, all right, I'll take two. So I bought this $180,000 ski chalet for $2,000. Is it just that they owe back taxes and they don't want to deal with it? And the side on this was he owed $6,000 in back taxes.

I actually paid him $8,000 for the chalet. Okay. Clear the back taxes, intake ownership of the property. You have to clear the back taxes. Yeah. Why not just sell the place for 180,000? Like it's just, he's a don't want her. Like you're talking about, you are a rational person and not a don't want her. I'm a rational person, not a don't want her. But there are people out there who are not rational. They're in the don't want her category when they don't want it.

That means they don't care to do anything on it. They don't even want to call a listing agent and say, hey, you know, see if you can get for it. You know, I mean, they don't want to lift one finger on it to do anything. And it's a beautiful thing because without those people, I would be out of business. That's the meat of my business is all those don't wanters out there who just don't care about their properties.

All right. Another site that I found, so starting at the county level, actually, King County pointed me to a site called bidforassets.com, bid the number for assets.com, which appears to be kind of a nationwide type of database. Bid for assets. King County used bid for assets to sell at auction their properties once a year. They don't use them anymore, but it's a really good site because it shows you, you can go on the site and see which properties are in the auction and

And it has a diagram of the property. It also has a title report, which is very critical. And it also tells the stats on the property, you know, if it's wet or whatever. It's a really good site. The one that King County is using now is called Real Auction, R-E-A-L Auction. That's where it is going to be this year.

They have the title reports and they have it. It's a nice informational site. Tells you what the minimum bid is, which includes all the penalties and stuff for the back taxes. And typically the cheapest thing you can buy is around $1,500 to $2,000 for a lot. I did buy a lot for $667 last year.

I bought one property for $600. It seems to be like it's almost a Warren Buffett type of situation where it's like, I don't need to be making deals every week. I just got to wait for the right one to come along. And that could be my year. That could be my two years worth of income here. Well, what I do is this has been like my hobby because I love it so much. And once a year, the tax sale comes up. So once a year, I'll buy 10 properties.

Or approximately that. Okay. And I spend the rest of the year working on those problems. Yeah, trying to fix them up and deal with them. And do whatever they need. Okay. All the work. And typically by the end of that year, I've sold one or two cheaply. And the ones that I get a lot of money for, I have to wait maybe two or three years to actually get the big money. Okay.

Okay. And you may want to, right? You'll got to hold on to it 12 months, at least for long-term capital gains or something, maybe. Yeah. Did you have a background in real life? How do you get into this? Like, this is just such a random...

random side business. I think I'm the only guy that really does this stuff here in King County, the way I do it. How I got into it is really a good story. Like 40 years ago or 45 years, maybe 50 years ago now, I went to a... I didn't know how to make money, but I thought, what the hell? I'll go to an auction. So I looked in the paper and it said, auction, dead people's effects by King County Morgue. I went to this auction and you buy...

All the jewelry and stuff, they cut off the bodies. Oh, my God. That's morbid. Okay, geez. Yeah, I know. Eyeglasses and false teeth and rings and earrings. Oh, my God. And this other guy was competing against me in the auction. And he stopped me in the middle of the auction. He says, Hey, Wayne, we're the only two main bidders. He says, What?

Why don't you and I agree to partner up and we'll just buy everything and then we'll split it up after the auction. We'll just do one minimum bid, you know. And that's what we did. So we got a minimum bid. We bought everything. And so we went to Denny's and we put everything on the table and a big pile of stuff. And we said, OK, one for you, one for me, one for you. And the most valuable thing were watches. They had some really nice watches.

And so he'd get a watch and I did a watch. But the bottom line on this is this guy owned a thousand pieces of junk property that he'd been buying at the tax sales for like 10 years. Okay. And I had been working in real estate at that time, and I knew how hard it was to fix properties when they have problems. And I know there's no way he can manage a thousand properties. Yeah. Get them saleable. So I said to him, I said, I'll tell you what.

I know how to fix problems in real estate. If you give me half of the profit on every property I fix and sell,

We can be partners. He says, I'll do it. Okay. So at that point, I became a half owner on a thousand properties. And that's where I really honed my skills on fixing stuff up. Got it. I had a thousand chances to learn how to get in the back door to fix properties. And since then, I've learned that basically there's about eight major tricks.

And they're all solid, really good tricks that you can do to fix junk property and make it saleable. Yeah, you're getting in a lot of reps. You're doing it almost on a performance basis. Like, hey, if it doesn't sell, you know, if it doesn't make a profit for you, you don't owe me anything kind of thing.

And this guy, Bill Looney, he was the third largest landowner, parcel landowner in Washington, below the state of Washington and the federal government. He had more parcels of land than anybody else. But they weren't buildable. They needed a little TLC. Yeah, most of them were not buildable. I mean...

Basically not buildable. He had some that were prime pieces, but the prime pieces I didn't help much because he could sell himself. So I just got the junk ones. All right. Let's talk through some of these tools in your toolbox and maybe even sorting that list of a thousand. Well, that's pretty daunting. Which ones am I going to tackle first? Is it these title issues like the Issaquah property? Is it sewer or septic? Is it trying to get a...

a variance you know some like where do you even begin or do you have a you have a game plan yeah right i'll tell you how i do it is um i get the list from king county and i print it out and i put it down in front of me the first thing i do is i look for all the cheapest it has the values okay and i look for all the ones that have the least amount of money that's owed on back taxes

So I work from the bottom up. I don't go with the ones that have the highest value. And I'll look at each one. The first thing I do, I look at it and I say, where is the owner? Is he a local owner or does he live in Iowa? And my list has where they're located. And if they're out of state, I know that they're probably a don't-wander. Is this like free public records? Just, you know, go find on the county website?

Yeah, right. It's all available. Okay. And then the next thing 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 examining properties and shows the property lines. And I'll see what the lot looks like. When I look at the lot, I have these seven or eight tools and I'll say, which of these seven or eight tools applies to this lot?

Okay. And I do a quick scan and, you know, one, I look at this and maybe it needs a boundary line adjustment or maybe this one needs a variance or whatever. And I can tell visually for most what it needs. And then there's some other things you want to check on, which is, 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 problem because you usually need a big lot to put a septic system in. Yeah, for your drain field. Okay. I know how to take a little lot and make it perk and put a drain field on it, even though it's too small for normal approval. So most people don't know how to do that, but I can do that. It'll have a checkbox. Is there sewer or sewer plumbed? That's just a public information. If you go to IMAP.com,

in King County here, there's a, you can actually see all the particulars on the property. You have a picture of it, and then you can also push a button and it says everything about it. It's got water, sewer, power, access. If it's got steepness or wetness or whatever,

It says all that stuff. Okay. Got it. And so you're sorting by least amount of back taxes owed. Any other filters that you try and apply? Because I imagine some of them are going to be pretty, you know, some of them are not going to be in the $1,000 range. Some of them are going to be like, well, it's a half a million dollar parcel because it's in the center of Bellevue or like right in Seattle. Yeah.

Believe it or not, I buy a lot of parcels that are in really high-rent areas like the center of Bellevue. I've got two parcels in downtown Bellevue. I think I paid $2,000 for one, and I paid maybe $1,000 for the other one.

And we're working with the city now. If we can get those approved, those two lots are worth $2 million. Right. They're worth a million apiece. And they're just little teeny scraps of land. They're very small, but they're buildable. Well, they weren't buildable when I bought them, but they're going to be buildable when I'm done with them. What do you do to have to make them buildable? Well, this one right off Bellevue Way, it doesn't have an access. It was landlocked.

Oh, okay. It's only 20 feet wide by 300 feet long. So it's really long and skinny. And there's a driveway that connects it. It goes right past the front of it and connects it to... It goes to some guy's house a few hundred yards beyond. Okay. So it's right on a driveway, but you can't legally use that driveway because you 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 said, hey, if you'll give me an easement, I'll give you $10,000. And he says...

I'll tell you what, if I give you the easement, I want you to give me what your lot's going to be worth, market value of your lot. And at that time, I told him my lot was worth $500,000 with an easement. He says, if you'll give me $400,000, I'll give you an easement. And then you make $100,000 and I make $400,000. You know, I can see where he's coming from. It's still a win, but yeah.

Yeah, it was a win. So easement would just be like, make it a part of the public record that the owner of this lot could use your driveway, basically. Yeah. Okay. It's like falling off a rock for him to give me an easement because it doesn't interfere with him at all. Yeah. There's no way. All he does is let me drive my car, you know.

50 feet and turn left. The driveway is 200 feet long. Okay. But he wasn't born yesterday. He wants a piece of the upside. Sure. So then I went to plan B, which is you can actually sue for access if you have landlocked property.

And I brought a lawsuit against him to sue for access on his driveway. And it's a long story, but basically I won the lawsuit. Not only did I win the lawsuit, I got the easement for free. And he has to pay me $10,000 in attorney's fees. Oh, geez. He fought me so hard on it. So he has to pay me $10,000 and give me the easement for free. And now my lot's worth a million dollars. Now, why is that? Why would the city force him to...

lets you use his private road. The law allows that. The law supports taking fallow land and making it viable. That's federal. It's called common law. Federal common law says they want to enhance use of land.

And if your lot line's landlocked, they wrote laws to allow you to sue to get access to your lot if your neighbor's a real jerk and won't give you a road, you know. You're like, hey, you should have just taken the 10 grand, buddy. Huh. Yeah. Okay. So that was that one. And the other one, we have an issue with the lot is 2,800 square feet. It's a little triangle, but it's buildable. And the building code says if the lot's 3,000 square feet,

or less, you can't build on it. I'm wrestling with the city to see if we can get them to roll over. It's only like a 120-foot difference between what the law is or the regulation is and our law. We're seeing if we can convince them to give us the approval for that right now. And what we did is we found a bunch of case law

We studied all the case law in Washington that supports that type of request. And we sent them all these lawsuits where people sued the cities because they wouldn't give them the billable right of their property because it was short by a few hundred feet. Well, that means if the city refuses to give us this right, we can sue the city and force them to give us the right to build on the lot, even though their code says you can't.

Okay, so you're making your case. Like, look, there's some precedents for this. On top of that, there's a housing shortage. Like, we're trying to turn this otherwise unoccupied, useless thing into something that could actually help people. And we just need you to sign on the dotted line. That's exactly right. It's all for a good cause. I make money, it creates a new building site. The city gets more revenues. Also, the cities are real. They force you to pay for all their roads and sidewalks and sewers.

They don't pay for it. You pay for it. I pay for it. When I build a property out, no matter what city it is, they make you pay for everything. So they don't pay anything. You don't pay for the road. You don't pay for the side. I pay for the side box. The city doesn't pay for it. I got a lot in Renton.

The lot's only worth $100,000 and it's got a building permit on it. The city wants me to pay $150,000 worth of sidewalk and road improvements on top of everything I've paid for that lot. On top of it, you know. What do you do in that case? Hunt. Let it go to the tax auction or you say like now you got to... No, no. Actually, what I'm doing in this case is I only got one-tenth of the block. I

I would be the only guy putting a sidewalk and improving the road on the entire block. It's a thousand feet long and I've got a hundred feet. Yeah. And so I'm going to go to the mayor's office and ask them if they'll support, let's see, overriding the requirement for the sidewalk because it just doesn't make sense. So this is something else to be aware of. It is like these taxes and permitting fees. And we were looking when we were looking to move back up here, we found this vacant property.

We're like, well, if you can't find a house, like maybe we just build your own house. Like, well, what's, what's that realistically look like? And some of those permits and fees, it was like $28,000 for like, you know, traffic impact study or something. It was like, yeah, right. Two, two cars. That's, that's the traffic impact. Like I'll give you the answer. You don't need to spend $28,000 on this. It was out of control. Yeah.

Yeah, so cities make a lot of money off what I do. So they actually do want you to build on the stuff because the more they give you more permits, the more money they make. Right. So they're really on your side. More with Wayne in just a moment, including his best practices for dealing with City Hall and his most expensive loss right after this.

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What's your best practices for finding the bureaucracy decision makers who can actually give you that stamp of approval? Because it seems intimidating as a total outsider, total newbie to find.

roll up to city hall or even like try and find the the right department and get transferred around a bunch of places oh i don't know you i don't want to touch that with a 10-foot pole like it seems i mean that's obviously where the value add is here and where the money's made cities can be your friend or your enemy and depending on your attitude it's up to you and if you look at them as a friend which i do i go in there and i ask people to help me

And I say, hey, I've got this unbuildable piece of property. Is there any way I can build on this? And if they say no, then I say, well, you know, if they're lower level people, I say, talk to your boss and maybe he's got an idea.

Maybe he can find a way. And then I go and talk to the boss and I ask him the same question. And then if he can't find a way, I say, can I talk to your boss? And I work my up to the top guys, the planning director. Typically, those guys have all the really smarts. They're really together, the planning directors, and they know all the tricks.

Okay. And then they'll come up with stuff you've never even heard of. That's where I learned a lot of my tricks is from these guys. I said, you know, I got this lot. Everybody says I can't build on it. How could I do it? Then they show you, well, if you do this and you do that, you know, you can build on it. Okay. You're working your way up the chain of command. Don't want to take no for an answer. There's got to be something creative we can come up with here. And my philosophy is if they're saying no to you, they're lying to you. And if they say yes, they're telling you the truth.

Right. It's just a matter of finding what's it going to take here, you know? Once you have that stamp of approval for building, like that's the primary value add, how often are you proceeding with that building yourself or saying like, I don't want to deal with contractors and construction and doing all this stuff. Like I'd rather just make my quick paperwork flip here and be done with it. Most times I'll either get it ready for a billing permit or get the billing permit and then sell it. And

And occasionally I'll build it out. And I've only built out two or three houses. Okay. It's quite difficult and it's lengthy and it's time consuming. And you get more money, but to me it's not really worth it. Yeah. I'd rather roll the property as soon as I get a permit or get the property where the city says they will give you a permit. I'll sell it then too. If they'll just say, okay, we'll give you a permit, even though you haven't applied for it. At that point, I'll sell the lot.

And let's say it's worth $500,000 with the permit. I'll sell it for $400,000 at a discount if you buy it right now because it's without the permit. Got it. And it's still a big gain for you. Everybody's happy. Everybody wins. Yeah. Is that process just a typical MLS listing? Is that a special land brokerage? How do you do the listing side of it?

I have an expert broker that I use over and over again because he's very talented. You have to shop around to find somebody who really knows raw land. Yeah. Because you're selling junk land that the first look people go, that looks like junk. And you have to have somebody who can say, well, no, it's not junk. You can actually put a 10-story building on it. And it takes a special salesman to sell that.

Where the average salesman, you know, they're house salesmen. They don't know anything about land, you know. Got it. Tell me about something that, despite your best efforts, it just would not polish into gold. It was an expensive... Yeah, I've lost some deals. I had one on Mercer Island. Long, skinny lot with a view of the lake. Okay. And it would be worth a lot if I could build on it.

And then it just needed a variance. And then for like setbacks from the property line or something. Yeah, I needed some setback because it was narrow. It was narrow. It was long enough. It was like 150 feet long, but it was only like 40 feet wide. And with the setbacks, it really crunched the house down. Yeah. So I asked for five foot setbacks instead of whatever they were and had a beautiful house designed on it. It was going to be great.

And then the neighbors there got up in arms against me and pressured the city to deny my variance. At that point, I lost.

And then I thought, well, okay, I'm going to do it again. So I applied for a variance again and I went out again hoping to change things a little bit to make it work. And I lost the second time too. And in the end, what happened is the owner who lived next door talked to his title company and they found that they had deeded him my property by mistake 20 years earlier.

And they screwed up. So they had to give him money for my property. And instead of doing that, they brought a lawsuit against me for partition, which is called a partition sale. It was adverse possession and partition. And by doing that, they forced the sale of the property. And I ended up with $85,000.

I paid $1,000 for the property, but in fees over the two years, I probably spent $150,000. Got it. So I probably lost $75,000 on a deal.

That was a failure. Yeah, I appreciate you sharing not just the upside, but there's things that could go wrong with these legal procedures and neighbor disputes and battles with the city and everything else. Yeah, and it's a 10 to 1 thing. That's why I buy 10 lots, and I'll go at 10 of them, and one or two will be home runs, absolute home runs. I'll make 100 times my money, or like the one in Iskall, I'm making like 500 times my money. I mean, it's crazy. Yeah.

But on others, I may make double, and some I may lose money on. I might lose money on two or three of them. But my investment is so low on the ones I lose. What do I lose? $2,000. Right, as long as you've minimized your downside. It sounds like where the major costs come in is in...

legal fees, attorney fees, you know, studies and surveys and everything else. Yeah. Yeah. You generally need a survey a lot of times on property and that's two to three to four to 5,000. No. So you have to think about that. A lot of times you need a survey. Well, Wayne, this is a fascinating,

fascinating business. I love that you have been at it diligently for years and years and years. I don't mean any offense by this, but you're not a young guy. Where do you want to take this thing? Like what's next for you? Oh, well, this is the deal. See, I just turned 81 this year and I'm starting to lose my brain because, you know, when you get old, things start falling off you and your brain gets weird. And I want to give all this knowledge to young people or whoever who

and let them learn how to become financially independent and just become wealthy on their own, you know, and not have to suffer. Like, you know, when I was young, you know, I could never pay all my bills. Every month the bills came and I could never pay, I never had enough money to pay my bills.

And this way, you know, like if I started this when I was really young, you know, that would have changed everything. So I just want to share my knowledge with people. That's my goal. Give them everything I've learned before I can't think anymore. And so that's why I did the program and I wrote a book and trying to get all that knowledge out of my head into some sort of form that people can utilize.

That's right. Wayne sent me his book, Junk Land Into Gold. You can check it out. It was a lot of fun reading through. Maybe more fun because it was all like local stories. It's like, oh, I know where that is. That's really cool. Are you still doing the annual auction? Like I'm going to do this as long as I can because it's fun. 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. It's just to have a good time. Other people like to play games online and stuff.

I go to the auction once a year. It's my vacation. Yeah, you think about people who are into fixing junk cars. I've always got a project car going in the garage or doing the furniture flipping thing and sanding and painting. It's kind of similar. It's just doing it with junk land instead. I don't know. Super interesting. But junklandintogold.com. You can find Wayne over there. He's offered Side Hustle Show listeners 25% off his Junk Land Into Gold program with promo code FUNFA.

No affiliation there, but be sure to use that if you want to dive deeper. I'll link up the book as well. Let's wrap this thing up with your number one tip for side hustle nation. Does not have to be land investing related, just whatever entrepreneurial wisdom that you'd like to impart. Most important thing you need to do is to mistake your way to success.

And what that means is you have to keep trying to succeed, failing at what you do and not letting it damage your ego at all. So I call it a mistake your way to success. And what that means is in this business, my business, you're going to make a lot of mistakes. And each time you make a mistake, you have to learn to laugh at yourself and

realize that you're taking one more step closer to winning. And if you don't make a lot of mistakes, you're not going to win because this is how it is. Most people, they make a mistake and their ego forces them to give up. And if you never give up and you just keep going and you laugh at it, say, well, I'm mistaking my way to success, then you'll win. You always win.

Yeah, I've never heard it phrased that way. You know, there's always like, oh, you know, every no gets me closer to a yes, you know, but I never heard a phrase, make mistake your way to success. It's so true in so many fields. Like we took the kids out to the driving range, golf driving range this weekend, and they

Those first few, it's like, you know, the wrists are going every which way. And you're like, well, why are you moving your feet so much? But then, you know, by the end of the second bucket, it's like you're actually making contact now. It's like you had to kind of do it the wrong way first. You don't mistake your way to success. So I like that one. Wayne, thanks so much for joining me. A couple of takeaways before we wrap up. You got to be a problem solver like these cities, right?

have an incentive to let you build on these lands, but you kind of got to show them the way. You got to really work and massage the deals and make it a win for everybody. You got to be willing to solve some problems and you got to be willing to do the work that the don't-wanters don't want to do. And so that's probably the big thing here.

And then it's buying right. It's keeping your risk slow because not everything is going to be a home run. So you can't get overexposed, overpay for the property where you might have a game plan in mind, but you don't know the outcome. Right. And so you got to keep that downside risk low.

And I guess worst case, you just resell it to the next person like Wayne who wants to come around and to see, well, maybe if you couldn't fix it, maybe I could fix it. But, you know, if you've minimized your upfront costs, I think that's a good way to go. Now, if you are new to the Science Hustle Show, welcome. Thank you.

And even if you're not so new, I want to invite you to grab your personalized side hustle show playlist. These are a handful of handpicked episodes specifically for you. Well, how do we do it? Well, you go to hustle that show. You answer a few short multiple choice questions about your side hustle interests, your goals, and it'll spit back out that custom curated playlist.

recommended playlist based on where you're at, where you want to go. That's hustle.show. Give it a try today. Plug those episodes into your earbuds next. Big thanks to Wayne for sharing his insight. Big thanks to our sponsors for helping make this content free for everyone. You can hit up sidehustlenation.com slash deals for all the latest offers from our sponsors in one place. Thank you for supporting the advertisers that support the show. It really does make a difference.

That is it for me. Thank you so much for tuning in. Until next time, let's go out there and make something happen. And I'll catch you in the next edition of the Side Hustle Show. Hustle on.