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Today, we’re talking with a good friend of the REtipster Community, Travis King.
Travis is a land investor, land investing coach, and innovator in the industry. He’s always pushing the envelope to explore new, better ways things can be done, and today, we’re going to riff on some of the things he’s been up to in 2022. With any luck, we’ll all walk away with new ideas and inspiration we can apply to our businesses.
Links and Resources
- LandInvestingMastery.com (Enter coupon code ‘SETH' for a discount)
- How to Find Duplicate “Portfolio” Property Owners with PropStream
- How to Find Portfolio Owners With Multiple Properties in DataTree
- 10 DataTree Hacks Every Real Estate Investor Should Know
- DataTree (REtipster Affiliate Discount!)
- PropStream (REtipster Affiliate Discount!)
- Pebble (REtipster Affiliate Link)
- MapRight (REtipster Affiliate Link)
- What Is a Letter of Interest (LOI)?
- What Is a Land Survey?
- How to Find a Land Specialized Real Estate Agent
- What Is a Phase I ESA?
- Direct Mail Hacks: How to Send a Mail Piece NOBODY Can Ignore
- 13 Cheap and Easy Ways to Significantly Increase Land Value
- 122: How to 10X Your Land Investing Revenue w/ Travis King
- 139: The Simple Land Investing “Hacks” That Won Ajay His Absolute Freedom
Seth: Hey everybody, how's it going? Welcome to the REtipster podcast. This is Seth, and today I'm joined by my special guest co-host Ajay Sharma. You may remember Ajay from episode 139. Go and check that out if you haven't already heard it. That's retipster.com/139.
I've asked Ajay to join me here today because we're talking with another friend of the REtipster community, Travis King. Travis and Ajay actually go back little ways too. Travis is a land investor, a land investing coach, and kind of an innovator in the industry. He's always pushing the envelope to explore new, better ways that things can be done. And today we're just going to riff on some of the things he's been up to in 2022. And with any luck, we'll walk away with some new ideas and inspiration we can apply to our own land businesses.
So, Travis, welcome to the show. How are you doing?
Travis: Hey, thanks Seth. Thanks Ajay. Good to see you guys and awesome to be here.
Seth: So, what have you been up to this year? Tell us what's the first thing that comes to mind when you think of all the new things going on?
Travis: Let’s timestamp this. So, we're late September 2022. We had a lot of market changes in the last six months, kind of in quarter three of 2022. So, anybody who's kind of got their finger on the pulses has felt the market shift. Definitely like everybody combating that, and it's a great segue into talking like plays in the playbook, plays in the land investor playbook because I think it's a Warren Buffet quote where he says “The naked people are the ones that get exposed when the tide goes out.” So, you don't know who's naked until they're exposed, right?
And I think these market shifts expose kind of the one-trick-pony, the investors that arbitrage play only. I think having other plays in the playbook are critical versus just sitting on the sidelines or sitting out market changes. I think that's really critical is having lots of plays you can run.
We'll get into those because we've got several of them. And that's a lot of what the coaching is about. As my wife and I scaled our business up like taking those plays that we created in our own business or kind of stumbled into. And really a lot of it was so many of our “aha” moments kind of came as opportunity by-products of countywide campaigns, right? Like everybody does. So many of our “aha” moments came from those as we're reviewing the property and saying, “Hey, what's the highest and best use?” And to me that just means the most profits. That's a phrase I use, highest and best use. To me, it's like, “How can I squeeze the most juice out of this?” Sometimes that's a subdivide with the property. That could be like a value add. That's an example of something that's not just arbitrage.
We kind of deviated a little bit from the standard land flippers’ plan of just buy low, sell high. And we started doing subdividing. We talked to a seller, “Hey, do you own more than one property?” “Yeah, I actually own 10.” So, you start to buy portfolios.
And then the way I view these is not just like one-off successes or one-hit wonders. It's like, “How can I repeat this?” It's kind of like the plays in the playbook I call, it's really like steady and gainful. What did I do right? What did I do wrong? How can I execute this better next time and how can I do it maybe intentionally next time? And that's really what it's about.
After I feel like we kind of added plays to our playbook and we proved it out, that's kind of where it became starting to teach clients and students one on one. Because it's one of those things, trust me, I'm not a unicorn investor here. I can share these strategies and I knew that I would get feedback and people would iterate and improve and add to it and share.
And that's kind of a lot of what happens in our mastermind group. People will execute on some of these advanced strategies and they'll come back and say, “Hey, I actually found this,” or “What are your thoughts on this?” And I'm happy to, again, iterate and improve it and not pretend it's the perfect play, but it's really just sharing those plays in the playbook that have allowed us to adapt to different markets or just to maximize profit on each deal. That's really what we're up to, is pulling out plays in those playbooks like with this current market shift.
Seth: Yeah. And that's something I think a lot of people are hungry for right now is just understanding what else can I do and do intentionally? Like you said, not just like, “Oh that was a fun one-time deal and it never happens again.”
I heard you talking about buying from portfolio owners, doing subdividing. I guess if we start at the portfolio owner thing, like finding (intentionally) people who own multiple properties, what would be the steps a person would want to take to go after that? If that was the main thing they wanted to specialize in, what would you tell them to do?
Travis: Yeah, there's a lot of things happening with it. It is very much like a Pareto principle, an 80/20 thing of when we all pull lists. I was thinking about it the other day and I looked at it like found money. It's something we're already standing on top of all this gold, but we don't challenge the status quo, which is just mail at a county level. And then sometimes we remove duplicates. It's just something everybody's taught to do. So, you never really challenge, especially as a beginner or intermediate, you wouldn't ask an educator, “Well why do we do that?” You don't challenge the professor.
So, what happens is you just kind of continue with the status quo. For us, I wasn't bright enough even on the first one to recognize how to go after this intentionally. I'm so slow it had to hit me a couple times to go, “Wait a minute,” and then I go, “How do I intentionally go after these owners?”
It's really about targeting duplicate owners and there's a difference there, right? Duplicate portfolio, they might own two properties only, or they might own 20. The key here is you're going after duplicate owners so that everybody on your list owns 2, 3, 4, 10, or 20 properties. Every lead on your list would allow you to achieve outsized profits versus going after a single parcel owner. That's kind of the portfolio takedown strategy in a nutshell with most data providers they allow you to pull. It says minimum properties owned as kind of a key field. And you're going to put two or more, three or more whatever you're going after. And that allows you to pick properties up.
It's kind of that “buy by the case, sell off by the bottle,” just huge economies of scale on everything from the buy side with escrow to instead of paying for 25 separate closings at $1,200, $1,500 escrow, you might be closing all of them in one transaction and pay $4,000 or $5,000 in closing cost.
So, it just makes a ton of sense but it's one of those things I say it's kind of found money. It's something we're standing on top of, and we're already kind of doing the inverse of that, we're removing the duplicates. This is just segmenting those duplicates and then intentionally targeting those portfolio owners.
And Ajay is not in his head because he knows he's doing this. This is stuff we've talked about in coaching it in the mastermind. The portfolio, it might sound more complicated or sophisticated, but really there's very little learning curve on the data side to pulling these lists and executing on that, wouldn't you say Ajay?
Ajay: Absolutely. And from an execution perspective, Travis, I think it'd be good for everyone to understand, when you're looking to implement new strategies, what should somebody who is committed to trying something new expect? And I'll give an example. If all you've done is Desert Squares in Mojave and all of a sudden you either want to target a potential subdivide or you want to go over a portfolio owner, what would you say to somebody in terms of how much mail should you be sending out, what you expect in terms of data, either from a cost perspective, a timeline perspective? Could you just set some expectations for people who are looking to try new strategies?
Seth: I'm sorry, I do want to hear the answer to that. But before we move on from the subject of targeting duplicate owners, just wanted to give people a heads-up. If you want to know, there are probably multiple ways to do this, but if you want to find one way to intentionally target only duplicate owners, I've got a video I put together earlier this year explaining how to do this in DataTree. It's basically in the advanced search function. If you scrolled onto the owner section, there's that little thing that says properties owned and you can specify how many properties they own. And it does cost extra money to use that single filter. I forget what the price is. Anyway, if people want to see how that works, just go to retipster.com/142 and see the show notes for this episode and I'll link that video there.
Travis: And Seth, you also I believe teach on it and do a little bit of training on PropStream as well.
Travis: That's the same thing if you want to point somebody in that direction, the same thing can be accomplished in there as well with the number of properties owned by owner. So, it's really common with a lot of different data sources to be able to do that, but that's kind of where it starts when you want to target those owners.
Seth: It's kind of funny. You talk about standing on a gold mine. I was always kind of been aware of that with these data services, but a lot of it, it's like limited to my own creativity. You just have to think of it and really examine all the possible ways you could filter things in and why you would filter them that way. And it's one of those things that it's staring us all in the face. We just have to recognize it and do it.
Travis: That's how I felt too. That's exactly what I felt when I kind of decided to, for us, Beck and I, we implemented kind of like our own strategy, how are we going to do this? And we started out with USPS two-day priority envelopes to every portfolio owner and handwritten and everything. Like anything, nothing is perfect at first. And until you roll it out and kind of crowdsource it, you're not going to iterate and improve on it. So, there's not that framework. I think a lot of people look for the framework, the training, like hold my hand paint by numbers, how do I do this? And sometimes it's just that immediate imperfect action and then iterate. So that's really where this strategy started.
And I'll give an example. I've got two clients and we're talking, the mastermind probably ended, I hit the end button on Zoom and they pulled portfolio owners. When I kind of did a check in four or five months after the portfolio take-down training, it was like a three-part series. Four or five months after, we have two guys and they're on our testimonials page. They had both captured $300,000-plus in equity.
Seth: Wow, that's awesome.
Travis: With this strategy, there's a lot of individuals that may have heard it, listened to it, and then said, “Oh, that makes a lot of sense. I'm going to have to look into that.” And then there's a handful of guys who said, “I'm going to pull the data right now and get those mailers and campaigns out the door.”
I think innovation is critical to navigate these changing markets and really to scale up your business. But I think that strategy part without execution, implementation, execution, which Ajay is a beast at. He's an action-taker. Without applying that knowledge, it's just a course. It's just training that just sits there on its own until you apply it and you execute it.
Anytime there's something new too, right? I'm spearheading this, it's the portfolio take-down trademark pending. I'm spearheading this, but like I tell people, it's an opportunity to exploit this, get out there and do this. You've got six months, nine months, 12 months, whatever before there starts to be echoes and it's just, “Yeah, everybody knows this, everybody does this.”
But I tell people that's part of the mastermind, “This is a new strategy, get out there and exploit it and capitalize on it when you're one of the handful of people intentionally doing this.”
Seth: On that, if somebody is going after portfolio owners specifically, what is different about the process? Is there a different kind of conversation? Is there something different about what you're saying in your letter or whatever your initial contact is?
I know in Pebble, for example, we've got a very different framework where you don't remove duplicates. You combine offers from multiple properties into one letter, that kind of thing. And is that the way you approach it or do you send them multiple letters that say different things or when you do talk to them is there a different selling point or negotiation strategy you use? Tell us about that.
Travis: It's a big shift from people that are used to, especially working in the lower value properties and buying one at a time where it's a big shift from transactional conversations, transactional thinking to relationship and relational thinking. And that if somebody owns 20 properties, the first call, you're not talking like, “Will you take X? I can give you between X and Y? Can we close quick?” We pay fast, we close cash. That's out the window. we don't even know we've got to qualify all those properties. Do we even want to buy all of them? Do they all have road access or are some in wetlands?
So, not only is it a much bigger conversation, it's multiple conversations. The beauty of this is that there's an opportunity to build rapport because, from the start, you and the seller both know you're not going to hash out the price on the first call. There's some getting to know you. There's an opportunity to build rapport. And that also gives you time to properly value the properties and see what you've got, what market values are versus assessed values, what properties qualify and meet your criteria, and which ones aren't.
But to kind of answer your question specifically, we lead with a letter of interest. I have a template that's built into the Pebble CRM system, but it's a portfolio letter of interest template. So, basically, we're just reaching out initially and not talking about dollars at all. We're just reaching out initially saying “We'd like to talk to you and we'd like the opportunity to buy some or all of your properties.” And then we take it from there.
It might be 3, 4, 5, or 6 conversations you're having with the seller. So, there's a lot of opportunity to build rapport, which really removes the people that feel blindsided by lowball offers, who are insulted on that first call.
By the time you get to discussing numbers, you probably know a little bit about them, their family, their background, how'd they come about owning all these properties. So, you look for areas to establish commonalities and get to know the individual. And they're going to sell you their portfolio. They want to work with you. The people that really excel with this strategy are those that enjoy the process and aren't just thinking it from… You've got to switch from thinking like an APN or a row on a spreadsheet type thinking and an ROI in a return to the human part of it.
But you're going to review the properties, you're going to follow your same qualification, valuation process, but really the emphasis needs to be on the back-and-forth conversation with the seller. And then when you do get to that point where you're extending the offer, we're going to talk about a ballpark range because we want to gauge their interest. And Ajay you've picked up a couple, I'll let you jump in here too and add to and fill in the gaps from your experience, if that's kind of what you're finding or I'll let you add to it.
Ajay: Absolutely. The first thing I want to say is just touching on when you and Beck were iterating early on. I think there's a really valuable takeaway for everyone here that you gave yourself permission to fail. It was okay to make mistakes. And that's something I know either a lot of newbies or people just trying to implement new strategies struggle with.
I can't tell you how many times I've seen in the forums or in the Facebook groups, “Hey, how many letters does it take to get a deal?” It's like, “Hey guys, there's a lot of nuances in that question. What kind of marketing are you doing? What's your follow-up look like? Are you getting on the phone? Are you doing blind offers?” All that stuff.
Travis: What's your offer price percent? Because you're offering 60%, your letters per deal's going to look a lot different than if you're offering 25%.
Ajay: Yeah, absolutely. Absolutely. And then where are you targeting, right? Because even those percentages change based on what geographic area you're in and what kind of markets you're targeting. You are absolutely right. But I mean really just giving yourself permission to fail as you try these new strategies is so important so that you can learn from them.
I think Seth, you've talked about in the past, how in one of the Native American languages that you had study, there's not even a word for failure, it's just learning which is such a good takeaway from this. And I think Travis was living it. It's like, “Hey, we're just learning here.” It's not about we sent out 2,000 USPS priority envelopes and maybe spent a couple thousand bucks on that, but it's not a failure. We learned from it.
You took away from it, and you're able to go implement that elsewhere.
Just first thing I wanted to say, aside from that with the strategies, I think it's so important that people are willing to just take the next step. For myself I know I've shared that I've done one minor land subdivision now, and when it came up I bought it off of a wholesaler actually that I saw in a Facebook group. I didn't know how to do a minor land subdivision. I didn't know the logistics of it, but I knew people that did. And that was enough for me to be like, “Well, let's go see what this is worth now.” And I was like, “Okay, there's some spread on this. Let's go figure out what this is worth cut up.” And Travis, I will tell you, I reached out to him, asked him about his process and then not only asked him how would you comp this, but also, hey, who's your realtor in the area? Who are you using to take it one level further or who's kind of the market expert in the area that I can talk to.
After I messaged Travis, after we got the survey back, I was like, “Hey man, how do I record this stuff? I have no idea how to record these surveys.” And Travis was like, “Don't do it yourself, man. Here, use these guys.” And so, I had no idea what I was doing pretty much the entire time, but we're on the market in three different parcels. And so, what I would encourage everyone to do is just keep taking the next step and figure it out on the way.
Travis: It really is that you don't have to see the top of the staircase to take that first step in that next step. That's kind of where you're at. It's like, trust yourself that you'll, A: either figure it out, or B: you can reach out to a professional. That's their area of expertise. The trouble I think people have is thinking that they need to become the subdivide expert. They need to become a survey expert. You don't need to do any of that. Did you go look at the property? No. Heck no. You didn't fly out there and look at it. You don't want to come out to Arizona in July. You weren't coming out and visiting that. If this were in Hawaii, you might have had to go look at the property.
But my point is, you leveraged others. You leveraged others and you trusted that you'll learn from it. And the thing is, once you get through one, I think this is true with anything, there's growth and there's familiarity. So, it's that uncertainty when you haven't done something. When you haven't done something, that's where it gets scary. The uncertainty part. But like you're saying, you give yourself permission to fail and you don't bet the farm. You make small bets.
On your end is all about valuing it ahead of time. Am I capturing enough equity? Am I adding value and forcing appreciation here or am I just splitting up a parcel into more parcels that are the same price per acre? So, we went through those. And that might be a great segue into the next strategy, Seth. That's the next six bigger strategies in the market is adding value or subdividing.
But the point is you trusted that you would figure the process out and you didn't work in a silo and alone. That's the problem I think with a lot of land flippers, especially if you're running that buy cheap stuff, self-closed, self-fund. You're kind of like a one-man show and you're not really taking advantage of networking, knowing other investors, building your directory of agents, title companies, surveyors. There's just so much you're missing out on when you operate as a silo and you run that same play of just flip, flip, flip small stuff. You don't grow, you don't learn, and then you can't adapt to market changes or saturation.
Seth: Also, it starts to get a little boring if you're not constantly trying to evolve and figure out new ways to do things. I mean, even if it is working, it's like, I don't know…
Travis: That's where I'm at. When I hear people or I see bios where it's like 5,000 completed flips or 15,000 completed flips, I'm like, “Oh my gosh, yeah, I was bored at the 100-150 mark.” I could not do this, to be excited about it, to be passionate about it. I had to go out and find these other strategies to satisfy that curiosity and to have continued growth. I'm with you. It's still land here and we'll talk later about the trophy-hunting strategy, but it's an exciting one because it's fun. The properties you're reviewing, those assets are beautiful. We're not looking at desert property. So, that brings some excitement.
But yeah, I think you've got to challenge yourself and you've got to grow and you've got to make it exciting because we're not buying the house, putting in all new appliances, and remodeling it. It's not an exciting process here. It's all virtual. It's all remote, and most of the time it's vacant unimproved land. The numbers and the inbound wires are exciting, but the process itself isn't all that sexy.
Ajay: Right. And I want to interject just briefly here too, because I'm sure people listening are going to get really excited when you say, “Oh, a six-figure deal.” And so, I'm going to throw in the phrase that my good friend Andy actually throws at me a lot that goes “Dance with the one that brung ya.” Because I think sometimes investors are a little too quick to say “That sounds cool.” And then go all in on that and completely stop operations of what's keeping cash flow running right now. Just a reminder and encouragement to not halt everything that you're doing in the business, but use these as supplemental activities, especially because the timelines can take quite a while when it comes to getting a surveyor, getting docs recorded, and then the more expensive parcels, depending on the market, they might move a little bit slower. So, your cash flow is not going to be as regular as it will when you're selling a parcel that's $15,000 and sub.
Travis: Absolutely. It's a pyramid. It's a revenue pyramid and you can't move to the next layer. You don't want to add the next layer on until the first layer below is solid. You need an absolutely solid foundation and you need to be killing it at lead. If you're only doing direct mail right now and your follow-up and your conversion is sloppy, don't move on to texting and cold calling. Like you're saying, get brilliant at the basics, dance it to one you came with. You need to master what you're doing, you don't want to jump from one thing to the next. I think what you're saying is you want to add to it and that's really what it is. It's complementing it.
Because you're going to run these things concurrently, all these plays concurrently. You're not going to abandon one to do the other, especially if you've got one that's working. If you're flipping small, cheap parcels and you've kind of got a machine built, I'm not telling you to stop. You don't have to completely stop that, especially if it's working. But if you want to do bigger deals, let's start running that in parallel and get that machine up and running and then at that time, if you decide to remove or strip off that layer, that's fine. But yeah, good point. Really good point there because it's not drop one thing, do the next. We can do more than one thing. We can have more than one product in our land store.
Seth: Yeah. Just before we move on to the next, I know we've got other stuff to talk about, but just in the interest of setting appropriate expectations for someone who wants to go down this path of trying to take down portfolio properties like this. And this first question might be kind of dumb, but for some reason it's just sticking out of my mind. How much money should a person be ready to work with? And I realize the answer is, it depends and all this stuff. But say if somebody has $5,000 and that's it. Did they have any business going after this? Should you make sure you've got $20,000 or $50,000? What kind of people ought to be going after this kind of thing?
Travis: Well, I think this is a dig your well before you are thirsty situation. The first time I encountered the portfolio takedown, I didn't have a 10th of capital to buy these properties. This seller I was corresponding had 130 properties. I was so far out of my depth, the conversation you're squirming in your seat because you couldn't afford to buy all these if you wanted to.
So, I hadn't dug my well before I was thirsty. I wasn't familiar with other people's money or capital or didn't have my own. I think that's something, good question Seth, because going into it, you want to know that and you're going to encounter different portfolio types. But you want to be prepared to take each one down because what happens is the tonality. The confidence in that conversation. If you've got access to the capital, if you're sitting on the capital or you've got access to it in close proximity, you're going to speak a lot more confidently and you're going to be able to explain a clear process. You're going to kind of be squirming in your seat and trying to think of creative ways to stretch this contract if you need to buy them in batches or release them or something. Yeah, you want to know that ahead of time.
The thing is, there are different types of portfolios. We're finding you might encounter somebody that owns 20 or 30 pieces of cheap rural vacant land. And let's say they're each worth $10,000 or $15,000 and somebody owns 10 of those. So, there are opportunities for cheaper stuff, or there's somebody that might only own four of those and you might be able to totally self-fund it and have that capital.
So, there are different avatars. And one of them is like that tax deed investor we find when we pull the data, and we start reviewing them, it's the guy or gal that for a decade or two has picked up one or two or maybe five properties at an auction and they're just like hoarding land and collecting it like stamps, right? But none of them are like, they're not $250,000 properties per property.
So, there are different avatars. One is kind of that portfolio owner. Another might be like the aging or retired builder who has two or three buildable lots in Florida, paved roads, utilities to them, they just didn't get around to building them. There are different kind of profiles for portfolio owners you're going to get but ahead of time you want to determine how will I, before I hit the send button on that mailer or between you hitting the send button on the campaign, and the letter's hitting, you want to figure out how you're going to address that capital component. Whether it's the rich uncle or you self-fund it or you just go after. You could put in a minimum-maximum property owned, maybe you just said I only want minimum two, maximum five and then I want to set the value range for your buy box.
So, it's really what you're working with. But I'd encourage people, there's so much money out there in the land space that the niche has kind of gotten mature in the last five years. It used to be 10 years ago, there were all sorts of hard money in house investing, but you talk about it in land, good luck, right? Nobody was doing it or offering it. There are 20 different resources out there if you're looking to have portfolios funded. We fund portfolios. And again, if you've got a relative, you've got a buddy, you've got a co-worker, or you've got your own money, heck, self-fund them. But don't let them not having the money stop you from doing it. Just address that money of how you're going to make that purchase ahead of time.
Seth: Yeah. In your experience when going after portfolio properties like this, are you able to offer a lower amount because you're buying so many? Is there an advantage from that standpoint in terms of “I can get an even better deal because I'm buying them in bulk from this person?” Or is there any other kind of trade-off or any kind of a “gotcha” that makes this harder than just going after single properties by themselves?
Travis: I think what makes it harder is reviewing the portfolio.
Travis: Reviewing the portfolio because we're no longer talking about your property. A property. Do I reference the 5.2-acre property in Polk County, Florida or am I talking about the 1.27 in Citrus County? So, they might own property over a couple of different counties. And if they own a dozen properties, it's “Do I reference the parcel number? Do I reference the acreage?” Identifying how we're going to review this portfolio together is key. And when we reference, are we going to reference by APN or acreage size? It's getting on the same page with the owner of how we review these and how we discuss these.
Because there's going to be situations where you want to buy them all and there's going to be somewhere, there are leverage points where you go, “I don't really want this one, but if it's a deal killer, it's a throw-in.” But I'm telling the seller that. “Hey, here's what meets our criteria. Here's the five or six that didn't, or one or two that didn't.” And that later becomes a negotiation point where they go, “Well, I only want to do it if I'm going to sell all of them.” And then you have to decide and that's kind of where you go, “Yeah, you can sell all of them, but I'm only paying a dime on the dollar on those ones.”
I don't think there's like a rule of thumb of “You get a better deal by buying more, or you pay more.” For me, I look at it like there are economies of scale. So, I'm kind of willing to pay a little more. But I really look at it as the individual assets within the portfolio. If it's cheap or rural vacant land, that's probably going to sell via owner financing. I'm going to be offering a lower percentage of market value. If it's buildable residential lots on or near a lake or in a metro area, I'm going to be willing to pay higher.
So, I'm truly reviewing the portfolio and extending my offer based on the portfolio and the assets in it. Not just my rule of thumb of I never crossed this mark or this line. But when I have that conversation it's kind of like, “Hey, we've taken the time to review the properties. Based on our assessment we're kind of looking in the ballpark range of here and here.” And we might be like 40% to 60% or we might be 30% to 50% or whatever that is. And this is where we're kind of “Then we're shutting up.” And we're just listening to how they respond and their tonality and how receptive they are to that. And that might have a lot to do with what part of that spectrum we come in at.
Ajay: Right, right. I think something Travis is getting at here is that it also depends on the seller profile. Your ex-builder who's no longer going to build on these homes is very different than somebody who picked up a couple of these at a tax auction. And then even the land product types make it different on your offer. Like if it's rural versus like an infill lot.
I have a small portfolio we're closing on at the end of this month where the owner owns five properties. They're not home runs. We're buying them at $5,000, and it'll be able to sell them probably between $13,000 and $15,000. So, solid base hits though. I'm happy with it. But two of them are not the best properties. When I was looking at it though, I realized with the best three, if I needed to, I could assign those three and still make a profit on the entire deal. And it's like, okay, if you're getting a couple of free properties and I know I can sell them because they're in an okay area in Florida. That makes it easy.
That's another thing worth thinking about is what your exit strategy is. Because if it's an easy fill lot, you might just be able to contact a couple of builders and end up profiting day one on this deal. And if it is, it becomes zero risk in my mind. If I've got no capital into this and excluding like a funders capital because I don't view that as zero risk. I want to treat their money well. But if I can get all my cash back day one, well, then it's pretty easy to either overprice or offer owner financing or whatever else it is that you want to do.
Travis: And I like that, you talked about. Thinking about the disposition or the exit strategy, that is a play in the playbook. The assigning it or wholesaling it out to somebody else, like you're talking about, same thing with the portfolios. Maybe Seth, maybe you don't have the cash and you just want to lock it up in a contract and then you're going to float it in the community. And the forms and the communities out there got a portfolio of this, reach out to me, here's what the assignment fee is going to be.
There are other exit strategies there. I've reviewed four portfolios in the last two weeks. Two of them had 50 or more properties in them. Lower price point, most of them under $15,000, around that range. And then the other ones, two of them were six packs. The total market value being at six properties, market value being $800,000. Another one, the market value is about $400,000 for those six properties.
The other portfolios, we were talking of about 50-plus, both of them. 50-plus properties. But they were anywhere from $8,000 to $15,000 range. That was one where we look at the portfolio and we go, “What's the exit strategy?” For me, I go, “I don't sell off. I don't buy and sell those $8,000 properties.” That would be more like get it under contract, let's assign that whole contract because there's a lot of people out there that that's their model. We'd assign the whole contract and I wouldn't even bother. But if that's your model, you go, “Oh, this is fantastic. I could sell fund this and sell 60 of these off one at a time.” Or you just go, “Okay, I'm going to assign the whole contract and move on.”
A great point there about exit strategies is because not everything is the arbitrage buyout right, close, resell. Sometimes locking it up, controlling it without owning it and no risk is a beautiful play in the playbook to have.
Seth: Yeah, for sure. So, why don't we transition over to subdividing? Now that's something that I wanted to get into. You made a little note here about smash amount subdividing, minor splits, and major profits.
Travis: Trademark penny.
Seth: Yeah, exactly. I did not make that up. That's a Travis thing. Tell us about that.
Travis: Yeah. Smash amount subdividing. People think of subdividing, sometimes they think of subdivisions and jogging trails and huge infrastructure, big expensive infrastructure improvements. And they all work. Land developers are like, “This works at all levels.” It’s a beautiful thing with this asset class.
But what I'm teaching is the play that we created and run in our own playbook. It's what I'm sharing because it's what I know. I haven't done a development yet. I haven't done a hundred-lot subdivision. So, I can't teach that. I'm only going to teach things I've done and know how to do. And this is a play that we've run to perfection and it is one of my favorites. It's like favorite kids. Subdividing, it's such a no-brainer. And especially when you stack things like capturing the equity, that's what we're all. People view us as vulture investors when you're just capturing equity, lowball offers.
Smash amount subdividing. What it does is it allows us to come into the market, take over the territory by offering more than others. We offer just a little more than everybody else does because our exit strategy is subdividing and we're adding so much value and we're forcing, we try to be at 100% or more. Sometimes it's as low as 80%, but quite often it's 100% or more appreciation. We're adding so much value to the property with the subdivide, the minor split, which minor split just typically meets like five or fewer or four or fewer children parcels. You're carving up the main parcel into five or four or fewer depending on the county you're working in.
And why we do that is because quite often if you stick to five or fewer, it's considered a minor subdivision. And you don't have to go through all these review processes and the timeline. The timeline is really collapsed and the review process is not as scrutinized. But you force all this appreciation and then price per acre significantly goes up in the smaller acre properties.
That's exactly what Ajay is doing. This is a play we run in our playbook. And when I started at years ago, again, I was stumbled into it, but we were actually using it because at the time our strategy was creating an empire of notes. The idea was instead of buy one 40-acre parcel, sell it off for $350 month's payment, it was “Why don't I subdivide this into 20 and two 10s or four 10s? Sell it off four 10s and then get four $250 payments.” That was really the hack or the goal. We're no longer using it for notes as the exit strategy. But what happens is you force appreciation.
That's what Ajay is doing with his. He's still buying it below market value, but instead of buying it 25% or 35%, what offer price percent would you say to market value you paid for your first subdivide?
Ajay: It was exactly 60%.
Travis: Okay. 60%. Look at that. This is what I call a smash amount subdivide. Where we come in at 50% to 65% of market value. Because almost everybody stops at the 50% mark. Almost everybody. So, if we come in higher, we're going to be the highest and best offer. And what happens is that 60% accepted offer, when you run the math, I don't know if you have yet, but with the appreciation you've forced or assumed appreciation that you forced, what was your offer, your accepted offer price versus the current market value? You're probably down on the 40%.
Travis: 35%, 40% or something. You go in with a 60% offer. But after you subdivide and even subtract out those costs, that 60% offer now looks like a 35% or 40% offer with all the value you've added. That's the play. It's just a value-add play. And Ajay knows. If you've got a road on two sides or two boundaries, you've got more options and you can get more children parcels out of it. You could squeeze more juice out of it. If you only got one road with less road frontage, you might be able to get fewer parcels and therefore forced less appreciation.
But that’s the basis of the smash amount subdividing is going in more aggressive than everybody else's because everybody else is buy and hold, leave on hold, flipping it. We're adding all that value, so that allows us to offer more.
Seth: Yeah, I think it's an awesome strategy on paper for sure. I guess when I think through that, because I know that timeline for approval and whether you can get it approved or what hoops you have to jump through, that varies a lot depending on where you're at.
Say you're going to make this 60% offer and then you get into it and you realize, “Oh no, I can't subdivide it.” What questions need to be answered before you can feel comfortable making that 60% offer? How much groundwork is there? How many phone calls? What questions need to be answered before you can do that?
Travis: Absolutely. At a cursory level when we're reviewing these, we're looking at the maps early and at the county GIS, and we're seeing, “Okay, what's permissible or likely to be accepted in the area? What's the minimum? Is this common? Do we see other larger parcels that have been split down?” That means that just at a cursory level of prospecting, the county's probably receptive. But then yes, we're diving in, we're calling the county. We're calling multiple survey companies and giving them the parcel number and we're asking for a quote on subdividing it.
And this is gold. What they come back with, what they tell us is like, “Oh no, it's reviewed at the city level here. The city is slow and you can do it, but it's going to take you six to nine months.” And other survey companies will go, “You know what? This is under county jurisdiction. All we've got to do is bang out a survey and record it. They'll give us new parcel numbers. It’s super easy to do.”
And usually, they have their own mapping systems. Their own internal mapping systems. We give them a parcel number, they're going to look it up and turn it on their system and they're going to say just like a well company or a septic company, they're going to go, “Oh, we've done a subdivide one or two parcels over.” They're going to know much more than you do. So rather than be scared off and make assumptions based on reading county ordinances of what you can and can't do, you want to individually take the APN and deep dive with planning zoning at the county and then make sure that the survey companies are telling you the same thing.
You want to triangulate and talk to as many people as possible and hope that they're all telling you a similar or the same thing. But no, we're not moving forward. We're absolutely not moving forward without knowing for a fact that we could subdivide it. It's the whole Warren Buffet “Never lose money.” The one rule. We'd rather leave money on the table and walk and not do the deal than make assumptions and then get stuck with the property we paid 65% for and then there's a 10% or 15% market shift.
Seth: Yeah. It sounds like that phone call to a few different surveyors is super important and valuable. Because you're right, originally, I might have thought “Call the township or whoever's in charge of the municipality and ask them.” But the surveyor could answer those questions and a lot more about what it would really take and what's the reality behind how this works.
Travis: The thing is, a lot of people, it's making the transition. If you haven't done any properties yet and you're exploring this play or this strategy, it makes sense if you're making a transition from doing a high volume of cheaper properties. Like with the blind offer, you get accepted offers back, you buy them, you sell them. Some individuals have to rewire themselves because it's more work, you've got to make phone calls. That's work, but it's not hard work. I mean, it's really not. Pick up the phone, get on it, don't think about it.
Seth: Deal breaker. If I have to think about all the answers now.
Travis: It's so true. That's the thing with doing bigger properties. “What do you mean I have to call three or four agents? I have to call survey companies? I have to call the county?” Either you or a team member. Yeah. You have to call that. That's how we ensure that you can do, your exit strategy works, especially if it's like a value-add play or you really want to know that with the agent's opinion of values.
The key here is don't operate sovereign. Don't be a silo. I've undersold properties prior to using agents because of that logic of “Well, I'm going to have to pay their commission.” Well, the reality is properties listed on the MLS command more than on land flipping platforms. Actually, I make much more using agents and I don't have to do all that work.
Same thing with the survey companies. We started with the survey company and doing a subdivide. Well, then later when we needed to do our first easement, guess who we called when I was ignorant, naive about easements? Call the survey company, ask them, they can educate me, and then you just keep building your directory.
But the key is not to be turned off or scared away or discouraged. You read an ordinance on their website and go, “Oh, they don't allow you to do this. I guess it doesn't work.” Well, no, pick up the phone. Dig in a little bit. Because Ajay, I’ll tell you. The appreciation you force here, we talked about earlier about these being layers to the pyramid you stack on. I call it layers to the cake, right? It's like the million-dollar cake.
The first layer for most people to reach $250,000 is kind of countywide single properties.
That's $250,000. And most people stay at that layer of the cake, that layer to the pyramid. And they don't move up to the next layer because the thought is, “I have to do more of what I'm doing to make 2X, 3X, 4X. I have to do just twice as much or 4X what I'm currently doing.” And that's not true. You want to build on these other layers.
You might make $250,000 a year when you get your county-wide system down, then you might make $150,000 and you get better at follow-up. You add in some more channels on marketing, cold calling, texting perhaps. And you really get that down. You move from $150,000 to $250,000. And then you add the portfolio strategy. There's another $250,000. Add subdividing, another $250,000.
The key is you do one or two portfolio deals a year, one or two subdivide deals a year in addition to, like Audrey said, not in replacement of your system, of what's working, what's currently working is the found.
And that's really the key. It’s building these up. And what happens is, as you have a strategy or a play in the playbook, as markets shift, as things change. And more so than just as markets change, each individual property, it's the whole Maslow's hammer. If all you are is a hammer, everything looks like a nail. Same thing when you're reviewing properties. If all you do is arbitrage buy low - sell high, you're not looking through that lens of “Can this be subdivided? How can this be positioned? Can this be sold and positioned as a hunting property? Is it back BLM land? Is this a better seller finance property where I can charge 12% interest in today's market with inflation?”
When you have a playbook, you review properties differently because you have additional exit strategies. And Ajay will tell you, he's looking at something and he's not going, “Man, they want 60%. That crosses my 50% mark. Well, I know subdividing, but it's not a good subdivide. And then I move on.” For him, it's a decision tree. And I think as you become an advanced investor, it becomes, “If I can't do this, can I do this? I can't subdivide, they want more than this. Is it a good assignment? Is it a good wholesale? Do I jump on Facebook or the groups or the forums? How do I make a deal out of this?”
And then let's say there's nothing you can do with it. They just want too close to market value. Then it becomes, “Do I know an agent in that market that I have a relationship with, or I'm trying to build one with? Hey, here's your free listing. Here's a referral to an agent. You want a top dollar seller, you're obviously motivated to sell, but not for my price. Why don't I pair you up? No commission, no kickback, no referral fee. Here's an agent.” You've just spoon-fed this agent a listing. Now do you think they'll be receptive when you ask for an opinion of value? The goal is knowing that with every lead, you can work a lead so many different angles versus just saying, “This is a deal or this isn't a deal.”
And when you have all these exit strategies, I believe that you review properties differently because immediately, that's part of my faster check. It’s like the exit strategy. We're looking at the floodplain wetland, the access, the slope, two or more comps. That's kind of the fast part. And the E and R is like an exit strategy, and resale.
So, reviewing the exit strategy, knowing who's my in buyer is a good question to ask yourself. Who's my in buyer? And Ajay, if I can't buy it, who can I assign it to or who can I wholesale to?
Ajay: Right. I think there's just a really good lesson here that I don't want to miss, that Travis is teaching. As you are trying to make more dollars, essentially as an entrepreneur, you have to solve bigger problems. And so, it's no longer the “How do I arbitrage on this?” It's “How does this best serve the community?” As you're looking at a subdivision strategy, the reason that smaller parcels sell for more is because there's demand for that product. There's no point in subdividing if there's no demand in that area. If the market's not going to absorb the subdivided properties at a higher cost per acre, there's no point, and you're not providing a service. It doesn't help anyone.
When you think of it through the lens of “How am I providing value to the world?” Well, more value equals more dollars. And so, if you cut it up and clearly there's demand for this, well, then subsequently it's going to be worth more through the same lens.
It's funny we're talking about this. I actually just yesterday got signed contract and got this property into escrow. Fingers crossed this works out. Otherwise, I'm going to sound like a fool. But it's a pretty big commercial lot in Florida that I just got under contract for $305,000 that I think could be worth around $600,000.
But the first thing I had to do was get a phase one environmental assessment, I think is what it's called. And it's not anything I've done before, but I was like, “Okay, what's the next step?” And I'm calling the brokers in the area to be like, “Hey, what do you usually do when you're doing due diligence? What do your buyers need to see? Oh, do you have a reference for that?”
And so, I'm in the process of doing all these things. And to Travis's point about the decision tree, I'm like, “Okay, if there's not as much margin as I thought, if I find out more of this is in wetlands than I thought, is there still enough margin to try to assign this to somebody who maybe just wants two acres? Or could I subdivide this if there's wetlands in the north part and the south part and maybe we can sell it as two different parcels and it has more appreciation that way, or more value to end buyers?”
I think Travis is spot on in what he's talking about in the way that if you're able to look through how is this the most valuable, what's the highest and best use for these properties, you're going to make more dollars.
Travis: Yeah. And if it doesn't, like you're saying, let's say this doesn't come to pass, this deal you're working on. Again, it's not a failure. You're learning. You're now a little more familiar with what questions you ask. You ask the stupid questions so you get the answers and then the next go-around you know those things.
As you're reviewing that property type later, this is an exercise. You kind of have to really exercise self-awareness. And as you're going through it, it's the whole like, “Yeah, you're in the play and you're acting, but you're also part of the audience watching yourself perform.” As you're doing this flip, as I'm doing everything like I'm talking and there's inner dialogue going on in my head or monologue, dialogue, whatever, in my head going like, “Okay, next go around. I stumbled there. I could handle this better.”
It's a case study. I look at every flip, every scenario, every deal, eventually, this is going to be a case study I look back on. So, even if the deal falls through, you don't get all emotional or up in your feelings about it. You go, “Okay, what did I learn? What did I learn from this?” There's some familiarity there with it.
But to your point of adding value and really more to the marketplace than anything. In my opinion, it's the whole go-giver mentality. If you give more than you take, we're talking about forcing appreciation, adding value to property, but it's a mindset change.
And for me, what a huge impactful book for me was The Go-Giver. Short story but it just completely changed how I think of things in terms of keeping score, where we're not keeping score of the good things we've done for others, the things we've done and then others have done for us. We dropped the scorecard. And it really becomes where if you give more than you take, the universe, and in this situation, the marketplace is going to reward you.
That's just the reality of it. And if you do that enough times and consistently over time, you're just going to be just overflowed with blessings. So that's why I said feeding the agent the listing. If you can't buy the property, it's not about you now. It's like, “How can I solve the seller's problem? How can I reward an agent?” Doing that right thing and consistently, it just compounds completely with time. It's having that go-giver mindset. Anybody who has listened that audiobook or read that book, it is key for me because you go, we're not keeping score of what I've done for you or you've done for me. But guess what? When you make that shift, if you're following it and you're living it, if we were keeping score, I'm running up the scoreboard. I'm winning five to one, 10 to one. Because I'm giving so much to everybody and in every situation I'm looking out for everybody and not taking. If you start to think like that, new opportunities come to you and you attract the right people.
Getting off-track a little on the subdivide there, but I think there's so much of this. There's a big mindset component. We all talk strategy, but there's a big mindset part of this too, of not that the deal is dead. It's like “How can this still be a win for somebody involved?”
Seth: One question on this whole idea of forcing appreciation. If land values fall a lot, like in the months ahead or just in any environment where values are going down for whatever reason, at what point does that ruin this strategy? Would it have to happen really quickly or at a certain amount? What would cause you to be “Oh, I shouldn't do this” and back out of it?
Travis: Yeah, great question. Here's the beauty of this, is when we're just running one play, the arbitrage play, buy low sell high, we're insulating from risk by what we pay. But at the same time, we're still not totally insulated from a market shift. We're probably not going to see a 50% drop, but still, we're going to see a drop and then we're going to have to build in costs like agent commission, closing things.
The beauty of running these value-add plays are we're still capturing it below 100%. We're still buying something at 60%, 65%, and then we add value. We're forcing 100% appreciation on top of the 35% we've captured. We cannot see a 135% depreciation. The most we can see is 100% market change where the property is worthless. We force so much appreciation that we're stacking things. It's still a little bit of an arbitrage play. We're still capturing equity, but now we're adding value to it. So, it really insulates you.
And here's the other beautiful part. You add in a third play of selling it with seller financing in a market like we're in right now, where the last two, three years people are beating us up on interest rates. They're like, “Hey, can I get it? 8%, 9%?” Everybody's getting all these postcards for 2% for their house, right? And so, interest rates are low. If you were a seller financer, you had to budge a little bit and drop down. Well, guess what? With interest rates climbing like they are now, we're going to originate some of the juiciest best notes we ever have in the next two years. Like 11%, 12% notes on land.
So, when you stack that, let's say you capture some equity, you force appreciation and then you sell one or two of those children parcels off with seller financing. You add in that interest income of 12% on that note. You're sitting so well when you stack these plays with each other. But I look at it like this. Like I say, adapting to the market and you go, “Oh man, interest rates are terrible, nobody's building or fewer people are building houses.”
Well, an interest rate hike or an interest rate increase is terrible if you're a borrower. But if you're the bank, this is fantastic. People aren't beating me up negotiating interest right now. You're going, man, that's 12% interest. 12%, 12.9%, whatever you're comfortable with. And people go, “That's high,” and you go, “Yeah, it's crazy, isn't it? Interest rates are crazy now, aren't they?” But you're the bank. You're the bank.
I think when you capture equity, add value, and charge interest income, the math pencils out really well. But it all starts with, there's no assumed value. You really want to be spot on with your after subdivide value. This is my made-up acronym, your ASV, your after subdivide value. You want to be talking to agents, you want to be doing lots of market research, you want to know what it's worth at the price per acre you're splitting down to and not assume. And that's going to protect you. Even if there is a shift, you weren't optimistic with your after subdivide value. You were accurate when you made that 60% offer, it wasn't actually a 75%, it was 60% because you valued it accurately. So, it all starts with that.
Seth: And just to be clear. When you subdivide this stuff, you are just subdividing it, right? You're not adding improvements, you're not bringing electricity to the property, there's none of that stuff. You're just taking what's there and splitting it up.
Travis: We're not yet, with this play and what I'm teaching, no. This is just drawing lines on a parcel. We're just parcels up right now.
Seth: Cool. Moving on to trophy hunting. I think I know where this is going, but I'm curious to hear the story behind this and when you're going to get the trademark in this one.
Travis: Yeah. All of these are strategies in the mastermind. The portfolio takedown, the smash amount subdividing and trophy hunting it's tomorrow. We're starting that training. I'm doing that training tomorrow night. Again, what this one is, is like every “aha” moment or innovative opportunity came as a byproduct of a countywide campaign.
This was one where we had a 40-acre property in northern Arizona. The first one that comes to mind. And when I was reviewing it, it was adjoining 640 acres of state land. And I start researching the area, elk everywhere, huge beautiful elk all over. And I'm reviewing the property, I'm looking at other people's listings and I'm seeing some trophy elk in there and I'm going, “Wow, this is going to sell really well. It's not just some boring photos of a desert property with no trees. This is a beautiful tree property, like a trophy property with a trophy elk.”
We listed the property. We had a great lead photo and we got tons of inbound leads and we sold it immediately. And then I left the listing up because that's back when I was listing everything myself. That's what I do. Leave it up for 30 days, continue to collect the leads so that we have leads for when the next one we get in that area. Somebody says, “Hey, what do you mean it's sold? Take the listing down if it's sold.”
Well, our process is every 30 days we take our listings down. That's why it's still up. It's leads gen. So, we're still collecting the leads on that property. And what would happen is I had multiple people email and they're like, “Do you still have that trophy property? Is the trophy property still available? Is the trophy property still available?”
That was like one of the first ones where it kind of branded my mind like trophy property. And then we did another one that's a completely different market, like a lakeside lot down in Florida. And as I'm reviewing it, I'm like, “Wow, this is a trophy property too.” Meaning anybody that's buying it, the in buyer, again, what's the in buyer going to do with this? It's a status thing. It's a status thing where it's like “I own a lakefront lot. I own hunting land with trophy elk all over.” It's bragging rights, it's a status thing.
So, I started to brand them as trophy properties for me and market trophy properties. It's less about market value there and more about price perception too on the disposition and sale side. There are a lot of people that feel if they pay max dollar, they bought the best product. I know individuals that if they pay the most, they think they got the best and then they can go brag to everybody. “I bought the most expensive car on the lot.” It's like, “Did you research it, or is it like right at the best? Or no, it was just the most expensive?”
It’s the same thing on the trophy property on the sales side. People are going to want this. It's not a commodity. I think that's what I'm getting at. It's not a commodity like our traditional, it's not a five-acre property in Costilla county where there are 5,000 of them. There are maybe less of them but the key is that also that there's potential for a high five-figure or six-figure per flip.
There's potential with all three of these strategies, the portfolio takedown, the subdividing and trophy hunting. There's a high five-figure profit or six-figure potential with each one of them. I think that's a trophy property. But what constitutes it? For me, what defines a trophy property is I call them frontage properties. Waterfront, lakefront, riverfront, canal front, or in this case it was fronting BLM or state land.
It's got to have an attribute that it's fronting. I just call it frontage property. It could be a beachfront lot in Grays Harbor County, Washington. It could be a canal lot on the Gulf in Texas. It could be a 10-acre property on the Yellowstone River in Montana. So, it's not a one-size-fits-all. It's very relative to the local market of what's a trophy property there. But for me, it has to have a high five-figure profit or six-figure per flip potential.
Seth: Yeah. Are you filtering these lists with PRYCD or DataTree or something to use this frontage stuff or are you looking somewhere else to do that? Because sometimes that frontage stuff isn't really reliable. I'm just curious, how are you narrowing it down by only that?
Travis: Again, we talked about conversing with sellers, like with portfolios to take it or leave it or discussing price or including price in the letter. We're moving away from an automated mentality, where we're selling widgets and we're buying and selling a hundred a year. There are data sources where you can search by, let's say, special site code. Meaning waterfront might be a 0301 in this county and you could pull everything that shows up in that county as a water code. That's a made-up code. So don't try to use that, it won't work. But what I'm getting at is all of these data providers, these data sources, they just aggregate the data that the county gives them. So, it's only as good as the county gives them. And with 3,000 plus counties it's different. Each county in Florida is going to have a different waterfront code than Montana is. And maybe Montana doesn't even have a waterfront code.
The beauty of this is you can't do it at a mass scale. You can go through your state or your counties and see if they have that and pull your list that way and shotgun them out and that's fine. It's also manually building these lists because I've tracked them. For me, the lowest it's ever been is a $250/hour activity, building a trophy hunting list. And the highest it's been up to $2,000 an hour when I was doing it. Like manually building out countywide trophy hunting lists.
But yeah, you can try to use site codes and test that and pull them. It works in some data sources to do that, but I actually prefer manually doing it. And you don't have to do it. You can use a VA company. Once you've done it once or twice and you get it, you screencast or you screen record your workflow, you type up a doc. And then you give an output, a deliverable like the Excel, Google Sheets, what it looks like after you've done it. And then you could have a $4/hour VA do it for you if you want.
Seth: Yeah. Are you using the lasso tool in a data service to draw specifically around or are you using a data service at all? Are you just going to Lands of America to find these things? I've done this before in DataTree or AgentPro at the time where you could take the little thing and draw lines around the lake to get only the lakefront properties. And is that essentially what you're getting at?
Travis: It all starts with what data source are you using. But there's a number of different things that I think the starting point for a lot of people is, “What is a trophy property in this county that I'm working? Are there trophy properties? What am I looking for?” So, it's identifying the counties you're looking at. I think to find inspiration, you could go to Lands of America, you could go to their filters section when you're looking at the sidebar of filters, and you would check a box for hunting. You would check a box for waterfront beachfront. This is where you're going to get inspiration and see what's in the county. You could use platforms like that. Zillow has a waterfront filter. I kind of prefer Lands of America. It lets you get more granular with hunting and things like that.
The MLS platforms are more like keyword-based, but Lands of America, you can get really specific. Is it a waterfront or a riverfront or a beachfront or hunting property? But I'll check those and then I'll look it at the county level and then I'll start to get oriented at the county level. And that's it. I'm going to identify all these little areas in pockets, or you could run the route of a river and look at all the parcel lines with the parcel layers turned on. So, that would be like drawing inspiration or where do I start, how do I find these types of properties, and then are they at the price point that I want to be operating at? For me, that's usually like $100,000 to $400,000 price point for resale market value.
So, you could start with platforms like that to find them. And then in the data source itself, you can click one property at a time. In most data sources, you can create a folder or a list. Florida, Polk County trophy hunting list as you put your folder. And then you go through and you click on individual lakefront properties all over the whole county and you build your list.
Or you could use MapRight. You draw a line around the whole lake, like you're saying Seth, there's a tool. You just draw a line around all those lots. Not a polygon, but like a line and any parcel hits, it kicks out a list. Or you use a polygon, but when you do a polygon, you are kind of just grabbing a little area. There are 300-plus lakes in Polk County, for example.
You can build like a county, your own folder and you can bookmark properties one at a time. So, you just go through and manually build that list. Whether the list is drawing a polygon, drawing a line, or manually click and pick and build that list, you wouldn't want to do this with $5,000 or $10,000 properties. You want to do this with $100,000, $150,000-, $200,000-type properties because the output is worth the input. So, that’s the trophy-hunting strategy.
But what I really like about it is that it is so manual. You only have to do it two times and you can send a training video to have somebody else, a VA or somebody else, do it for you. But what I like about it being manual is that people tend to be lazy. If it were easy, everybody would be doing it. Many people won't do it.
The fun part about this is, like you said, keeping it exciting is these are beautiful properties. Who doesn't want to look at beautiful Yellowstone River in Montana, riverfront property? Who doesn't want to look at a lakefront property in Florida? Who doesn't want to review a beachfront property in Washington or Oregon? If anything, you got to be careful, not getting emotional about an overpaying on the trophy property because it's one of those you go, “Man, I could use this. I do this all the time still.” I have to remind myself. “No, you don't, you don't need a lakefront vacant land lot here.” So, it's easy to fall in love with the asset because the trophy properties are beautiful properties.
And the hunting one we talked about, that's when I knew more plays and new exit strategies. We married up the two. We married up subdividing with the trophy hunting. We went out and got those properties. We just drew that line around the state land and every property that bordered it to target those that were fronting state land. And then we also subdivide them and make sure that every one of them, it still backs up too or has access to state land.
So, when we marry the concepts together, it amounts to a fantastic payday. Great harvest. Like I said, we're actually doing the training tomorrow. So, Ajay has got some familiarity, like a one-on-one coaching client. We've screen shared, we've done this before. But as far as the formal training, I want to share it.
Ajay: Travis, I want to highlight a theme that I think we should recognize as we talk about all of these strategies with you as an investor specifically. You have done a really good job of identifying, “Oh hey, we made a lot of money there. How do we go do that again?” Which funny enough is pretty unique because I think you talk to a lot of investors. Well, everyone's got a story about some one-off deal where they made multi-five or six figures on a deal. Not everyone, but a lot of investors who've been around for a while will have some kind of a story.
Then you kind of raise your eyebrow and you're like, “Well, why don't you go do that again?” They're like, “Huh, I’ve never thought of that.” Which is pretty funny. But you have done such a good job of every time something like this happens, the light bulb goes off and you're like, “Hey, how do we replicate that? What's the data? What's our seller demographic? How can we create a process so that this is repeatable even to a point where then you can go equip other investors with the strategy?” I really don't want to miss that theme with Travis as an investor.
Another thing worth thinking about is your first story of the trophy hunting property. When you have the ability to collect those leads for an extra 30 days, that's so valuable because if you understand the price point you can sell these properties at, you can get more aggressive with your marketing. When there are only 100 to 150 parcels you're targeting, don't send them your double window letter anymore. You can get creative, and like you said earlier, either send a USPS priority mail envelope for $7, $7.95.
Seth, you have a really good video out on REtipster with different creative marketing pieces. You talk about a FedEx priority mail envelope. There's even a video one, if I remember right, that you do. I think it's maybe like $40 or something a little bit more expensive. But when you're looking at potentially easy $20,000 assignments, maybe it's worth $1,000 in marketing spent. Again, you got to give yourself permission to fail here, but obviously, there are varying degrees you could execute this at. But I didn't want to miss the theme that Travis always goes back to find these high-value activities and that there are sub-opportunities as you continue doing this stuff.
Travis: You kind of get to the psychology behind it. Where does that come from? And it comes from a place I like: predictability. I like predictable revenue. For me, the one-offs or those type deals. It's hard to build a budget, it's hard to build financial goals and reach those goals if you don't know where it's coming from. For me, say you could look it as a one-off, and sometimes, like I said, I'm not that quick. Sometimes it takes me twice to encounter the same property type to recognize, “Oh, hey, this is repeatable.” But that's the thing. I think it comes from a place of “I like predictability, I like predictable revenue.”
If we set out to achieve our financial goal, how do we collect that revenue? If we're collecting a dollar, and this is why this is a good one I think, because this is land flipping. If you tell me I need to go out and get a dollar, am I going to go out and get a hundred pennies? Am I going to get 20 nickels, 10 dimes, four quarters? There are a lot of different ways, denominations, to collect a dollar.
I think a lot of land flippers are trying to collect the hundred pennies with the smaller deals. It's really like changing your denomination, changing what you're thinking in terms of it. Now we wish we could just collect dollars one at a time. Every deal is a $100,000 or $250,000 deal. The likelihood of that it's very unlikely.
We're much more likely to find a nickel on the ground than we are a dollar. It's not predictable. But the key is that people are thinking in terms of only one denomination. They're only doing one type of deals. Well, your dollar could be made up of a couple quarters, some dimes and some nickels. Get there a lot quicker. It's the same goal. It's the same amount but less of them.
So, I think that's the thing. I look for, especially that repeatability. When I look for something, I look, is this learnable for me? Is this too complex for me? I don't have a master's degree from an Ivy League school. It's got to be learnable for me. I've got to be able to learn it. If I can learn it, trust me, other people can learn it.
And then it's got to be learnable, it's got to be teachable. Because I don't want to do it forever. I want to outsource it to somebody. So, it's got to be learnable, it's got to be teachable, it's got to be really profitable, and it's got to be scalable and repeatable. We're kind of looking for those things. And if it checks those boxes of learnable, teachable, profitable, repeatable, scalable, then I'm all in. I'm exploiting this. I'm all in.
And I sometimes think when you do a big deal that's what happens. It's kind of like in sports. You win the game. How much game film do you watch? As a team, you won the game, you crushed them. You don't watch much. So, you learn from losses sometimes. So, it's looking at losses too and say, “What went wrong? Maybe I overpaid or maybe didn't go as well as I liked. Maybe the agent overvalued. Maybe I assumed I would force more.”
It's kind of doing a postmortem or a case study on each deal and going, “What went right, what went wrong? What can we do better? What can we grow from?” Instead of just flip, flip, flip onto the next one. The endless treadmill of nowhere, where there are a lot of people trapped in that self-employment trap I think of flipping cheap properties.
For me, yeah, I really like that repeatability and I like that predictable revenue. If I've already ran the play and executed it, I know what the market value is, it just sold. I'm my own comp. So now I'm really comfortable with my offer. In fact, I can probably even increase my offer to pick up these other deals.
Again, it's kind of the found money thing. You're already standing on it, it's just awareness. I think that when I'm coaching somebody, if they do a good deal, I always go “What's next?” And then it's like “Well, let's find another area, let's go after it.” And I go, “No, let's draw a polygon where you just did this. Let's try to repeat this if we can. You had a great day fishing, why not go back to the same hole? Keep fishing it till there's nothing there.” For me, it comes from that place of wanting predictability.
And you talked about the marketing component. Yeah, again, we're not looking at automating things. These are trophy properties. So, your approach is different. This is where you get creative. It's hard to value trophy properties all over a country, different lakes, different zip codes, let alone zip codes, different census tracts. We're all over the place.
So, your marketing is going to look different. I'm not blind offering day one with my trophy hunting strategy. It's going to be expressing interest. But the beauty of these portfolio strategies, the trophy hunting is your overall list size. Your campaign size is so much smaller versus a countywide mailer. But every lead in there has the potential for outsize returns and profits. So, if the campaign sizes are much smaller, as far as return on ad spend is going to be incredible. So, why not hammer these lists? I'm talking three campaigns, cold calling, text messaging, mailing, getting creative with mailing. We've got a client that does, it's like a $2-unit handwritten thing and then it's the waterfront-specific lots. It has a picture of the waterfront on the postcard and stuff.
You can get as creative as you want. But the key is differentiating and not treating it the same as that $10,000 New Mexico property for this $250,000 lakeside lot. The marketing part that I just want to sneak that in with how you reach out is key. Also, how you interact and reach out. Because this is very much if we're collecting quarters for the dollar and we only have to do four a year, you don't mind if it's a little more an increase in phone calls or touch points with the seller. And you have to call more agents or survey companies. You don't have to do that a hundred times because you don't have to do a hundred transactions a year. I'm like, how do I say this so that it doesn’t sound like I'm talking about religion? I'm going to encourage everybody to change their denomination.
Change your denomination, change how you think. Think in dimes and quarters in terms of pennies to get to the goal quicker. So, all of these plays, that's really the goal. If you have that foundation of your business built on knowing how to process leads and do market research at a county level, that's that foundational layer. And once you understand that, get brilliant at it, but then stack on other layers. Because to search from six figures to seven figures, the answer is not just “send more mail.” There are other ways to achieve that. What got you here, won't get you there. So, if we do a one or two subdivides a year, one or two portfolio deals, a couple of trophy hunting on top of our county-wide, it all stacks up for a heck of a year. And your position right now, this is your next year. We're talking about next year for you. I'm vested in you. It's my goal for you to hit seven figures by the end of 2023.
Ajay: It's also a goal of mine.
Travis: And you're well in year one, but it's stacking. This year's been about overcoming inertia, setting up systems and processes, building that foundational layer and you're dipping into layer two already. But next year will be about executing all these strategies and implementing them. We'll have to set the calendar, Seth, to regroup. Reconvene towards the end of 2023 to check in with Ajay because I'm really confident that he can hit that seven-figure mark by exploiting these six-figure type strategies.
Seth: Yeah. I've got two more questions. I know this marketing trophy properties, some of this has to do with the way you're marketing them on the sell side, how well you explain it in the pictures and you could even call it a trophy property. All this stuff is just to help people understand and realize the value. And some of that is just cold hard facts about the property because it is great, but other things are just making it look as good as you can.
It makes me wonder, could you position any property as a trophy property or what things could you do? Say if you had an average property that was kind of run of the mill. Maybe it is one of a kind, but it's still not amazing. But what could you do to just make that thing look like a trophy property and increase that perceived value? Because a lot of land value is perceived value. That's kind of what goes on when people decide whether or not to buy it.
Travis: I think that's a great point because when people think of days on market, they're pulling from some data source. They're going, “What are the days on market?” And they're looking. Well, days on market were different for the crappy property with the terrible lead photo and the non-responsive agent. It was different days on market than it was for the agent who sent a drone photographer out there.
Seth: It sounds like every agent I've worked with.
Travis: Beautiful 4K cover photo. You know what I'm saying? Days on market, sometimes it's apples to oranges in how it's listed, like you're saying. So, I think that's a good point. A trophy property would be maybe if the lakeside lot were having it cleared, we're going to go out there and have the brush cleared and have it mowed so that the agent can see the lake from the road. They don't have to walk through this overgrowth to see the water. And then we're going to have a drone photographer take drone footage of it. One, they're going to give us aerial photos, which stand out because they're going to show the lake. And we're also going to have a video. So, you're right, how you position that is a big part of the trophy property.
So, that's a good point. Definitely would've been an oversight, for me, mentioning how you position on the sales site. Some of the things you can't force or dictate days on market, but you can make decisions during the pre-listing that influence days on market. Meaning these great photos, onsite great photos, drone videos and drone photos. The cover photo is key and huge. The copy, the cover photo, all of those things are going to play a role.
But then there's even a couple things prior to that. Once we do find the buyer, the clickbait, they click on the lead photo, they put in inquiry, they work with the agent. What are their objections? What are they going to ask? Boy, it has some low spots and we're going to need to bring in filter. Have you had it survey? Does it pass a perc test? What are these friction points and what are these points that eventually the end buyer is going to say, “I need a longer due diligence period because now you fill in the blame.”
If you ask yourself that question ahead of time prior to going to market with it, you get the survey ahead of time. If you get the survey complete it, you get maybe a wetland report if you're in an area like that. Every end buyer objection, if you get it addressed and it helps with your due diligence anyway during the acquisition phase, but if you call companies ahead of time, “Hey, do I need to bring in dirt? And if did, how much to level it out or to build?” Anticipate all the buyer's questions and objections and things that are going to make them go “Well, instead of a 30-day close, we need 60 days to do the due diligence.” No, you don't, here's the survey, here's the wetlands report. You combine that with the great onsite photos, the drone footage, maybe clearing the lot or going up and taking pictures, a current picture, not a chamber of commerce or Google images, a picture of that county or the local area. I mean an onsite phone, like if it's a trophy hunting area, right? Let's go up there. We got a guy out of Flagstaff that'll drive out there and take onsite photos, take pictures.
So, yeah, you wouldn't want to score a trophy and then fumble the ball on the marketing side and disposition side. But if you elevate your game even on the cheaper stuff, like you're saying Seth, even the cheaper stuff, when we used to operate in that $5,000 to $15,000 range of the very cheap properties, onsite photos were huge and we would brown that and tout that. And we'd say onsite photo. Onsite photo and date stamp it. People could see the road access. They could see the car in the picture. It wasn't a generic photo.
So, I think all of that has an impact on if the buyer is scrutinizing the listing at any level. Just anticipate buyer objections and solve those ahead of time and then market it really well. And it's going to reduce your days on market and your days in the market will be like the ones pulling down the average in the area.
Seth: Yeah, for sure. And one last question before we wrap this up. By the way, this has been an awesome interview, Travis. I'm sure everybody listening to this will agree. Tons of great information here. A lot of the stuff we've talked about here in terms of subdividing and trophy hunting and portfolio owners, it has something to do with the market. It helps to understand that market, to figure out what would the value be when this is done. And even if you have an agent involved, even if you have a surveyor involved, that still kind of depends on the market. Because once you establish these contacts it becomes way easier. You just know who to call and they can handle it versus when you're starting in a new market and you don't know anybody. It's just more groundwork to figure out who those players are going to be.
I'm curious, how many markets are you in doing this kind of stuff? And would you, if a so-so opportunity dropped into your lap that looked like maybe there's something here but you didn't know anything about the area? Say it's in Rhode Island or something like that. Is there any point at which you'd be like, “No, I don't know that market, I'm not going to do that?” Or do you just go after everything?
Travis: Well, because I'm not operating my acquisition side marketing, it's not inbound market, it's not SEO. I'm not getting random submittals from Missouri or Rhode Island. I'm targeting my market. And for me, I was in the same my first year. My first three years we were in two states only. I didn't even have to venture out of that. So, I don't want people to think you need to go really wide. Because I actually think canvassing counties and adjoining counties because you can leverage the same agents and title companies, and like you're saying, when you do get an agent, maybe they work the adjoining county.
So, I'm kind of a bigger fan of somebody being in two states and maybe three counties in each state then I am trying to go super wide. Personally, I invest in three states. I'm only in three states personally. Beck and I, we will buy and hold in other states that I know. We're from Montana. To me, there's not a big enough buyer pool to flip there and with the weather and stuff.
So, we're familiar with other markets, but personally, I'm only in three states. Florida, Texas, and Arizona are the three markets that I like personally. I like sunny states, year around, red states, growth, friendly to development. Those are my states. But as a company, I co-owned Freedom Land Capital, a funding company, and that's what really allows me to truly have my finger on the pulse of the market.
In Freedom Land Capital, it's tied to our CRM or whatever. The website stays updated on how many counties and states we're in. But we're in over 20 states. We're in over 20 states, and we're in over 80 counties. That's what allows me, I think, to be a little different than most where people will give you their opinion of the market value or their state of the union. And they're speaking to the one or two states they have familiarity with. We get submittals on 20-plus states. We build our own directory of agents, title companies, professionals, these things.
But really what the funding company does, it really allows me to stay current everywhere. That's my favorite part about it, is it allows me to review in areas that I would never target myself or I'd never think of mailing. And it also just reinforces that people are doing well with this everywhere. In all different states, different markets I've never been in. So that's what kind of the capital and funding company lets me do is I get to underwrite and approve deals in markets that I personally don't invest in all over the country.
Seth: Awesome. It's so helpful to have that kind of perspective and understand the differences between different markets. I feel like every day I see people just posting these opinions as if it's a fact based on their one county that they work in. And it's just like, “Hey, understand the statement you're making when you say something like fill in the blank.”
Travis: Well, a lot of times that's like I said with the Maslow's Hammer earlier where I have a lot of people tell me that about, with blind offers, they'll be all in on, and I'm like, “What? You only send one letter type.” It’s like it all works. So, people go, “I don’t know if a range offer works or a letter.” They all work. They're different tools to have in your tool belt. But when you think in terms of that, I am a hammer, all you see are nails. So, there are 20 different, there are probably a hundred different letter types that would work. It's probably more important that your follow-up is locked down in your conversion than your letter and your offer price percent is more important than what letter you send.
There are some of these things where I think there are a lot of generalizations and there's bias and sometimes it's borrowed or inherited bias. It actually doesn't come from your own experience. That's what I try to do is even with these strategies, I don't say these are perfect. I say these are innovative. I'm spearheading them, now go out there to our community and one-on-one clients and mastermind clients.
Go out here and do this, and then bring me back your assessment. I would love to build on this and improve it as a community, as land investors, not as an individual telling you every single thing figured out. We're going to improve these plays and we're going to add plays to the playbook. But yeah, don't fall into that rut. Ruts are easy to get into and hard to get out of.
So don't fall into that rut of thinking only one thing works, or this only works in this market. Really get yourself out there and connect with other investors. Ajay is great at this. Connect with other people and identify that some people are subject matter experts in other things. And know that. If they're not an expert, maybe they're a generalist or an expert in one thing, go seek out a different expert in that other area. That's what Ajay is really good about. It’s vetting people out and then identifying experts and going to different experts for one thing. If you got a heart problem, you're not going to a foot doctor.
Ajay is not getting all his information from a generalist. He's learning these different things. He's going to go and he is going to separate out texting from cold calling. Two different marketing channels we don't lump in together. So, it's really just taking time. It's the whole, like Michael Gerber said, “You hear it said, but people don't even pause to think about it.” They work on the business, not in the business.
To be innovative, you have to have time. You can't be bent over working all the time. You have to think while you're working and you have to schedule time to go, “Let's get creative here. Let's look at that property. Let's take a minute after the closeout sheet and the deal is done. Let's go back and scout around the area and see what others did and see did we leave money on the table? How could we do this better?”
So, it's really looking at your business. And the innovation part of it makes it fun. Again, at the end of the day, we're flipping vacant, unimproved land, guys. You got to put whatever you got to make it exciting. For me, like I said, the inbound wires are exciting, but it's also fun if you enjoy the process. It becomes fun if you enjoy the process. And to me, working with other investors, working with people, that part of it is a lot more fun than just staring at a monitor and reviewing properties. So, step out there and connect with people and that's where the growth comes from. And that's also where the connections and capital come from.
Seth: Yeah. Great conversation, Travis. I appreciate you being here. If people want to find out more about you, where should they go?
Travis: You could go to travisking.com or you could go to landinvestingmastery.com. We've got a group coaching for intermediate and advanced investors coming up too, Seth. It's where a lot of people start. A lot of people start with a course, maybe they've done some deals and they're looking to transition into bigger deals. As we talked about, instead of collecting pennies, collecting dimes and quarters and stuff. The group coaching is really about blue ocean land investing and doing bigger deals, what I call boss deals. Teaching a boss method that I have. And really that's what the group coaching is about. It's a new method, a new system that kind of elevates you above the red ocean investors doing the smaller, cheaper properties. So, yeah, we've got group coaching, we've got mastermind.
If you could check out the website, you'll find something that's probably a good fit for you. But as Ajay knows, you start with the course. Ajay did group coaching, then did one on one coaching. You just keep taking that next step and really what he's identified, I think is accelerators. What things can accelerate my success and how do I collapse that timeline? Hopefully, it only takes him three years or four years to achieve what took me nine or 10 because he identifies accelerators and he exploits those.
Seth: Yeah. Does the coupon code SETH still work to give people a discount?
Travis: Yes. Yeah, absolutely. And I was going to pull a report before the call. I just didn't space that and didn't get to it. But I was going to look back, Seth, and see from our other podcast because I've always thrown it out there and I've always honored it regardless of what service or product it was. I was going to pull a report and tell you how much the REtipster community saved because people let me know. They say, “Hey, I heard that. What about that SETH coupon? Don't be charging me full price here.”
It comes back to people who haven't heard previous episodes. You play a big part in the genesis of my career path in land. And gratitude is a huge part of my success. Gratitude and showing gratitude and acknowledging those that played a role. And you played a huge part in that early on for me. And then as we've gotten to know each other a little better since then, continued to be. So yeah, I'm happy to give anybody in the REtipster community take some sting out of it and give a discount for that. So just plug in the SETH coupon code on whatever you buy, and it should give you a pretty substantial discount. And if it doesn't, just reach out to us and we'll make that adjustment on the back end and make sure you get that.
Seth: Awesome. It's been awesome to know you and it's really cool to see your journey and how far you've come. It's kind of crazy actually. You just think of, since 2014, and the progression and where you are now, it's an amazing thing to see. It's an inspiration for anybody really that this can be done. And there's not really a limit to how far you can go if you just have the ideas and you want to do the work though.
If people want to see the show notes for this episode, again, retipster.com/142. You'll see links to all the stuff we talked about, links to Travis's websites, a lot of other things that we touched on. Also, if you want to check out Travis's earlier interview with us, that's retipster.com/122. I think that was like a year ago, but there was also a lot of good stuff covered there as well. So, thanks again, Travis. It's great to talk to you again and hopefully, we'll talk again soon.
Ajay: Thanks, guys. That was a blast.
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