Category: No Money Down Deals

 

Mark & I Discuss How to Flip Land Deals with No Money Down:

• How to Profit from the Current Bubble in Land
• Where the Best Land Deals are Located
• Finding the Best Buyer for Any Land Deal
• Knowing Which Land Deals Have Little Competition

 

How to Invest in Land with No Money Down—Podcast Episode Highlights

Mark Podolsky, aka The Land Geek, has been buying and selling land for more than 20 years. In this episode, Mark & I discuss how to invest in land–specifically how to buy land with no money down. His specialty is buying vacant land very cheap—in the $5,000-$20,000 range, closing using quit claim deeds, and then reselling to buyers on terms at nice profit spreads and strong interest rates.

In other words, buy a parcel of land for $5,000, close, then resell immediately for $20,000. The trick is the terms-to that same buyer, Mark would collect $5,000 down and accept payments of around $200 until paid in full. Oh, he also charges interest on the $15,000 balance, so there is some additional profit in the deal long term as the payments roll in.

Mark uses direct mail & software to fire off automatic offers in bulk, allowing the seller to simply sign the agreement should they accept the offer. Using his system, which he shares with his students, he’s been able to build a substantial passive income while systematizing the business to run on near automation. Mark’s goal is to do a deal per day—or somewhere around 200-300 deals per year.

Buying Raw Land is Only a Good Real Estate Investment Strategy When

The way I see it, there are really only two ways that land investors make money. The first would be to buy land at a low price and then sell it at a higher price at some point in the future. This is Mark’s strategy, as we discuss in depth during the episode. The second way to profit from raw land is to buy the plot of land and then develop the land to increase value—build a house, rezone, or maybe construct a commercial property. This podcast does NOT focus on development; however, we have had many commercial real estate developers on the show.

How To Profit from the Current Land Bubble

Covid has superheated the land market. People have been racing to buy land as outdoor recreation, safely away from any virus danger, has become very popular in 2020. What better place to camp, ride dirt bikes, or have an RV than on your own land. There is something seductive about owning land, it always has been.

Mark’s buying and selling of land, the strategy of leaving no money in the deal long term—is the perfect way to profit from the current land market. It’s all about velocity: buy & sell as quickly as you can. In my own experience flipping houses, the good deals are those that profit. The best deals are those that profit and close quickly! The less time you actually own the land between the purchase and sale, the lower your risk of losing money or other liability.

You Gotta Avoid the Land Losers…

Some land is simply worthless. Areas such as Pennsylvania & New Jersey are often laden with environmental clean-up sites. Old industrial properties with EPA superfund sites could place the unsuspecting buyer into a huge financial responsibility. You can do quick due diligence on a potential land deal at EPA.gov

Another issue which could make land worthless is no road access. Think about it-you’ve gotta be able to get to the land you bought without encroaching on someone else’s land. I’ve personally passed on a large number of very cheap land deals because there was no access road.

If you were focused on the land that you were going to build, you’d also need to be aware of flood zones, but the deals Mark and I discuss aren’t really affected by flood zones. Most of the buyers are using the land for recreation, not development.

Cash Flow from Land Deals

The big takeaway here for Real Estate Investors is that you can take a small amount of seed capital and build your cashflow up to $100,000 or more per year in a short time. Mark has students who have done this in as little as 18 months. And Mark sees no end to this trend—with 2.43 billion acres in the U.S., there will be no shortage of land deals anytime soon.

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Watch the episode here

 

Listen to the podcast here

 

How To Buy Land With No Money Down With Mark Podolsky

This is episode 176 on how to invest in land in 2021 with no money down. If you’re into building wealth through real estate investing, you are in the right place. My goal is to invite high-caliber real estate investors and other industry service providers onto the show and then draw out the jewels of wisdom, those tactics, mindsets, and methods used to create millions of dollars and more in the business of real estate.

Our guest has been here before. You will remember Mark Podolsky, a.k.a. The Land Geek. Mark focuses on high-volume, low-cost land flipping, with a focus on using those deals to generate long-term passive cashflow, putting himself in a better situation with taxes. As you’re probably already aware, the US land market has been heating up over the past few years, with COVID only serving to supercharge the market as people flock to places where they can have more distance from other people. Mark and I discuss this trend, as well as a few recent deals, including a development expected to generate more than a million-dollar profit.

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Mark, how have you been?

Pulse is normal. Respiration is fine. I’m so glad to talk with you again. Thanks for having me back.

I love having high-quality guests come back on the show a second time because it gives us this different timestamp perspective for the curious audience. I will include the 2018 recording that Mark and I did in the show notes, but you can go back to then and then come to now. It’s so revealing to pay attention to trends in real estate. The more that you are comfortable with the trends, the better your long-term investing strategy is, and probably the way you run your business and maybe even life in general, when you’re paying attention and on top of the trends.

The Land Geek’s Business Journey And Growth

These revisiting episodes, Mark, that we’re getting ready to dive into, provide that perspective of how things evolve and change over time. I know in the last one we probably did something similar, but I would like to begin again with the Land Geek creation story. What your business looks like, and how did you get here, Mark?

The way I got here, rewind the tape, it’s been twenty years now, Dan. I was a miserable, micromanaged, 45-minute commute-to-work-and-back investment banker, specializing in mergers and acquisitions with private equity groups. I hated it so much that I wouldn’t get Sunday blues anticipating Monday coming around. I’d get the Friday blues, anticipating the weekend going by fast and having to get back to work on Monday. My firm hires this guy.

He’s telling you that it’s a side hustle. He’s buying up raw land, pennies on the dollar, and he’s flipping them online, and he’s making a 300% return on his investment. I’m looking at companies all day long, and a great company has 15% EBITDA margins or free cashflow. Your average company is at 10%, and I’m looking at companies all day long for less than 10%. I don’t believe him. I’ve got $3,000 saved up for car repairs.

I go to New Mexico with him. I do exactly what he says to do. I buy 10.5-acre parcels, an average price of $300 each. I flip them online, and they all sell for an average price of $1,200 each. It works. I went to another auction where I live in Arizona. Again, there’s $2,000, there’s no one in the room, and I’m buying up lots and acres for nothing. I sold all that property over the next six months, and I made over $90,000 cash.

I go to my wife, and she’s pregnant at the time. I said, “Honey, I’m going to quit my job to become a full-time land investor.” She’s like, “Absolutely not.” I said, “Okay, it’s fine.” It took me about a total of eighteen months for the land investing income to exceed the investment banking income, and then I quit. I’ve been doing it full-time ever since. I’ve done over 6,000 transactions to date, and I love it.

For business now and over the last couple of years, you started getting a little heavier into some software programs. Is that right, Mark?

Yeah. The philosophy is we can always make more money. Solving money problems isn’t that hard, but solving money and time problems is the holy grail. That’s why we’re doing all this, to create this passive income. To do 6,000 transactions or do that volume, it’s a business. Anything that we can do to automate, I want to do it. I want to use three leverage points in my business, which are other people’s time, other people’s money, and software. The software that we’ve developed now has evolved so much since the last time we spoke. It’s unbelievable, literally saving thousands of hours.

 

We can always make more money, so stopping money problems isn’t that hard. However, solving both money and time problems–that’s the holy grail.

 

Finding Undeveloped And Off-Market Land Deals

Why don’t we start a little bit of the land conversation here? It’s 2020 now. It’s been 2 or 3 years or so. How do you find undeveloped lots and undeveloped land for sale? Maybe a better question is how do you find off-market land, which you can buy for a good price?

What we’re going to do is we’re going to go to these counties where we know there’s inexpensive land. There are 3,007 US counties. Where do you go first? Let’s face it, nobody wakes up and makes themselves some raw land in Iowa unless you live in Iowa. We’re going to focus on California, Nevada, Arizona, New Mexico, Colorado, Oregon, Washington, Florida, these fast-growing states, the sunshine states.

We’re going to go about an hour to three hours outside of a major city. We’re going to get a list from that county. What we’re going to do is we’re going to price that list. I don’t want to be in the appraisal business. I don’t want to send out a blind offer, “Sam, I’m interested in buying your land,” because the next thing you know, now I’m in a negotiation like, “I’m interested in selling my land.”

We’re going back and forth. It’s not an efficient use of time. Essentially, what we want to do is price the list. All I’m going to do is take the comparable sales for the last 12 to 18 months of that raw land. I’m going to take the lowest comparable sale and divide it by four. That’s going to get me a 300% margin of safety.

From there, I’m going to take that list. I’m going to load it into my software. It’s going to automatically send out offers at $0.65 a letter, with address verification automatically, first-class mail. It’s amazing. That’s how we want to get that deal flow rolling, by sending out actual offers. We’re looking for a 3% to 5% response rate. If it’s under 3%, I know I priced probably a little too low for the current market. If it’s over 5%, I probably need to renegotiate and retrade, because I probably got in too high. Does that make sense?

It makes sense. The savings in time. Are these DocuSign, or they will sign off on a physical 2 or 3-page agreement of sale that you’re sending off? How does that work? They now reply to that and engage by accepting the offer, I imagine.

They can mail back the offer, but it’s not through DocuSign. They can do it like a QR code and go to a little landing page and accept the offer. We make it as easy for them as possible, depending on how technically literate they are. They can even call or fax to accept the offer.

Let’s play it out a little bit further down. They accept the offer. What’s the next step? How long are we under contract with them? When are they expecting me to show up with a bundle of cash for their land, or however I promise to pay for that? What are your next steps as far as maybe selling or doing some due diligence about whether the land’s worth anything or not?

Our intake manager will take it from there, and they will contact the seller and say, “We got your back, you accepted the offer. This is the next step. We’re going to close in as fast as possible, about seven days.” The actual offer letter we give ourselves is about 30 days before we close it. We want to under-promise and over-deliver. We’re going to do our due diligence. I’m going to get back to you, seven days are left, and we’re going to close this transaction.

During that time, the intake manager will pass that off to our due diligence team, which if it’s $5,000 or less, we’re going to outsource it to our team in the Philippines. They’re connected to an American title company, and they’re going to fill out everything we need to know. We want to make sure there are no breaks in the chain of title, no liens or encumbrances, they still own the property, and that the back taxes aren’t too high, that it’s not going to destroy the margin on our deal. We want to know what’s compelling about the property. We want to get plat maps, GIS maps, aerial maps.

We want photos around there, video if we can get it, and give them a whole property checklist. Once everything checks out in due diligence, the intake manager again will contact that seller and say, “We’re going to go ahead and send you a deed. You’re going to print it, sign it, notarize it, and send it back to us.” That’s if it’s $5,000 or less, which is closed directly. If it’s $5,000 or more, we’re going to close through a title company. Once we own that property, this is where the magic happens, because we’re going to sell that property in 30 days or less and make it cashflow. I don’t want to go too far in, Dan, without hearing your voice.

I appreciate the break there. That’s interesting, it’s $5,000 or less, it’s like we’re still checking the title to make sure things are clean, but we’re not having to pay the $400 or $500 or so extra to get the title insurance added on there. I’m curious, have you ever got in trouble, like you sold it for let’s say $15,000, $20,000, whatever you ended up getting for it, and then a title issue did come back to bite you on one of these $5,000 deeds?

I’ve never had an issue. It’s not like housing, where we’re talking real money, $100,000 or more, or even $50,000 or more, super small house or whatever it is. These are small deals. They don’t change hands a lot. It’s rural land. The biggest thing you have to worry about on the due diligence piece is that can’t be cured, even an IRS lien can be cured in 90 days, the biggest thing is going to be, is there an environmental issue?

We’re not going to places like Pennsylvania or New Jersey, where there’s a lot of manufacturing, or maybe even Ohio and a chemical company could have spilled out there. You’ve got a Superfund site. What you would do essentially, to make sure you’re not in a Superfund site, and our team does this on all the properties, is go to EPA.gov and make sure that you’re not buying in a Superfund site. It is because then you’re talking about millions of dollars of cleanup that you could be liable for.

You might buy it for $5,000, and you sign a deed, and you could be on the hook, and they could come after you personally, for an unfathomable amount of money. Not good.

That’s why you have to make sure you’re not buying in those areas. I’ve been doing this for twenty years, and I’ve never had that issue, but we still check it.

Evaluating Land Size And Potential Uses

Makes sense. Let’s frame the piece of land itself. This is a three-hour drive from whatever it is, the bigger city there. I imagine there’s not a whole lot out there. What’s the size of the lot? What is the purpose that this potential buyer, we’re getting ready to touch on, what are they going to do with the land, Mark? Why is this valuable?

There’s a lust for land in this country that most of us don’t realize. I’d say that the majority of our buyers are what I call legacy investors. They want to own property. The fact that they can afford it, because if they’re looking around their own city, it might be unaffordable for them, but we make it like a car payment. We make it irresistible for them. They might go out there, they might camp or hunt or fish, but it’s the only asset that lasts. It’s this generational investment. They should have heard growing up, “Own land.” I’ve never been stuck with a piece of raw land. It’s crazy. They all sell. There’s a pig for every barn.

 

There’s a lust for land in this country that most people don’t realize.

 

It sounds strange to me. We have done 247 houses so far this year. I am stuck with 1 or 2 of them, only because I’m not willing to come down on my price much more. There’s this pain of reducing the price. I know I’m not losing profit, we’re losing real money we already have in on these houses by lowering the price. I am stuck with them, but I’m not because we’ll eventually sell them. One of my operating philosophies is to do a huge high volume of deals. It is because if there are some losers, and a lot of times there will be a loser here or there, at least in my experience, I make some mistakes by doing a high volume of deals.

In a high volume of deals, like a stock portfolio, there are more winners than there are losers. It all averages out at the end of the day. It sounds very strange to me when you say, “There’s a buyer for this place.” I’m in Illinois. I’m in Chicago. I live right here on the lake in the middle of Chicago in the city. Three hours south into the bottom of Illinois, where it’s like farmland or something like that. Who’s going to do anything with it? I don’t even know anyone who would want to. Campground stuff and hunting and fishing, I guess that does make sense when you say that. How do you find these buyers?

We’re going to market first to the neighbors. We send out a neighbor letter, and we’re going to say to them, “Here’s your opportunity. Protect your views, protect your privacy, know your neighbor.” Oftentimes, the neighbors will end up buying. This is like this built-in best buyer and this advantage that we have. If the neighbors pass, we’ll go to our buyers’ list. These are people who have already indicated an interest by either saying they’re interested in raw land or buying raw land from us in the past. Oftentimes, they’ll buy.

If the buyers’ list passes, then we’ll start marketing on Craigslist, it’s the tenth most trafficked website in the United States. We’ll go to Facebook buy/sell groups and Marketplace, and then we’ll go to the lands, Landmodo.com, LandAndFarm.com, LANDFLIP.com, LandHub.com, and LandsOfAmerica.com. These land platforms are where people buy and sell raw land every single day.

Is there a process for building a land buyers list? Do you have one for South Dakota and one for Colorado and one for this state? Is it going to be the same flock of buyers that somehow has this land list no matter what remote location it exists?

I think they’re location-agnostic for the most part. They want to own raw land. Even if they’re located in New York City, Nevada, or Arizona, they don’t care. The desert’s the desert to them. They want to go to a cool place that is outside the city. We’re marketing to them. We’re not doing a whole lot of segmentation. Once in a while, when we email our buyers list, I’ll get an email back saying, “Do you have anything in Texas?” In that case, we’re like, we do. We’ll send them the listing. We’re not letting our buyers dictate where we’re buying. We want to buy the property for $0.25 or $0.30 on the dollar. We’re making our money on the buy. We know we’ll sell it.

Understanding Land Deal Structures

It boggles my mind that there are land hoarders in this country like this, enough to build an entire business. It’s pretty cool. Can you talk about the deal structure a little bit? You mentioned selling to them on car payments but paying $5,000. How does that math work on a $5,000 deal?

Let’s take a deal that I did in West Texas. We sold it for $20,000. I believe it was $249 down, $249 a month, and 0% interest, and we paid $4,000 for it. Our annual yield on that deal was over 60%.

Are they land contracts? Are you doing a deed of trust? Does it unwind quickly?

No cost of foreclosure. We only do land contracts. We use a software program called GeekPay.io, and it’s a set-and-forget-it system. We’ll get the down payment via credit card, and then we’ll get their checking account information, routing number, and account number, one time, and then the system will draw from their checking account each month.

Let’s say that they don’t have any money in their checking account for that month and it bounces. We can use the credit card as a backup as well. It lowers our default rate on those types of deals. If their credit card bounces and their checking account bounces, then they’ve got 30 days to cure the default, and if they don’t, we keep the down payment, we keep all the monthly payments, and we resell the property. It increases our ROI in that situation.

Is there any risk when you’re owning this land in the land contract that you would have to keep property insurance on the land? I don’t know, if someone crashes a dirt bike on there and you’ve got a land contract, who would be liable for something like that?

That’s a great question. In reality, it hasn’t happened to me yet, knock on wood. The way that we protect ourselves, and the way I recommend people to do that is if they’re homeowners, they need an umbrella policy on top of their homeowner’s insurance. Typically, that’s the reason that we have an LLC, to limit liability. They can sue the company. You have this umbrella policy. When we’re doing the volume that we’re doing, to insure every single piece of land would take too long and be too costly for a commercial policy.

As long as a black swan event doesn’t occur, it’s okay.

So far it hasn’t. I remember years ago, they were out in Nevada, and they’re out 30 minutes from town. It’s rural Nevada. They’re looking at their land, and they’re telling this harrowing story, that they went off-road, and the car got a flat tire. They barely had any water. They thought they were going to die out there. The whole time I’m waiting for them to say, “I want a refund.” They’re like, “We loved it. We want the adjoining land.” That was a great adventure, this great story. They almost died, but they loved the land.

Put a spare tire and make sure you have the jack in the car next time. What type of inventory is involved in the business? I know you do this where you teach people the business, and you have the students running their business, I believe, separately. What type of inventory do you have now for sale, to give an idea of the numbers and volume it takes to be successful at doing what you’re doing?

I’m probably a little bit of an outlier because I’ve been doing it so long, and we’ve got this machine built. At any one time, I’m going to have 100 to 200 properties in inventory. We try to do a deal a day, that’s going to be our type of volume. I would say that for our students, for them to get to let’s say $10,000 a month in passive income in twelve months, they’re going to need to do about eight deals a month to get to that number. It’s not a tremendous amount of volume, but that should do it. To get to about $5,000 a month in passive, you need to do about 22 deals that average about $200 a month.

What kind of monetary and time commitment do you think would attach to each one of those two numbers?

We tell our clients that they need to budget an hour to a day of focused time in the business. The whole idea is to make it a business. A business is going to outlive you and me. They should be able to travel around the world, and this passive income machine should continue churning it out. To start building that infrastructure, hiring the virtual assistants, getting the teams in place, and the software, takes some time. Maybe about a year-long learning curve. That second year, it goes up from there.

 

A business should outlive us. The goal is to build a passive income machine.

 

That doesn’t sound too crazy. I spend a lot of time in my business, but I imagine that 1 to 2 hours. We say 1 to 2 hours, and it probably sounds like not a lot. In reality, for a lot of people to have 1 to 2 solid hours of doing something they have not been doing forever, it’s hard work. You have to push and use the force of will because it’s not something you’re used to doing. You’re setting up these VA relationships and stuff. It can be a challenge if you haven’t done that stuff already. It is no small thing, but it is a small-time commitment.

It’s a simple model, but it isn’t easy. If it were easy, everybody would be doing it.

What about cash marketing-wise? You had to use 3,000 deals, and you bought ten lots, and then you sold them off. What kind of a cash reserve would you have, and what kind of a monthly budget would you also have to have to get to the $5,000 to $10,000 per month coming in?

It depends on how you structure it. If you’re doing cash deals and you’re flipping at 300%, you can start with $1,000 or less, and it’ll move the needle because you build up your cash reserves real quick through cash sales. When you start doing terms, you’ll run out of money at some point because your capital recovery might be 6 to 12 months before you get your capital out.

At that point, we tell people, you’re making 300% to 1,000% ROI. If your yield is 70%, it is irrelevant to what you borrow. Get as much money as you can get at 2%, 3%, 5%. There are so many friends and family that are making 0% of their money. Do them a favor. Do a debt deal with them. Pay them back quarterly at 10%. They’ll be super happy. You’ll be happy. That’s how you scale your business to the next level.

As you talk about it, I’m single-family real estate, small multifamily stuff, 2, 3, 4-flats. That’s our specialty. The barrier to entry is high. You’re talking $50,000, $60,000, $80,000 by the time you buy a house and renovate it on the very low end, whether we’re talking Atlanta, Philadelphia, or Chicago, where I operate my business. It’s hard to find a $30,000 to $40,000 house and then put $50,000 to $60,000 in it, especially with some of the risks that come with some of those neighborhoods that are $30,000 to $40,000.

The real barrier to entry for a lot of investors in these three markets for us in single-family and residential, and I imagine throughout the United States as well, is probably more like $150,000 to $200,000. I funded a deal through one of my private lenders, and we paid 10% and 2 points to our money network. People go to FundRehabDeals.com. They sign up.

We send out our private mortgage investment opportunities. For someone to participate there and fund one of our deals, they have to be an accredited investor, and they have to have the $200,000 that we needed, and it’s got to be in a position where it does not have to be liquefied and returned to them until we’re done with the deal, which could be 3 or 6 months. We might hit some snags, and it’s all of a sudden 9, 10, 11, 12 months.

They’re earning interest the entire time, but the illiquid and larger amounts of cash keep a lot of people from being able to play the game. As you’re talking about your thing, if this was my brother that came to me, or my dad was going to do this business, or vice versa, I know that my dad would have been in a much better position years ago if I was starting this business to hand me $10,000, which could be leveraged into  1 or 2 deals, it sounds like.

Maybe I get lucky and I get three deals if I’m getting into the land business, versus my dad was in no position to hand me $200,000 fifteen years ago when I started in the business. The barrier to entry-wise, I’m out on a limb because I don’t know your business, feels like you can do this with a much smaller pool of seed capital in the beginning. We get momentum and velocity and build it up. Is that correct?

You’re 100% correct. We’ve got people that have started with $800. I started with $3,000. It’s a very low capital cost to get started.

Land Market Trends And Pricing Over Time

Since 2018, when we first did our episode there, how has the land market in the United States changed since that time? Has pricing started to get a little higher? Has the market got more competitive? Have things stayed relatively flat and it’s been the same operating business? If it’s not 2018, maybe we go back to 2010 and you give a price comparison of what the trend or the trajectory might look like going forward.

It’s been a very weird two years, where 2019 was good equilibrium. It was easy to buy, and it was easy to sell. 2020, with COVID, we could not keep anything in inventory. It was like we went back to 2006. When the government does a stimulus and there’s all these dollars going into the economy, where do people go then for inflation hedges? They go to gold, silver, and land. It was insane this year as far as selling land. As fast as we bought it, we would sell it. As a result, prices have gone up this year. The ratio has gone up as well. I’d say it’s been a little harder to buy, but easy to sell. As we go into 2021, I don’t know how it’s going to be. We’re due for a recession. I’d like to think that there’d be some dip, but I don’t know. The market is hot.

It’s what I expected. Are prices increasing? Are you seeing more people paying cash, or are you selling them the same way on terms, and the balance of cash deals versus terms deals is equal through 2018, 2019, and 2020? Have you started to see maybe a weighting toward cash buyers suddenly in the market? They’re outcompeting, the terms buyers are getting squeezed a little bit.

Terms are always easy because you make a car payment. I’d say that we probably do 90% terms deals and 10% cash deals. The only reason we ever do a cash deal is because they insist on it, or they pay off their note early. We don’t want the cash. We want the cashflow.

Is some of that wanting the cashflow having to do with your overall tax strategy, or is it the higher price and the person paying cash wants a better deal? What’s that all about?

The person paying cash, they don’t want the debt. They want to own the property. They want the deed. Sometimes it might be cultural. If you have somebody from China, they want to pay cash for everything. They don’t believe in debt at all for the most part.

Why Teach Land Investing And Its Potential

What questions have I neglected to ask that you feel like the audience would love to know the answer to?

I don’t know. I think I would want to know why it’s so great. Why is Mark teaching this and telling everybody about it? That I’d want to know if I were the audience. What do you think, Dan? I think the answer to that is that the market is massive. I remember my wife and I were having this conversation. She’s like, “This is years ago. You’re going to teach people how to do what you’re doing. You’re going to create your own competition.” I put on my investment banker hat. I said, “You might be right. Let’s see how big the market is.”

When you analyze the billions of acres in this country and how few people are doing this business, because if you go to a meeting and there are 100 people in that room, you and I would be the only land guys. Ninety-nine of them are going to be house flippers, wholesalers, or landlords. It is because if you go on HGTV or the DIY network, you’ll never see a show called Flip This Land.

The before picture is raw land. The after picture is raw land. It’s the most boring niche there is. All we’re doing is shuffling paper and making money. Ever since I’ve been doing this, my investment company has only grown. Our clients’ businesses have grown. There is no competition when you look at the size of the market. There’s no big money in it. There are no private equity groups and no hedge funds.

Are most of the deals in this price point that we played out for all of our examples, or are there examples that you have that are not necessarily outliers, but where the deals are made in $60,000, $80,000, $100,000 pieces of land, or is that maybe what’s reserved for the private equity and the big money, the larger-priced parcels of land?

That’s going to be too small for them too. Let’s pick on some of the bigger landowners. They’re billionaires. Jeff Bezos and Warren Buffett. They’re buying productive farmland or timberland, and they’re making 8% of their money. They’re very happy with that 8%. It’s a very steady bond if you will. They’ll get some appreciation for it. If you’re a billionaire, you’re Ted Turner, you’re buying cattle, ranches, and that type of property. You’re not even playing in our little niche. It is because at some point, then it’s too much volume. If you’re a private equity group, you can’t even manage it. It’s too much money in one place.

It makes sense. Are you guys playing mostly it’s $20,000 deals all the way across, or are there any pricier deals than that that come through this niche?

For me, if I can deploy a couple of hundred grand on a deal and subdivide it, that’s a nice big deal. We’re not talking real money here. We’re doing a development deal. We’re buying 15 acres of 1,000 acres. After we subdivide it, we’re going to flip it for $5,000 an acre on easy terms. We’ll have all our money out in three years. We’re going to make $1 million on that one deal.

Nice. Where is that type of property located? Are those going to be one-acre lots that are buildable or are these going to be one-acre campsites like some of the other ones we talked about earlier?

Those will be buildable lots. We’re going to put roads and infrastructure in as well. Those will be a little bit more like a development-type deal. There are no restrictions. If someone wants to camp out there, they can. The end buyer is most likely going to want to eventually do something with it.

That makes sense. Do those lots have water, or are they going to be by well? Are you guys putting in pipes?

No, that would be by well.

That’s interesting. Nice. Congratulations. Sounds like a good deal.

That’s all we do, Dan. Good deals. Just like you. We don’t do bad deals.

I’ve done a couple of bad ones. I’ve done a couple of record-breaking bad ones. It’s the nature of the beast for me, I think. We do enough deals, but hopefully more good ones than bad ones. We do a whole lot of good deals. Some of them, we talk about our winners usually, I’m sure, in public. I’ve had some losers too. We’ll leave it at that.

I did a deal. It was a bad deal. We screwed up on the due diligence and had POA fees. We were buying these things for $50 a lot. We missed the due diligence. They owed $3,000 a lot in POA fees. We’re like, “This is terrible. We’re going to lose money on it.” I’m like, “Screw it. Don’t pay the property taxes. What we’ll do is we’ll let it go to auction and we’ll apply for the overage.” We did that. We didn’t pay the taxes because once it goes to a tax sale, it wipes out that POA lien. We made $8,000 on the deal, on the overage. It was pretty great. Even when we make a mistake, there’s a way to salvage it.

 

Even when we make a mistake, there’s a way to salvage it.

 

It sounds like you’re lucky there on that one. The POA, what does that stand for?

That’s a Property Owner’s Association.

Could they have, in theory, gone and applied for the overage and then got it in front of you as the owner, but they neglected to do that in that case?

I guess in theory. They don’t want to own the land. They want their fees.

It makes sense.

They know about it. The overage situation is not that well known. It is because it’s not like the county wants to keep the money. They don’t want to tell anybody.

Top Book Recommendations From Mark Podolsky

You’re right about that. What books have you recommended lately? Are there two books, real estate or otherwise, that you find yourself recommending most often?

The two most recommended books are the combination of The ONE Thing by Gary Keller and The 12 Week Year by Brian Moran. Those two books combined are magical. I always recommend those two books. A shameless plug, my own book is Dirt Rich. I think it’s pretty good, Dan. I’m working on a sequel to that. I don’t know if I’m going to call it Dirtier and Richer: How to Scale Your Land Business. That one I’m working on. If you’ve ever written a book, it’s miserable. I don’t recommend it.

I have only one.

I must hate myself, but I’m trying again.

Mark’s Ultimate Wisdom For Success

That’s cool. It can be fun to think through all the thoughts and put it all together. Mark, I ask all my readers this, and I know that we probably asked you that in 2018. We’ll probably go back and figure out if the answer was the same. This is the REI Diamond Show. It’s all about the jewels of wisdom. That said, let’s talk about the crown jewel of wisdom. Is there one thing you’d share with your younger self or maybe one thing you wish you knew then that you know now?

I wonder if I said this two years ago. I wish I knew how to meditate when I was younger and experience everything arising and not getting identified with good and bad thoughts. That would be like a superpower if I had done that when I was younger, for sure.

 

Meditation is experiencing everything arising without identification. Good and bad thoughts become just that – thoughts. That’s a superpower.

 

I assume you’re doing this on a regular, maybe daily basis?

I do it on a daily basis. Years now. It’s 5 or 6 years, and I love it. The best part of my day is this hour I spent with myself, literally doing nothing except watching my mind play out some dramas and then getting back to the moment. You realize, holy cow, there’s nothing out there that’s going to make you happy. It’s all internal. It’s a weird experience when you experience it. It takes a while to get enough mindfulness to get there.

It makes sense. I am an avid fan of Bulletproof Radio, which is Dave Asprey. This guy’s going to live to 180 years, and he puts a show out and has a brand. The supplements used to be on the anti-aging something in Silicon Valley. Anyway, on his show, he had a guest and he has a lot of guests who are doctors and this and that. It’s all about anti-aging.

The doctor would take patients who are experiencing things like anger issues, things like depression long term, people who have issues sleeping, anxiety attacks, and panic attacks, and they would use this alternative treatment plan where they would put them in the MRI machine, I believe, and they would check out there. It may be a different type of brain scan they use, but they look at the brain and they would find these dead spots. What their conclusion eventually came to be is a lot of times people have these brain traumas from childhood.

You fell off a bike, you fell out of a tree, you played hockey, you played football, you got hit with a baseball, you got in a car accident, you tripped and fell. They found that the brain needed these different protocols to redevelop connections to be able to use these neural networks fully and completely. A couple of the small little things this doctor said that you would have almost all patients do were fish oil pills twice a day and adjustments to the diet, maybe adding more fish in there, avoiding gluten in the bread, and the sugars.

The one thing and this is why I bring up this long-winded tangent, the one thing that they also included was a twenty-minute meditation in the morning and a twenty-minute meditation at nighttime. I started doing that at least a year, maybe a year and a half ago. I do it with the Muse meditation device, which gives you feedback on your app to see if you’re “doing it right” because you have your actual, not scientific feedback, but it is some way to get feedback to see what is going on in your mind.

It has been one wonderful year and a half. The same thing you’re talking about, this level of happiness, well-being, the calmness, my sleep is better. That was a long-winded plug-and-bow to the meditation thing. It’s been as equally life-changing for me as it sounds like it’s been for you. That’s pretty cool.

Do you do Bulletproof coffee?

I was doing Bulletproof coffee every day, and I think I screwed up by doing it every day. It’s now maybe once a week or less. It was giving me this indigestion by doing it every day. How about you?

I love coffee and I’ve been drinking coffee for fifteen years, daily. I became like a coffee snob. I would spend an hour in the morning drinking coffee and doing this whole ritual. I was like, “What would life be like without coffee?” I think it’s been like a month now. I have to tell you, I’m sleeping like a teenager now compared to when I was drinking coffee. I was substituting that time now to meditate. It is because I used to meditate for twenty minutes, so now I meditate for an hour. It’s great. I’m not missing it. At least not yet, but I did the whole drink coffee thing too.

You probably won’t at this point.

I don’t think I will. It’s social, you’re that person now. “You don’t drink coffee?”

Fair enough. Mark, how can our audience get some more information about you or The Land Geek or maybe even the software that we were talking about earlier?

The best place to start is TheLandGeek.com. I don’t think we had this two years ago, but I created a whole-tailing course on how to double your money in 30 days or less. It’s normally $97, but I’d love to offer your readers it for free. They go to TheLandGeek.com/QuickDeals. They can get that course and see if this is a niche that resonates with them.

I appreciate you taking the time out. I got a couple of pages of notes. Great conversation. Great follow-up here. It’s interesting to see the US land market in these tertiary areas developing and heating up here per your feedback there. I appreciate it, Mark. Thank you for coming to the show.

Dan, thank you so much for having me again. I appreciate it.

—

My favorite way to fund a fix-and-flip deal is by using private money. I did an episode on raising private money for single-family flips a little while back, detailing my entire process with Joe Fairless, as a matter of fact, which you can find at REIDiamonds.com by typing raising private money into the search bar. What if you don’t have access to private lenders and need money to get started? Everyone usually talks about hard money. That’s great as long as you have some reserves or a nice chunk of cash in the bank to show the hard money lender to get the loan. They like to loan money to people who already have a little bit of money, at least to be able to cover the payments and any other ancillary construction items that may come up.

One little-known and little-talked-about option is gap funding. Gap funding is a line of credit used to access the funds needed for reserves and business startup costs. There’s no restriction on how you use the funds. It’s called gap funding because it’s used to fill in the gap. The team over at REI Pathway Funding can set you up with a gap funding line of credit, which has an initial interest rate of 0%. In certain cases, if you qualify, it does not show up on your credit report as it’s structured as a business loan. To find out how much you might be pre-approved for, go to www.REIPathwayFunding.com.

Thanks again for tuning in. Remember to review and subscribe to your podcasting app. Search REI Diamonds and click subscribe. You can also access the 175- and 176-episode archive at www.REIDiamonds.com. My main business, Dan Breslin, is diamond equity investments, buying, renovating, and selling houses.

We bought and sold 223 houses in 2019. We’ve been blessed to grow about 40% to 50% year over year. We’ve done 273 houses so far in 2020. As I’m recording this, there are a few more days in the year to add a few more closings. We currently have another 108 houses in our inventory, either under construction, for sale, or sold and awaiting closing. Here’s how I can do business, you and I can do business together.

First, if you are interested in having access to the best real estate deals in your market, go to www.AccessRealEstateDeals.com. Number two, are you an accredited investor who enjoys double-digit returns? If you’d like to potentially invest passively in a real estate deal or several of mine, go to www.FundRehabDeals.com and sign up to receive my private mortgage investment opportunity emails.

Number three, I am always buying houses that I can flip. I buy occupied apartment buildings with below-market rents. If you have a deal that fits that description in either Atlanta, Chicago, or the Philadelphia region, please send me an email with the details. We are at the conclusion, my friend. Next up, fellow Forbes Real Estate Council member and Smart Real Estate Coach founder Chris Prefontaine joins us to discuss no-money-down real estate deals with average profits per deal of $75,000 and up. More on those fat deals next time. Danny B, signing off.

 

Important Links

• Mark Podolsky on LinkedIn
• The Land Geek
• DocuSign
• Superfund
• The ONE Thing: The Surprisingly Simple Truth About Extraordinary Results
• The 12-Week Year: Get More Done in 12 Weeks than Others Do in 12 Months
• Dirt Rich: How One Ambitiously Lazy Geek Created Passive Income in Real Estate Without Renters, Renovations, and Rehabs
• REI Pathway Funding
• REI Diamonds
• Access Real Estate Deals
• Fund Rehab Deals
• Geek Pay
• Landmodo
• Land and Farm
• LANDFLIP
• LandHub
• Land.com