Seth: Hey folks, how's it going? This is Seth Williams, and you're listening to the REtipster podcast. This is episode 180, and today I'm talking with my friend, Neil Clements, about all things subdividing.

So Neil is a phenomenal example of a land investor who has been killing it in the subdividing niche. I got connected with him a few months back when I was looking for the subdividers in the REtipster community, and I got on a call with him, and in an hour and a half or so, he just blew my mind. He gave me an incredible education about how subdividing works in Texas. I asked him tons of questions and he just nailed everything and really made it make sense for me.

And I wanted to share the love with all of you here. And Neil was willing to do that. And we're going to be going through this process of I'm going to do what I do best, where I just try to pick around and ask as many questions as I can to really try to understand the full scope of what's going on, how this works, who this is and isn't for, and on and on. And I think we're going to have a good time here.

So, Neil, welcome to the show. How's it going?

Neil: Great, Seth. I'm happy to be here. Thanks for having me on again.

Seth: Yeah, absolutely. So for those who don't know you, why don't you tell us your real estate investing background? When did you get into land and what were you doing before that?

Neil: Yep. So I came out of college and immediately went into real estate. It's one of the only things that I've ever done. And so that looked like for me starting off as a real estate agent agent about eight years ago, and then went to be a mortgage broker, went back to be a real estate agent once I moved from one part of Dallas to another, and quickly found myself flipping houses with a partner, doing rent houses, flipping houses, and that was near COVID time, about three years ago.

And so we had a very successful house flipping business, scaled that up very quickly. First year did about 20 flips, second year did 30 flips, and wanted to keep scaling from there. until recently, early last year, early 2023, took a one-month sabbatical, went to the beach with the family, worked part-time, even though I had a team back here in DFW that was still working, and really looked over the whole business. Where were we successful? Where were we not successful? Especially with the market recently changing and some deals looking like really good deals that we had bought that were no longer good deals now, now that the market had shifted late 2022 going into 2023.

And I looked back and saw that most of our profits came from land deals. And it's not that we had done a ton of them. We had done maybe a handful of them. But I looked at the profit that came from the land deals. I looked at the time that it took to do the land deals. I looked at how much did we have to spend to renovate the properties and had this epiphany that, oh my gosh, we're focused on the wrong thing.

And so I came back, shifted our team of cold callers, our operations, everybody that we have on the team and just said, let's have one singular focus. Instead of trying to do a lot of different things in real estate investing, let's go all in on land, specifically on land subdividing.

So I had an excellent year last year and looking forward to a really good one this year.

Seth: So you took the Land Investing Masterclass, right? If I remember correctly.

Neil: I did. Yes, I did.

Seth: Sweet. So did you start off just doing straight-up land flips and you're like, okay, I'm done with this. Let's go on to subdividing. Or did you get into this knowing, okay, subdividing is where it's at. That's what I'm going to start with.

Neil: Yeah. So I probably started off different than most people on a few different aspects. So first off, it was the second thing you said, which is I started off subdividing. And the reason I did it that way is because the first time we bought our first handful of flips actually had four to five acres on them. And so we came across laying deals very early in our house flipping business.

We quickly found out that this, I guess, ingrained concept in the land, just like it is in houses, that the smaller land that you have, the more price per acre that you've got, because you have more demand, more people can buy it. The bigger land that you have, the lower price per acre you have. There's less marketability, there's less demand, therefore you can't sell it as much per acre.

And so it's the same with houses. Lower square footage equals higher price per square foot and vice versa. And so taking that similar concept from house flipping just to land, we started to find that there were opportunities out there where, for instance, maybe you could buy 20 acres for $10,000 an acre and then sell one acre lots for $50,000 to $75,000 an acre.

And to put that in perspective, that's a purchase price of $200,000 and a sales price of $500,000 to $700,000, with not a lot of renovation needed in between.

And now, obviously, that's a home run deal that doesn't happen every single transaction, but that's the power of subdividing. And so we got into subdividing specifically to look for subdivide deals and not necessarily to look for properties that were extremely undervalued. Because, I mean, we're in the fastest growing metro in the nation being DFW and trying to buy properties that most of the people out there say, buy it at 40%, 50%, even 60% for but the size of properties that we're purchasing, you know, people just laugh at us.

And we've spoken to, in our cold calling efforts, about 20,000 to 30,000 people last year. And I can't tell you once that we even got a deal at 70% or 80% of market value, even though we actively offered at those amounts. Anyways, we came into it looking to subdivide and add value to properties.

Seth: So what percentage of market value are you buying them at? Like 90%, 80%, or 100%?

Neil: Yeah, so there's two ways to look at it. I mean, let's tackle subdividing a little bit, then I'll explain how we look at it.

So there's one area of subdividing where you can do big lots, meaning that you essentially take 50 acres and a 10-acre lot. You don't have to have any kind of approvals, no county involvement, an exemption. So that's easy because you don't have any risk. You can literally just survey it. You don't have to wait for anybody to approve it.

So on something like that, yeah, we can typically offer up to 90% of market value, potentially 100% of market value, just depending on if the spread hits where we want it to hit. I'll tell you about that in a second.

The other aspect of it is a platted subdivision where you have to get county approvals. And the reason that that's different is because if we go out there and say pay 100% of market value or 90% of market value for a property, having to have a platted subdivision doesn't mean we get automatic approval. And so therefore, it's not like on the big ones where we can just say it's actually worth, say, 30% more. It's not worth that extra margin until it's actually approved.

And so therefore, we either have to wait until it gets approved to close, or are we going to take that risk? But to backtrack here, your original question was, how do we calculate offers?

So we don't like to pay over market value, don't like to pay over 90%, 100% of market value, but truly our main margin is we want to have a 30% gross profit margin on every deal we do. And what that looks like for us is we've got to buy at 60% of the after-repair value. And so that leaves 10% cost for expenses. So if we pay more attention to what we can make the property worth more than what the property is currently worth.

And I liken that to apartment investors or to people who buy businesses who are not necessarily paying as much attention to what the property is worth in current condition based upon occupancy, based upon revenues, whatever they're evaluating. They're going to look at what's the future potential, what it's going to take to get there, and how much money is it going to take, how much time, how much risk, and calculate it based upon the after repair value.

And so similarly, we've put that approach toward land investing. And so that's more of how we calculate what is it going to be worth after we do this subdivide and how much money is it going to take to get there.

Seth: So in this whole thing of figuring out what your offer price is versus the improved or after subdivision value of that property. So how do you know when it is or isn't worthwhile to subdivide at all?

Like, say, if you were to buy a 40-acre parcel, split it up into four, and the net proceeds of that or the sale of the child parcels ends up being not that much more than what you could have sold the original parcel for.

Is there some kind of ratio you're looking for? Like, what kind of increase do you need to see in the child parcel versus the parent parcel in order to justify your involvement in doing this?

Neil: Absolutely. I mean, there's no set in stone number. My number I'm looking for is a 30% gross profit margin. And so that's just specifically running your net numbers versus what you sell it for, or 60% of what it's worth after you subdivide it. And that's how I calculate the offers.

But to answer your question another way is there has to be a difference in price per acre between a smaller lot versus a bigger lot in a county. And so we actually started recently running our numbers differently.

Previously, when we were targeting counties, you know, we just went into a county because of proximity, you know, because we can drive there essentially, you know, it's within three hours of DFW Metro. And so we said, okay. Here are 20 counties we can target. Let's call all of them.

And very quickly, we learned by doing that is that there are some counties that you have that spread. Again, kind of like we said, maybe 10,000 an acre on bigger pieces. You know, 10 to 20 acres, 50 acres, and on smaller pieces, you're at, say, 20,000 to 50,000 an acre.

There's a clear, massive value spread between lower acreage and bigger acreage, because that's how we create our profit. And so that's one reason to do it.

So the second reason to do a subdivide would be to sell a property easier.

And so although not more profitable, in almost all circumstances, there is more demand for a 25-acre lot than there is a 50 lot in most places in the U.S., you know, 25-acre lot, 50-acre lot versus 100-acre lot, one acre lot versus 10-acre lot, you know, however you want to slice it up, there is more demand at the lower end. And so you either do it for profit or you do it for days on market to be able to sell it faster.

But if we're going to take on a subdivide, it's going to be for profit. And it's going to have to be a very sizable chunk because the properties that we're looking at buying, our average purchase price is about $350,000. Our average after repair value is just about one and a half times to double that. So, you know, anywhere from 550 to about 750 and so we're not necessarily looking for skinny deals.

Yet another question you asked earlier about how do you know when to subdivide things like that. Subdividing it's not right for everybody and the other thing that I will tell you about it is that it's rare to find a good property that can be subdivided. And we can dive into that. What do those properties look like? But it's not easy to find. Let's say that.

Seth: Yeah. I mean, maybe we should get into that. Like, and I know this, this probably differs from state to state and area to area. Cause I know in Texas, the availability of water is a huge deal. That is not a big deal in other parts of the country, but that's just one example.

But when you're looking for the perfect parcel to subdivide, or maybe when you're putting together your list of property owners to contact, whether it's direct mail or cold calling or however you do that. So what does your perfect property look like? And what kind of of stuff would you just be like, absolutely not, this is never going to work; don't even call them.

Neil: Sure. So you're looking for the needle in a haystack, I will tell you that. The difficult part that we have found in running these properties is that you have to hand-sort them. In most of the areas, if I'm using DataTree or some other list provider, they're not going to give you, for instance, road frontage as the main, ideal goal that you want to have.

Because when we talk about subdividing, if you're talking about wanting to put in roads, you want to install utilities, you want to do all that. Well, you better have some deep pockets or you better have some good relationships with people who do. Yet the subdividing that we like to do already has the roads in place, for the most part, already has the utilities in place, water and electric, and has the ability to, with minimal effort, say $10,000 or $20,000 or less, has the ability to be instantly marketable.

And so, that's what we're looking for. Floodplains, in a lot of instances, kill that. Obviously, steep contours kill that. So we're looking for properties that we can instantly market as smaller. That is the best way to say it. Otherwise, you're not necessarily doing a minor subdivision. You start to get into a major subdivision, which takes a lot of time, effort, and money, and a lot more risk, in my opinion.

Seth: So it sounds like this isn't the kind of thing where you just, you know, go to DataTree and say, yeah, give me everything vacant land, 40 acres and up, and go. Like, you have to download it and then open up Land ID or something and go parcel by parcel and look at it and be like, does that make sense? Yes or no. No, because you got to understand road access and utilities and a lot of stuff you just can't really know without looking at it, right?

Neil: That's correct. And that's what makes it so difficult. And that's what kind of isolates the opportunity to the select few who are willing to do it.

And so we still we know an only prospect for subdivides where I mean, we'll still prospect for properties that don't need subdivision. However, you know, out of the, I think we bought 15 properties or so last year, those amount of properties that we bought, there was only one that was not a subdivide opportunity.

To give you an idea, the competition in our marketplace, and maybe this is everywhere, I don't know, I only target North and East Texas, Dallas, Fort Worth, and Tyler. But the competition in our marketplace is just unlike anything I've seen.

Now, I will say it's not as intense as house flipping or wholesaling, yet I did not expect for land investing to be this intense and for every single phone call we do to have to even, for instance, if we give an offer at 100% of market value, to even have to convince somebody that that's market value and to take it.

So, I mean, that's the struggle, you know, you would think if you're not in this industry or if you've never given offers that good, you would think giving somebody 90% to 100% of market value that they would all just jump for joy and be like, oh yeah, where do I sign? And the reality is in hot market areas, like I work in a lot of times, that's still not enough.

Seth: Yeah. Now, what do you think that is? Cause I'm pretty sure it's not that case everywhere where you could make an offer for 60% of market value.

Neil: I don't think it's that case everywhere.

Seth: Yeah, so is this just because it's Texas and it's growing like crazy? And I do think there are a lot of land investors there because of the relative ease of subdividing and that kind of thing. But I don't know, is it just because it's one of those hot markets out there?

Neil: Yeah, I mean, if you look at, a lot of people still have, I guess, COVID mentality, and not the disease. Yet COVID mentality and the fact of they think their property is going to get 10 offers in three days and sell for 10% above market value with no effort.

And the reality is, is that since late 2022, that's not what's going on. And so a lot of times we're in an uphill battle on what people perceive their property to be worth. And even after we're able to talk to them about what that looks like, they just don't agree or they have a reason they want to hold onto the property.

The other thing that we don't encounter much, we're encountering almost no distress, which is extremely foreign to me because, you know, in house flipping, that's, that's the name of the game is, you know, somebody has a rundown property condition. Somebody's in a hardship, such as foreclosure. Somebody needs to sell a house quickly for some reason or another, you know. In land, especially in our area, property values have shot up so high, so quickly. I mean, most properties in our area have doubled over the past three years from what they were previously worth.

So I think that there is just a lag between market perception and what people expect to get for their properties.

Seth: Do you ever even start the conversation with like 50% of market value or does it just start at 80% and go up from there?

Neil: Oh, no, it doesn't even start at 50. I mean, it's hard to say, but we even have people laugh us off the phone at 90% of market value.

And I'm not saying that lightly. I mean, we have two American cold callers in our office who are my acquisitions agents that make the calls and they lock up the deals. And we found them to be the best possible callers on the phone for the type of properties we deal with.

And even with that, I'm continually surprised every single day for about the past year, how often, you know, we just sit and look at each other like these people are absolutely insane as far as what they expect to get for their property.

And the other difficulty that we have is, and maybe this is everywhere, but in North and East Texas markets, it seems like land sellers and land real estate agents price their properties at just ungodly prices. You know, if a property is worth $10,000 an acre, they'll list it at $25,000 an acre and they'll flood the market with all these bad listings.

And so anytime we're negotiating with somebody, you know, we have to try to show them sold comparables and they just don't want to hear it, especially in Texas, because they can't see that data. So all they have is to go on as us because we're real estate agents, we have access to it.

But it's difficult to convince somebody in these areas to even sell for market value, much less 10% or 20% off market value.

Seth: Wow. It's fascinating. Has it always been like this? Or is this something you're seeing like this year? In 2023 or I don't know.

Neil: I'm relatively new to the game of straight land investing and not house flipping. And so even though we've had immense success, even though we've done quite a few properties at this point, even just in the last year, I can say that this is all that I know. know.

And we didn't expect it to be this way, especially based upon the education and the content that we'd absorbed in preparation for making this change. We didn't anticipate it to be this hard.

Now, a lot of people listening to this are probably going to say, yeah, you shouldn't know. But everything's harder when you actually start trying it. Yet truly, I thought it'd be easier. And maybe it is in other areas.

And that's maybe a point that you're trying to make is maybe there are other areas of the U.S. that are good for these subdivides that don't have as much competition. And I'm definitely all ears for somebody who knows of some areas.

Seth: As I'm hearing you say all this stuff… It does make some sense. I mean, Texas is like fastest growing, has a lot of stuff going for it. It's relatively easy-ish to do these kind of minor subdivides anyway. Not that there are no obstacles, as you know, but there's a lot of reasons why the stars and planets align and send a lot of people that direction.

But we actually had a conversation with David Hansen, I believe it was episode 176. He works in several different states and he's always doing like the platted subdivisions where it's a major subdivide. It's very involved. And he's kind of a genius at figuring out like, what is the best possible way to carve up these parcels so that we can get as many in there and have green space and sell this whole thing for that, you know, as much as you possibly can.

I think it still has a lot to do with the market, but is your preference to go after after minor subdivides?

Neil: Oh, absolutely.

Seth: Yeah. And I wonder like if things would shift, say if it was the other way around, it's like, no, my specialty is platted subdivisions. I'm not afraid of spending over a year to get this thing done. Like I'm the best at this and I will figure out how to make the most of it.

Like if you all of a sudden had that competitive advantage, this would be a lot easier because you can create money out of thin air by just being willing to go through these difficult steps and having the expertise to do that.

That's what David's situation is. But it sounds like you're more like a normal person where you don't necessarily have that civil engineering expertise and you don't want to deal with all that stuff. I certainly wouldn't.

But I wonder if maybe it's just about changing that recipe a little bit in order to find that competitive edge that most other people don't seem to have.

Neil: Yeah. I'd be curious to know with David what that looks like, because I know that there are instances, for instance, where we can pay, say, 150% of market value, where we could pay 200% set of market value. The instances are varied.

For him, I'm sure it's all about after repair value. What is the value when I've done? It doesn't matter what has worked now. The constraints for me is that when I'm getting a bank loan, my property's still got to appraise.

And so a lot of these banks aren't necessarily, they're not seeing the same value as I'm seeing it as a subdivision because they may acknowledge that the subject property is 50 acres, but they're not going to value it as five, 10 to acre lots, even if I send them the surveys. They just don't want want to take the risk on that collateral.

And so as opposed to if you have a major subdivision, you have a plat in place, you have all those approvals. Well, hey, now a bank looks at it as a completed platted subdivision. Hey, it is different. And so that could be it. And could it be possible that he's coming in here, somebody like him is going after these exact same properties that I'm going after and just doing more work on them, such as a major subdivide? It's very possible.

Seth: Yeah and I don't want to speak too much for David, but I believe what he said was like, they don't even get into this until they know they have a national builder who's ready to buy up everything. So by the time they're closing on it, the deal is sort of done in terms of getting the thing sold.

So maybe that gives a bank a different kind of asssurance, when it's like, hey this thing is literally worth this, here's the purchase agreement, it's done.

Neil: Yeah, that's super smart. I mean, my model would differ in the fact that I'm looking to stay as nimble as possible and looking to move as quickly as possible. And so most of our minor subdivisions, from the time we go under contract, we close within 45 to 60 days and then we're only holding them for at a maximum of six months. We're not necessarily installing a ton of utilities. We're not installing roads. And so, beyond the purchase price of the property, we're not shelling out a ton of capital.

And so for me, as I'm growing this from nothing to something awesome, kind of this first, second year of getting into it, my priority is quick capital return so that I could actually go out there and maybe do some of those bigger deals. But right now I'm trying to build a capital stack so that I have the opportunity to wait for a year to do one of those major subdivides. Because right now, it just wouldn't be in the cards.

Seth: So you may have already said this, but maybe we should talk about just some typical numbers on this thing. So like what is a typical acquisition price and the typical disposition price, what you're selling it for in the end?

And I think you said it takes six-ish months if it's a minor subdivide. Is that right?

Neil: Right, exactly. And the 60s months is specifically just days on market. It's specifically just advertising time for either going to market with a realtor or actually trying to sell the properties.

And so there's very little time, a week at most, just to really coordinate your photographer, maybe get property mode, maybe clear some frontage, just some basic stuff that really doesn't take much time. And so, with that, average numbers, if we're just trying to look at what does this look like on an average basis, I'll give you an example of what I think like a good deal would be.

So this is just an example of a deal that we're working, east of Dallas, in a smaller county. We're purchasing for a hundred thousand and we're selling it for 260,000. We've got to add a water line. So we're doing about 35,000 in repairs and all in our net profit on that is going to be 107,000 after you take out about 10% or so for real estate agent fees, closing costs, and holding costs.

And so I would consider that an excellent investment. Profit is 40% of ARV in that circumstance. And that's what I would consider for what we're doing a very average deal. Not necessarily a home run, yet also not a single. Somewhere in between, double, triple, a good, solid, healthy deal.

That's kind of what we average. Some of our bigger deals, we're looking right now at a deal that we're buying for a million, and we're going to do a major subdivide on it and ultimately make it worth about two and a half million, but that's going to take two or three years.

And so there are stuff like that that we are doing, yet that's really the one-offs. Those are the home runs. Those are the once a year, once every other year properties that you actually get to see on it. But my average minor subdivide is only maybe three or four lots.

It's not that bad. If you know the challenge, the challenge is finding the properties, right? I mean, because if you can find the properties and you can get them under contract to get a value, the actual end subdivide is not really that hard. Especially if you have a good real estate agent you're partnering with, a good surveyor, a good title company or attorney, you've already got really everything you need to do the deal and to do it right.

Where most people get in trouble with subdivides is specifically just having a lack of knowledge on what can be subdivided and it cannot be subdivided. Where people get in trouble is they buy a property thinking it can be subdivided without actually having discussed with anybody. Then they go to actually try to subdivide it, figure out they can't, and then now they're either upside down or they're just selling the property for breakeven.

Seth: So right there, what would a person need to do to avoid that, to buy a property thinking they can subdivide it and then realizing they can’t? What questions need to be answered for them to be 100% sure they can do what they want to do?

Neil: Yeah. I mean, so you've got to figure out who's going to give you approval. And so, and you need approvals. So for instance, if we're talking about Texas, you're 10 acres plus, there's a full state exemption that says if all your resulting lots are 10 acres plus, then you don't have to get any formal county approvals or anything like that. If you're outside of city limits.

Now, if you're inside city limits, you're always dealing with the city. You know, that could change. depending on jurisdiction. And so you've got to figure out what governing body has authority over your land. And are you going to be subject to what their rules and regulations are? Or are you going to be exempt?

The second thing you need to do is verify all utilities. In Texas, that means water primarily. Water is the big issue here, like Seth alluded to. Electricity, not as big of an issue, but still, we've got to make sure it's there. And then you've got to make sure your other basic due diligence for buying a piece of land, easements, floodplain, et cetera.

But the biggest thing that I would say for somebody looking to subdivide is you've got to add a layer of due diligence into your process of buying that you don't previously probably have, which is county approvals, city approvals, and what is that all going to look like.

And then if you're not verifying buying utilities such as water and electric on these properties, for subdivides, you're going to want to, because especially if you're subdividing into smaller lots, you're probably selling to somebody who wants to put a house on it to some extent. And so bigger recreational tracts, that's not as important.

But if you're subdividing into smaller pieces, you have to make sure that they can actually do what they want to do. And a lot of times, that's building for us.

Seth: Yeah, that was an interesting thing that kind of had this aha moment because I know like in states like Michigan and Florida and Wisconsin and Washington, perc tests are a really big deal. It's the kind of thing that can kill a deal if it doesn't.

And things like water, it's a non-issue. There's tons of water. Like there's so much water we don't know what to do with it. Whereas in Texas, it's the opposite where perc tests are never an issue and water is always an issue.

So, and it's not like, say if there's no water and correct me if I'm wrong on this, Neil, but my understanding is that if you find out there's no water, that doesn't mean you can't subdivide, it just means you're going to have a really hard time selling that.

Like, it's almost like, why do all this when you know you're not going to be able to sell it because there's no water, right?

Neil: Well, to some extent. So it all goes down to, are you talking about exempt subdivisions, big parcels, or platted subdivisions? Because big exempt subdivisions, yeah, you're just going to have trouble selling it. No big deal.

Smaller platted subdivisions, the county or the city is going to… you actually have to submit proof that you can get water. And so if you're wanting to take, say, five acres and the five one-acre lots, just for example, the county is going to want to make sure you can get water and electric access, and they're going to need actual signed documents from your water provider and electricity provider saying they agree to provide water.

The answer is it depends, but it depends on what kind of subdivision you want to do. I mean, I was talking with a colleague yesterday who was just asking me, hey, can I subdivide this property? What would it look like? And she was looking at a five-acre property, tried to divide it into two or three different lots.

And I looked at it pretty quickly and just said, hey, you're not going to be able to do that. She said, well, why is that? Well, first off, it doesn't have the road frontage. You need to look at those regulations on how much road frontage is needed per lot.

You also can't just survey this out with a surf pair. Like you got to get a plat. It's inside city limits. You got to get city approval. You got to run it by them. You got to verify water. You got to verify electric. Sometimes counties will have you verify drainage runoff to make sure you're not going to flood somebody else's property by putting houses there.

And so when you do a platted subdivision, which is kind of teetering on major minor, you know, somewhere in there, if you're not doing roads, it's a lot more extensive. And you really got to know your stuff. Or you need a long due diligence period to make sure that you don't get stuck with a property you don't want to buy.

If you're doing an exempt subdivision where nobody has approvals over it, you're kind of more in the wild west and you just need a really good real estate agent surveyor.

Seth: Yeah, this was another huge thing I learned from Neil the first time we talked was when he was explaining this whole exempt subdivision thing about basically how to find like, what are these rules? When are you exempt from having to go through all these requirements and get county approval to do this subdivide?

And he showed me line by line in the document online. Here's where you go do it. And I actually made a video explaining how to do this with Claude, the chatbot. You can probably do it with a lot of different chatbots now.

And I actually discovered it's easier than I thought it was to do this in Michigan, just by following what Neil showed me how to do. I'll include a link to that in the show notes for this episode, retipster.com/180.

But this kind of goes back to if anybody out there heard the episode with David Hansen in 176, he was explaining what he has to do is basically read the county's zoning ordinance and rules and all this stuff and understand it better than the county does so that he is the authority and he knows exactly what he can and can't do. And if people challenge him, he can say, no, your own rules say this.

How much time do you have to spend going line by line through county and township and city regulations to understand this stuff? Like, do you not have to do that much anymore because you stick to the same few markets all the time?

Neil: So we still do it every time. And I'll give you an example of why.

And the time that we do it is we do it right before we call a county. So especially if we're exploring a new county, I'll read the subdivision guidelines and I'll send my acquisitions guys a summary of what we can do in the county.

Because the acquisitions guys are going to be running their after repair value and giving offers based upon the margins we want to hit, based upon what's allowed in that county is exempt, essentially.

And so there's a county in our area in Texas, and there's actually several counties in Texas that can not only do 10 acres, they can also do five-acre exempt subdivisions, which is really neat because especially in areas where there are high demand for that, that’s fantastic.

And so in this specific county, we put under contract a property that was 25 acres. And our intention was to make five five-acre parcels. Well, in our due diligence process, we originally saw five acres was allowed. Our project manager called the county and the county told him, the provision says greater than five acres.

And oh my gosh, my heart sunk because what they said is we interpret that as 5.01 acres per lot. And you have five acres, therefore you cannot do this. That killed our deal. Oh my gosh. I mean, it's just little things like that that you get the nuances of.

And so to answer your question, yeah, we absolutely read it every single time because we've also seen other counties that don't even have any subdivision regulations, especially getting out toward West Texas. There are actually quite a few counties that are small enough that they don't want the hassle of dealing with your subdivisions. They don't care. And you can do literally whatever you want.

And so knowing those subdivision guidelines and knowing which counties you can do what and cannot do what, you could actually make a business, and we have made a business off of taking advantage of those exceptions and counties that have unique offerings like that.

Seth: Yeah. Makes you wonder, though, like a big component of what makes this work is the fact that there's demand for these newer, smaller parcels that you create and they just kind of sell relatively quickly.

If the demand suddenly dried up, this would kind of not work anymore, right? In a place like West Texas, is there demand for that kind of thing? Like, does it make less sense to do it out there even though it's easier?

Neil: Yeah, I mean, that's absolutely what you got to watch. You've got to know that there's probably a reason that they don't have subdivision regulations. And it's probably because they don't have an issue with it because not many people do it.

So on this whole issue of demand and how important that is to this whole strategy of subdividing, whether it's major or minor or exempt. So like, what is the risk that demand would dry up? It seems like this is not a huge risk in Texas, at least in your area. As long as I've been aware of what's going on there, it seems like there's always high demand for it.

But say if you're working somewhere else, I look at the six-month timeframe or maybe the year-plus timeframe it takes to do this with like a platted subdivision. What is the risk that, okay, this made sense when we started it, but something changed in the meantime, and now it doesn't make sense, and they're subdivided.

And, you know, is there much of a risk of that, or could you catch it before it gets to that point?

Neil: No, of course, there's always a risk. The advantage of the model that we use with the minor and exempt subdivisions is that, you know, our contract period is maybe only 45 to 60 days.

And so from the time we go under contract, if we can't predict the market 45 or 60 days out, we're in trouble. And nobody can predict what's going to happen. We saw that with 2020. We saw that with 2001, 2008. All the times that the market shifted drastically very, very quickly. We can't predict the big “black swan” events per se.

Yet even in events like that, land demand has historically stayed there, especially if you're able to pivot to an owner finance strategy, or if you have good capital backing you to where you can make those pivots.

And so I'm not necessarily worried too much about that. The people who I think should worry about that are the people who are doing very long-term and large-scale major subdivisions, who, from the time they go under contract, have to spend a year to maybe 18 months to get approvals for that. You brought a massive risk.

I mean, imagine, Seth, if you went under contract on a property, summer 2021, the absolute peak of the market. And then you look and you had to spend a year, maybe 18 months to get that plotting approval. You know, the market really started dipping April or May 2022. Especially in Texas. And so the market that you bought into and now you did this major subdivision on, things have changed drastically.

You spent all this time, all this effort. And so if you didn't have a good contract or you don't have a way to get out of that contract or you don't have competent attorneys on what you're going to do on that, not to mention the time and money wasted, you could be in for a pretty big loophole or a pretty big trouble there.

So my worry, and that's the worry that I have with being a home builder, that's the worry that I have with doing those big subdivisions is demand can change at the snap of a finger. And if you don't have good, competent attorneys that can get you out of contracts like that, that could be big trouble for you.

But with how fast we do things, I'm not as worried about it.

Seth: Now, going back to something you had said a while back, you were talking about a property, like one of the home run deals where you bought it for a million and it's going to sell for two and a half million, I think you said, and it's going to take two and a half years. So why is that taking so long? Two and a half years is a long time. What's going on there?

Neil: Yeah, and that's probably an overestimation. Yet, it's outside of city limits, yet it's in a city's ETJ. Have you ever heard of that term? Extra-territorial jurisdiction?

And so basically what that means is that the city, and it's a pretty big city in East Texas, has decided that anywhere surrounding us within a certain number of miles influences our city. And so therefore, we're going to have to control what happens in it. And so even though no tax is paid to the city, they still control development in that area.

And so you go from previously being able to maybe do something exempt or dealing specifically with just the county, which is my preference in every circumstance—county is a lot easier to deal with than cities—and now you move it to having to get full approval from a relatively large city in East Texas that is known for not being easy to work with.

So once you get to that, our process is going to look like listed on market day one with with some preliminary marketing materials right after we buy it, spend six months to a year to attract… our main goal is RV parks or mobile home park because that mobile home park is next door. And so our main objective is to attract a similar investor who is going to, an in-builder or buyer who's going to want to do that.

And then we'll partner with them, us take on the expense of actually doing the subdivision of the development and go through all the hurdles with the city. And ultimately, probably, I would say, six months of back and forth, maybe nine months of back and forth, get that approved and get to the closing table.

And so that's overall a time period of say a year and a half, two years to do that. And I went ahead and got a 30-year loan on it. Just in case, man. You never know what's going to happen. But that's an example of just what I'm being told by a commercial real estate agent that we're going to partner with on the deal and what I've seen other comparables in the market take to actually get full market value.

And so a lot of those big subdivision contracts like that, the work is not necessarily done until the builder is selected. Very similar to what you said, David had told you, you know, you don't want to get the work done first because, well, what if the builder doesn't like it? Or what if the person, the end buyer says, well, I would have done this differently.

You could have a preliminary plan, but you also want to get their input too, because they're the ultimate end buyer. So they need input on how they like to do things.

Seth: As you were talking there, a thought just came to my mind. I know that in Texas, the availability of water is a big deal in order to make that property useful. So there are actually some improved property types that don't require water at all.

I'm thinking about my self-storage facility, like we don't have water there or there's other solar panel farms and that kind of thing. I wonder if you do come across these properties that are not worthless, but they're worth less because of the lack of water.

I wonder if you could just look at it from those other angles of, well, we couldn't build a house here, but we could do this. Maybe it's useful for that.

Neil: No, I love that idea. That's a really good idea. I mean, the challenge with most of the properties that we are doing deals on is that they're in relatively rural locations. And so they're far enough away from a major population center to not make sense for self-storage.

Yet solar is absolutely something we're looking into in every single project we go into contract on. And so we go ahead and list that on a service that markets solar listings. We also send it out to five or six guys who do solar that I know to get bids. And so yes we are actively pursuing those opportunities because they are incredibly lucrative whenever they hit. I haven't had one hit yet, but I had a friend who had one hit and it's life-changing money.

Seth: Yeah. Well, it's actually like, you're right about self-storage in terms of like the rural markets and that kind of thing in terms of that playing a part in it. But I'm kind of going on a tangent here, but I've been researching, you know, higher end RV and boat storage and that kind of thing where it's like an improved garage type thing you stored in.

And apparently, the population matters a lot less for that. What is important is that the facility is really close to a highway and really close to a gas station where RVs can pull in there and people can air up their tires and get gas and that kind of thing.

And it's kind of opening up my mind a lot because the lens that I've always looked at self-storage through where it's like, okay, there can only be so many square feet per person in that area. It's like, throw it all out. It doesn't matter. All that matters is that it's not all that matters, but the things that do matter is proximity to a highway and that kind of thing.

So, but it's just making me wonder, like, there's probably tons of different uses for certain properties that would otherwise be less useful if you didn't know about what makes a good version of this property use. I don't know if you're able to follow what I'm saying.

Neil: No, I completely follow you. And I think that's really intelligent. I mean, our ability as land investors to make money is going to be only limited by where we can see the demand.

And so you're absolutely right. I mean, you know, whereas I look at a property, I see a really cool subdivide. Somebody else looks at it, sees a major subdivision. Somebody else looks at it, sees an RV park. Somebody else looks at it and sees exactly what you just talked about. You know, everybody has their own playbook that they want to run. And the more plays that you have in your playbook for whatever situation comes up, the more money you're going to make.

Seth: Absolutely. I almost wish there was like some kind of an AI thing where you could like plug the property, like upload the DataTree profile report. And it could just like, you know, do its magic and think of all the possible uses based on where it is. And I don't think we're there yet, but hopefully someday somebody makes something like that.

So going back to something you said earlier about how, you know, you don't even start by offering these people at 50%. Like you get laughed out for being offered 90%. So that implies that the conversation starts with a pretty high offer and you go up from there or the deal just dies.

So what if you did start by offering 50% knowing that you won't get the deal then, but like, you're going to have to go up and up and up, but at least you're like anchoring them at that lower price instead of just anchoring them at a 90% price?

I mean, I'm kind of with you. I think I would be doing the same thing you do. Like once I get laughed at by enough people, I would just stop trying. But I don't know. What if you did? Would that make any difference, do you think?

Neil: Yeah. So we started off the first three months of last year when we were doing cold calls, we started off at offering 65%, went up to 75% of market value. The challenge was that we didn't get any deals within three months.

And as soon as we started evaluating these properties differently, we started calculating our offers based upon ARV in a gross profit margin versus current market value and just offering, you know, say 65%, 75% of it, that's when our acquisitions really took off and we started putting under contract a lot of properties.

And so, you know, out of the 15 deals that we closed last year, a majority of those were last six months and most of them were last 90 days of the year. And so our acquisitions ramped up. And now we also were doing more phone calls. And also cold calling takes a long time to ramp up as far as actually starting to get those under contract. Maybe mail's the same. I'm not as familiar with it, but it takes a while.

It's interesting to think about what-ifs. I can just tell you what we've done. And I can tell you starting off that low did not work for us. Now, we're always trying to get prices out of people before we tell them our price, of course. And we're actually pretty successful at it, probably 90% of the time.

The issue is that, say a property is worth $300,000, people are telling us they want $400,000, don't call us back unless you can get me $400,000. And we'll call them back and offer them 200. And they'll say, I told you not to call me back.

You know, I mean, it doesn't mean we don't call them back, but it's just, you know, here's how our offer is calculated. Here's how we see it. Here's the potential in the property. And it’s not resonating, not hitting. And so that's the difficulty.

Is there any merit to offering 50% in these areas? Hey, man, I'm sure that there are other people who are buying deals at 50% in these areas. For some reason, that's just not us, though.

Seth: Well it's almost like… When you said originally you started at 65 then you went to 75 you weren't getting deals, again, this is a what-if game, this is probably pointless even. But like what if you started at 50 knowing I can go up to 100 and it can still work but I'm still going to start at 50 I’m going to make them think that that's a valid starting point? And I know they'll say no, but we'll go to 65, we'll go to 75, we'll go to 85. I wonder if you might end up in a lower place as a result of starting so much lower?

Neil: It's a good perspective and it definitely be something I'm willing to try. I don't have any guess to what would happen. All I can say is when we tried something similar previously, it ultimately led to fewer conversions.

I mean, the difficult thing is, I mean, some of the more recent properties we're buying are actually up in the $600,000, $800,000, a million. For properties like that, obviously, you got a pretty good offer on there.

I mean, overall, I think there are two factors that contribute to why we have to offer so much. So one is that we're dealing with extremely sophisticated sellers. They own assets worth $300,000, $500,000, $700,000, $1 million. Absolutely more sophisticated than the person who owns a $50,000 piece of land. There's no doubt. And so with sophistication, I believe, comes a higher price.

And then two, with the demand and the growth in this area… The other problem that we hear a lot is that, hey, I just got a mailer, and my mailer offer was $350,000 when we can maybe only offer, I don't know, $350,000 as well. But they're like, yeah, I wouldn't take $350,000.

And so I can tell you for a fact that there are other people in Texas doing the same thing that we're doing who are blasting people before we get to them with cold calls, but they're blasting them with mailers. But the people that we get would say, oh, I'd never call a mailer. I'd never talk to somebody who sent me mail, but you're really a nice guy, so I'd rather sell it to you. I can hear you. I can see that you're trustworthy.

And so that's why we like cold calling. But it's an interesting thing.

Seth: Do you ever do seller financing? I know you get bank financing a lot. So like what percentage of your deals that you buy end up going the seller financing route?

Neil: Not many, unfortunately. That is something that we're looking to implement more of this year. We just put a property under contract yesterday on seller financing. So that was an excellent deal for us. And then we bought another, we bought one more last year.

And so I'm thinking in terms of probably one out of 20, one out of 30. So yeah, I mean, 5% or less for seller finance. We're actually selling more on dispositions on seller finance more than we're acquiring on seller finance. And I love holding those notes that will do that all day.

Seth: Do you prefer to do that on the disposition end? Like if you could have your choice, would you rather do seller financing or do you want to get cash first if you could?

Neil: No, I'd get cash first.

So as we kind of talked earlier, I'm in the building phase. And so I'm looking to scale as quickly as possible. And so the thing that is holding me back from scaling is absolutely access to capital. 1000%.

And I know that I could probably get unlimited capital at say 50% profit split or whatever profit split it would be. It would not be hard to find. But I'd rather take the full profit and fund it here and try to scale up a little bit slower, but albeit build up a much bigger capital stack a year or two from now. So that's what I'm trying to build up.

Who knows what's going to happen in this market and this economy with this year coming up. And so I'm just trying and build up capital stack to go to town when something happens.

Seth: Yeah. Totally. Now, I think you said you did about 15 of these deals this past year. Is that right?

Neil: Correct. Yep.

Seth: So how much are you making doing this?

Neil: Our average profit last year per deal was 150,000. And that's gross. That's not net. That's gross. But that's after all like cost of goods sold and everything before staff.

And our median profit’s about 110. And so some of those skewed a little bit higher, but we're making about $100,000 per property that we do. We're very fortunate to have a very high net profit last year, over seven figures. And looking forward to this next year, try to do the exact same thing and maybe double or triple that.

And so the craziest thing is that, I mean, we really focused on this May of last year. That's a full six months ago. Now, we had some success in land before that and subdividing before that. Yet, I have never seen an opportunity like this. Being a realtor is a fantastic income opportunity.

It's not necessarily where I want to be forever. Being a house flipper was a fantastic income opportunity yet it was very difficult compared to land flipping and doing these subdivides and doing these land flips, I mean drastically easier than being a realtor or being a house flipper. And I'm making three to four times the net like net profit on every single land flip that we did on every single house flip that we did.

And when we put it like that, I mean, it's just, there's no comparison. And a lot of people, you know, you and me included, are saying, hey, it's getting competitive. There's a lot of people out there. You know, we're having to decrease our margins. But I hope what people are taking away from today, and one of the reasons I wanted to get together with you, Seth, again and talk about this, is…

There's more than one way to do this game. And as things get more competitive, we have to find ways to add value to properties. The days of offering 30% or 50% on a $200,000 property, buying it for $70,000 to $100,000 in my market area are long gone.

And so if you want to work in extremely high demand areas, you've got to find ways to add value to properties that nobody else is looking at, whether that's building self-storage like you did, Seth, whether that's subdividing properties like I'm doing, or whether that's doing major platting. Whatever you're doing, you got to be adding plays to your playbook or else this competition is going to get you.

Seth: Yeah, man. I totally agree with that. Do you ever think about, or does it ever seem enticing to like, maybe I should go to a less demand, less competition area where it's easier to buy deals, but maybe take longer to sell?

Like, does that thought ever cross your mind? Or is it like, no, I prefer the high competition, difficulty of finding deals, low market value. And I prefer being able to sell them at a good amount of time.

Neil: I've heard from several people that a land investor's biggest struggle is selling properties and selling them quickly. A lot of times acquisitions…

Seth: Sounds like the opposite for you, right?

Neil: Yeah, it is. And so that's where I'm very fortunate. And so with me being a realtor and me having access to MLS and all these areas that I work in, and us having an operations team behind the scenes with a full-time person here, and then also a VA in the Philippines, with us having that kind of support, our disposition effort, I mean, maybe takes me a handful of hours a week to be able to sell these properties.

And that's not an exaggeration. It does not take long or much effort from me.

Seth: That's awesome.

Neil: I would rather have that dispositions effort and have the ability or have the hardship be on acquisitions, because once I sell some of these properties, get some capital back, I'll just reinvest it in the acquisitions.

And so I would prefer a market that is fiercely competitive to one where I can do these subdivides and I can just keep on funneling acquisitions, acquisitions, acquisitions, and then selling them pretty easy.

And so now I will say it also doesn't make sense… so we don't target, for instance, like a Dallas county, a Tarrant county, Dallas and Fort Worth, Collin County, like Mckinney… We don't target these suburban areas either. So there comes a point where too much demand is too much demand. So we have found some sweet spots in some counties that have less demand.

But for me, in the most rural areas we work at, which would be, say, two and a half hours away from Dallas, you can still have 10- to 20-acre properties selling in a month or two. That's considered slow in a lot of areas. Maybe three months, four months, worst case.

And so it's hard to find an area in North Dallas or North Texas or East Texas that doesn't have a ferocious demand for land. It's actually hard to find.

Seth: Do you know Logan Fulmer?

Neil: I've heard his name. Yeah.

Seth: Yeah. So we interviewed him, I think it was episode 177. And he goes after properties in Texas that have a lot of title issues, like intentionally going after them and fixing the title issues. Sometimes it takes years.

But one of the examples that he talked about recently was when he bought a landlocked parcel in Texas for 5,000 bucks and then sued for access, put a road into it. All of that cost him like 150 grand. And then he sold it for $500,000.

I wonder, is there a lot of landlocked property in Texas near your area? I wonder if that might be a way of somehow seeking out the landlocked ones, even though it's a huge pain and a lot of cost to build a road to it. Maybe it's still worth it if it makes you come out ahead.

Neil: My objective, and this is kind of a recurring thing that we've talked about a little bit, is it's a good idea. There's no doubt. Just like major platting is a good idea. Just like building a self-storage facility is a good idea.

Seth: Hey, everybody. How's it going? This is Seth Williams and Ajay Sharma, and you're listening to the REtipster podcast. This is episode 177. Today we're talking with Logan Fullmer.

So Logan reached out to me recently about coming on the podcast, and when I heard more about his experience and his story, he seemed like a really great fit. Logan is an investor in land and commercial real estate, and he deals with some of the toughest title issues out there and uses them to kind of find some incredible opportunities. And these are three areas that I have a lot of interest in, and I know a lot of other people in the REtipster audience do as well. We're going to talk all about that and learn everything we can from him.

Logan, welcome to the show.

Logan: How are you doing, Seth?

Seth: Doing great. I appreciate it. Thank you. So why don't we start from the very beginning? Why don't you tell us about your real estate investing story? How did you get into it? What did you start with? How long ago was this? And then when, how, and why did you make your foray into the land business? How did that come about?

Logan: Well, about ten years ago, more or less, I'd kind of gotten my first real job. I inherited a little bit of money early on, and I was a poor steward of that, so I spent it as fast as I got it, just about. And it was a substantial amount of money.

After that, I thought, oh, my gosh, I got to figure out how to be an adult. I thought the $1 million was going to last the rest of my life, and it lasted, like, three years. So I went up and worked in the oil field, and after a couple of years, I started saving a little money and thought, okay, let me try this again. And I knew that I had to invest, otherwise, the salary that I made wasn't enough to get me much further in life. I bought some low cost vacant land just outside of downtown San Antonio, just outside of the MSA.

And those lots I was buying for between $5,000 apiece back then about ten years ago, and I'd already lost. I already had an experience with risk and loss and poor choices, and I went in with a bigger concern about my downside risk than more people usually do. Usually, folks are looking at how much money they're going to make on the upside, and they completely forget about all the risks. And this happens. A large part of the people, even after their experience, it continues to happen.

When I looked at this, I thought, what have I seen in the past? How did people make money? And I saw folks buy land and buy houses in older parts of town. And as those parts of town would turn around over a ten-year period, they would get some value, not just rental income, but just truly appreciation. And I remember seeing a couple of different big cities in Texas.

So I kind of had this thought in my mind. San Antonio was very close to where all the oil field areas I was working in. And San Antonio is the 7th largest city in the United States, but it's very undervalued. So I could buy these lots, literally. There was a highway that divided the central business district from some of the lowest values in San Antonio, so you'd have big time value and then nothing.

And I thought, boy, if the value spilled over that one highway, we're in good shape. So I bought a couple of dozen lots with a couple of years of my savings. So $5,000 to $10,000 dollars apiece. At that time, I was thinking, how much lower can the value go? They can't get that much less valuable than $5,000 apiece.

But if they do anything like the other downtowns in the big cities in Texas, they could go to hundreds of thousands apiece. So I've got a good shot at a lot of upside, but the downside risk is very low. So that made me feel comfortable spending every nickel that I had at the time. And the neat thing is, that segment of the story is very short, because within about two years, the market moved. I got really lucky and put all my chips, pushed them across the line there, and bet on black.

Thank God black was the color and the values just started skyrocketing. And the way I found out is I got a call from a realtor that said his client wanted to buy one of my lots for 200,000. And I was all in the whole portfolio for about 300,000. So you can imagine what changed in that moment.

Seth: You didn't learn about the land business from some land flipping course or something like that. You just kind of figured this out on your own, is that right?

Logan: Right. So this was ten years ago. So what we had on YouTube, that's just at the time, the guys, like all the guys that we look at as the old timer guys now, they were just starting to play with YouTube or hadn't even had a channel yet.

Seth: Yeah, that's kind of unusual. I do come across people like that from time to time who figure out land on their own, like, without somebody prompting them and kind of showing them the light. But it's not that often.

I mean, usually people hear land and they just are kind of turned off by it and they walk away. But it sounds like you kind of figured it out on your own and put the pieces together. It's pretty cool.

Logan: My dad was a CPA, so I'd gotten to see his stories about a lot of wealthy people because he got to see their taxes. Now, my dad wasn't wealthy, but I got to hear these stories about folks. And I realized folks usually made their money investing. It was a lot fewer people made it in just some kind of special career. And I realized that I couldn't afford a lot of the investments that were out there at the time. So I kind of defaulted to land because I just happened to be in a situation where someone said, oh, wow, land is cheap in San Antonio.

And I thought, I don't have a lot of money. Land is cheap and it's stable, whereas stocks, I don't understand that. And that'd just be a bigger risk than I took. So that was something that was affordable, it was close and I felt like I understood it because the lot that I bought was right there and no one could move it and it couldn't go up or down in value overnight like a stock. And I thought, this is the easiest thing I can get close to in my proximity and timing.

Ajay: Super interesting, Logan, because I feel like you interpret risk very differently than most. I think a lot of investors and folks listening get super excited at the prospect of doing massive deals, which I do too. I like doing deals where you can add some zeros at the end.

But I want to highlight your philosophy as you were getting started You essentially said, well, it can't go any lower. So if I'm investing five grand, I can't lose more than five grand a pop. But these things can go to the moon, essentially, right? And so they're not really going to go down to zero because their land in San Antonio, this is a great area, but I have a lot of upside here and I think investors talk a lot about asymmetric bets. But you basically figured asymmetric bet out on your own. Just reasoning through, let me throw some money at this thing.

I'm curious, is there a reason as to how you thought about risk back then and why you perceived it that way or anything kind of ingrained in how you grew up?

Logan: I didn't grow up with really much, just middle class, whatever, nothing really special, but neither up here big into investing or any of that stuff. But when I inherited some of that money, I didn't realize it was nearly a million bucks, and it was just the largest amount of money I’ve ever seen. I never had more than $10,000 or $5,000 in my checking account at one time. So when that kind of money came in, I thought I was rich for life. I was young, I wasn't paying attention. And when I lost all that or just blew through it, basically, I remember thinking, oh, my gosh, money can go so quickly. I need to respect it more. I had a good shot at it and it's all gone.

And I remember the next time when I worked to earn a couple of hundred thousand dollars. I remember it took me several years, three years to earn and save this after my income, after my expenses, after my taxes. And I remember thinking, gosh, it can go so fast. So I was really worried about losing it.

Seth: Yeah, for sure. I know a lot of people who went through the last big recession in 2009 and all that, myself included. It kind of scarred me to this day. I kind of have a hard time going out on a limb because I always see the world through that lens. I mean, that's how I entered the real estate investing market. Just saw it, it's very risky.Things can go wrong, things can go terrible, which they can. But that was kind of an unusually bad time back then, and that was not an appropriate way to think over the past ten years, as things have been going up and up and up.

So, it's kind of a blessing and a curse, I guess, when you have that sort of scar in your upbringing, right?

Logan: So there's an interesting balance. I met a guy, he's a local CPA. We started doing business together a couple of years into this. And it's interesting because I still had this care for the downside and risk mitigation. But he is ultra conservative. So there were times where I was willing to push the envelope more, although not near as risky as some people. I kind of helped things grow and expand, but he was always there to remind me, if you screw up, this is how bad it can be.

And I always remember thinking, man, I can swing for the fences like some of these guys that take on huge amounts of debts and take on projects that are real risky, that might have massive multiples, but if we screw up, we have to start all over again. And I remember thinking I would rather grow aggressively, but in a manner that I could control and felt comfortable with than looking for that one in a million shot. But I have good odds that I'm going to lose it all or bankrupt. I would rather be stable and consistent and grow in the long term than keep swinging for the fences.

Because I met guys like that the old time. A lot of developers have been bankrupt multiple times. They've been divorced a couple of times. They've had to move back into that small apartment multiple times from some lavish life. And man, that's stressful, dude. I didn't want that.

So anyway, that mattered to me a lot. But that was an interesting part. But to me, what was more valuable than that particular chain of events was when I went back to the market after I'd found that my lots had gone up in value and I sold several of them. At that point I said, great, I'm going to go buy some more of these $5,000 lots. And I realized there were no more $5,000 lots.

Ajay: Yeah, where'd they go?

Logan: Yeah, there's a really unique situation though. One of the lots that I bought, I got sloppy and I didn't buy title insurance. I was going through this slow process of going to title company, getting a commitment, closing, blah, blah, blah. And this one guy would sell me his for $5,000 or $4,000, but he said, “I'm not going through all the title company stuff. Just come pay me for it.”

So I gave him a check and he gave me a deed that recorded it. But later on I found out that I bought one of five deeds. That's why I didn't want to go to title because he would have to share the proceeds with four other siblings. And I went through this process that summer of calling lawyers, asking them how to fix it, making calls to property, the other owners trying to get this thing in front of a probate judge (it turned out I only need an affidavit of heirship), just all these steps.

And I figured out how to fix that. I picked up the other shares and then I also found there were some judgments and liens along the way. And I had to call these creditors and negotiate them. Some of them were so old that they were no longer valid. I learned a whole lot of information about that property. And I remember when I went back to the market to try to find those $5,000 lots that were no more, they were $100,000, $500,000. I remember thinking, “Wait a sec, there were a lot of people that couldn't sell because they had problems with title.” And I thought, I bet they haven't sold still.

So I called some of those people back and none of them had sold. So I remember thinking, well, there are problems but if I can figure out how to solve them, maybe I can get a deal. And that's when I started offering people just pennies. Like, literally, I'd still offer them the $5,000, but the difference is, I said, hey, you can come to the lawyer's office to pick up the check, and I'll get a deed from you.

I know we got multiple owners. I know we have title problems, but I'll basically inherit your issues. And that's when I started buying the land with problems in tow and figuring out every possible way to solve the problem. And that more or less became the basis of my business model for today. That was eight years ago.

Seth: Maybe that's a good segue. Tell us about your curative title work. Is this like a separate company you have where you help people solve title issues? Let's get into that a little bit.

Logan: So it basically has become the basis of a lot of my companies. It's kind of the feeder to my portfolio. It became the feeder to my cash flow machine. But at the end of the day, everybody's out buying property from wholesalers, sourcing their own deals, figuring out any way to acquire real estate. And I realize I'm looking at the downside risk.

If I can buy something for substantially less than it's worth, I can make a mistake valuing it. I need to liquidate it real quick and get some cash and still make money. All the things can go wrong, and I can still do okay because I got such an extreme discount on it. And that really mattered to me.

So I started acquiring properties with these problems, and it started translating. Into big ranches, I bought apartment complexes with problems like this. I'm talking industrial sites. You'd be absolutely amazed how often this problem exists in the rest of the commercial world.

Seth: If I understand right, are you intentionally going out and trying to buy properties with title issues? Is that what's going on? Or you're helping other people solve their problems with title issues, or what is it you're doing in that?

Logan: My goal is to buy them with the problems, I guess, inadvertently solving other people's problems along the way. But I'm the one that most of the time gets the bigger financial benefit out of that. I'll pay them some amount of money for their share, and then I'm taking on their problems. Then I've got to solve those problems that now become mine because I've got the land.

So at the end of the day, I'm looking for something that's got trouble. It may have judgments or liens, like an IRS lien or a creditor lien that's more valuable than the property actually is. As a result, these folks cannot sell with title insurance. It doesn't work. I'll buy it for a very small amount of money and then at that point I'll go in and negotiate with the creditor, sue the creditor, I'll deal with all the title issues. Maybe I have to open a probate. Maybe I've got to go find some owners that are lost or disconnected, things like that.

And once I get through solving those problems, now I have an asset for $0.30 on the dollar and I can decide, is this development land? Is there something I'm going to go sell to the market and capture my equity? What am I going to do with it?

Seth: So it sounds like the big advantage of buying properties with these title issues is basically you can get them at a huge discount. I think you just said $0.30 on the dollar, that kind of thing. It makes me wonder, though, what kinds of issues are we talking about and how costly and time consuming are they to fix those problems?

Logan: Yeah, I'll say one of the most common ones is multiple owners in unresolved estates. I call them kind of “orphaned estates.” That's one of the big issues.

Another issue is a break in the title chain, meaning someone didn't file a deed 40 years ago and then the next person that bought it sold it to the next person. They didn't get title insurance, but there's this chain of transactions, occupants, users. There's just this gap in the title chain for an unrecorded deed 30 or 40 years ago. Maybe you'll have an unreleased mortgage that's 70 years old and there's no release. And the owners can't find a mortgage company because they're out of business.

Sometimes you'll have a bad deed. Sometimes someone will sell this property and they'll write the legal description wrong. But that deed is from 60 years ago, maybe. That's a problem that has to be solved or the property can't sell the judgments or the liens. Maybe somebody didn't pay their child support liens. They have 250 grand in child support. The properties are 200. That doesn't make sense. All of these problems that prevent a property from selling.

I'll give you an example. Somebody wants to sell an apartment complex. He contracted to sell it. And the guy who was the seller changed his mind and did not close. He backed out. But the person who wanted to buy it still wants it. But he's in this spot. Well, I'll buy a specific performance claim from him and go sue that seller for performance, as long as there's enough equity in the deal. And I'll become the buyer of that after I win a lawsuit, basically.

So, in that case, you got to have millions of dollars at stake. I mean, that deal is $150,000 worth of legal fees. Took two years. I had a couple of million dollars in equity on the line there. So that is an expensive, long, high value-solve.

But some of these aren't so bad. I'll give you an example of a very common event. A property is worth 200,000. I'll buy it for ten or 20 grand from two or three owners. But there are half a dozen lost owners, and none of their probate, none of their heirship has been not. I'll just buy shares at a time and go find people one at a time, and we'll do a big affidavit of heirship or a declaration for heirship in the local probate court. That might cost… I might spend another 20 grand buying shares and doing a declaration of heirship. So that would be on the low end of the expensive side, and then the apartment specific performance would be on the high end of the expensive side.

Seth: In terms of these different issues that you're mentioning, some of them I understand pretty well because I've seen them many times. Some of them, I haven't seen them. But when I think of breaks in the chain of title or multiple owners and that kind of thing, can you just file a quiet title action to fix that stuff? Or is it way more convoluted than that?

And what happens if you take on one of these projects and you can't solve the title issues, and now you have a property you don't really own? Does it ever happen? And what's the risk of that?

Logan: Okay, that's a two-part question.

The quiet title lawsuit is not for multiple owners. That would be a declaration of heirship. That would be a different situation. So you need to be very sure that the share you're buying is legitimate. I've bought shares of properties before that were not shares of properties. So I got a deed for somebody from somebody, and paid them money, and that deed was worth nothing. So I've made that mistake. But I also bought six deeds to the same property, and I got those deeds for a good deal. And that last 7th one that I bought that was worth nothing. Didn't matter because I paid so little for them. I was still in the money.

So that happens a lot. But a quiet title action, a lot of times a quiet title or trespass to try title, those are two curative lawsuits that basically can catch a lot of different problems. A title break in the chain, that's a really common word that I'll use for that type of suit. And what you're doing is you're basically saying, this is my property. I'm saying it's mine. And unless anybody else comes to challenge that, the judge is going to rule in my favor and give me a full order for title. That works on some of these problems.

But when you're talking about the heirship stuff, the simple answer is you have to find everybody, and you have to have a bunch of people sign off on a genealogy report. And in Texas, we have a statute, an affidavit of heirship. And a lot of family members have to sign off on this after this big genealogy project has been done that says, this is my family. These are the heirs. Then an attorney compares the intestate succession chart in the estates code that says, these are the heirs. According to the law, if there was no will, it's a big document that gets filed in the land record, and that becomes your title chain instrument that connects all of those breaks in the title chain from all the owners.

To me, some of the ones I've done have been the worst. You're talking 60 and 70 heirs. So you have to find people all over the world sometimes. Sounds like an absolute nightmare. It can be. I made a million dollars on a 60-heir property. I spent $250,000 paying liquid taxes and buying shares. So I was all in for about 250. It took about six or a little less than six months, about half a year, when I got down the way and resold the property. Sold the property for a million.

So it is a hassle. But for a million bucks, I'll take that hassle

Ajay: Me, too!

Seth: It almost kind of reminds me of when you're trying to subdivide or get entitlements for a property where there's some. Risk there that maybe this won't work out. Like, I'm sinking a bunch of money in that maybe it won't come to fruition. It sounds like kind of a similar thing where you're doing a lot of this paperwork to put the pieces together. Has that ever happened where you went all in on this thing, and you couldn't get all those heirs to sign off, and you're like, well, I'm screwed. I mean, does that ever come about?

Logan: It's happened, but I'm not screwed. So let me talk about the entitlements for a minute there. You're saying you're going to spend all this money and you might not get the entitlements. There are tons where you're not going to do well in that case.

And I've got several, very large, I've got a 250 and a 450 lot subdivision happening right now, one in Austin and one in Dallas. But I bought each of those 30% below market. So I can screw up and spend a quarter million dollars on engineering fees and legal fees and all this.

And let's say I don't get the entitlements. I can still take the property to market, sell it for fair market, and I'm not going to lose any money. I'm going to make a couple of bucks, but I'm going to get reimbursed for my legal fees and my labor and time and the investment. I'm going to get all that back because I bought it below market.

Seth: And that's assuming we have a firm understanding of what market means, right?

Logan: I'm not going to spend three, four, five, 6 million unless I know what market is.

So there are times where I'll pass on them. When I'm looking at the 100 acres it was $7 million. I've got another one that's 200 acres, that's 450 lots, that's $6 million. So if I'm going to spend that kind of money, I'm going to figure out what it's worth and feel good about it, or I'm not going to buy it. So I'm not going to take that risk.

Some guys, they'll cut that check and say, go big or go home. I'm like, well, you might be in the courthouse one day and I might buy that land from the next guy at a price where I got the protection. You see? Different.

But that's how that'll play out of the land development deals. I don't want to take that risk there. But when it comes to the 60 heirs, I've had that situation where I get 40 people in and the other people say, “I'm not selling to you, forget it. I'm done.” In that case, in Texas, we've got section 23, which is a partition of real property. 23, the property code. It's an absolute right in Texas to access your equity and land.

So you file that judicial plea in your county or district court, and you ask the judge to sell the land and you get your share of the money, the partition lawsuit. So you're not ever going to be in a spot where you're just screwed and you can't get your money unless you bought a share that's not actually a share, then you might be. But if you bought a bunch of shares, that judge will sell it and give you your money so you can get out. I had to do that, too.

Ajay: Logan, this is super interesting, and I think most people are afraid to go through the quiet title process, and I think a big portion of that is truly, they just don't understand it. And so could you speak about, number one, who are you hiring to get that done? I'm assuming an attorney, right? But for those that don't know, just what type of attorney are you reaching out to?

Number two, how long does that time take, that whole process take? Number three, sorry, this might be like a four-question stack, man. Number three is, what court is that going through? What judge is ordering that summary of judgment? So I guess who do you hire? How long does it take? What's it cost? What court? Let me know if you need me to repeat that.

Logan: A real estate attorney that's experienced in this specific area. If you go to the doctor, you're not going to go to a quick doctor for a brain problem.

There are a lot of real estate attorneys. You need to find one that specializes in this stuff. I've got an attorney that works for me and he has a lot of this experience, but over the years, working specifically with me, he's kind of narrowed that down. Now I've got half a dozen other attorneys that don't work full time for me. I use them as necessary.

So an attorney that is experienced in this type of lit is what you've got to get.

Ajay: And what would I Google, “title attorney?” Or what exactly would I be looking for?

Logan: You're going to have to Google real estate attorney and start calling them and asking who takes on these cases, what their experience is. A lot of attorneys will say, oh, we do quiet title. And I say, great. How many of them have you done? How many have been successful?

And that second layer of questions, people like you and I are usually afraid to ask an attorney that, because the attorneys are condescending, you think they're smarter than you, you think they're richer than you, you think they know everything. When you take my annual income and divide it by the hours I work, I make probably four to six times what most of the best attorneys make.

So I had to realign my thinking and say, no, I'm the expert here and I need to find the best trade. It's a carpenter. It could be, I don't know, a plumber. In this case, it's an attorney. But there's still a trade to supplement my business. So when you think about it that way, all the questions you would ask a carpenter, you better be asking these to an attorney before you start dropping tens of thousands of dollars to hiring him, before you know what kind of work he can do. So you got to ask the right questions. But when you find that right attorney, then you get going.

Now, when you talk about, you could make a mistake and things may not go your way. You mentioned that earlier and you said, because you don't know what you don't know, is more or less what you're saying. In this case, we look at the statutes, we find out exactly what that is, we compare my fact pattern to that, and I look and decide how closely those line up.

If the fact pattern is darn near dead-on, and I really feel good about that, then I’m gonna file the case. But there are a lot of cases that I've looked at that I decided not to file and not to take because the fat iron wasn't convincing enough or wasn't close enough of a match. So I walked away and didn't take them because I didn't think I could win. I'm not going to take on that case and file that lawsuit unless I think I got a 90% chance or more. Otherwise, I had a really good track record in winning these things.

So it's kind of like that. You don't pick a fight that you don't think you can win. All the boxers do that. Now let me speak to the time. If you're going to get a default judgment, let's say you notice all these other parties that you have a plea and their name might be on an instrument of title chain. And I'm basically saying, hey, everyone, this is my property in this plea. And either you contest my ownership or you let this thing go. But if you don't contest it, I'm going to be the title holder according to the judge's final order.

That's what the summary is. If you get a default judgment and you notice everybody in the title chain and no one responds, you're going to get a default judgment in 90 days. But if folks raise their hands and say, “Whoa, that's my property, and here's why.” You have to litigate it a little.

Quiet title cases, unless you're dealing with a high value in a very complicated fact pattern, if you spend more than 10,000, $20,000, and it takes more than a year, be really surprised. These are usually relatively simple. So less than a year, less than 20 grand.

Seth: I got a question. When you were talking earlier about buying shares in a property, so are you talking about, like, a tenants-in-common situation where that's how the property is deeded to the existing owner, and you buy out one of the owner's shares in the property? Is that what you mean?

Logan: Right. Yeah. So you have co-tenants here in Texas. So what happens is most of these people that have multiple ownership situations, they didn't buy the property. It's not like all three of us went and bought the property, and all three of us are entitled together. That's very rare. That does happen. It's very rare.

It's typically Seth's daddy died, and Seth had four siblings, and Seth died and had seven kids. And now you have this congregation of 18 people. That's the most common tenants-in-common situation or co-tenant.

Seth: Okay. And that's what you're referring to when you talk about buying shares, right? Because otherwise there are joint tenants and that kind of thing. That's where everybody owns all the property together. And do you not deal with those types of properties as much?

Logan: Texas laws are different. We don't have rights of survivorship in our Texas laws. So when Seth passes away, if you don't have a will, Seth, the state's got a will for you. It's just a succession chart. It's in the state’s code.

And when you die, Seth, without a will, that section of the law, the codified laws, basically say who your heirs are. And there's this whole chart that you go through to pull out who says the heirs are.

Seth: It sounds like a lot of what you're able to do here hinges on the fact that you understand Texas law really well. If you were to try to do this in some other state, how much of this would you have to relearn? I don't think you'd be lost. But is there a lot of stuff where it’s like, oh that doesn't apply anymore. And neither does that. That's the Texas thing.

Logan: Yeah. I think once you understand the process and you understand how to read it, how to understand it and how it works, that's your biggest hurdle. Laws apply a little bit differently in each state, obviously, but it'll take you some time to figure that out. But as long as you understand the basis and civil practice and procedure, you'll be able to look at stuff and figure out the difference just by reading the common law or the statute and figure out what to do differently.

But what's neat here is Texas is huge, and I got no reason to go outside of Texas at this point. And I can talk through these projects with people on the phone like that without having to research.

Seth: Now, when you're working through these title issues, do you wait until the title issues are clear and then take title to the property, or do you just buy it and assume you're going to be able to figure it out and then deal with the stuff after that?

Logan: Typically, what I'll do is contract with at least one or multiple owners. I'll get a contract, and then I'll do some real research. And at that point, I'll make the decision to buy pieces of the property without title insurance or continue to work on solving them while I have a contract.

But I would say a large part of the time, I'll buy without the title insurance, and then I'll fix the problems. And the reason is, early on, I would trust people, and I would go fix all their problems. And then at the end, they would say, I changed my mind. And that's how I learned to do so well with specific performance lawsuits.

Seth: That's not cool.

Ajay: That's tough.

Seth: Are you putting down an earnest deposit or something to secure this? And how much time do you have to work through this stuff while it's under contract?

Logan: I do pretty low earnest money on stuff like this. A lot of times, I'll give somebody $500 for earnest, if I'm doing earnest. But because a lot of these are not going through a title insurance company, I'm going to send them a contract that doesn't include earnest money. And I'm basically going to tell them I'm going to close them.

The typical contract in our office closes between three and five days. So I only need enough time to run my own title abstract, get a third party title report to fact-check my work. My attorney and I look at it, and then it closes, usually within a week. So I don't have time to receive earnest money, get it receded, send out copies, everybody. I need to get them to sign that contract, and I'm going to pay them for their deed.

Seth: So it sounds like you are taking title to as much of the property as you can for as little as you can, and then solving the title issues after the fact, just based on what you said there.

Logan: That's right. A lot of folks watching this stuff saying, oh my gosh, that sounds so complicated. But one of the messages I like to explain to folks is it's a lot less complicated than you think because you don't have the right guidance and you haven't been around the right folks to figure it out.

But I'm going to tell you, I look at this and say, I can't understand why everybody is not doing it if they would just get a very small amount of education or read a little bit about it and invest very small amounts of money at a time. The returns are freaking astounding. I bet there's probably half a dozen people in the United States that are doing it at my level and they're all really open and really willing to share.

So if someone's got some, if, let's say they have a little bit more time than they do money and they're willing to invest some time but make exceptional returns, I'd tell people to seek these folks out, go watch all the stuff on the internet, call an attorney and pay them a couple of $100 an hour to explain stuff to you and go buy yourself a deed for $500. How much are you going to lose?

Seth: It sounds like there maybe is a systematized way to intentionally go out and find properties with these kinds of title issues on them. And it got me wondering, say if I want to go out and find a bunch of commercial properties with title issues so I can buy them at 20% or 30% of market value, how do you do that? Because a lot of times you can't really find title issues until you do the title search. And that's when you realize, oh, there's a problem.

Is there a way to, in DataTree or whatever your data service is, only show me these properties that are likely to have a problem? Or do you go to Foreclosure.com and look for those properties? It sounds like there's some special list somewhere that has all this stuff. Is that true?

Logan: Usually the property that have these kind of problems, the problems have been there long enough for the owners to be frustrated, are delinquent on taxes. So there are a lot of different ways that you can go find this stuff. In my opinion, that is the best distressed real estate list ever in the world and probably there will never be better.

Seth: When I hear that, I think, the distressed issue is delinquent taxes. There's a tax lien on the property or something like that. But it sounds like there's probably lots of other different issues on those same properties. Is that accurate?

Logan: Yeah. Usually once you start peeling those layers back on that onion, the first one is the delinquent taxes. But there are usually other layers in there. So let's examine that for a moment.

A property can only be delinquent on the taxes if there's no mortgage. Because if there's a mortgage, the loan servicer or the lender will pay the taxes and then shoot that bill over to the borrower and put them in default many times. So if there is no mortgage on a property, then the taxes can be delinquent. If there is no mortgage on a property, then it's very old ownership, or it's a very wealthy person that didn't use debt and they just bought it. The odds are it's old ownership.

So many times when there's old ownership, title problems exist. Because generally, if a mortgage is for 30 years long, most people don't pay mortgages off in their life. Some do, but a lot of people don't. So let's just say most people buy property and pay it off and live there. When they die, their children inherit it, may not do the right paperwork, and it comes without mortgage liability.

So many times you have second generation owners with title problems and they become delinquent on property. These folks didn't buy property and set out to be a property owner. They inherited it. They were given the property from their parent. So the folks that handled the title problems paid up the taxes and kept the property in good standing. They're not the person you're dealing with. You're dealing with that person that inherited it and really wasn't ready for it.

Seth: Well, this makes me wonder. Of all the different title issues out there, what one or two title issues would you say are the easiest ones to solve? Like when you're aware, okay, that's the problem. No sweat. We're going to take care of that. Just push-button easy.

And which title issues are like, the worst? Like, so bad they would scare you away. What would cause you to say, no, this isn't worth it, I'm running. Is there such a thing?

Logan: Yeah, there is. Or two things.

One of them is low property value. Almost any problem with the property. If the property is only worth 30 grand, I ain't getting out of bed for it. Not worth it.

The other thing is one of the owners is a minor. That's a nightmare. You're unable to buy a minor share for a discount to market, and you're generally unable to buy it for market value. You have to appoint an attorney for them, for the minor. You have to go get a guardianship of the real estate of a minor. You have the estate of a minor. Then the judge appoints an outline of attorney for the minor.

By the time you're said and done to this thing. You had two or three freaking attorneys for this dead gum minor. And if the minor has a very small share, like a few percent. You can afford to pay the premium on it. But if the minor has a large share, 20%, 30%, 50%, you can't pay the premium. So it's not worth doing it.

So if I hear there's a minor involved, I'm out. Unless they own a very single-digit share.

Seth: When you say minor, are you talking about somebody under 18 years old? Are you talking about like a coal miner? Because I keep hearing miner, like, what's the problem with miners? These coal miners, why are they such an issue? That's what you mean now, right?

Logan: Yeah. Somebody who's under 18, it's slow and it's a hassle. Some of these bigger problems, they're okay to deal with. When you're dealing with property, it's worth a couple of million dollars. You're willing to deal with it and pay the fees and take the test of time.

I did one earlier this year. That was about between $5 and $7 million community property estate. And I purchased the community property from the wife. It's worth somewhere around $3, maybe $4 million per share for. I'm not going to say how much, because this will probably end up in court one day. And we're not that far. But I'm going to tell you that you could buy a forerunner for more than I spent for this share of property.

And I believe the husband, who is going to say this is separate property. And we believe that it's community property. I think it'll be a substantial fight. Hundreds of thousands of dollars of legal fees. Many years worth of fighting. But on my side, I got $2 to $4 million on the law. So I'm willing to take that fight.

Seth: What are, like your bread and butter easiest title issues to solve. Like when you see it, it's basically not even an issue. Like you know exactly how to fix it.

Logan: A judgment or a lien that's almost ten years old, that's cake. That creditor is willing to negotiate. The debt is so old, it's almost worth nothing anyway. You give them 10 cents on the dollar, you're settled, done. I don't care how big it is. Good deal. So a low value judgment or a very old judgment.

And then when you have less than half a dozen owners, that's usually a gimme because each share of that property is worth at least 15% to 20%. So if you can buy that first share or two for a small enough discount, or big enough discount, small enough price, you're in the money. You're going to get those other shares from those folks.

And once I buy two, three, four, or five shares, even if the last person says, I'm not going to sell it to you because you want to give me small money for it, I just say, look, let's go sell it at market. I'm going to sell my 80%, you're going to sell your 20%. You'll get fair market value, your 20%, while I'll get my 80%. To me, that's cake. I'll get the three people of the five that agree in contract and close them. Let's go sell it at market together. It's easy.

A lot of folks walk away from a deal who only have four owners and two of them don't want to sell. They walk away from that because they don't know what to do. I just say, buy those two who do want to sell for ten grand or something low, record your deeds, call the others and say, let's go sell at market. You just replace those other two people, but pick up their equity for the discount you negotiate, and then it's a clean deal from there.

Seth: When you talk about low value judgments, that being an easy thing to solve or a judgment that's ten plus years old, is there a systematic way to find properties with just that issue? Or is it, again, back to the delinquent tax list, and just hopefully you'll come across something like that in your contact with those people?

Logan: I think the best way to do this is to start becoming very familiar with the basis of these half a dozen most common issues. Become familiar with them, how to spot them, what you think you might be able to do, and then go start fishing in the delinquent tax list. And once you start to find these and hear the problems, you call a guy like me, you call a local attorney and start to walk through those problems. You would be surprised how much easier you can really solve these.

But a lot of folks just don't want to put in the time. I look at it and say, I ain't about to go flip that house for a $19,000 profit margin and do all that construction and borrow hard money and all that for four months. I'd rather call lawyers and call property owners and make negotiations for four months and make an 80% margin instead of a 20% margin.

Seth: Well, on that thing, because I've seen this tons of times on the delinquent tax list, where there's properties that have a break in the chain of title or like a tax sale in the not too distant past. But I won't know that until I get it under contract and send it to a title company and they do their title search.

And now, at that point, I've already made an offer to them not knowing about this issue. How do you know this stuff before you make an offer? Or do you make the offer and then adjust it way down?

Logan: Well, it can happen like that. You make the offer and you adjust down, but that's really hard to do because the moment you tell someone, you're giving them $200,000, and then you come back to them and say, just kidding, you have all these problems, 20 grand, they don't trust you, and they walk away.

But typically, if you're buying from the delinquent tax list, these folks have already tried to sell. They know they have problems. I know there's usually a problem. So when I'm going through this process, we're scanning the delinquent tax list, especially on the tax sale list, we're plugging these people's names and legal addresses and land records and doing a five-minute title search real quick to see what we can find as we're talking to them.

So, in my office, people are in clusters. You have a closer and you have a researcher. So everybody works in teams of two with this kind of work. So I got somebody, a phone jockey. And he’s like a deal maker who loves to talk to people. They're gregarious or charismatic. They love making phone calls. They're doing that. And I got a super nerd sitting there on the computer running the data.

Seth: How are you doing that five-minute title search? Are you using certain software for that?

Logan: Most land records, there's a couple of iFile pages or websites that will allow you to search all of the land records together. But we're in Texas, we're pretty familiar with the different real property records. So you just get a login to the deed records in your county and log right in, and you can pop the name in and literally see all of the deeds that attach to that legal description.

Or you just go, grantor, grantee, and just keep swapping their names into the search and you'll pull out deed after deed after deed. So it is a skill. I won't say it's not.

Seth: Yeah, I've actually got a video I put together a couple of years ago showing how to do this with DataTree. You can do title searches right in there. It doesn't work everywhere. The county's data has to be available in their system, but assuming it is, you can do it pretty easily there, and there's a cost to that.

Logan: What's DataTree?

Seth: You know First American Data?

Logan: I have no idea.

Seth: So First American, it's one of the big three data aggregators around the country. First American, Corelogic, and Black Knight. They all basically collect this county data from the counties. And First American has a platform called DataTree, and that's where people like us can actually subscribe and get this data directly from them. And it's pretty convenient.

DataTree data is also hooked up to a lot of other resellers out there that kind of pretend to be their own data service, but they're just rehashing DataTree's data. DataTree has a way to do these title searches throughout the country, in most markets.

Ajay: DataTree is where us regular land flippers go to find deals at 50 cents on the dollar, where people want like 120 cents on the dollar pretty regularly. It's a great tool.

Seth: I was actually talking to the folks at DataTree not long ago, and they were telling me that apparently most users of DataTree are not real estate investors. Really, the reason any real estate investors use them is because, well, I don't want to take all the credit, but I started making videos about it and a few other people started doing it too. Most real estate investors use other stuff, like PropStream and that kind of thing. It's really tailored to them. But DataTree is like a catch-all. Like anybody who wants property owner data, you can use DataTree. So I thought that was kind of interesting.

Ajay: That's super interesting.

Logan: Is there a couple of providers that can provide a title report within one day? And they may be using some of this as a background source of information. But I've got providers that for $200 will do a title report and it's 80% of perfect, and it literally gets delivered in a couple of hours for $200, we do a quick report real fast, in a few minutes in the land records, and then we get to the point where we say we're going to do this deal, let's get on the phone, let's start finding people. We'll immediately order that third-party title report and it'll show up later on that day. And we have something to compare our work to just to make sure we're not messing out. It's kind of a fact check for $200.

Seeth: I've made several videos showing how to do this with several different platforms. I'll include links to those in the show notes for this episode at retipster.com/177.

I was wondering, Logan, so I was looking at your Instagram profile, and you got some really fascinating stuff there about some of the deals you've done, like this landlocked parcel that you bought and then put an easement and a road in there. And I think if I remember the numbers right, you said you bought it for $5,000, put about $150,000 of work into the easement and building the road, and then it was worth $500,000. And I saw another one about like an RV, a parking lot that you bought and then a metal building that you bought and turned it into storage.

Are these deals all coming from the delinquent taxes? Like, is that what you're doing right now when you find these deals? Or are they coming from other places, like referrals from other investors, or do you have some other secondary or tertiary source of deals you're getting?

Logan: I would say right now about a third of these transactions are coming from referrals. I really don't like to be the first one that calls to identify a problem because then there's no trust with me. And that's not an indicator of my pitch, that's more a human situation.

So I'm the first guy that shows up and says, I found you have a big problem, by the way, I'm going to buy it from you for nothing. I have a hard time there. But usually when I'm the second, third or 10th person that just gets brought to me at that point, it's real easy. They already know the problems. They've been down this road.

And it's funny, the shoe is down the other foot where these folks are referred to me by a realtor, or we have called them after they have had many years of problems. And I say, look, I think we've identified some problems. This may be the type of project that we take on often. I have a series of questions, and if it looks the way I think it might, I would consider taking on that problem and maybe doing a project like this.

So I'm kind of telling them I might do it, I might not. And at this point, they tell me, “We've been trying to sell this property for ten years. We hired our own lawyer. We've done it all, and no one can buy it.”

And that's when I say, great, would you like to come to my office tomorrow and I'll give you $10,000 in cash? It's a whole different thing, because no one's ever offered that and no one solved it. They already told me. So now I've got an answer for them.

But I would say a third of the deals do come from referrals. We are looking through the delinquent tax list. You can run a search for tax foreclosures in the docket search in your county, because tax foreclosures are judicial foreclosures. They're not like a mortgage, where it's a foreclosure on a deed of trust.

So lawsuit happens for about six to twelve months before the order of sale happens. So we can get into the docket and find hundreds of those.

Seth: Have you had to work really hard on just making it known? Like, “Hey, I'm a guy who deals with title issues. If you have those problems, come and talk to me.” Has that been a useful thing for you to do, given that you have the skill set of knowing how to deal with those problems?

Logan: Yeah, I mean, I've spent a lot of time on my social media talking about, know, my followership is nothing like a lot of folks, relatively small, but it's enough to drive a substantial amount of business over the years.

Ajay: Logan, in terms of foreclosures, so obviously you're dealing with delinquent, you know, a decent chunk of these are tax foreclosures. But are you ever negotiating with mortgage companies as lienholders or banks or people who might be holding first position liens of a mortgage that's going into foreclosure? And how is that different from a tax foreclosure?

Logan: It does happen. A lot of the time, I'll find that there are mistakes. If there's a title problem with the property, they'll have a situation where they made a mortgage with the husband and never got the wife, and it's a community property asset. She never signed that mortgage.

So, unfortunately, they only have half of the collateral that they foreclose. They will only foreclose on a 50% undivided interest, more or less effectively, not the entire share. So I go to the bank and say, “Guys, you only have 50% collateral, but in order to get to that, you got to foreclose and then you have to deal with the other person. Then you have to file a partition lawsuit. Now you're going to look like a monster because you did this. You're going to be in the news. Do you want to go through all that or will I? Sell it to me for a discount and we'll all settle today.”

Man, this is an interesting thing. You take everything for granted. You think the guy that wrote your insurance policy on your car did it perfect and didn't make mistakes. You think the deed of your house doesn't have any errors in it. You think the lawsuit that was filed against all these people, you think all the mortgages are out there don't have problems? Think about this for a minute.

If you fill out a 100-item questionnaire, you're probably going to make a few mistakes. It just happens. We're humans. If you look at every single document and every single process, you find a lot more mistakes than you realize. And those are opportunities.

Ajay: Seth, I feel like your skin's crawling at the thought of every property…

Seth: A little bit. I was actually talking to a different guy, David Hansen, from the last episode. He does fairly complex subdivisions and plat maps and all this stuff. And he was explaining to me all the costs that go into doing that and how much time it takes and the risk involved. And it kind of reminds me of this a little bit. Just in the time and money investment to solving these issues and making it a marketable title and all this stuff and then having a much higher value on the other side.

But when you're figuring out how much to offer somebody, is there a certain formula you're going into this with? It's like, okay, well, the market value is this and it's going to cost me this much and take me this much time to solve the problem. So my offer is this. Or is it just like no, 30% and whatever delta is there between that and the market value, I just could take that.

How hard do you think through that? Or is it just sort of the standard formula is 30% of market value?

Logan: It is case-by-case dependent. But I will tell you a number that sounds really good is $5,000. And another number that sounds really good is $10,000. The reason I like those numbers is they're big enough to be real money, but they're small enough to where if you're talking about real property that has any amount of value, those are small dollars.

So if I'm offering a person 5,000 or 10,000, it can be a very small fraction of the value of the property. But I don't care how much money you got or how much money you got, $10,000 is real money. And if I'm going to put it in your hand tomorrow, the next day, I'm worth a lot of money and I'll pay attention to ten grand, so it matters.

10,000 is a really good number. I use that number a lot, and that number can be used on a $200,000 property, or it can be used on a $500,000 property. If I think the problems are big enough that people are just done with it.

Now, I do, back in a lot of times, I don't want to be in anything for more than 30 or 40 cents on the dollar. So I've got to back into it a lot of times and say, these are the taxes, these are the amount of shares. Total 30,000, but I'm only buying 25% from them. Okay, I can only afford to give them this much, but I also kind of feel through it because you'll hear indicators during the phone call. We're sick of it. I'm done with it. I'll just let the county take it for the taxes. And when they hear that, I'm like, you'll give it to people.

Seth: Logan, I saw you post about a landlocked property that I mentioned earlier, where you bought it for five grand and put 150 grand into it, and then it was worth 500,000.

That struck a chord with me because I come across plenty of landlocked properties and I buy them a lot. I just don't do anything to fix it. I just buy them for super cheap and then sell them for super cheap. But when I thought about this idea of, man, that is a huge jump in value from putting in the easement and the road. I mean, that's just amazing.

And you mentioned in that video that in Texas there are four common law remedies to get access to your property. And I don't know that those laws exist in every state. In fact, I've come across issues where there definitely was not a way to solve the issue, or at least everybody I talked to didn't know how to do it.

And so I'm wondering, if somebody was trying to do exactly what you did and intentionally seek out landlocked properties with the goal of suing for access and building a road. That is the sole business model, only landlocked properties where we can do this. How would they figure out which states make the most sense to do that in? Like, what do they need to research and figure out and then what's the best way to filter a list or find only landlocked properties like that and only go after those? Any ideas on that?

Logan: Yeah, so I know for sure Texas has really good laws for that. We've got a lot of common law that gives you those four remedies. So I might spend a little time doing that research for those other states. But if you get an attorney who knows what they're doing, it's not as complicated as people think.

I mean, you can get into Westlaw or some of these, the programs that they have and type in landlocked, and you're going to find a bunch of case laws. So a lot of attorneys just say if they don't know how to do it, you can't do it. I heard that for several years, and finally I heard a different answer. I realized there's a big business case out here. So spending the time to keep asking people and doing your own research, you'd be surprised what you'd yield.

Now, when you talked about CoreLogic, you can go into the company like that, or even, there's one here called TaxNet that we use, and there are a bunch of different categories of filters. But a lot of these properties, if they're landlocked, it does say it in the appraisal district like metric somewhere.

So you might spend a little time filtering through some data in particular counties that you're familiar with. But a lot of times you can find it where it says that it's landlocked, and they even under-assess the value sometimes because of that. So if you do that, and you could pull that stuff out really quickly in large volume.

I haven't done it that way. I'm really looking at this particular property that was on the tax sale list, and I called the owners, $5,000 in the taxes owed, and $5,000 is what I paid to the owner. So I was in it for ten grand, which is what I actually paid. But you really have to look at the fact pattern and what caused it to be landlocked.

So if you're a single operator and you want to go make a lot of money, you might want to do some bigger projects or other projects. But if you have some people or some help or your time isn't quite that valuable, you can poke through these and you'll see a lot that's landlocked and doing a little bit of research, you'll be able to see that the front property is what used to be adjoined with that property in a single property. And when the front person sold off the back piece and caused the back piece to be landlocked, that's your event that's going to allow you to get access. That particular problem caused land to be locked. That event is illegal in Texas. So you can sue that front tract owner for an implied easement and you'll get it.

Seth: It makes sense. I don't know why that wouldn't apply everywhere.

Logan: All of these situations exist. All of these situations have clues. All of these situations have data pathways somewhere out there. You can get into it fairly easily by just finding a few owners and doing one of those deals, maybe negotiating some judgments or liens. What I'm talking about is ten years in, so they're very complicated and I'm talking about very simply.

But if you really want to get started, pick a couple of problems and just sort your way through it at a low cost every time. And that's when you develop a skill that may not be your everyday full-time skill, but when you run across these deals once a month, that might be where you pick up massive deals because you feel willing to try it.

Seth: That thing you were saying earlier about how you come across an attorney who doesn't know how to do it so they can't say it can't be done. I feel like I've encountered that a lot in my life where people just, what they're really saying is they can't do it, not that it can't be done.

How do you know when to believe that versus saying, no, I don't believe it. I'm going to keep powering through. When do you quit or when do you settle and just accept what you're told? Do you have any guideposts that you use for us? Like, okay, well, this person is this level of smartness, so I'm going to take what he says. Any thoughts on that?

Logan: You know, you'd be surprised. There's a lot on Google today. A lot of these law firms put out good articles, and if you get on Google and start Googling about your problem, you'll find a lot of really good information. And you have to feel comfortable questioning the knowledge.

The first guy that I sat down with was referred to me, the attorney from the title company, and he would say, this won't work. And I would say, why? And he would say, well, because of this. And I would say, why? And he would say, well, because of this. And I would say, why? Like a three-year-old. You really have to be willing to pester the heck out of a professional who thinks he's smarter than you, and you have to get him to the point where he'll either give you a different answer or give you an answer that you really believe.

Seth: Awesome. Well, Logan, if people want to find out more about you or learn more from you about how to dig into these title issues and make sense of them and really get to the bottom of what can and can't be done, where do you suggest they go? Do you have a website for this kind of thing or how does that work?

Logan: I tell people to go to Instagram, type in “Logan Fulmer” on Instagram. You can see it right down there. My name, if you go there, man, I'm easy to connect to. I give a lot of information out here. And the truth is I need those folks and they need me. I can help solve their problem, but I do deals with folks from these referral sources all the time. One in three deals are referrals.

So I encourage folks to reach out to us with these problems. You're going to learn something from us. We're going to help do the deal with you and make you a little bit of money on it. And you might decide it's your new profession, I don't know. But let's start that on Instagram.

Seth: Awesome. And just to clarify, that is logan_fullmer, and I'm going to have a link to that Instagram profile in the show notes, again at retipster.com/177.

Logan, appreciate you spending some time with us today and schooling us on how this stuff works. Appreciate it. And let's stay in touch.

Logan: Absolutely. I enjoyed it. Thanks for your time.

Seth: Hey, how's it going? This is Seth Williams. You're listening to the REtipster podcast. This is episode 176.

And today I'm talking with a new friend of mine named David Hansen. So I met David through a mutual friend, Chris Duff. Chris runs Land Daily Diligence in Sirius Land Capital. And the first time I met Chris, it was at the Land Unconference Inner Circle, and I just overheard him talking about how he was working with this guy named David Hansen.

And he kept mentioning David Hansen this and David Hansen that, and I was like, who is this David Hansen guy? Am I supposed to know who he is? It sounds like he's like Mark Cuban or some huge name or something.

And so eventually, Chris put me in touch with David, and I got on a call with him, and just learned a lot more about who he was, and I started to see why this guy was kind of a big deal.

So, David Hansen is a civil engineer, planner, and land developer, and probably a lot of other things I don't even know about yet. And he has a wide breadth of experience in the world of land development, and today I'm gonna talk with him about how he's been able to take a lot of different properties and figure out how to set them up so that they're worth the most on the back end when the development is done.

And he's got a very interesting mix of experience and abilities that I think can be pretty valuable to learn from. So we're gonna learn right now.

So David, welcome to the show. How are you doing?

David: I'm doing great, Seth. Thanks for the overwhelmingly positive vibe you've set. I hope I can live up to what you just said.

Seth: Oh, yeah. I'm sure you will. No problem.

Other than what I just said about you in that intro, why don't you tell us your story? Who is David Hansen, and what have you done in the past, and what is it you do now?

David: So, let's see, I was born and raised in Pensacola, Florida, went off to college in Tennessee, went back to Pensacola. In 1985, I moved to the D.C. area. I sold paper and office products for three years, and I woke up one morning and said, “I can't do this any longer. I need to find something else.”

And I promise you, I pulled out one ad and I opened them to the civil engineering ads and I read a couple. I went, sounds interesting. I actually went on five interviews. I knew nothing about civil engineering; my degree’s in mathematics. But I went on five interviews.

And at the fifth interview, at the point in an interview when you think you're probably about halfway through, I looked at the guy across the table, stood up, and I said, “Everything sounds great, when do I start?” And I reached out to shake his hand and he stuttered. He shook my hand and said, “How about Monday?”

I said “Great!” So I was at that firm for 11 years.

And on my five-year anniversary, the VP of the company came in. When you were there for five years, they gave you a week's pay, and ten years, two weeks paid, just as a bonus. And I could feel—his name was Lou—I could feel him standing behind me.

I stopped and I said, “Yeah, Lou, what is it?” He goes, “Well, you've been here for five years,” we shook hands, and I went back to work, whatever I was working on at the time. And I could feel that he was still there.

So I turned around and I went, “What's up?” And he goes, “Don't take this the wrong way, but why did we hire you?”

And I said, “I don't know if there's a good way to take that, Lou.” I went through my story that I just told you, and he paused for a minute, and the guy that hired me—his name was Dick—and he goes, “You know, you might be the only good thing Dick ever did for this company.”

And as I said, I was there for almost 11 years.

Seth: One quick question, was I hearing you right in your interview? You basically hired them? It almost sounded like you made the decision that you were gonna work there, and they just kinda accepted that. Did I catch that right?

David: Yeah, you got it right.

Seth: Yeah. Is that a good tactic that new employees should take when they want a job? Just interview your employer and then say it.

David: I don't know. It hit me at that point that, A, I really knew nothing about the industry, I mean, other than you deal with it every day. You drive on roads every day, you pull into the shopping area, and you notice how traffic flows and things. And all of that just kind of hit me all at once, at a point where I was like, “Okay, it's gonna go one way or another. Either he's gonna say, no, we need to take this decision or whatever.”

But it just felt like the right moment. So yeah, you kind of hit it. I just said, “This all sounds great. When do I start?”

Seth: So you didn't need a degree in engineering or something to get there? You can just, like they just taught you, based on your math knowledge?

David: Actually, in high school, I've always wanted to be an architect. And we can do this again and I can tell you all the things I've restored: eight historic homes in Virginia with my own hands, done all the engineering, all the architecture. But when I found out it was a five-year program and I knew I was a four-year student, that wasn't gonna work.

Yeah, you don't need an engineering degree to learn how to practice. I can't seal and sign plans—I'm not an engineer—but I still get phone calls from firms that I've worked with and worked for. The engineers that I engage for my current projects, we sit down and confer on how I like things laid out, how I want to handle stormwater management, where I think the best location for, whether it's ponds, low-impact design, things of that nature.

Once I started, I immersed myself in it. One of the things that I did then, and I still do, and I recommend people do—I think you and I talked about last time—is to read the zoning ordinance and read the subdivision ordinance in a jurisdiction that you want to be working in.

Those are the Bible. It is what the bureaucrats in the jurisdiction use to counter anything you're trying to achieve. They always roll back to, what's the standard zoning ordinance? What's allowed in our subdivision ordinance? Those are the tools that they use. So my recommendation to everybody is that you should be well versed in in those tools. That is what is going to be, the end of the day, how all the decisions are taken.

Seth: Cool, and then after the civil engineering thing, so you said you had some other career after that? Or what was next?

David: I worked for one of the national builders for a couple of years, not in their engineering. I thought I was going into work in their engineering department, acquisitions and entitlements, where I ended up was in the field, developing land.

To be honest, I couldn't be more thankful. I learned a lot in two years. I'd seen a lot. I'd watched a number of my projects, whether it was big road design or things like that, I'd watched things get constructed. I've been in the field watching heavy equipment move, watching rock being blasted, and all that of excavations.

Two years of learning how to move dirt from one spot to another on the phone with the excavation contractor on one phone and my dirt hauling guy in the other, negotiating prices to have them come in with 400 trucks and how I had to pull permits from the city of Alexandria to ensure that.

But you learn a lot. I learned a ton about not only how to engineer it, how to plan it, but then how to develop it. And I continue utilizing those skills to this day.

And then after that, I went back to engineering. I was at another big national civil engineering firm for another six years, where I was the assistant director of planning. So I got out of the day-to-day civil engineering end of it and worked strictly on town and urban planning.

Seth: And when was that? What year?

David: 2004. In 2004, I stepped away from engineering and I went full-time doing owners’ representation. I had my own projects. I had three huge projects in West Virginia and got everything teed up just in time for the 2008 crash. That was a party.

Seth: Oh, I'm sure.

Now, that decision to leave your job and go out on your own, so what led up to that? Like, how did you know, okay, it's time to move on and do my own thing? Like, did you get people asking you to do some kind of consulting on the side?

David: That is a great question. In my time with the National Builder, I'd stayed in contact, of course, with engineering. As the development wing, I was in meetings with sellers and property owners as we were negotiating the acquisition of property, rezoning, and everything.

But I stayed in touch with people. I had my old clients, my development clients, I stayed in touch with them. And like anything else, I'd gotten immersed in land and land development, so I was still finding deals and sending deals to whether if my group didn't want it or to other people.

And when I went back into engineering, I was still kind of juggling those things. And finally, what hit me at some point was that I was really running the risk of a conflict. I had to sit down with the owner of this company, who's still a very good friend of mine. We had a conversation. I said, I can't run the risk of you guys risking somebody brings a deal into the office that I'm working on on the side.

I know about it, this guy. They come in and say, oh, well, your guy saw the deal, stole the deal, took it to somebody else. And so I felt it was time for me to put it aside, you couldn't do both. You can't serve clients and serve yourself at the same time.

Even though ethically, I don't think it was a problem. It was, ethically, it was a problem for me to run that risk. I couldn't, I didn't want to risk a relationship that I'd built up and so many other things, it wasn't worth it. So I decided to just do it on my own.

Seth: So these three big developments in West Virginia that you're doing, was this the kind of thing where you're putting your own money into it or people come to you with money and you just tell them what to do to make the development? What's your involvement in that?

David: Yep, a little bit of both. I was lucky to have been introduced to landowners who had the desire to develop their property. They had some of their own money to put toward the entitlement cost. They, for the most part, had very low basis in the land and I also had investors, guys that I knew would step in.

I had the relationships that I built up with all the national builders over almost 15-plus years in the engineering world. So it was fairly easy for me to take deals that I planned to builders that knew my reputation and set up the deals, the projects in West Virginia.

One of them was, it's built out today, it's called Archer's Rock. It finished out at 3,800 units. Another one called Morning Dove, it was almost 600 units. And they're both finished today. The third one never got built, but it's one that I wish it had. So this is one that's 3,800 units.

Seth: So like, tell me, what was that property originally? How many acres was it? How do you take a property like that and figure out, okay, this size property should be this number of units. Like, how do you know what to do with it?

David: It was a total of 1,400 acres, three owners. It was an old apple orchard. It was in Berkeley County, West Virginia. It was planned in, I think we had six or eight phases. The original land plan that I did was, you do it in big bubbles. They're big bubble diagrams. You lay out the main infrastructure, the main roads, the big divided roads, how you're getting the traffic in and out and distributing it throughout the site, and then created the pods of varying lot sizes.

Again, working with the builders, and I still do this today, I don't do a deal today, if I can't lock down a builder during my study period, I'll kick out of the project. If it's not interesting enough to the builders, there's really no need to proceed.

The other thing I do, and I'm going to steal a phrase from somebody else, I hate to bake a cake with the wrong ingredients. So, not having a builder and not knowing what product they're going to put on the project and what product lines, how many different product lines they want to use.

You know, you can go from a 45-foot lot to a 55 to a 65 to an 80, depending on product width and depth. And I like to work with the builders to make sure that what I'm specing, now you can run into a lot of problems if, say, you spec a 50-foot lot, but all the builder's product is with two 5-foot side yards, so you've got a 40-foot envelope, but everybody's product is 42 feet. Nobody's product fits on your lots. Or they have to step down to a smaller product, which is less expensive. They'll pay you less for your lots.

Had you designed all your lots at 55s or 53s, everybody's product fits, or the builder's product fits, and they can build what they want to build and you can sell at the number that you need to sell at.

So the big projects start out as big planning efforts. And once you create the framework and the grid, you work your way down into the individual blocks and lot sizes within those, then it gets passed on to the engineers and that's how they engineer it.

Seth: Man, tons of questions are coming up as you're talking. Just kind of like an off-the-cuff question. By the way, when you say units, you're talking the parcels, right? Like making lots? Is that what you mean when you say that?

David: Yeah, when I say unit, it's a building unit. So if the builder wants to do, say, three product lines, so you're dealing with NBR and they want to do three product lines. What they're gonna want is a 30- to 35-foot piece, a product.

And then a 40- to 48-foot product, and then they're going to want a big product that'll fit on an 80-foot lot. It's going to be 65, possibly 70 feet wide.

Seth: And when you say product, are you talking about like a type of residence or something? What does product mean?

David: So the builders program and they have product. Their program is how they're combining their product lines and sizes. But the product is the individual building that they're going to build.

Seth: How do you determine what that size is supposed to be? Is that after a long discussion with the builder to figure out what they want? Or do you just kind of know, no, this makes sense. I'm going to make it this way. I'll lay it all out and then I'll start talking to builders to see if they want it. Like, what comes first?

David: Two things. Yes, you kind of hit a couple of things that happen.

One is, once again, the zoning ordinance and the subdivision ordinance come into it.

A good example is my city of Augusta, Georgia. I have a project there. It's got three different zoning categories. It's got R3B, R1B, and R1A.

R3B is a multifamily townhouse. Minimum lot boundary is 2,500 square feet. The R1B is a minimum lot size of 7,500 square feet, and the R1A is a minimum lot size of 10,000 square feet.

That said, I dug deeper into their zoning code. They have an option called “open space conservation design.” If you give them 40% open space, they'll allow you to reduce your lot sizes by 40%. In the R1B, 7,500 square feet goes down to 4,500 square feet, and the 10,000 square feet goes down to 6,000.

I take all of those into consideration, then I start talking to the builders. First question to a builder is, do you have product that will fit on a 45-foot wide lot?

They all do. The question is, are you building it in this market? If you're not, what's your preference?

There, they've come back to me and everybody's got a product that will fit on the 45 and the 60.

And we've also got some 10,000 square feet that's either 80 to 100 feet wide depending on what we do for depth. So they can do three product lines on that particular job, possibly four, but they do have one that fits in those lot sizes.

Now they could have come back to me and said, “Look, in this particular market we don't have the bigger product. So we only do two. If you got to have 10,000 square different lots, we've got to put the only other product that we build, so we're not going to pay you more for those lots because we can't get any more out of the house just because it's on a bigger lot.”

Seth: Now, the first time we talked, you mentioned something about—maybe this is a good example of what you're talking about—a 149-acre development in South Carolina where the owner was going to do 70 single family lots, but you figured out how to do over 260 lots, which made the deal a lot more profitable. And I think at the same time, you also added more green space to that development.

And the first I was like, how does that work when you add more green space and get more lots like that? And that's probably what you're talking about right here, right?

David: Yeah, that's the same thing we're doing in Augusta. If you did it per the ordinance with the lot sizes that they had, you end up with significantly fewer lots, and you basically lot out the entire property by going in.

And the same thing in South Carolina, that was in Richland County. If you utilize their open space option and give them 40% open space, you can reduce your lot sizes down to… they didn't even have a minimum. I could have made them anything.

So on that one, we were actually working with the builders to lay out the lot size based on product that they wanted to build, because there was no absolute minimum in the lot sizing, as long as you came up with 40% open space.

And there were some bonus densities in there. If you gave them more contiguous open space, you got a 5% bonus. If you created parks and amenities, you got a 5% bonus. So, all of those add up to constantly increasing the yield.

The other interesting thing about that in South Carolina was that I didn't have public water or sewer. That's never scared me. I've done communal-based water systems and wastewater treatment with disposal. And that's what we were going to do on that particular project.

And again, as I said, unfortunately, the contract wasn't exactly right to make it work the best. So, the guys that I was helping out decided to kick out of the contract. It's funny, I actually reached out to the seller over Thanksgiving and he said he's under contract right now, but if they kick out, he'll call me back.

Seth: It sounds like, you know, say you find the piece of land, and maybe your first step is to read that zoning ordinance, understand maybe a few different scenarios of what's even possible. Then you have this discussion with a builder or two or three to figure out what they want.

And once you understand that, then you can go and actually start plotting it out and just saying, okay, well, given that this is what they want, we could put these things here and those things there. Is that the right order to think through this?

David: Kind of, yeah. One of the things that I do in between, I'll do a sketch almost. Before I speak to the builders, based on the ordinance, I'll do a sketch. A little bit more clean than rough. I can say, “I'll email you one of my hand sketches. They're to scale, they're detailed, show the open space, whatever preservation, I show wetlands.” I try to get all of that out of the way first, but I use that to entice the builders.

The one deal that I've got right now in South Carolina is funny. All the builders looked at it, we got it under contract. And when I sent my sketches out to three of the builders, three of the nationals, one of them called me back and he was laughing. He goes, “We looked at this and the engineer we took it to could only get 125 lots on it. How did you get 200?” And I explained to him how I'd configured everything and what I'd based everything on. That particular builder actually has that project under contract with us right now.

Seth: That right there, your ability to do a hand sketch… are you literally like putting pencil to paper or you have software or something? I have no idea how to do this kind of thing.

David: There it is right there. I do everything absolutely by hand.

Seth: In order to do that, though, don't you need topo surveys and wetland delineations to actually know for certain where all that stuff is?

David: Yeah, it's amazing how accurate it is; there's a ton of ways to find all of that. I utilize every available tool.

Local GIS is fantastic now. Jurisdictional GIS is unbelievable. Most jurisdictions that I'm working on, if they're developing right now, they're fairly sophisticated. All of their topography is LIDAR-based, and if you interpolate, even if it's at five-foot contours, most of them go down to two-foot contours. But even if it's four and five-foot contours, you can interpolate in between the two.

The National Wetland Database is great to work with. Once again, most jurisdictions that I'm working in are sophisticated enough to have at least a rudimentary wetland determined area. I normally stay a minimum of 50 feet off anything I plot.

One of the first things we do when we move in and are looking at a project, I find a local engineer and surveyor, I have boundary done. I send out a wetlands survey, or bare minimum, I'll have the wetland scientists do a desktop survey for me.

It's amazing. The wetland scientists, and I don't know if a lot of people know this, have a lot of really powerful tools now. Whether it's the LIDAR-based infrared. They know with probably 90% accuracy where the wetlands are on a piece before they leave their desks to go flag it. And most of them will give you a desktop version for maybe a thousand bucks.

Seth: Do you use Land ID for any of this stuff?

David: You know what? I looked at it briefly. I don't want to say whether I trust it or not. It's enough, combined with a couple of other things. Again, I've been doing it for a long time. I can look at aerial photographs and tell you from the color of the flora and fauna where the likely spots for the wetlands are.

But I trust the local wetland guy. Again, with a phone call and 10 or 15 minutes on the phone, if he knows you know what you're talking about, he'll generate a desktop version of what the potential wetlands are for you based on soils and his infrared LIDAR. He'll be about 90% correct.

Seth: I guess what I'm getting at with a lot of these questions is when I look at a huge deal like this, where you sink tons of money into it and put a lot of work into it, what questions need to be answered before you actually close on the thing and buy it? And what do you do to lock up the property in the meantime to get those questions answered?

David: Okay, well, now we're down to contract and then there's not a deal that I've done unless it was; we closed on part of a deal in Augusta, because it was too good not to close on, price-wise, it was ridiculous.

Generally speaking, you're looking at appropriately contracting things. Most of our contracts, 90- to 120-day study. We go hard after the 120 days. I try to contract as well as possible with an approval. Generally, final site plan, if at all possible.

If they're looking for more of a date certain, and most attorneys or counsel will ask you, you know, we need some kind of date certain. I'll start out at 18 months after the execution date of the contract, and the least that I'll do is 12 months.

Seth: And this is, you have that much time to get the property purchased, all of the entitlements, everything completely finished?

David: Yeah, and I usually base it on that, and I try to have fairly in-depth conversations with the jurisdiction. I talk with the engineers. For any deal or any new jurisdiction we're working in, I'll interview four or five engineering firms. And from that, part of that interview with me is asking, you know, what's the generalized processing time on a buy right, construction, and plats here?

And you'll hear a ton of different things. Generally, what they're going to give you as the processing time is six to nine months. And then you have to add in the ramp up time for the engineer to get the plans done and submitted, the engineer's time to respond to comments and scheduling.

And it runs, again, depending on the jurisdiction, it's nine to 12 months. I do a lot of work still in Northern Virginia. It could be 18 to 24 months.

Seth: Yeah. So talking about money, I guess a few different steps in this process, you got this initial earnest deposit that you're putting down for 90 to 120 days. Is this like a 5% or how much money do you put in it just to lock it up?

David: Nah, normally, and here's the way I negotiate that. Normally, depending on, I mean, it tracks back and forth with the value of the contract, because most of what we're doing exceeds a million, to two million, let's just say.

Seth: Just to buy it or to do all the development?

David: To buy. Just to give you an example, the piece we have in South Carolina, 105 acres, it's 1.85 million. $10,000 at contract for the first 120 days. If we decide to proceed after the 120 days, we put up another $40,000. So the at-risk deposit at that point is $50,000.

The reason that number is what it is, and I do a couple of other things too, and I'll allude to those and I'll actually disclose them, because we've run into issues where it's difficult to negotiate contracts because people have been misled by other folks in our industry. And I don't think it's malicious, I just don't think they understood what they were doing.

And what it does is it kind of sours the pool. So if somebody else came in and had a 120-day study and didn't do anything, then the seller is soured. And if I come in and ask for, yeah, the last guy didn't do anything.

So one of the things that we do is, during the study period, I stay in touch with the seller's counsel or the seller, at least monthly, I disclose all of our due diligence. And if we decide not to proceed, I do two things.

One, I release all of my due diligence and I do it with a written report as to why we're not going to proceed. I tell them why. “I can't make the numbers work. Here's what the builders are telling me. Here's what it's going to cost to extend sewer or water or whatever, whatever the issues are, that make it a deal that that's just not going to work for me.”

If we decide to proceed, one of the things in the contract is that I have my engineer either bi-weekly or monthly write a status report and he signs it and seals it. One thing to remember is an engineer's seal is a license, just like a lawyer's bar certificate. It's a license. If his veracity comes into question, he could lose his seal. He's not going to risk his seal over giving bad advice.

So I make sure that all my engineers will do that. They'll sign it and seal it. And we provide that to the seller and to his counsel monthly, because when I'm negotiating a contract, one of the things I tell them is about the project in South Carolina.

So we got 50,000 hard. We're going to spend probably close to 230 grand to entitle the property. And if at the end something goes wrong, we can't settle, guess who gets all that? The seller does. It's his. We release it. His only cause against us is the deposit and everything we've created while we had it under contract.

Seth: How often does that happen, where you do all this stuff, the due diligence, like you go the whole nine yards and then something falls apart, you spend 230 grand and then you lose it all? Has that ever happened? Or what would cause that to happen?

David: Yeah, not quite that much in engineering, but yeah, I had deals in, well, I lost a lot in West Virginia in 2008, and somebody got it all.

Yeah, I keep, to this day, copies. I had $9 million worth of worthless paper or selling finished lots to three national builders. It all fell apart, and it felt like overnight, but I think it was probably like a week, but it was pretty tough.

Seth: You kind of skipped over and got into the good stuff, but back in 2008 when you made these, or tried to make these three, and they kind of fell apart, was that your money into that, or was that somebody else's money? And how do you recover from something like that if it just goes so horribly wrong? How do you bounce back from that?

David: It was both because I'd rolled not only my own money, I'd left some in and I subordinated to a bank a couple of times to get settlements across the table. A lot of people lost a lot of money and it really happened overnight. How do you recover? It was a bloodbath.

Seth: Yeah, it was awful.

David: I mean, they went from selling, I mean, man, they were rolling through those two of the subdivisions. I can tell you very briefly. I attended a meeting at a bank with the guys from NBR, and we were sitting at the table, and the banker, a lovely woman, but she told the guys at NBR, and I was there with one of their VPs, and she said, well, we have your deposit, because we were trying to renegotiate the deal. They were going to keep working their way through the project.

At the time, we were selling finished lots for $72,500. They came in and said, we can't do $72,000 anymore, but we'll keep working through it. We'll buy lots from you at $55,000. And they were getting 70 at every closing—the bank was—to pay down their debt.

And the banker goes, “Well, who's going to pay the other 15?” And we're all looking, I'm there with the owner and the developer, myself, the guys from NBR. And we all went, “Nobody, you'll get 55,000. Nobody else is getting anything. You'll get the 55,000.”

And she's like, “No, we get 70.” It's like, “But there's not going to be 70, there's going to be 55.”

And she looked at the guys at NBR and she said, “Well, if you're going to walk away, you're going to walk away from the deposit.” it was like, 700-something thousand on that section. And she goes, “You're going to walk away from 700,000?”

And the guy from NBR, it was great. He goes, “Do you read the papers?”

She goes, “What do you mean?” He goes, “We just walked away from a $35 million deposit. Do you think we care about 700? We're trying to work this deal out and the place you are, you can't even see the forest for the trees.”

But that's how it was. She was so filled in the week before, where everything was great. Not even paying attention to what was going on in the world that day, and basically told NBR, no, we'll just take the land and sit on it, thinking that it was all just like a bad dream. And I think, well, and I think the bank would belly up, I don't even know.

But yeah, NBR would have stayed in the deal. They would have kept buying lots at their takedown at 55, and the deal would have worked, but the bank couldn't buy what was taking place.

So, yeah, it was tough, it was a weird time. I had to go and tell my wife we were losing the house, and it's hard, it was hard. You know?

Seth: Yeah, did you kind of just get out of the business for a few years, or like, what did you do at that point, when it's so catastrophic?

David: So, when I graduated from college in 1982, I learned how to build houses, and I worked for a couple of big builders in Northwest Florida, and then I worked for a couple of custom builders. I've always stayed in it. I would build decks and do additions for friends and stuff like that.

When the market crashed, there were still people that were still doing stuff. Not everybody got pummeled. It certainly wasn't as bad as when the S&Ls all failed in ‘89 and ‘90 because I was there for that too and survived all the layoffs as a civil engineer.

But I just started building things. I started restoring, like I said, I restored eight historic homes. I've got real older friends who are doing the fix-and-flip things. I would go in and roll through a house and roll it back out for them, anything to keep rolling.

I still kept dabbling in what I knew. I had a friend who owned his own small engineering firm. I would do all of his comment responses and land plans. If he had a client come in and ask for a land plan on a piece, I would do all the layouts and everything. And I kept that up and then rolled it down from there.

Seth: Does that make you gun-shy, I mean, going through that? I know I got into land in 2009, so like from the very beginning, I was also in banking at the same time, and like you said, it was just a bloodbath. It was terrible everywhere, and that was kind of the mentality that I got into the business with.

I never had really seen it any other way, and that kind of made it hard for me to go out on a limb with this stuff, because it's like, well, what if there's another 2008 after I do this, now what? But it sounds like you were able to overcome that. So was that hard? What did it take for you to be like, yeah, let's take another risk?

David: You got to remember, I watched 89 and 90, you know, when they all the S&Ls failed. And I watched just the community where I lived in Northern Virginia, countryside, like overnight, people were selling houses, new homes were going in, and they were like in the 390s.

And overnight, that fell apart so badly with the S&Ls, nobody knew where to send, there were people who didn't even know where to send their mortgage checks because the bank was gone. And, you know, people tried to get out of houses that one day were 390 and the next day were 150.

And I was at the engineering firm that I started with and I lasted through all the layoffs there and watched it all roll back up again. And then I saw what happened in 08. Now we are where we are right now.

But the one thing that I learned in both of those, in 89 and 90 and 08, you know, the national builders, you know what they did? They kept building because it's what they do.

So I even look at today and say we're in the 08 thing, which was catastrophic to the point that it put us in the housing deficit that we're in today because, you got to remember, everything slowed down and everybody was afraid from like 08 to 15 or 16. And that's a long time. I mean, the builders kept building, but historically, year after year, if you look at the number of building permits that are being pulled in any jurisdiction that's seeing growth and whatnot, and there's a number.

And then you look at what happened during that time frame, and you noticed you were in banking, so say you're at 5,000 permits, which is the norm. But then for five years, you're only pulling 3,000, so it's 2,000 behind. Then, even when you swing up and you think you're catching up, you're still behind.

I live in Northeast Florida now. When I first moved here, I hooked up, I met all the builders. I'm doing some stuff down here. One of the builders, super smart guy, nice, he's a great regional builder, he and I were out having drinks one night. He goes, “In 2018, in this area, we were 30,000 permits behind.” Even what happened from 18 to 21 or 22 with all this huge growth, he goes, “we are still 18 behind.”

Even with this, with what's going on in the markets today, yeah, there's going to be ebb and flow. I mean, I was lucky to live in Northern Virginia. You got the federal government there. It flows. But there's always something there. I feel for some of the areas that really get hard hit and shrivel up and die.

It's funny. I'm working on a deal, oddly enough, in Lackawanna, Pennsylvania, where there are no national builders. We're trying to figure out how to make this little deal work, which is really tough because… So it's right next to Scranton and, you know, essentially, when steel and that industry died, Scranton was just kind of bumping along. There's no big draw there. There's nothing happening. It's very funny to try and work in those.

And then, when you see the economic impacts of today, they kind of tighten back up a little bit, too. You know, there's not a builder that wants to go out on a limb. And that, looking down at what's going on in the Southeast, with industry moving out of the North and Northwest and Middle America, moving down to South Carolina and North Carolina, those areas are kind of thriving and moving. It's interesting to see those subtle shifts and changes.

But again, what I did notice was that the national builders are machines and they get to feed their machine, even when it slows down. Those guys are more innovative. I mean, right now, they're buying down points on 7% more. Whether it works or not I don't know. You said you were in the banking industry. I don't know whether those things work, but it's what they do.

The national builders don't have a fallback plan. What are they going to do? They don't wake up and go, “Hey, let's start making cars.”

Seth: Yeah. On that whole thing of talking about the Southeast U.S., what does a market need to look like for you to pursue these projects? Like, are you looking for something like certain demographics or growth trends? Like, what makes you spin the globe and be like, okay, we're going to go here and not there? Or when you see a big development opportunity, what would make you say, no, we're not gonna go there because there's not enough demand. Like, what are you looking at?

David: Yeah, that's another great question. For me, so I've spent my life essentially up and down the eastern seaboard, the southeast. I was in Chattanooga for a couple of years. I was just outside Nashville for a couple of years during college. And I grew up in northwest Florida, so I know the Gulf Coast, Alabama, doing some stuff.

I've got two or three projects in Alabama. I know the Mid-Atlantic from having been there. I know how the Mid-Atlantic functions. And I learned interesting trends on things, just me personally, where I think people are heading and why. I look at the right-to-work state and the opportunities there.

And then COVID. I mean, myself, we were in Northern Virginia. They shut Northern Virginia down. And I have teenagers, my daughter's a senior in high school, our son is at the Fire Academy of the South in college here in Jacksonville.

But when they shut everything down, my children didn't take to the electronic learning. They needed that peer push. And we sat down and had a long conversation, the entire family, and it was like, we have to go somewhere where A, school's in session, and B, preferably, if they lock down the globe again, I wanted to be somewhere where it was warm. So, Northeast Florida, so we're here.

And so what I noticed from that, just also being a student of people, I watched people streaming out of the Northeast, out of Middle America, South. And a couple of other things happened with that was we can work from anywhere. I mean, I do what I do here. I have projects anywhere from Texas to Virginia, Florida, Tennessee, Kentucky. I don't have to be there. I can go there and visit and look at things. I can have somebody put eyes on the ground and take photographs

It's the idea of being able to virtually accommodate what we do that has become unbelievably prevalent and a lot of ease in function with electronics and better access to information. Things that started out in engineering, when I started out, everything was done by hand. You were in a jurisdiction. I mean, there were computers, but it wasn't like it is today. Everything was paper copies of ordinances that you went through.

So I noticed those things. And to me, people are going places for a reason, whether it's to escape the cold, escape an over-aggressive regulatory arm, whether it be government or quasi-governmental, that was kind of where I look. And I gravitate toward areas that appeal to me, you know?

I mean, I'd love to do a deal in Colorado, because I think it's—to me, Colorado is where the people that flooded out of the east and came to a mountain range and basically said, I'm not crossing that, we're stopping here.

Seth: Yeah.

David: You know what I mean, they were like, “Man!” Yeah, think about it. If you left the Blue Ridge and you rode in a covered wagon and you saw the Rockies, I'd pitch my tent under where we are, I’m good.

Seth: I saw this video a while back explaining why California sort of operates like a different country. Like in its prices and its culture in a lot of different ways and a lot of it has to do with the Rocky Mountains, because it's so hard to, or for a long time, it was so hard to transport oil there and just travel there at all. You had to come around the other side of the country just to get there. So, it's interesting.

David: Yeah, well, until the Panama Canal. But I think that's a lot of people, Seth. I think a lot of people focus on… not necessarily what they know.

And actually I do, I see it in the industry that we're in. I see the guys who… I don't understand it. I appreciate it but I don't understand it. The guys that flip lots, one lot, 10 lots, but individual lots everywhere. I don't understand it because to me, 20 transactions criss-crossed everywhere, versus I find one piece and I can turn it into 20 lots and I can do it. The timeframe takes longer, but it's what I know.

For me, I see the added value of that operation. And that's not to discount the fact that there's been a lot of money made. I'm sure there's a lot more to be made in finding those one-off lots and finding the right buyer.

Seth: Can you tell me about a time that a development opportunity crossed your desk, and you just said, no, this is a terrible idea. The market's bad, the property's bad. Why did you say no? What went wrong with that?

David: Nine times out of 10, it's not right off the bat. I look at a ton of things. I’ll give you a great example.

I had somebody bring me something in Oklahoma. And for all the world it actually might have been a really cool opportunity. Eventually, it was east of Tulsa, almost at the Missouri border, can't think of the name of the city. Although I want to say Roger Maris's house was in the little town, Converse right above it. And it was really neat. And the gal that brought it, and I explained to her after I went through everything, like the little town is kind of coming back, Route 56 goes through there, and all these things.

And her big thing was that the American Heartland is about to do this park, you know, like Disney World in the middle of nowhere in Oklahoma. And her thing was, this would be great for housing and things.

And I paused for a minute, and one of the things that hit me was, and I sent this to this gal, was Orlando and Disney World. Go 30 miles, draw a circle, 30 miles around Orlando, and what are you going to find? It is still rural as hell. And this little town was like 45 or 50 miles from that core. And I went, it's not what you think it is. It won't work. I mean, it theoretically has a potential, but it's not going to work.

But I didn't walk away from it immediately. Anything that I look at, I embrace. I'll look at what it could be and what all the options are. I guess what I like to see myself as, I'm not a problem finder, I'd rather be a problem solver. If there are too many things to overcome, then I have to just say, you know, it's probably a deal for somebody, just it's not a deal for me. Does that make sense?

Seth: It does. And the next question is, when you find a deal that does make sense, how are you figuring out how much to offer for these things? Are you just paying full market value, whatever that is, or do you need to get it at a certain discount or something?

David: There are a couple of ways to look at it. I look at as many, people say, off-market. That always makes me laugh. It's off-market. Is it for sale? Yeah. Well, apparently it's on the market. If it's for sale, it's on the market. You stumbled upon it. I know guys have lucked out. A blind squirrel finds a nut kind of thing.

But yes, there's a negotiation. Once again, I open book them. I'll sit down with a seller and tell them exactly, “Okay, here's what you have. In my opinion, you've got this much wetlands. I think I can get this many lots out of this, the builders will pay me X for the lot, I need to be here.” They can either get down to that number or we go back and forth with a few things.

What I learned a long time ago is that I don't have to buy every deal. Many times, sellers are too stuck on a number that doesn't work. Have I put things under contract at a seller's number because I thought, yeah, we kicked out of two deals this year, maybe three, one north of Atlanta and one in Savannah.

What I do with those is the deal in Savannah. I told the builders what I wanted for it and I had a builder come back. And he gave me my number and I still couldn't get it over the line. I went back to the seller who was an elderly gentleman and I made him a great offer of a structure and he didn't want to do it.

But what I ended up doing in the end was I hooked my builder up with the seller because the builder, he'll entitle himself to develop. So basically, I didn't get there in time, I couldn't assign my contract and get a fee or anything, but it was a builder that I haven't worked with before. And by putting him in the deal, I built a relationship so I can go back to him.

We had this conversation and I said, “So okay on the next deal, you're gonna pay me a little bit more.” And he goes, “Yeah, if it works, we'll do that, definitely.” And actually, we're looking at a South Carolina deal that we'll probably do with him.

So I was able to post it with a builder, saved the deal, kept the seller happy because I know the seller's got some other stuff, and it created a relationship with a builder that I didn't have before.

Seth: So when you're coming up with an offer price, it sounds like you're kind of reverse engineering this, right? It's not like you're comparing other comps, if comps even exist, it's more of, okay, what's the end game and what's that gonna make and how do we back into our offer price number? Is that right?

David: Yeah, a comp to me is, it's useless. Because, I mean, I'm sure it's useful to someone. To me it is, it's useless.

Seth: No, I totally get that.

David: I don't care what somebody else paid or what they got. And I've heard that from sellers who, well, so-and-so across the street sold for this. And I'm like, yeah, they sold on a rezoned piece with construction plans done. You don't have that. You've got a raw piece of land, and I don't know how we're going to make that work.

Yeah, I do. I basically reverse engineer. And then figure from there what could go right and could go wrong.

Seth: I don't know if you've ever heard this, but I know when I first started learning about house flipping many, many years ago, which I did not end up doing, because I was not good at it, but I heard this idea that anything is a deal at the right price.

And when I think about what you do, and the fact that, you know, going back to this Oklahoma example, say if you got that land for free, and you put half a million dollars into developing, you know, a development that nobody's going to buy. Would you disagree with that statement, that anything is a deal at the right price?

David: I would disagree with that every day. But you made a great point. In that genre of a house flip or a lot flip, then that's 100% correct. If you can pick up a lot for a thousand bucks that has any intrinsic value and roll out of it for $2,500 or $3,000, that's a deal.

What I like to think that I'm doing is, and others do—I mean, this is no innovative thing that I just somehow managed to figure out—not every deal is a deal. There's a lot of things that… again, I've looked at a lot of things where I wanted to make the deal work and if you can't, you can't.

What I like to think of it as is leaving a deal where I don't sour the other side.

Seth: Yeah. So how are you finding these deals? Are you finding them yourself or do other land investors bring them to you? Where do these come from?

David: Yes and yes. I'm in a couple of deals where other people have come to me who couldn't figure it out and have asked for help. I'm in deals that I've found. I found the one in—the big one that we have in Augusta. A couple of South Carolina deals, realtors.

Seth: So you're kind of just always scanning the horizon and people know they can come to you with these kinds of opportunities?

David: I'd like to hope so, yeah.

Seth: And how many of these projects do you do per year?

David: It depends on the level of involvement.

And again, like we talked about earlier, I'm trying to get better and I can't keep doing everything for everyone for nothing. But I love it, so I kind of do it in my sleep.

But I think once you get to a certain point in the engineering process, once you get past the study period, the 120 days, because I think somewhere between eight and ten of these per year, there's a lot of work in it, but you got to be backfilling. You need them staggered and you got to backfill with things coming in. As long as you can't just have eight of them and stop and then scramble for eight more than that.

I think as they roll forward, juggling eight to ten, because again, not every deal is a deal. You're going to kick out of a few. Some will make sense, some don't. And some things get through the process faster.

Seth: I'm trying to figure out, how do you make money and how much money can you make from these deals? And which hats are you wearing in this process? Is it you doing literally everything? What are you not doing in this process?

David: Okay, well, it depends on how the structure is. I'll just focus on the deals that I'm working on with one partner.

So we're 50-50. He's the money guy, I run the show. Just a quick example, right now, the deal in South Carolina, 1.8 million. Our contract is for 3.9.

Seth: So that profit you guys split 50-50?

David: Yeah, and once everything is paid back, entitlement costs and things like that are netted out, yeah, 50-50 of the net.

Seth: And then being the money guy, so whoever this other person is, they're kicking in all the cash? Are you getting like a bank loan to float it while it's being developed and sold off? How does that financing work?

David: Right now, he's covering the entitlement costs, and then as we close deals, money will stay in to fund other deals.

Seth: And was I understanding the timing right? Like you get a property under contract for, say 120 days, in that time you're doing your due diligence like your topo survey, your wetland delineation, anything you need to know to get the thing figured out, and then the entitlements happen after you close or before you close?

David: You're not gonna close until it's fully entitled. So now after the 120 days, your deposit goes hard, then you start your entitlement work.

Seth: Okay, so after the 120 days, what is the time frame after that you have to get your entitlements done?

David: Depends on the contract. The least would be eight months, both probably 18, or depending on the jurisdiction, if they entitle quickly, it'll be less.

Seth: Okay, so like on that $1.8 million deal, say if it takes, I don't know, 12 months or something to do that, once the entitlements are done, then you buy it for $1.8 million, and then it's up to you to, are you putting in roads and utilities and all this stuff?

David: No, although I can, I don't like that. I'm not a fan, but we could. If you get that far in, it's debt and equity to finance.

Seth: So you're just doing the paper entitlements and then you're selling off everything to a builder and they come in and put in the roads and do all that stuff?

David: Yeah, or a third party developer. My preferred method is to contract directly with a builder developer or a third-party developer.

In Augusta, we're going right with a JV between a third-party developer and the builder. I've got a project in Alberta, Alabama. We are contracting with the third-party developer who has an agreement with the builder. I put the builder in, he brought the developer to the table. Now we're working with the developer who's got an agreement with the builder.

Seth: So, that builder is super important. How do you know that they're committed? And at what point did they come in and say, yes, we'll do it, and do they put money down or something? How do you know they're serious about it and they're not gonna flake out?

David: Yeah, my builders, my preference is to have a builder either under contract or right at that point before we go past our study period.

Seth: So, before you go past the 120-day due diligence period?

David: Yeah, to give you an example, on the South Carolina project, we had six LOIs from the national builders.

Seth: So six different builders were like, “Yeah, we'll take it.”

David: Yeah. And the builders post 10% of the contract value in a deposit.

Seth: And that happens before the 120-day, or whatever the research period is?

David: No, that'll happen after their study period, depending on what the terms of their contract are. Normally, 60 to 90 days.

Seth: And if something were to happen like what you were talking about in 2008 in West Virginia, maybe they would walk but you would get there 10% that you could keep?

David: Yeah.

Seth: Okay.

David: But hopefully they don't. What you do is you restructure.

Seth: So just like, ask for less money?

David: Well you know hopefully everybody sees the writing on the wall and you go back in maybe restructure a little bit with the seller, restructure with the builder you know, and just try and keep the deal like anything else to try and keep pace together.

I mean, we did everything everything we could to try and keep things pasted together, and it was just, as you and I spoke about earlier, everyone was in shock. You said you were in banking, right? The bankers were in shock.

Seth: Yeah, for sure.

David: They didn't believe it. It was like, “No, no, no, this will all change tomorrow.” Like, it ain't changing.

Seth: Yeah, that was a crazy time. I don't know if we'll ever live through something quite that bizarre again, but yeah, it was nuts.

David: Yeah, it was definitely different. And it's hard to explain to folks who missed it.

Seth: I know demand for new building and that kind of thing is super important for this kind of thing, because if you're creating all these new products for builders and that kind of thing, there needs to be sufficient demand.

So given this environment that we're in with rising interest rates and buildings kind of slowing down in a lot of places around the country, does that pose a serious risk to you? Say, if you started these projects back when interest rates were a lot lower, and now they're going higher, I don't know, does that ever happen where a builder's like, you know what, things have changed, we don't need this anymore, see ya.

Is that only the most catastrophic situation where that kind of thing would come up?

David: You know, it could, it did in no way. I'd like to hope we're a little more savvy about it now and that people are more realistic.

No, I mean, you certainly could, I mean, it's a risk. Anything we're doing's a risk. The question is, how do you minimize your risk? How much are you out, you know, can you afford the deposits? Can you afford how much entitlement you've spent?

It's the biggest reason to avoid closing on a property until you have something. I mean, imagine you spent a million eight on a piece and now you gotta sit on it for five years. It might be better to walk away from 70 or 80 grand than try to figure out how to juggle a million nine for a certain time frame.

Seth: If somebody's out there, they're listening to this, they're hearing you talk, and they're like, man, this David guy, he's awesome, what he's doing. Like, I want to do what he's doing.

And admittedly, it sounds like a big unfair advantage you have with your ability to look at a property and just intuitively know and sketch out, “This is what I think is the best thing. Here are a few scenarios.” I don't know how to do that. I have no clue where to even start with that.

So, is that because of your civil engineering background? Or if somebody wanted to become like you, what would you suggest they do in terms of their career path?

David: Again, well, career path, I mean, trustable engineering if you have an aptitude.

Without that in place, no, I'll tell you the same thing. I've said it a few times in this, read the things that matter. In this industry, to me, if you're looking to do this, you need to understand those things that matter, the zoning ordinance, the subdivision ordinance. It sucks to read them. They're technical manuals. But in those, there's little ClipArt pictures sometimes and some ordinances that show you what they're looking for.

And all that does is give you a basic understanding. The rest of this is, I guess, you could find the right engineer in. I don't know, but you're killing me. It's a tough question.

Once again, I use the tools that I've forged over 35 years to kind of do my end of it. There's a dozen ways to skin this cat, find an engineer, but then you're trusting someone else. My issue with these things, and I tell this to folks I help. It's not that I don't trust everybody, but here's one thing, it's why you need a lot of people looking at things.

If I had one piece of property and I gave it to ten engineers and I got ten of the same answers, I don't need nine of you. You want ten different answers, but you also want somebody who's looking.

I'm the most unconventional engineer I've ever met. I don't think in terms, in boxed terms. Given an opportunity to lay something out where somebody tells me that the minimum lot size is 15,000 square feet and the minimum frontage is a hundred square feet, I know that five out of ten engineers are going to give you a layout with lots that are a hundred by a hundred and fifty.

And I'll use an example. I had an engineer do that on my project in Alberta, Alabama and he gave me 75 lots and inside of an hour I've set in my layout with 95 lots. I've magically found 20 lots? No, all I cared about was, if my minimum lot size is 15,000, what's 111 by 130? It's 15,000.

Now, I just picked up 20 feet on three-size lots, that's 60 feet. I picked up another row of lots. I double-loaded a street he had single-loaded, but he thought inside of a box.

My first vision of things is not inside of a box. I have guys in our industry calling, going, what's your buy box? I'm like, I don't have a box, I'll look at anything you send me and we can take a decision from that. Because once you're in a box, it's hard to get out.

Seth: Maybe the box is the zoning ordinance, right? So whatever that says you can't do, that's essentially the box, right?

David: Yeah, yeah. But there's one thing, there's nuance in every zoning ordinance. And there is because they want to build in some flexibility while trying to contain you. But if you think in rigid terms, then you're stuck there.

But if you step back a second and go, “I can make 15,000 square feet look different a bunch of different ways,” that's when you start nailing the success.

Seth: And I hope people are catching what David's saying here in that taking a plan of 70 lots and turn it into 90, or however many he's able to do, effectively he's creating money out of thin air. And sometimes a lot of money, because you can sell it for a lot more. And when you have that kind of a brain that can think in those dimensions, it is surprisingly uncommon.

And in terms of finding a good engineer, I mean this is probably a huge discussion, do you have any pointers on how do you know when you've got a good engineer who knows how to think outside the box or just see things in different ways.

David:Here's one of the things, this is a good one, maybe we should do this again, Seth.

One of the things that I've learned is, in 35 years, see I can speak with you on your level, with your experiences, right? When I'm on the phone with a lawyer, I speak to a lawyer in ways that he can recognize that I'm educated, I know what I'm speaking about. When I'm on the phone with a bureaucrat, jurisdictional bureaucrat.

I've been dealing with them for 35 years. I speak to them the way they see things and I don't try and argue with them over their reading of the ordinance. I merely point out the way I read the ordinance and I don't ask them what can I do on this piece of property. I tell them what I've read in their ordinance so immediately they know that, “Wait a minute, this guy read the ordinance!”

And then when I'm having a conversation with an engineer, I speak to him using engineering terms and speak about it the way an engineer would.

And I think that can all be acquired and it doesn't have to be in those terms exactly. I mean, if you read enough, if you know enough about what you're seeking to find and you're asking the questions the right way, the answers you get are significantly different than the answers you get if you just ask someone, “What do you think I can do with this?”

Because then they're going to revert to a box. “Oh, well, you can do these five things.” And they're going to leave out the fact that we've got this other part of our ordinance that if you give us 40% open space, you can shrink everything down and do something completely different.

You'll never find that out if you don't say, “Oh, I noticed that you have this other section, and if I read it correctly, if I give you 40% open space, I can make my lot 6,000 square feet.” And a lot of times, whether they read it or not, then they're going, you hear the pages flipping. “Oh, yeah, I see that. That's interesting.”

So I think, if anyone wants to learn anything, it would be to focus on not necessarily asking an open-ended question, because you're not really gonna get the answer that you're seeking. Even if it's subtly educating yourself before you ask the questions, you're gonna get better answers.

Seth: That's a huge lesson right there that I can totally vouch for. Being able to dispense with any assumptions that a lot of us make when we ask and answer questions and really get clear on what you want to know.

Those open-ended questions, I can't stand them. I see them all the time in our forum and my answer is it depends on 500 different things. Get really clear about what you want to know and show me that you've actually thought through it yourself before you start asking questions and wasting everybody's time.

David: It's great because we talked about earlier, I met my one partner because he asked the question online and I read it and what I knew was that the question he really wanted to ask he didn't know how to ask. And so I responded to what I thought the question was they was and I wrote it out pretty detailed like, you're not asking it correct here. Is this what I think you're looking for and within three minutes I got a DM from going can we get on a call?

Seth: Yeah. Well, David, this has been awesome talking to you. So appreciate your time and sharing your wisdom with us.

If people wanna get ahold of you, do you have a website or something that someone else can learn more about what you do or anything like that?

David: Yeah, our website is openlandcommunities.com. If you got a deal or something that you're not sure of, reach out, man. I'm happy to give it a look, give you an honest opinion. I tell people I got enough of my own. I'm certainly not gonna steal anything from somebody. I've never done anything like that in my life.

I’ll also sign NDAs or non-competes, I have no ill will. I'd rather give somebody free advice and help them structure a deal right than run into a deal that somebody has just soured or clouded the water and then you got to unwind it. Besides, I like this community and I think we should all help each other.

Seth: Yeah, I'm with you, man.

Well, thanks again. Thanks to the listeners out there. If you want to stay up to date on everything going on with REtipster, you can text the word free, F-R-E-E, to the number 33777, stamp it in, all the stuff that's going on.

Thanks again for listening, and we'll talk to you next time.

Seth: Hey everybody, how's it going? This is Seth Williams and you're listening to the REtipster podcast episode 168. Show notes for today's episode can be found at retipster.com/168.

So today I'm talking with my new friend Joe Roberts. So Joe is a former Marine Cobra helicopter pilot who began his real estate investing journey while on active duty. And he started acquiring single family and small multifamily rentals before making the switch to flipping land in 2021. Joe left Marines after eleven years in 2023 to pursue real estate full time. He is married with five kids.

And today I want to be talking with Joe about cold calling for land investors. Joe actually owns a company that does this, it's called Landcaller.com. And up to this point in time, cold calling is not a major marketing medium that has been commonly used in the land investing world. Perhaps it's going to change after this, but the first time I ever heard about the idea of cold calling a couple of years ago, I honestly thought it was a little ridiculous. It was like the marketing strategy of last resort, something I didn't really want to know or understand.

But the truth is this can actually be incredibly fertile ground for land investors. And I think it's kind of a thing where direct mail has been so easy for so long that there wasn't a need for anything else. But as the competition has really heated up over the past few years and response rates have been going down, a lot of us have been looking around for the next thing and wondering about what else might be able to pick up the slack.

And Joe has about as much experience with this as anybody I know with cold calling in the land investing world, which know definitely a niche in, you know, as I think we're going to find there's a compelling case to be made for cold calling in the land business, and we're going to talk about all that right now.

So Joe, welcome to the show. How you doing?

Joe: Thanks Seth, I am doing great. It's great to get on here finally. I still remember before I'd ever launched Landcaller reaching out to you and asking, “Hey Seth, who does cold calling for land investors?” And you're like, “Nobody that I know of.”

Seth: Yeah, that's right. A lot of times before we get on these kinds of calls, like when I'm going to talk to somebody like this for the first time, I'll go into my email inbox and just do a search for their name or email and be like, have I ever talked to this person before? Maybe I didn't know them, but I just got an email from them and you were there and I saw that first conversation so it's kind of funny.

Joe: Yeah, that really started the track because decided like, yes, I want to do cold calling after kind of proving it myself. But I didn't want to do it myself, and I didn't want to just hire a VA to do it for me either, because I tried that and it didn't work very well. And so I was like, well, if anybody knows a company doing this, Seth does. And you were like, nobody that I know of.

Seth: Yeah, looks like that's changing now that you're around. But I wonder what made you even decide to think of… like, in my mind, cold calling was just, no, I don't ever want to go there. That just sounds like a horrible existence to try to do this and find deals. So is it because you had been sending out mail and it wasn't going well, or what made you even think to do this and then actually put all the effort into trying it and figuring it out?

Joe: I mean, mail and how it kind of went throughout 2021, played a big role.

So when I started in 2021, mail was easy. Probably not as easy as some guys that had started in 2017, 2018 2020, but it was pretty easy. I was landing some great deals. I just noticed as the year progressed, and 2021 was obviously the year of real estate, crazy appreciation across the board of basically every asset class as things kind of got crazy post-COVID or through the lockdowns. And just as the year progressed, things that had worked initially or that I had maybe hadn't worked in my campaigns took some tweaking, but once I'd gotten them working, there was a good almost year where they were running on full cylinders and then things just started to tick down.

And so I tried changing up my types of offers, blind to ranged. I tried changing up the different types of mailers, what I was writing in the letters and postcards, and I just wasn't getting the same kind of metrics and return that I had before. And so spending all that time looking at it and, obviously direct mail is very expensive, I was sending not nearly as much as some people, but I was still doing about 10,000 letters a month, so that's expensive. So I was like, what are my other options, essentially?

So there was SMS, pay-per-click, cold calling. I mean, I was basically just googling like ways to generate off market real estate deals. What kind of landed me on cold calling or at least wanting to try it was I did a deep dive into my “seller profile,” is what I called it. So I basically went back through my last year of mail and I took every positive response to a piece of mail, even if I had never ended up getting it under contract, but a positive response. And I just kind of categorized these people and was like, okay, what do these people look like? And they're primarily boomers. So they're seniors. Many of them did not have cell phones or still had landlines that they use primarily that I was calling them back on when they received mail. They owned their property free and clear.

In my dealings with them, a lot of them didn't necessarily trust tech. I wouldn't always be able to get DocuSign or whatever with them. I'd have to send contracts out after we negotiated over the phone. There were people that were comfortable talking on the phone. And so to me, that's the mess was kind of the sexy thing that people were kind of moving to at the time. But I thought that at least for my sellers in my markets, cold calling was going to be a better way to get to them.

So I tested it out myself, had some really good success. I wasn't doing it at any sort of scale. In fact, I was pretty hyper localized in a very specific area that I wanted deals, but I at least kind of proved the model to myself and that's when I started to kind of explore different ways to scale it into my business.

Seth: And maybe we can talk just a little bit about why did you even start doing land in the first place? Sounds like you started doing single-family and multifamily houses like many people tried to do. Was that not going well or what even led you to start searching for something else?

Joe: Actually, I mean, it went very well. I had a single rental, which had been a primary residence, and then when the Marine Corps had given me orders and moved me to another state, we kept it, rented it out, and I had that single rental plus my primary residence for many years. When I started buying single-family homes and small multifamily in late fall of 2019, I just had those two homes, and by summer of ‘21, I was up to 23 doors. So in about 19 months, I owned 15 properties.

Seth: That's amazing. Nice job, man.

Joe: Thank you. So it went well.

First of all, I think you can only scale so much with single-family before kind of the economies of scale get to you, even if you have property managers, which I did prefer that because even property managers require managing. And there's always something going wrong with every house and that requires your attention.

And then honestly, I just looked at the real estate market in general as kind of ‘21 really took off and I thought it was getting pretty bubbly, to be honest with you. And I was also getting outbid on all my projects. I was doing the Burr model, as I'm sure some of your listeners are familiar with, where you buy it with cash, renovate it, and then refinance and rent it out so you could use the cash again on the next deal.

So I was finding very crappy and fixer-upper properties, but as 2021 kind of kicked off coming out of 2020, I just kept getting outbid on everything by flippers, who could buy it for less basis than I could because they were going to put lipstick on a pig. Whereas I needed to make significant capital improvement sometimes because I wanted it as a long-term asset. So I couldn't find good deals that I penciled anymore. I felt like the market was getting bubbly.

So I kind of just stopped for a while and I met JT Olmstead at a conference by chance, BiggerPockets conference. We sat down at lunch at the same table. I'm sure your listeners know JT, fantastic guy. I know he's been on here, I think a couple of times, but he was like, “Hey, what do you do?” And we got talking about land and it just fascinated me. I'd been sourcing off-market deals for single family with mail. So I had an understanding of sourcing off-market leads. All I needed to do was kind of tweak it for a new asset class.

Seth: So it was kind of because of JT that you discovered land?

Joe: Yeah, it was 100% because of JT.

Seth: Wow, that's crazy.

Joe: We had that lunch talk and then I was just fascinated and I hit him up later that day. I was like, “Can I buy you a drink and talk more about it?” So we went to the bar that evening and I think we talked for a couple of hours and I was hooked and I went back and started my land company.

Seth: Yeah, that's crazy man. Those conferences, if you really make an effort to, even if you don't make efforts, if you just are around people like that and have open conversations, it's crazy the connections you'll make and the people you'll meet.

Every time I go to this thing, I know something cool is going to happen. I don't know what that's going to be yet, but I always walk away from them with some “Aha!” moment or relationships that can turn into stuff that lasts for years. So it's cool to hear.

Joe: JT's still a great bud of mine. I use YourLandLoans, his service, and I still pop ideas off of him to get feedback. He’s a great dude.

Seth: Let's get more into this cold calling stuff. So when I think about cold calling, is this something that I should be using in conjunction with other marketing mediums? Like should I be doing this in addition to direct mail or texting or ringless voicemail or emails or whatever? Or are most of your customers using just cold calling? Like that's the main thing that they're doing and nothing else? And I guess if it is used in conjunction with something else, where would this show up in the sequence? Is it the first thing you do or the last thing you do?

Joe: Yeah. So before I kind of answer that, let me back up a little bit and discuss how I kind of view there's two types of cold calling. I kind of break it down into two categories.

There's cold calling that is the equivalent of you handwriting letters, essentially, which is you calling or somebody that's highly trained, excellent negotiation skills, knows the business in and out. That doesn't work at scale. So that works for you have that specific subdivision, that specific area within a county. You know, you want deals and maybe it's 20, maybe it's 50, maybe it's a couple of hundred lots, but it's doable. You can be highly focused and it's something that you could be just individually pulling the data on a property, finding the owner, skip tracing them, calling them yourself. That is one type of cold calling.

That's not what Landcaller does. Because what we're trying to model is essentially the direct mail, mass mail model for lead generation, which is out of 10,000, 20,000, 50,000 records, you find those few that are ready to make a good deal that pencils for the investor. So that's what Landcaller does.

And as that method of lead gen, it really can work either way. Our clients are almost 50-50 between those that use only cold calling and then those that use cold calling plus something else. Some of them are in all of the above. I find those clients tend to be a little bit more experienced. They have their honeyholes, their markets. And cold calling works really well because they're going back to the same areas time and time and time again and now they're hitting it from every possible area or angle.

And if there's a Venn diagram of all the owners in a county, there's overlap between those that are going to respond to SMS, those that are going to respond to mail, those that are going to respond to a cold call. But when you hit it from all sides, you could really take advantage of trying to capture everything else.

50% of our clients just use cold calling, and I would say at least half of those used to use other methods and just switched completely to cold calling because of some of the cost efficiencies, the agility of the model with how quickly you can kind of adjust things. So it's an either or, really.

Seth: Correct me if I'm wrong. So it sounds like when you were first testing this out to see does cold calling work at all? Is there anything here? Was it just you? And like a spreadsheet running it through something like their DirectSkip, getting their phone numbers, you would call them personally and go through these conversations and see if it led anywhere. And that's kind of how you decided, “Okay, there's something here. Maybe we should scale this now and do this other way where we have less specialized people doing the initial call and that kind of thing.” Is that kind of how it panned out?

Joe: Yeah. So there was a little bit I didn't kind of have this idea of the different types of cold calling formulated my mind then. But yes, I was basically using that first model I spoke about and I was calling I mean, I was very rudimentary. I was using Land ID or the GIS to find that I'd look at a lot, be like, I want that lot in a specific area, use Truepeoplesearch.com to find a number and cold call them again. Unless you're hyper-focused on a specific subdivision or whatever, that's a terribly inefficient waste of time for you to be trying to find deals yourself.

So then I tried to hire yes, I tried to use some of my VAs to cold call. So I was like, I'm paying them a lot less than I would want to pay myself to do this, so let's use them. What I quickly discovered, even though they had good English and they were comfortable on the phone, in having my VAs cold call, there was a whole lot more that kind of went into doing it even at a small scale within internal to the company. So I quickly realized I had basically hired myself as a cold call center manager at a small scale, which I didn't particularly enjoy, I don't think I was particularly good at. There was a lot of tech aspects. I'm not a very techie guy with the dialer system and all that.

And so that was actually when I reached out to you because I was like, okay, I just want cold call leads is what I really want. I think I'd proven a bit to myself that yes, cold call leads can work. I just want a bunch of cold call leads. And that's when I started my search for a cold call company that worked for land investors.

Seth: I mean, I know there's other cold call agencies out there that work for like house investors and that kind of thing, but to my knowledge, I think you're the only one that does the land specifically, right?

Joe: Yeah. And that was what, you know, talking to you JT some other people I do in the space, like, yeah, I haven't heard of anything like that existing. So I interviewed three or four of those kind of real estate cold calling companies very popular with wholesalers for single-family homes.

And I mean, they were good. They follow much the same model that we do at Landcaller. It was just when I tested them or when I interviewed them, I just didn't get a feeling that they understood kind of the intricacies of vacant land. A couple of them, I had their caller kind of call me and I ran through some things with them and I didn't get the warm fuzzy that they really understood the niche. These callers have been calling kind of single-family homes forever and they were just very much focused on what that looked like. And so I was about to hire one regardless and just figured over the months we'll work out and hopefully my caller sticks with me and we can get that caller comfortable with the vacant land niche.

And then I was just talking to my wife and I'd seen something on Twitter about starting your own call center and I was like, well, what if we just started a call center, hired a manager, so I'm not managing it. I'm sure I could find other land investors that would want to do this so that I make the investment worth it and go from there.

Seth: It makes me wonder, is there anything different about how you build your list in the beginning and ultimately decide which people to call? Like, do you only go after higher value properties or property owners that fit a specific criteria, like being more likely to respond on the phone or anything like that? Or is it literally just take the exact same list you would normally send mail to and just give that to you and go from there?

Joe: So we have clients that do every basically we have every type of land professional at this point as clients. We've got large scale, like big, big-time developers looking for vacant land. We've got land-specific agents, plenty of flippers, those focused on larger acreage and doing subdivides and stuff, those focused on infill lots and flipping them to developers and builders. So the only difference I would say is that because it is quite a bit cheaper than mail, you don't necessarily have to spend as much time scrubbing it or upfront doing so much work.

Because I know flippers—I never did this—but I know flippers who had a team of VAs who prescrub all their lists prior to mailing. They're looking for slope, wetlands, landlocked stuff, and they've got multiple people working on this going like looking at the properties in Land ID or GIS. And it makes sense because they've worked out the economics of mailing for all in cost of record or what it may cost to mail, versus hiring a VA for $4 or $5 to do that. With cold calling being about 60% cheaper on average than direct mail, there's really not a need to do that. So that's kind of the only difference I see in how you may have to prep a list or go after a list.

Cold calling works for the same types of properties that direct mail does. It's cheaper so if you don't want to spend the time scrubbing them up front, you don't have to.

Seth: Well, it's interesting that right there is something that it makes sense now that hear you say that, but I wouldn't have assumed that, not having knowing any better.

But you said that cold calling is 60% cheaper than mail, so what does that break down to? What is the cost per call for somebody to dial a number? Because I guess that doesn't include people that hang up or don't answer, right? It's just making an attempt to reach someone.

Joe: Yeah, so I look at it more as a cost of kind of per record. So a record is going to return multiple numbers, obviously once it's skip traced. And not every record is going to be skip traced. Just like when you pull a list, not every piece of mail is going to be delivered.

But if you look at a list of 10,000 (that was a pretty standard month for me mailing) all-in cost, including property records and mailing and stuff, depending on how much bulk you're buying, between 65 and and 70 cents a record. So you're looking at 6,500, 7,000, 7,500 depending on what scale you're doing it.

Whereas all-in cost for calling 10,000 records with land callers, about 3,000 to include the property records and the skip tracing and the TCPA scrubbing and all that and the caller working full time on the campaign. 3,000 to 7,000 is kind of the comparison there.

Seth: So I guess in terms of a land investor scrubbing their list before they hand it over to you, I guess they would just kind of go through their usual steps, like take off the stuff they absolutely know you don't want or stuff that you're 100% sure are not going to work with you, like a government agency or something. Is that it? Or should they be doing more or less or is there any notable difference in how they should be processing that before they put it in your lap?

Joe: No, not really. Again, that kind of depends on the flipper and what their strategy is. But a good chunk of our clients we pull the list for because we can get the data for cheaper than they can because we're buying in bulk, like DataTree data. So we'll take their criteria, we'll pull the list based on their criteria, and then skip it and scrub it. But other than the common sense things like you're not trying to call the Forest Service for their 50 acres in your county, no, there's no need to really scrub it out any more than that. And that's also something that we can scrub out when we get it. So there's really not even a need if you don't want to scrub it.

Our goal to be honest, is whether you're incorporating cold calling with other lead gen methods or we're your only lead gen method. And to me this should be the goal of any cold calling company that you potentially go with, is to be kind of, I call it as a Marine Corps background, a “fire-and-forget” weapon system. So it can be as involved as you do as much scrubbing as you want on the front side, but if you don't want to, you can fire-and-forget it. You can give us the county and the criteria and the acreage size and then you forget about it until warm leads start showing up into your CRM.

Seth: Maybe that's a good segue to help us understand. Take us through the cold calling journey. What exactly does Landcaller do, and at what point is it dropped into the lap of the land investor? Like, how many calls does it take for this entire journey to first contact the person to actually close the deal, and which of those calls are handled by your team? And at what point is like, okay, here's the information we got. You run with it now, land investor, how does that work?

Joe: Great question. So we are lead gen. We're not negotiating lead gen with some due diligence. Caveat, some due diligence, okay.

And that's based on the flipper as well. We individualize our scripts. We'll work with our client to build their script out, split test things with them, let them know what we've seen work, et cetera. There's any number of qualifying questions or whatever that they could put into the upfront script so that it does or does not get passed along as a lead.

But when you think about, okay, what does a cold call lead look like when it comes from the cold call center? It's going to look the same as when you sent out a mailer, and let's say you had somebody answering the phone and taking down that information, which then gets sent to your email or your CRM. That's the same kind of place where you're picking it up and taking it. So you have somebody who's interested. If you've got qualifiers in terms of things that you do or don't want, then it's not passed along. But if you have some due diligence questions in there, for instance, I'm running a campaign. Now, I know I don't want any of the HOA properties that are in this area. So that's one of my qualifying questions. Is it an HOA? Answer is yes, I don't see the lead in my CRM. It's not a lead.

So the negotiations and all that is on the client because they all have different strategies, right? Like I said, our clients are vastly varied. And even within the flippers, we've got very different strategies. We've got folks that they just want to buy cash at 35% of market value. That's all they're looking to do. And then we've got folks that are like, yeah, I'll put it under contract at 60% of the market value and wholesale it and make 20K. Sure, why not? So we don't get into the business of negotiating for our clients.

Seth: So I guess maybe one question is how many phone calls is this process, and which of those phone calls is handled by you and which of them is handled by me?

Joe: We will have one phone call ultimately with the lead, maybe two. If we call them, we start the conversation, and they have to call us back. So we pick it up later. But once we've got the information that's on the script or the information the client requires for their CRM, we pass it off, we're done calling.

On the client side, it typically looks like two or three conversations, maybe more. I'm sure we've all had those leads, even with direct mail where you go back and forth on negotiations because you're pretty close for a little bit. But typically what it looks like is— I'll use my land of business as an example, and my partner in Landcaller, John Lowry, also a land flipper with his own land business, he does it very similarly. So when the lead comes in, our first callback is rapport building plus more due diligence. So the lead came in, my VAs have pulled the deed, they've run the comps based on my script. We asked the question, hey, what are you hoping to get for this property?

So if they gave an answer, we have that number. We have other questions that kind of get after what level of motivation the lead might have, which helps us to prioritize who we're calling back. But that first callback is really to build rapport, build a relationship, be likable on the phone, and then answer additional due diligence questions that help us really pinpoint the value on improvements. Any number of standard due diligence questions, I mean, most of them come from the REtipster due diligence checklist straight off there. So anything that didn't get asked on the cold call is asked then.

We don't make an offer on that call. Some investors do because they've pulled comps, they know what they want. In my business with my sellers, I have found a higher conversion rate if I just use that call to get them to like me and to get the information. And I come back on a third call when I'm actually making an offer. I have a theory that it comes across as a little bit more professional, it gives time for the relationship to develop a little bit more.

So I'm making a third call, which is including the first cold call. So cold call from Landcaller, follow-up rapport building, due diligence call, and then offer call.

Seth: That’s helpful. So to recap: three calls, call number one, that's what Landcaller handles and that's ultimately the lowest value call. That's where I don't know what percentage, but a large percentage of people probably will not fit the bill.

And like the biggest time waster, if you were trying to do this yourself, yes, that would take you the most time.

Joe: Yes, exactly.

Seth: And once you actually have verified, I don't know what you ask like, are you interested in selling below market value or how you ask the question, but it sounds like by the time it's delivered to the land investor so that they can pick up call number two. In order to do that, they're armed with the knowledge that, yes, this person said they're interested in selling at a discount and it's not an HOA or whatever. Other basic questions they want answered. Is that accurate?

Joe: Yeah. Because to give you an idea, again, a caller on a campaign for us, they're working full time for that campaign, 40 hours a week, calling all day long with a multiline dialer or changing out the numbers up to twice a week. And they are going to make around 3,000 to 5,000 dials per day on average. And they're going to contact typically 200 to 300 people. And in a month they'll send about 60 to 70 leads.

Really, the number of leads has a lot of variables, but I would say that's our average smaller lots, lower price points have higher lead gen than more sophisticated big lots with high price points, a few hundred K-type price points. But I'd say our average is around 60 to 70 leads in a month. You're going through a lot of numbers and a lot of dials to generate those leads, which is where the economies of scale kind of work themselves out.

Seth: Yeah. And having a lead doesn't mean it's going to be a deal. It doesn't mean that they're going to sell for any specific price. It just means like, hey, this is the one to pay attention to. There's a hot one in the line here.

And then on that second call it sounds like it's a mixture of rapport building and also just verifying the facts. There's a link to the phone call checklist that I put together years ago, we still use it today. You can get a free PDF of it if you want, but that's kind of like the list of stuff that you want to verify. Just understanding the facts. Am I correct in assuming that a lot of that stuff you can find out on your own before you call the person back?

For example, does this property have road access or is it in a flood zone or whatever the question might be. So is the idea like on that second phone call you're not necessarily asking all those questions but you're verifying what you already think you know? It looks like this property doesn't have road access. Is that right or am I mistaken? That kind of thing?

Joe: Yeah, 100%. So I'd say it's three aspects to that. One is how much work do you want to do on the lead prior to asking them? And so that's a time value equation. There like how many VAsdo you have working for you? Are you doing it yourself? Do you really want to go pull every deed, every plat, look at every GIS for every lead prior to calling it back? Maybe you do, but there could be some things where you're just like, I will ask and then if it turns out we're close on price because I haven't made an offer yet, I can now go verify it before we go make an offer.

Then there's the aspect of just using those questions, and that's verifying like you said, but also just using it to have the conversation. A lot of these cold call leads, they're relational people. It makes sense. They picked up a call from a random number and talked to somebody for five, six, seven, ten minutes, and now they're talking to you again. Sometimes they just want to tell you the story about their land or they want to tell you like oh yeah, when they went to their grandfather's lot to go hunting when they were a kid. And so being just an active listener and then just some of the questions are just an opportunity to get them talking and again to get them to like you.

I mean, I'm sure you've had this with direct mail leads, Seth, but I've had many leads where they say something know I've had higher offers in the past but I want to sell to you because I like you. Maybe they're blowing smoke but I get that more often with cold call leads because they are relational people.

So it's a verifying of facts or it's getting the facts if you don't want to spend too much time on the front end before calling them back to do it. Although I recommend you do some due diligence. Like when I call them back, I've got land ID up, I'm looking at the lot so I can ask them about things on the lot and that sort of thing.

Seth: And I think that's a good thing for people like me or people who might be, like introverts or people who just despise getting on the phone for any reason, to understand that the point of phone call number two is not just to check boxes. I mean, that's part of it, but it's also to build a relationship with the person.

I can totally understand why that might be uncomfortable for some people, just picking up the phone and talking to a stranger, but I'm sure it works wonders when you can humanize yourself in any way. And it sounds like contrary to the way that direct mail works, how sometimes you get lots of hate from people and they just are livid. I mean just illogically angry at you when you have these kind of phone conversations.

Even when you get to call number three and you make the offer and it's below market value and they say no, how often do those turn into just vicious, hate-filled phone calls? Is it like a nasty experience or is it like they're just more civil because you've humanized yourself and they almost kind of like you in a way because you built a relationship? Is that accurate?

Joe: That's very accurate. Very accurate. I can count on one hand the number of people, even after making offers, which I knew we were going to be way far apart, that have even just hung up on me, let alone I don't know that anybody's yelled at me. And to be fair, I also don't do a fair amount of my calls anymore because I've hired an acquisitions manager who I've trained to make these calls and that stuff.

So we split my leads. But she's the same thing because she gives me reports every week on how the calls went. So it's exactly that you've humanized. It's not some disconnected piece of junk mail that they've gotten that they feel like is kind of a slap in the face.

Which is another reason I like giving the offer on the third call. If you give the offer right off the bat on the second call, it comes across as a little bit more business-like. Like, hey, yeah, you said you wanted to sell, here's my offer, take it or leave it type thing. That's why I don't know that it necessarily works as well with this type of lead. It filters like you are saving yourself some time. I will 100% give that. You will filter out more leads. You will lose leads, though, that you definitely could have worked.

And I feel like anybody who's doing this, regardless of what lead gen method you're using, should have follow-up drips. A lot of people that are doing mail, they'll drip their mail, right? Like they'll send a mail and then three months later they'll send it again. But with cold call it's nice because you've got their phone number.

So it's very easy. Maybe you're 20,000 apart and their motivation level is meh, but you call them back or text them, you've got their number. It's very easy. Just put in a CRM or a Google Sheet and be like, all right, in two months I'm going to hit them back up. You've already established that relationship.

I've landed many deals in the last two months from calls that were made in March and April, three or four I can think of off the top of my head. The lead gen method works well with follow-up campaigns and drip campaigns.

Seth: So I mean, aside from maybe the demographics and just the way that they interact with you, is there anything different about cold calling leads versus direct mail or texting or otherwise? Have we kind of covered it or does anything else stick out to you, yeah, they tend to accept lower offers or anything come to mind?

Joe: So a couple of things. So for one, there are people that you're only going to get with cold calling because they either don't have a cell phone so I can't respond to SMS or they just don't trust SMS. They're never going to respond to a text and they never respond to mail. Many times I've had leads that said, yeah, I get junk mail all the time. I get letters every day of the week asking me to buy this property and they all go straight in the trash. So there's one aspect, there's a subsection there that are only going to be reached by cold calling.

In terms of how the lead looks different. I would say this is if your business model is completely built on the self-filtering model of I send mail really it's the blind offer, right? Like kind of the least amount of work possible. I send the mail with the blind offer. I only get people that see that exact number and want to sell for that number and then I bet and make sure I offered the right number that actually makes sense for the property once the lead comes in.

This is different. It's not going to work the same. Now there's some things you can do up front like having that number or a range of numbers in that initial cold call conversation that our callers are having with them to pre-vet, that kind of narrows the funnel when it gets to you. But ultimately a cold call lead I would say is slightly more work. Like you're probably having at least one additional conversation over on the phone that you would a direct mail lead. I mean ultimately I spoke on the phone with every direct mail lead I ever got. So speaking on the phone is just part of the business regardless of what kind of lead gen method. You're just doing a little bit more with cold call leads.

Seth: I wonder, do cold calling leads tend to assume that you know more about the property or that you're smarter than if you were to just send them a blind offer since a blind offer is such an impersonal cold thing, like you're not really displaying anything about what you know about the property. Whereas with a cold calling sequence, you've had these conversations with them. You've asked the questions, you've had a chance to point out potential flaws in the property. Not saying that their property is worthless, but it kind of plants the seed that this might not be worth as much as you think it is if it's landlocked and if it has these issues, that kind of thing.

Do they tend to just sort of accept what you're saying as reality easier? Because you've sort of displayed your competence and that you know what you're talking about.

Joe: I personally would say yes. I don't necessarily have hard data to back it up other than anecdotal. And what I would say is so, first of all, we spend so much time customizing these direct mail letters and throwing in the tidbits here and there. Ultimately, who's reading that whole letter? Probably who's, like, picking up on the things that we're trying to imply in the conversation of making ourselves an expert in the air or whatever. They're scrolling down till they see your big bold price and then deciding, hey, cash offer. So I feel like it's easier to kind of drop those hints or those implications that we are professionals in a conversation.

So for instance, like one question that we script into a lot of our campaigns is it goes something like the cold caller says, “as I'm sure you're aware.” So right there—I love the psychology of cold calling, by the way, because it's fun to kind of just play with—you're establishing yourself as an expert because you're about to bring the facts, but you're not talking down to them because you're telling them that they're aware. And so when you bring the facts, the implication then is that this fact is true because you've just implied that they're aware of it.

So that's how we start that sentence: “As you're aware,” “As I'm sure you're aware, land in this market, in your market, can take a very long time to sell on an average of over a year for full market value. With that in mind, where would you say you're at with this property on a scale of one to ten, with one being ‘get the highest possible price I can,’ and ten being ‘sell as quickly as possible.’” And so now not only have you implied your professionalism and knowledge, you've implied that they also know this. So now they want to accept that because you've just implied that they're knowledgeable.

And then you've also given them the opportunity to demonstrate what their motivating factors may be, while not necessarily having to say, like they're vulnerable and saying, “Oh, yeah, I need to get rid of this thing as fast as possible.” Because even people that don't understand sales or anything else understand that when they do that, they give up leverage. But if they're just giving a number on a scale, they don't feel like they're giving up as much leverage.

So the psychology there can work. And now when you get that lead into your inbox, now you can prioritize it based on where on that scale they landed, but you can also take that and use that in negotiations because you've already implied your company as a professional. So you call back, “I saw you answered one that you're interested at the highest possible price. Absolutely understand that I'm not going to mess around with any low offers with quick closing timelines. Understand. Highest possible price, a little bit more risk. I might need a little bit more due diligence.”

So you can use that to your advantage. And then they're assuming you had multiple price points. You took their input of, hey, I want the highest possible price, and that's what you're now offering. So even if it may not look on the surface as a lead that might be any good, they're like, oh, I want the highest possible dollar amount. You can still use it in negotiation.

Seth: I'm wondering what percentage of these warm leads that you get end up as closed deals. And I know this is… I hate this question. I feel bad that I'm even asking you this because it's a giant “it depends on how much you're offering and what you're looking for” and on and on. But just to give people just a wild guess, like if I get 100 warm leads from land caller, what would be like maybe a percentage range that I could expect to actually close on those deals? Like how many of these callbacks and conversations would have to be had to actually walk away with the deal? Would it be like maybe, I don't know, five out of 100? Or one out of 100? Or 20 out of 100, or have any thoughts on that?

Joe: Well, it depends. That is probably the most individual client or flipper or land professional dependent. We have land flippers who are realtors. The vast majority of these leads or could end up a high percentage of them can end up as clients for them because they're people interested in selling. They're realtors who also flip. So even if they can't buy it, they'll sell it for them. We've got land developers, all they want is like 15% to 20% off market value because they're going to subdivide the thing and build on it so they get a nice high percentage. We've got flippers who use the kind of traditional model of, yeah, I just want to buy at 30% of market value cash and close in 30 days. I don't wholesale, I don't double close, I don't assign. They have the smallest percentage, I would say 2% to 5% of leads that come in.

And then I'm a little bit of… so my business, I average about 8% to 10% conversion rate off my leads. But I'll get creative and find ways to do a deal. I don't have like a very strict, “I need to purchase at this percentage of market value.” Because a lot of that is predicated on the deal size. Like that kind of like sub-100k or even sub-50k deal where you need to buy it at 30 to make it worth your time. Right? But if I'm calling for a lot, that's worth 150k and I know I can sell it for really going to only offer 40% of 150k lot if I could make 50k off of it with a quick wholesale? No.

So I would average higher than some of those other flippers because I'm willing to double close stuff, put it on a long due diligence period, see what happens. If I could make 15, 20k. And especially on higher price point properties, I'll take well above 50-60% of market value and put it under contract because I'm going to make more money than I would on the property that I bought for 10k cash at 25% of market value on the same property.

So I know that was kind of all over the place, but if your kind of land business looks similar to mine, I would say expect that 8-10%, 7-10% conversion rate.

Seth: No, that's super helpful. And it sounds all over the place because it is all over the place. I mean, there's all kinds of different people using your service, so I appreciate the different examples there. That's really helpful.

One thing I will say for those of you out there who are wondering, what exactly do I say in this conversation? Like give me a script, give me a word-for-word thing that I can use.

So Joe and I actually worked together on putting together a script. You can download it in the show notes, retipster.com/168. We'll have an email opt-in thing. You can download it there. We also had a completely separate and much more in-depth conversation about this where we even did some role-playing and that kind of thing to explain what does a call sound like. And Joe was very good at this stuff.

And that's in module one of The Land Elite Masterclass, along with a bunch of other advanced strategies. So if you're interested in that, check out landelitemasterclass.com and I'll have a link to that in the show notes as well. Again, retipster.com/168.

I'm wondering, who do you hire as these cold callers? For Landcaller, it sounds like they're not from the U.S. So I'm wondering does it matter if they have a foreign-sounding accent or anything like that or, I don't know, is that an issue or anything?

Joe: We've done some split testing with callers that we have that essentially have zero accent. Either they were born in America and they've moved back and the split testing hasn't indicated that for that initial cold call there's not a statistical difference. I think it potentially matters more on the follow-up calls where now they're kind of getting down to brass tacks and deciding, do they like you? Are they going to sell you the property? Trust is being established, but on the initial call it doesn't seem to matter.

So we have two centers right now. We had to open a second one to kind of keep up with demand that we opened up in Egypt. So we have a call center in Egypt, in Cairo, and then one in Manila in the Philippines. Classic offshore worker location. Both centers are in-person call centers, so the workers are coming into the center so we can keep things like internet speed, quality. We're trying to keep as many variables constant as we can. Internet hardware, management by floor managers on the floor so we can QA things quicker and that sort of thing.

And then we do a pretty extensive hiring process. So we only hire cold callers, first of all with excellent English skills, little to no accent. A lot of our callers, and then they have previous real estate cold calling experience, so we have no newbie callers. And what a lot of them we're realizing come with is a pretty unique ability to mimic American accents, particularly Southern accents and so they actually can sound almost a lot of them almost undifferentiated from an American caller.

And then we give them our own training package that we've developed, teaches them kind of the specifics of what land investing is, kind of what do our clients look like, what do these sellers look like? Who are these people you're going to be talking to? What is the process when it leaves here? So they kind of understand what's happening with the lead and why they're trying to get the lead and why they're trying to gauge motivation levels, those sorts of things. We do role playing with them and then we hire them on.

You lose all of your kind of cost benefits or most of your cost benefits over other lead gen methods, particularly direct mail, if you try to onshore this and use American callers because it is monotonous and tough work. You're dialing thousands of numbers a day and having hundreds of conversations a day. So to be able to do that at offshore prices versus U.S. prices is the difference, really.

Seth: If I were to try to hire my own telemarketers in the Philippines or something like that, just take this on myself, why should I not do that? What are the biggest challenges of trying to find those people on my own versus just going with a kind of a proven entity that has all the kinks worked out?

Joe: I would say that kind of what I mentioned. When you do that, you're hiring yourself as a cold call manager. You just have to realize that and what all that entails. So there's the hiring process, finding somebody with experience who understands the space, or maybe they don't understand the space, they probably don't, but at least experience cold calling. Make sure they have good enough English.

Then there's the training. There's figuring out the payment that you're going to use. You're going to go through Upwork or Wise or whatever. You're going to use contract training. How are you confirming? What's their internet speed? What's their setup at their house? Do they have the right hardware for calling? Do they have a good mic? Do they have a quiet space? They're probably working at home. So is there going to be traffic in the background?

Then there's the dialer system. So picking a dialer and understanding all the intricacies because you're not going to do this with an Open Phone number. I mean, you could, but you're not going to get nearly that amount of volume you need to sift through all these numbers to find those leads, right? When we talk to clients that previously used VAs to cold call and they're blown away by the numbers of people, we're reaching, like we're reaching more people in a week or two than their cold caller we reached in two months.

And it's because they're just using a single line dialer. They're just using an Open Phone number or whatever it may be. And just manually dialing numbers. So you want a dialing system and I don't even understand all that. That's why we have managers with 20 years experience that take care of that aspect because there's all sorts of variables when it comes to the dialer, the settings you set up in there.

There's maintaining TCPA compliance… well, not necessarily compliance, because if you're making offers to purchase, you're not subject to it technically, but there's still a lot of rules around it that you want to follow to keep yourself out of trouble. Even though you're not technically compliant. Then you've got training, so you got to make sure how are you training them? You're doing follow-on training because we do follow on training weekly with all our callers, and then QA is an aspect of that too. Are you listening to calls, providing feedback to the caller, incorporating that into future training modules for the caller, and making hiring and firing decisions based off that?

So I mean, that's some, not all the aspects of managing a cold call campaign at scale effectively.

Seth: No, that makes total sense. I know I actually work with a bunch of different individuals for various things. And maybe seven total that come to mind immediately. But all of these people, I could have them be my own full time employees. But there's just so much wrapped up in that, like the training and overseeing them and all this stuff. It's way easier to just outsource it to an actual company that does this and then they can figure out all the HR stuff and they already have the systems figured out. So it makes total sense to me.

Joe: And I think people, they just run the numbers of like, oh well, I'm sure I could find somebody who can do this for $4 an hour. First of all, good luck. But you can find a VA overseas for $4 an hour. Whether they can do it as well remains to be seen.

What's the price difference between them calling full time and us? Well, maybe let's just say it's $1,000 a month all-in cost. So what's your time worth for all those things that I talked about? Are you getting the same quality? So I feel like most people very quickly arrive at the conclusion that you're not really saving yourself anything by trying to bring this in-house most of the time.

Seth: What does it cost to hire a land caller at this point in time?

Joe: It's a little bit dependent on whether you are providing us a list or we're pulling it for you. So the caller themselves is just a flat fee for that full time caller on your campaign. And that's $1,500 to $1,700 a month. Based on the length of the contract you signed with us, we can go down to as short as a month-to-month contract for the highest cost.

And then on the data side, we can pull the list based on your criteria using DataTree data. That would be four cents a record. And then we will skip trace it and scrub it through a TCPA scrubber, which removes all known litigators and their family and friends, essentially, and plainers to the FTC. So essentially anybody that's at possibility of causing us or you problems with litigation gets removed out of the list so they're not being called.

Just a side note for all the listeners who are either cold calling themselves, hiring a VA to cold call, thinking about hiring another cold calling agency, or texting, you should be doing that because go look on Facebook. There are groups with tens of thousands of people where they just teach people how to conduct TCPA litigation. Like they don't even need to win in court. They can just file a suit and then, we or you, depending on what stage of the process it works, or they decide to file, then gets served with a notice.

So anybody dealing stuff on the phone should be doing that. Even though offers to purchase property are not subject to the TCPA, that doesn't keep anybody from filing a suit. And so it's very important to remove those litigators with a good software prior to it getting into your dialer.

Anyway. That’s 11 cents a record. So all-in cost. If we were pulling your list, skipping it, scrubbing it is going to be around, let's just say 10,000 records in a month, $1,500 for that, because fifteen cents a record, and then another $1,500 to $1,700 for the flat fee for the caller.

Seth: It's not that bad. I mean, you compare that to the cost of direct man, l I mean, it almost sounds like, correct me if I'm wrong, but do you recommend that people have Landcaller pull the list and skip trace it and do all that stuff instead of me? Like getting my list from DataTree, running it through Direct Skip and then I give it to you? Is it better for me to just put that all on you guys?

Joe: So we actually don't even allow people to give us skip trace lists anymore. We make some exceptions every once in a while. But the big reason there is we used to allow people to bring us their skip trace list. The problem is the quality of skip tracing available out there ranges widely. Let's just say that. And the vast majority of companies are all white-hatting the same data. They're just putting their brand on it, and it's this white pages data and it's not great.

What we did is we just require that we skip trace the data. Because for us, we can't perform for a client without good numbers. So it would made it very hard to pinpoint things going wrong with campaigns, split or test things if we don't know that we're getting good data back in the first place. So you pay more than you're probably your average skip tracer because we use credit bureau data, which is a lot more expensive. On average, it's bulk discount.

That's why somebody might hear that and say, “Oh, 11 cents skip tracing, that's crazy. I paid Direct Skip 9 cents.” But even just a few percentage points of better, of more numbers that are accurate, leads to one more, you're talking about saving like a couple of hundreds of dollars versus one more deal for a year for hundreds of thousands of numbers you're dialing. One more deal that lands you 20,000. So that's why we require that we skip trace it.

But yes, people can still bring us data. Lots of people have lists that they've been pulling forever. Land doesn't change hands that quickly. If they've got a list, bring us the list by all means. But if you want to move into a new area where you're probably pulling it for cheaper than you are and it's your data, we give it back to our clients. That's how our clients are doing their own SMS campaigns and direct mail campaigns with the data that we pulled and skipped and gave back to.

Seth: So aside from TCPA stuff or known litigators and that kind of thing, are there certain types of property owners you simply won't call? Like, “Oh, we noticed there's this characteristic about this person, so we're not going to call them or you shouldn't call them.” Anything like that come to mind or is that not a thing?

Joe: No, not really. And here's another tidbit for your folks that are doing cold calling themselves or hiring it out themselves, go ahead and call “do not call” list numbers.

I see a lot of or I talk to a lot of clients that used to do cold calling themselves maybe or had a VA do it. Yeah, half my list I can't use, and that's right about half your list is going to be people on the federal “do not call” registry. You are not subject to that if you are calling them in order to ask them to purchase their property. There's multiple court cases you can look up that have established the TCPA does not apply if you are offering to purchase and you were not marketing.

So if you're a realtor trying to find leads, it's a little bit different if you are trying to market yourself to provide a service to them. But if you're calling because you want to purchase a property and some court cases have even established that putting it under contract with the intent to purchase it or even wholesale, it also works. You can call “do not call” list numbers.

So a lot of you out there listening to this, if you're cold calling, you're artificially limiting yourself to half your possible list by scrubbing out “do not call” folks from your list.

Seth: So what if I hire Landcaller and I pay you guys thousands to call people and no leads materialize, or no deals are closed? Or I guess those two different questions. But does that ever happen where people spend the money and it just gets them nowhere? They just flush the money down the toilet?

And if so, how often does that happen? Why does that happen? Is it because people aren't following up fast enough? Or is it because they're terrible on the phone? Or any insights on people who try this and it doesn't work for them? If that ever happens, why doesn't it work for them?

Joe: Yeah, that's a great question. I'm sure everybody has that in the back of their mind.

So we have had one client to date that did not land a deal with us. We sent them close to 200 leads over the course of three months. No, actually it was about 220 leads. They were averaging close to 80 or to 100 leads a month. I think it was 220 or 230 leads, and it was about two and a half months of calling.

I don't know why they didn't land a deal. I looked at their leads that were coming in. Some of them seemed plenty motivated. They were a relatively experienced flipper, also a realtor, I couldn't say. I had coaching calls with them where I tried to figure out what they might be doing differently. They ended up getting out of land flipping altogether, or at least stopping their business for a while, not sure.

We have had nobody else that hasn't landed a lead. We have people that have landed, obviously, like much fewer than our average conversion rate. That's why our average is there. But the biggest probably, I'd say the biggest variable that you can control is—aside from your general strategy, which we talked about earlier, which is going to raise or lower what type of leads you're ultimately closing—is how quickly you're calling them back.

So this is not the guy that didn't land any leads, but we had another client. I see a lead come in, and I see in the notes that he talks about how he wants to move out of state. He wants to get it sold quickly because he wants to go live with his kids. He's 80 years old, and he's got like five other parcels he wants to sell as fast as he can. This is all in the notes. And so I hit him up on Slack. Every one of our clients, we set up an individual Slack channel for them where we communicate with them. We give them their daily KPIs, and they can ask questions and that sort of thing.

So I hit him up on Slack. I'm like, “Hey, great lead. Let me know how that goes. That sounds like a killer lead.” Yeah, I'll let you know. About a week goes by, I hit him up. “Hey, how'd that lead go?”

“Oh, I haven't gotten back to him yet. I'm going to do it soon.”

I'm like, “All right, man, get on that. That seemed like a great lead.”

About another three, four days goes by. Hit him up like, “Hey, how'd that conversation go? Did you get all those properties locked up?”

“Oh, man, I called him this morning and he went under contract with somebody last night for all of them.”

“You're killin’ me, Smalls.”

Seth: Yeah, that's a good lesson though.

Joe: it's warm.

Seth: These people are probably getting hit by other land investors giving them offers, and it's front of mind, like, they're thinking of selling.

Maybe the question is, what should the time limit be? Like, the second you get that lead, you got to call them within 24 hours? 48 hours? I know the answer is as soon as possible, but…

Joe: I try to do 48.

Seth: 48? Okay.

Yeah, I try to do 48. We have a couple of clients that we do live transfers with, and if we can't transfer to them, those lights are a little bit bigger. They have pretty built out robust systems, but we're handing off the lead. We go through some questions and they're like, hey, do you have time to talk to a manager? And then we're handing the lead straight connecting the call. I mean, that's as warm as you get.

But we haven't seen any data that actually indicates that that's necessarily any better at conversion rates than calling within 24 to 48 hours. Once you go past 48 hours, I think people start to kind of back to that, like, building, presenting a professional and serious face of the company that you represent. If you go past 48 hours, how serious are you? Like, 72. If you're calling back a week later, how serious are you about this transaction? Do you really want to buy it? It may be the implication to some sellers there.

So when a lead is warm, you definitely want to follow up as quickly as you can. But, yeah, 24 to 48 is what I do.

Joe: I'm not the expert that you are, Joe, but I would almost think 24 hours would be exponentially better. I think back to different real estate people I've called over the years, and psychologically, there is a difference when somebody calls me back that day or the next day. But once you start waiting, like days or weeks even, it's like, okay, I already written you off. I know I can't rely on you because you're not getting back to me.

So I guess ASAP is the answer.

Joe: Yeah, ASAP is definitely best. The only kind of caveat is a lot of times, our callers, we usually finish the conversation with, “Our manager is going to call you back. Is there a good time or what time of day works best for you?” And so a lot of times the seller is giving us a convenient time, which may not be like this afternoon. But all things considered, yes, the sooner the better.

Seth: And another thing that comes to mind here is the time commitment of calling people back. I mean, if I'm getting 100 warm leads a month, that's got to take a lot of time to actually call those people. I mean, never mind the discomfort of it for the introverts out there, but just like the time of following up.

I know it doesn't all happen in one shot like this, but if I get 100 leads dropped into my lap, how much time should I set aside to make sure I'm following up with those people? Is it like 15 minutes per lead or 20 minutes or five minutes or what would you say?

Joe: Yeah, I would say a little bit of that is what are you front loading that second conversation with? We kind of talked about that earlier. How much due diligence of online sources are you doing on that lead before you call them back? And how good are you with your systems? How quickly can you comp a property?

So that's kind of a whole aspect which I'm not going to speak about because that ranges widely. I take about three minutes to comp a property, and I know people that will take an hour to comp a property. At least I take three minutes to get a number that I'm comfortable going under contract on.

But I would say if that second call is about eight to ten minutes, and then a third call is typically shorter because you make the offer, you do a little chitchat, you make the offer and then pretty quickly, you know whether or not you're close and maybe there's a follow-up call or two to negotiate the last few thousand or not. So that one can typically be a little bit shorter. So I would say 15 minutes is probably a pretty good average.

So how do you manage that? First of all, 100 leads, that'd be a pretty successful campaign. That would be abnormal. But even 60 leads, that's still a lot of time. So the things you do are you either tighten the funnel on our end with our scripting, so you're only getting sent higher quality leads (which you just understand that there are leads that you don't get sent that you could have probably turned into deals, but you're just recognizing that you don't want to spend the extra time sifting through some of the other ones), or honestly, you hire a VA to do a good chunk of it. Because if your VA is doing a lot of that due diligence on the front side, it's very manageable to carve out a couple hours in the day or in the evening when a lot of people ask to be called back in the evening, you carve out a couple of hours and you just knock the phone calls out one after the other.

But if you work in a full time W-2 job, and you're also trying to do all the GIS, Land ID, deed registry poll, due diligence ahead of time, now you're probably running out of time to additionally do the phone calls. And so that's where a VA can really help you do those kind of monotonous tasks.

Seth: How knowledgeable are your cold callers about their clients? Like, if I hire you and somebody's calling on my behalf and the property owner's like, “Hey, I got you on the phone right now. Let's get an offer. How much can you offer me?” Are they authorized to throw any numbers out there? Or if not, how much information can they share about me before I get involved and start calling them?

Joe: Some of that's dependent on the client. So at a base level, they have standard responses. We get some information obviously during our onboarding about the client, where are they based? And you're always a local company, right? That sort of thing. And that buys. And so they understand the standard land flippers company looks like, and they can answer questions that just kind of come up, like, “Who are you? Why are you calling me about my piece of land I haven't thought about in ten years in another state?” they could answer those questions.

In terms of pricing, they will, unless it's a campaign where a client has provided us a pre-priced list and said, hey, either in the script, “I want you to bring this price up. You're authorized to bring this price up during the call.” Then on a question about pricing, they're just going to demur. They're going to say, “We want to give you the most accurate offer possible because we want to make sure we're maximizing the return for you. So we need to get this conversation and then make sure that we accurately comp it before we offer you a price.” And they'll just demur essentially to the manager, which is the client.

Seth: I'm assuming you don't record these calls, right? It's not like I get to listen to exactly what we said. There's just a few basic pieces of information that are passed along to me so I can kind of have some context for who I'm talking to.

Joe: So calls are recorded sometimes. Every state has different rules about recording conversations, so if we're allowed to record them, they are recorded. There's not an easy way to get recorded calls to the client that doesn't take a lot of man hours. So providing with the lead a recording of the call to every lead is not something we do.

That being said, we use the recorded calls most importantly for quality assurance. So we have a whole quality assurance team, which is listening to calls, a percentage of calls from every caller on a weekly basis, providing grades to that caller feedback, and then follow-on training. They're important for the QA aspect.

And then if it was a place where we could have recorded. We had the recording. If something in the caller's notes doesn't make sense or know, the client calls them back. And just what the caller or the seller is saying now is not jiving with what the caller said. They said on the initial call, we can pull that call on a case-by-case basis and provide that recording to the client so they can kind of parse through what the issue may be. I mean, that doesn't happen very frequently, but that is something we've provided for clients before.

Seth: When I jump in and do call number two, does it matter which phone number or area code I use? I guess along with that, is there some trick to getting people to actually answer the phone? Because I know whenever I get calls from numbers I don't recognize, I let it go to voicemail because I don't know you. And I guess if people do that to me, do I leave them a voicemail? I don't know, just any thoughts on how you best manage that?

Joe: Yeah, so when we're calling, we're calling either with an exact match or more likely a near match area code. So an area code from a nearby county. Best practice, I feel like this is regardless of lead gen source, is to call people back with a code from the state that you're operating in.

The way we kind of get around people ignoring that call—and they will ignore it sometimes—is kind of setting the expectations with the seller when our caller gets off the phone. So, “Hey, you can expect a call within 24 to 48 hours from our local manager who will follow up with you on this.” So they know to expect it. So if they see an unknown number, they might call back again. Why that kind of follow-up as quickly as you can kind of makes sense.

But then the other aspect is just leave a voicemail. I have to do that relatively frequently. It helps when the seller said, hey, I want to be called back at this time on this date, or whatever it may be, because then they're even more so expecting it. But sometimes you're not going to hold them because they're normal people and they're doing normal things. They don't have their phone on them. So just leave a voicemail. You'll get contacted back most of the time. Hey, talk to so and so. We can provide you with the name for your caller if you're a client with us so that you can reference it. You talk to so and So, my assistant. Just call them back with a few more questions about your property to make you an offer on that piece of vacant land we discussed.

Seth: And then if a person just doesn't answer, like ever, how many times should I be calling them back? Is it three and you're done, or do you just do it forever?

Joe: It happens. So I'll typically call them. I'll alternate calls and text if it is a cell phone and on a landline, usually every other day or sometimes every day for about a week to ten days. And then I'll usually just send a final text if it is a cell phone. Or I'll leave a voicemail which goes something like, “Hey, it seems like you're no longer interested in selling your property. I'll stop bothering you.” That will sometimes motivate people into no, I am interested, and they'll get back to you.

But if not, then I just transition them into a drip campaign and I'll follow up with them a couple of months later.

Seth: When you say drip campaign, you mean drip for phone calls, not like some other type of texting or mail or something like that?

Joe: Texting as well. But yeah, typically a phone call. There's a whole list of all right, this week we're following up on these phone calls from six weeks ago. Quickly make a dial, they pick up. Great. Hey, we had discussed buying your property a couple of months back. We lost touch. Or is that something you're still interested in? If they don't answer, then call them back the next month at about the six month mark. I typically just drop them off.

Seth: Now with all these I mean, even if you're just doing cold calling and nothing else, but especially if you're doing cold calling plus texting, plus direct mail, plus email, plus ringless voicemail, all these other things you can do, it seems like the need for a good CRM system of some kind goes up and up and up, because how do you remember what the last conversation was and what the first one was and how that went and when you've called them back and all this stuff? Do you recommend any specific type of system or do you use anything specific that's helpful for you?

Joe: So I use Pebble. I like Pebble. Pebble is a good CRM. Pebble I got because of how optimized it was for mailers back when I mailed, but I don't mail anymore. But it still works well, it has a public form like any good CRM should have, so that my caller on my land caller campaign just fills out the form and it drops it straight into Pebble. Pull it straight into a deal. That's pretty standard for any good CRM.

Airtable? I don't know. Airtable? Airtable is a pretty popular one with like we have a number of clients that have Airtable, but you're absolutely right. I mean, none of our clients that are doing multi-pronged lead gen are doing it without a CRM and doing it without VAs. I don't know how honestly it'd be possible to try to send mail, text, and get cold call leads using Google Sheets and doing it all by yourself.

Theoretically, I guess it is. But they all have VAs, and they all have pretty robust CRMs. But for somebody just starting out or wanting to bootstrap a little bit. We have plenty of clients that we are their only lead gen source, but they're just getting their leads in a Google Sheet, not spending the time working out how to maximize a CRM's efficiency because it works well enough for them.

Seth: We've actually got video tutorials explaining how to use both Pebble and Airtable. So if anybody's out there is like, what? What is this? How does it work? Check out the show notes for this episode. Again, I have got a ton of stuff that's going to be in there, lots of links to these tutorials and different things. So again, retipster.com/168.

So as we wrap this up, I keep coming back to this whole shy introversion thing. People who just really do not like talking to strangers on the phone. And I have an interesting history with this, but for somebody like me, cold calling, I mean, I guess doing that first call especially sounds awful. Luckily, we don't have to do that because of you.

But even the second phone call, whether it's the time commitment or just the discomfort with it, is there any trick to getting past the discomfort? Anything that you go through, it doesn't sound like you had this discomfort. Correct me if I'm wrong, and maybe the question intertwined with this is like, what kind of person should or shouldn't consider using cold calling in the first place? Is there a type of customer? It's like, yeah, you don't even go here, do something else.

Joe: I mean, I think there's definitely an aspect of know thyself and what your kind of strengths and weaknesses are. I would argue a little bit that just the land flipping niche, like making this a full-time business or even a lucrative side hustle very much lends itself to people that are good conversators. Like, even if you're doing direct mail and you're sending blind offers and you're only getting mail back from people that agreed to your offer, like I said, most of the time you're still talking with them on the phone, so you still have to be able to converse professionally.

Part of what's helpful for some people is just a little bit of, it's almost like hype man, or just envisioning how you'd want to appear to the other person before you get on the phone with them. Like when I was active duty Marine Corps and doing this as a side hustle and calling from my Google Voice know, after the kids were in bed. Or like, I'm not like Joe Roberts who's just got started in land flipping, and I don't actually really know what I'm doing yet. I'm the owner of New Life Lands. I'm a professional land investor. We buy and sell lots of land in this space.

Just tell yourself that right before you get on the phone and then act like it. It can be an act. There's actually a very interesting video, go try to find with so Deion Sanders, right. He's all the rage right now for the CU Buffs as their coach. It's fascinating. He did an interview, I think pretty recently of talking about how he's a very introverted or was a very, very introverted, shy person. But he had this goal of being a superstar because he wanted to provide, he's coming from a single mom whom he wanted to provide for. He wanted to give her the things that she had never been able to give him.

And so in college he realized, like, I need to build a persona and the persona is not me, but I can build this persona and then I can just go act out this persona and I'm just acting. It's not me. So I could still be Introverted Deion. But his persona was Prime and really fascinating interview that anybody that kind of struggles with this, I would say go look it up because I thought it's exactly that, build a persona. You're a professional land investor. You own a successful company. You're calling them back because you know the value of their land and you want their land and that will come through in the conversation.

Seth: Actually reminds me of two different actors, James Earl Jones and Samuel L. Jackson. They both struggled with stuttering as children. Like it was like a debilitating stutter. Like it was very, very difficult. But both of them got into acting because it's actually a fairly common thing. I don't know what it is about acting, but when you're reading lines and being somebody else, you don't stutter.

It's also a similar thing. Some singers, I can think of at least a couple singers off top of my head where they stuttered horribly when they would speak. But as soon as they're going to a beat and they're singing, they don't stutter at all. It totally clears up. And it's almost like if you can visualize who you want to be and what you want to be, you can make it happen.

I think I remember hearing I think it was Jack Nicholas, the golfer, where every time he would step up to the ball and take a swing, he would clearly visualize exactly how he wanted to hit it and it would go perfect, like perfect form. It would go exactly where I wanted it to go. And that was like a huge tool that he would use to hit it right every time.

It's probably a similar thing where your behavior and your actions and all this stuff kind of follow your thoughts, so you have to train your thoughts and take every thought captive.

Joe: I learned that flying helicopters in the Marine Corps. Like before I would go on a flight, especially a particularly tough, complicated mission, I would sit down and typically try to do it in a quiet space in a ready room. And just visualize the flight, like visualize the control inputs I would need to make for a particularly tough maneuver or when something was going to happen in the objective area, a particularly complicated portion of the flight. Just visualize it, walk through it. It's not the first time you're seeing it when you're there flying and things are shooting and you're shooting and everything's going on.

So you could apply those same principles to golf, to getting on the phone, to talk to a lead that's in your inbox.

Seth: Did you ever fly a helicopter upside down or anything crazy like that?

Joe: No.

Seth: Is that even possible?

Joe: With some models it is. There's a rumor that it's possible with the Cobra, which is the model I flew. There's a rumor that it's possible with it, but I don't know anybody that's tested it out.

Seth: We haven't done this in a while, but I want to do this because I think we got a little bit of time, and I'm interested to hear these answers. So at the end of some podcast episodes, when we have time, I like to ask three final questions to understand more about our guests and understand how they think and how they work.

So, Joe, first question is, what is your biggest fear?

Joe: My biggest fear is that somebody else controls my ability to take care of my family. That was my entire motivation to get into real estate was some things that happened while I was in the Marine Corps and I realized that this could just all go away at a moment's notice. Whether that's my life or that's my job, but somebody else is controlling whether or not my family is going to be taken care of for the rest of their lives.

So that's my driving motivation, really, with anything I do, is that I'm not dependent on anybody else to provide for my family.

Seth: Yeah, it's interesting. I heard this on some podcast probably like, seven or eight years ago, but a lot of people have this idea that I don't want to have a boss. I want to work for myself. But the reality is, when you work for yourself, you actually have hundreds of bosses. It's just that it's, like, spread out and diversified. And if one of them disappears and fires you, it's okay because you have 99 other ones.

Joe: Yeah, exactly.

Seth: But I hear you, for sure. So what are you most proud of?

Joe: I mean, I'm most proud of my family, my kids, and my wife. And there was some tough years. I was deployed three of my last four years in the Marine Corps. By the time I got out of Marine Corps, I'd been gone for, almost all of my kids, more than half of all their lives. So just how they came through that experience and then my wife standing behind me as I left the safety of a guaranteed pension, a good career, essentially just kind of left it all aside so that I could pursue my real estate companies full time. And then when I have harebrained ideas, like, let's launch another company, call it Landcaller, and see what goes from there, she still stands by me. So I'm probably most proud of the woman my wife is and my kids for sticking with me.

Seth: That's got to be hard, man. Honestly, I can't even imagine that. I don't think I even let myself think about it like being away from your family for that long. I had a cousin who was deployed using the Navy Jag, and he was on a Navy ship for a year and a half on the Pacific, and he said it kind of felt like he was just in prison for that entire time because maybe it's different when you're on a Navy ship. I don't know. But that's tough. So my hat’s off to you.

And I bet being a Marine is that kind of wrapped up in your identity, do you think? Is it sort of part of who you are? Do you kind of look at a lot of life through that lens or not so much?

Joe: I actually like to say that it is not part of my identity and is why I was able to just walk away from it. It was a job that I took seriously, that I tried my best at every day. But ultimately, the people that treat something like the Marine Corps as being one and the same with their identity, they're let down, because when they get out of the Marine Corps, the Marine Corps doesn't care about them anymore. And many of them had left behind broken families. They may not have any faith to ground them to speak of.

And so when that's your identity, what are you left with when that's no longer there? So did the Marine Corps mold and shape me and teach me discipline and critical thinking? All sorts of things? Absolutely. I probably can't even count the ways that my experiences in the Marine Corps and with the people I served with have impacted my life, but it's not part of my identity.

My identity is first and foremost a child of God, a sinner saved by Christ, and then a husband, a father, a brother, a son. Those things are my identity.

Seth: Yeah. That's awesome, man. That's great to hear.

So, last question. Suppose you just got $100 million wired to your bank account, and you're not allowed to stay on your current career path. So no more land, no more cold calling, none of that stuff. You got to hit the reset button and do something else, but you can do anything else you want for the rest of your life. What are you going to do?

Joe: So no real estate at all or just no land?

Seth: Let's go extreme. Let's say no real estate.

Joe: All right, so I would probably start a and there's a little bit of real estate involved in this, but it's not the main part. So I think you can forgive me, but I would like to start like a company which finds big pieces of real estate in great areas. But what it does is it develops them out to train first responders, military, and that sort of thing in unique ways that they may not be able to otherwise.

So, for instance, in the Marine Corps bases it's very difficult to get ranges, get training areas. There's so many units and everybody's fighting for the same little piece of ground on the base. It's the same similar thing with EMS, police forces, and that sort of thing to get a big cool piece of real estatem maybe has the lake on it, it's got a mountain, it's know, backs up the national forest and then you can set up all sorts of good training for various first responders in the military.

I think that'd be something that would kind of pull from different aspects of my life. I've got a brother who's a SWAT officer who would probably be all about coming in and doing training and that sort of thing. And then I would also offer courses in survival, like wilderness survival. That's a big passion of mine. I did a lot of wilderness survival courses in the Marine Corps, all over the world, north of the Arctic Circle, in the desert. So I really enjoy that. And it would be fun to just have a wilderness survival kind of compound or big piece of land that people could come to and learn wilderness survival skills.

Seth: You ever seen that show Alone?

Joe: I love it. That's a great show. It's probably the best survival show out there.

Seth: How long do you think you would last in that situation?

Joe: I think I would last pretty long.

Seth: Of course.

Joe: Definitely when I was deploying all the time. And you have to have a mindset when you're leaving your family, especially when you're going into a combat zone where you have to be able to flip a switch from missing them, right? Because if you're missing them and you're not focused on your job, especially in your place where people are trying to kill you, then you probably don't come back alive.

So I'm sure you've watched Alone. You see the mental aspect is a big part for most of them. And they don't know that switch. They don't have that switch. So I think I would last quite a long time.

Seth: It is fascinating. You're absolutely right. I mean, so much of it is in your head. I mean, sometimes people have to leave the show because they're sick or physically they're totally worn down. But I feel like more often than not, they just miss their family or they discover themselves and realize this isn't actually what I want, and all this stuff. It's a fascinating show, just psychologically seeing what it's like to go through that.

And it's also interesting to me, I don't think they ever point this out on the show, but I keep thinking, like, what if it wasn't a single person on their own, but what if, like, two people could survive together? Because then you can start specializing. And it kind of goes back to this idea that two are better than one and three are even better. It's this idea that as soon as people can support each other, keep each other warm, one person can be like, okay, I'm going to look for food, you build the shelter. But when it's one person, they have to do it all on their own. It's like it's really, really hard and it's very difficult to survive in that scenario.

Joe: Absolutely.

Seth: Joe, thank you again for doing another conversation with me. I say another because we already did another one for the Land Elite Masterclass, but both of them were fascinating. I learned a ton. I hope people listen to this, learned a lot as well. You're a great guy. It's great to know you.

And again, if people want to find out more about Joe, where do they go? Landcaller.com, is that the website?

Joe: Yeah, Landcaller.com that will have just kind of information about the company. I'm not very active on most social media. I don't have most of it, but I am pretty active on X, formerly known as Twitter. So if you want to give me a follow on there, I post not just about land and cold calling. You'll also get my thoughts on military matters and geopolitics sometimes, but I do post a good fair amount on land investing and cold calling for land investors.

So @joethelandguy is my X handle.

Seth: And I will include that in the show notes as well. Well, thanks again, Joe. Thanks everybody for watching. Again, I've said this several times, but it's because there's out there. Go to retipster.com/168.

I can't think of a recent show in recent memory where we had this much stuff in the show notes, so definitely check that out. I think you'll find it interesting, and I'll talk to you again in the next episode.

Joe: Thanks, Seth.