I recently had the privilege of interviewing a well-known real estate broker who specializes in vacant land. His name is Pat Porter with RecLand.
If you’re in the land investing business, you probably know that finding a real estate agent who truly understands vacant land is an incredible asset, and it’s not always easy to do.
Many real estate agents who specialize in houses are somewhat clueless about selling land because it’s just a different type of property that requires a different set of skills, knowledge, and network to sell quickly. Land investors need to know where and how to find agents and brokers specializing in LAND.
I’ve been looking for land agents like Pat to interview because, in some respects, guys like Pat are more knowledgeable about land than most land investors are. They also have connections and work with a lot of other land professionals. People like Pat can shed a lot of light on things land investors need to know about!
In this conversation, we cover a wide range of topics every land investor needs to consider.
Links and Resources
- RecLand.net (Pat's Website)
- RecLand Talks (Pat's YouTube Channel)
- How Land-Specialized Real Estate Agents Can Change the Game for Real Estate Investors
- Real Estate Agent vs. Real Estate Broker: What's the Difference?
- How to Find the “Market Value” of Vacant Land
- A Map of Every Non-Disclosure State in the U.S.
- Realtors Land Institute
- Where to Find Free Land Pictures (Without Leaving Home)
- How to Write Real Estate Ads That Seller Properties Fast
- How to Build a Land Selling Website With Pebble
- What Are Sunk Costs?
- Gary Vaynerchuk
- How to Sell Your Land Faster By Adding Value by Pat Porter
- Land Buying Tips from the Pros by Pat Porter
Seth: Hey, everybody. How's it going? This is Seth. You're listening to the REtipster podcast.
Today I have the privilege of interviewing a pretty well-known real estate agent who specializes in vacant land. His name is Pat Porter with RecLand. If you're in the land investing business, you know that finding a real estate agent who truly understands land can be an incredible asset. And it's not always easy to do.
If you call up any old agent and ask them to list your land for you unless it's a truly remarkable property that kind of sells itself, most agents who specialize in houses and other types of properties don't really know a whole lot about how to sell land specifically because it's just a totally different type of property that requires a different set of skills and knowledge and network to sell quickly. This is why it's important for land investors to find an agent who specializes in land. And Pat is one such agent.
He came across my radar because he also has a YouTube channel where he talks about a wide array of topics from this specialty. I'll go ahead and link to that in the show notes along with his website if you want to check that out. Show notes are at retipster.com/153 because this is episode 153.
I've actually been looking for land agents like Pat to interview because, in some respects, guys like Pat are more knowledgeable about land than most land investors I know. Because a good land agent sometimes has to dig into the details of a property, both literally and figuratively, more so than the owner does. Land agents also have a lot of great connections and work with a lot of other land professionals. A guy like Pat can just shed a lot of light on the things we need to know about.
So Pat, welcome to the show. How you doing?
Pat: Thank you, Seth. I'm glad to be here. Appreciate it.
Seth: Yeah, absolutely. So let's start with your background. How long have you been working as a land agent like you do?
Pat: I got my real estate license and started working as a land agent for another broker about 19 years ago, 18, 19 years ago. As soon as enough time elapsed, I was able to take my broker's license and became a land broker. In 2010 I started our own company, RecLand Realty. I'm the owner and broker of it. I've got a lifetime friend who's a business partner. He and I own RecLand together, but I'm the broker. And man, that's all we've been doing for the last 13, 14 years.
Seth: What were you doing before this? What made you decide I want to become a land broker specifically?
Pat: I live in Louisiana now, but we lived in the Carolinas 20 years ago. And I had a real job and I started doing some personal real estate deals on the side. I wasn't an agent, I was just buying and selling houses on my own. I was having to do it kind of on the cheeks. I didn't have any money, so I was having to be real creative in doing deals. And my buddy here in Louisiana wanted to get into the land business. He just wanted to buy and sell his own stuff.
And he and I talked and he said, “Man, why don't you come here and do what you're doing in the Carolinas? Just come here and do it in Louisiana and we'll just do land.” And one thing sort of led to another, and I moved here with my family. We're from here. So, it was an easy move. Started doing our own deals, and one thing led to another and I realized not every deal that comes across my plate was something we wanted to do, but it was something somebody may want to do.
And I’m going, “If I had a real estate license, I could market this as a third party for somebody else. It won't work for us, but it may work for somebody else.” And that's how I got into licensed real estate activity. It was pretty quick. I realized, hey, I need to have my own company. And he and I talked, and that was our goal. As soon as I was two years as a licensed agent in Louisiana, you could then become a broker.
And after those two years went by, we turned the switches on and started our own company. And so, that's the short version of it, but that's been the progression. And now here we are, RecLand is a huge part of what we do, but we still do our own personal deals as well as I run a land brokerage marketing property for other people.
Seth: Yeah. I think I know the answer to this, but I'll just ask this in case anybody listening is wondering this. When I hear the term “agent” and then “broker” used, what is the difference between that? Does a person start as an agent and then once you're a broker, are you managing a group of agents or something? What's the difference there?
Pat: Yeah. I manage 20-odd agents and the way the license law works, a licensed agent has to be under the sponsorship and oversight of a licensed broker. It's just a structured system that creates a massive amount of accountability between a licensee and the public. License law is a pretty sophisticated and serious thing. And the broker is that level of accountability between the public and the agent.
Seth: And how long does that last? When does the agent get to become a broker or do their own thing?
Pat: It's different in every state. In Louisiana, it used to be two years and then they changed it to four. Most states, or many states, I should say, are four years or more to be a licensed agent before you can become a broker. And hey, most agents don't do that because when you become a broker, you're taking on the business side, you're taking on the responsibility side, the financial accountability side. And so, most folks don't want to be a broker and I don't blame them. They'll operate as a licensed agent under a broker. And even licensed brokers can work under another broker, man or woman. The buck stops with them as the sponsoring broker.
Seth: Okay. So, how many markets does RecLand work in?
Pat: We're licensed in eight states. Louisiana, Arkansas, Mississippi, Texas, that's our primary. Missouri, Iowa in the Midwest. And then we're also licensed in Georgia. My company and I, we're set up in Georgia. I just don't have any agents there yet.
Seth: I'm assuming it's you and how many other agents?
Pat: 22, 24. Somewhere in the low to mid-20s. I'd have to write them all down and count them up.
Seth: So these people are kind of speckled throughout these states and they have local expertise in those markets.
Pat: As far as the sheer number, most of it, let's call it 25 are in Louisiana and scattered around the state, but also those of us that are licensed in Louisiana, most of us are also licensed in Arkansas and Mississippi, this kind of region. And then I also have some Texas guys and one of them is also licensed in Louisiana. And so, we got some crossover there, which is helpful. State lines my guy in Texas, he's 90 minutes from a big market in Louisiana. So, it works out for him. And a lot of people are like that in land business, they're licensed in multiple states.
Seth: When a land agent or a broker like you is involved, what kind of commission is paid to you for your involvement in the deal? Is there a standard percentage that always happens? How does that work?
Pat: According to the public, there's always a standard percentage because the residential commercial world sets that out there and makes it appear like it's a set standard, but it's not. The number can be anything. Our typical deals are 5% or 6%. We have some large deals, maybe a large, if we'll get a large package of deals or maybe a large timber track or a farm, we might push that number down a little bit just to make it make sense to the seller.
I've done some large deals that were three and a half, four, four and a half. It's a negotiable number. I got a lot of faults, but being greedy has never been one of them. And I'm a land buyer and seller myself. And so, the commission's got to make sense. Just to charge somebody 6% on a $10 million farm, come on, that's just a huge number. So, I try to make it make sense for the seller because I'm a business person too, and I try to make it reasonable. But most of the time, it's in that 5% to 6% range.
Seth: Okay. And you mentioned that you buy and sell your own land deals. Do you find those opportunities just in the course of your regular work when you're coming across opportunities? Or are you doing some kind of extracurricular marketing to find these people and find deals that way?
Pat: I find them in both ways. Sometimes they just come across our plate as a normal course of business. Somebody has something for sale, that they list it with us and we look at it and go, “Well, that fits what we're wanting to do.” So, one of my investor buddies or somebody like that will just make the deal.
Other times I swerve into properties that I find sort of on my own as I'm working on a listing. Maybe I see an adjacent property that I go, “Well, that's kind of cool, let me look at that.” And I look up who the owner is and may send them a personal letter, that sort of thing.
I have a systematic way of marketing for RecLand getting listings, but I don't have a systematic full-boat way of marketing for personal deals. There's just not enough time in the day and I swerve into enough of those deals sort of on my own anyway.
Seth: Yeah. And just to clarify, when you say RecLand, do you mean recreational land?
Pat: RecLand. Yeah, some people look at it that way. It was just a cool name when I had to name the business 15 years ago. I wanted the word land to be in it, so it'd be distinctive. And I wanted it to be short enough so that the website recland.net shows you how far back I got. I wanted it to fit on one line of a classified in the newspaper. I saw some people that have this huge name for their website, and it would run over into two lines on a classified, which doesn't make good sense.
So I'm going, “Okay, what's a word that kind of captures what we do, but it's short enough to fit on a classified?” And that's where RecLand came from. Most people associate it as recreational land, which is a big part of what we do. So, it fits. Yeah.
Seth: Well, I guess that leads to my next question. So these deals, just out of curiosity, and the deals that you are pursuing for yourself, what kind of deals do you go after? Are you trying to develop farmland, or are you trying to just flip something and make money? What would look attractive to you, and what are you trying to do with it?
Pat: The two main things I look for, found one yesterday, bought one last week, or tracks that are maybe just underpriced, undervalued where I could go, “Well, dang, that's just a straight-up flip the way it sits.” We've done deals like that. We do them routinely. We just buy it for X and sell it for Y.
A deal I did, closed on last week, and a couple others that are closed on a few weeks ago, I look at tracks like that as, okay, buy this track, go do a little something to it. Maybe cut some timber or put in a road or just clean it up just a little bit and divide it. Some of those are divided for rural home sites 10-, 20-acre tracks for homes or some of them are just divided for recreational use. We bought a lot of tracks that several 100, several 1,000 that we can carve up into smaller, more manageable bites and sell it to the recreational buyer out there. Hunting land and places for camping, fishing, that sort of thing. A lot of people can buy 40s and 60s and 80s. Not everybody can buy 800, 8,000. So we buy wholesale, sell retail, or develop something, fix it up, and then just increase its use.
Seth: Okay. And then the types of properties that you list and sell on behalf of other people, what do those typically look like? What is size, value, uses of the property? What's kind of an average, or what would fit inside that box?
Pat: I'd have to crunch a lot of numbers to figure out an average size. But I was looking at a track yesterday of a lady in Colorado who wants us to sell for here in Louisiana. It was 120 acres, that's sort of run-of-the-mill normal kind of deal for us. Timberland. It'll have some home site use for it because of the way it sits on a road and there are utilities. So, we could have some use other than just timberland or recreational land. It could maybe be home site potential.
We sell a lot of timberland. We get a number of farms, improved farms because where we are here in the Delta, farmland is a big deal. So farmland, timberland, hunting land. Over in Texas, we sell some ranches, so it's that. A lot of tracks will be smaller tracks that are 20s, 40s, things like that, that really, that's best use is a rural home site. It may just be growing timber now, but really its best use, which is a higher value in a rural home site. So, we do a whole lot of that.
Seth: I know a lot of land flippers in our community anyway, when they get started, they might go after really, really cheap stuff. Just bottom of the barrel. Like lots that they can buy for $1,000 and sell for $5,000 or something like that. I think about that compared to what you just told me about the sizes and values and uses and that kind of thing. What would cause you to say no thanks to a landowner who wants to sell their land through you? Is there a point at which it's like, nope, that's too small, or no, that's never going to sell? What would make you be like, “Nope, sorry, do it on your own?” Or would you ever say that?
Pat: There are four main things that I say no to. Somebody that's just hard to deal with. If they're hard to deal with on the first phone call, they're going to be hard to deal with later. So life's too short. I'm too old. I'm too busy. I used to say yes to everything because I'm a hustler and a go-getter, but I've learned to say no to people that are hard to get along with. I just say, “No, thank you. I'm good, but I'm not that good.”
Seth: It's important to have boundaries, for sure.
Pat: If it's in an area that I don't have an agent somewhere nearby that we can't really service properly, I'll tell them that. I don't want to take something that I really can't service and the customer doesn't necessarily know that. They called me because they maybe trust me and I want to make sure I can service them well.
So, if it's in an area where the closest agent is three hours, we may say no to that and I may help them find somebody closer. Just little small lots. You've run into them in towns and cities all over the country, a three-quarter acre or a two-tenths of an acre lot in a subdivision. It's better for the seller, honestly, if they'll use a local residential company. Pick your poison on those, but that way, that agent can put it on the MLS. It'll sell locally to somebody in town. That's the quickest, easiest way. I usually say no to those little bitty, bitty deals. We sold a lot of them because sometimes it's just part of it, it comes with a package and you got to take the good with the bad. It's my philosophy.
And then the fourth thing I say no to is 131 Elm Street. If it's just a straight-up house on one or two acres or a small subdivision lot, that's better for the residential folks over there to do. That's really not our cup of tea.
So, those are the four things that we'll say no to. We sell properties, we have some listed that have houses on it, but the house is sort of just part of the deal. It's maybe a home on 40 acres or we got one under contract now, home on 17 acres out in the middle of nowhere. Yeah, we'll do those. But we can market that to the land buyers. The house is just sort of there. Does that make sense?
Seth: Yeah, for sure. And what percentage of your clients, and when I say clients, I mean the property owners who are selling their property through you. What percentage of those people are returning customers, so to speak, where maybe that's an investor where they do a lot of volume and they just keep coming back to you again and again versus just one random guy who wants to sell one random thing and then that's it?
Pat: I don't have an exact number. I don't keep metrics of that where I could look up and give you the exact stat on that, but really quite a bit. It makes me happy when we get a return phone call. We had a deal closing this office yesterday. One of my guys, it's the second time he's sold this property. My personal record in the office is six. I sold the same 63 acres six times.
Pat: Recreational hunting land turns over like that sometimes. People's lives change. We'll have investor groups that use us over and over. And so, we get a good bit of repeat business, which I really appreciate it. It lets you know, hey, you're doing something right and people appreciate that.
Seth: How do people find you? Do they just see you're listing and call you that way, or is it through YouTube? What do you think is the biggest driver of new leads for you?
Pat: This changed the world, of course, as you know. And so, everybody is looking here. Even when they're driving down the road, they're looking at this, they're not looking at billboards anymore.
Seth: Pat is holding up a phone just for the listeners out there who can't see it.
Pat: The internet and the apps that run on the internet, that's where all the eyeballs are. And so, I made that switch years ago where I put aside, remember I made the joke about the classified ad. I quit using newspapers, print and radio, and TV. We laid all of that aside years ago and put every penny, every piece of activity of our marketing on the internet, websites, electronic books, the YouTube videos that you've seen, the social media stuff that we do. People swerve into us there.
Exactly how many come from our website and how many come from a Facebook ad and how many come from a YouTube video, I don't have the exact number, but it all comes from that pretty much because I don't do the old traditional dinosaur advertising anymore. We used to do it a lot. We don't do it anymore. We're busier than we've ever been. It's the internet. We're on every major land website there is, plus our own site, all the social platforms, e-blast, text blast. Any way that I can get our name or our properties out on this device in people's hands is what I do.
Seth: Of those different selling platforms out there, selling websites, is there one or two that are responsible for the majority of your sales? If a land investor is listening to this and they're like, “I just want to do the 80/20 and focus on the most powerful selling platform," what is that for you?
Pat: Without a doubt, it's our website, recland.net. But I understand that a personal website for your average investor doesn't work because he doesn't have the economies of scale in place that are driving hundreds and thousands of hits to that site every day, like people are hitting ours. So, personal website is us, but we're an established business. 15 years. People have been going to that website. The numbers are there.
The second place after that would be, there are a handful of well-established land websites out there, the one-off, the onesie, twosie investor can use. If I were that guy, I would use those. I hate to plug them on your show here.
Seth: No, that's fine. I'm just looking for what's working for you.
Pat: Landflip.com, top-tier people. Great website. I think one of the top three or four land websites on the internet. And then you've got the land.com family. So land.com, landflip.com, those are the two that I would start with if I were onesie, twosie or a handful of deals a year investor.
Seth: What is it about landflip.com that you think is so effective? I don't think that's the biggest one out there, is it?
Pat: No, it's not the biggest at all. Like I say, I think it depends on who you ask, and when you ask. I think it's number three, number four. But when you only have a handful of top-tier land websites, it's right there. You got Hertz, Avis, Enterprise. Everybody rents from all of those. Landflip.com is probably number three or number four, again, depending on who you ask and when you ask, it's a stellar website. It's user-friendly, it's got all the bells and whistles and it's run by world-class people.
They're run by great people. Not corporate pointy heads, not VPs in the office, run by real land people who've got the technical expertise to make it all work. And I know I sound like I'm plugging them. I'm not, they're just friends. I don't have a single dog in the hunt. In my opinion, they're the standard even though they're not the number one site out there as far as track.
Seth: No, that's actually really good to hear. I've known about Landflip forever, but for whatever reason, it's not like the site that I hear about the most from where people are selling stuff. But I think the world that I'm operating in, it's a little bit different than yours where mine are specifically land flippers, people who are buying super cheap and selling for more, whereas you're more like the people who are more invested, maybe, with bigger stuff who are doing more things to the property. But I wonder if the market has anything to do with that too. Maybe certain markets, for whatever reason, gravitate more toward certain platforms. I don't know. It's hard to say.
Pat: Maybe so. But again, I've been doing this a long time and I'm reasonably good at what I do, got a little information. Knowing what I know now and if I were starting from nothing and I were just a onesie, twosie land flipper, whether it be three acres or 32 acres or two-acre lot here, there, I would still use these platforms because that's where people look. Their SEO is out there. If you go online and you're doing anything looking for land, these platforms are going to pop up. I would be there whether I had 10,000 acres or 10 acres. That's where I would be if I were onesie, twosie guy. And I don't need mean onesie, twosie in any disparaging way. I'm just trying to make a distinction between the guy that this is all they do and then people, this is just part of what they do.
Seth: Got you. No, I appreciate you mentioning that. So figuring out what land is worth can be a very tricky thing in some cases. I'm curious, how do you do it? I've seen on some of your YouTube videos, you talked specifically about that with regard to timber and surrounding properties and I'm just curious, do you have any software that you rely on, or is it just your knowledge of that market, and previous sales there of similar properties? How do you get confident about the value of a property?
Pat: Yeah. That's unfair to your average guy out there because I'm sitting here with, I don't know, thousands of land deals under my belt and a great office manager in the next room who's got every detail of every deal we've ever done in Excel. So, we've got our own database that, if we're uncertain, we can always kind of look at. We're running hundreds of properties through here a year, we do our own deal.
So there's this mental database that I can go look at your typical property in our region and I'm going to be able to put a range on it really quick just because of what I know. And that's a little bit unfair. Your average guy out there that's trying to put a value on something, he needs to, and this is what I've told people before in videos and stuff and books, is you need to call and ask guys like me. You need to ask questions. Not just call and ask one person. You need to just acquire information and you get that from a lot of sources.
You might be able to get that from your tax assessor, the clerk. And a lot of this is states specific because some states are disclosure states, other states aren't where the purchase price has to be put on a deed. Other states, they don't. States like Arkansas, it doesn't have to be put on a deed, but you can still figure out the purchase price because of the way they tax the transaction. You can figure out exactly what the price was. So, there are people out there that you can ask, and you can put together enough information to get in the ballpark if you're a onesie, twosie, a smaller guy, just trying to figure out something that you want to buy or sell.
There is no magic website. There is no magic solution or silver bullet for it. Houses are different because you've got the MLS and you've got comp, comparative market analysis, but they've also got 15,000 other sales right there in Littletown, USA to be able to pull from. So, that database exists for them. For us, we have to create our own database and we do. We have it here, I've got it here, we've got that database, but we've had to acquire it one deal at a time.
There is no simple way. And if people say there is a simple surefire guarantee, that's the guy you need to run from or quit watching on late-night information television. If it's really not a bulletproof system for that. It can be done, but it takes work, takes digging and work. And that's where most get-rich-quick investors fall out because they wanted the quickness, they didn't want the digging and the work part of it.
Seth: Yeah. And I would agree. It is an unfair advantage for sure, but that's why it's important for people to talk to people like you. Take advantage of your unfair advantage. I know a lot of land investors now who rely heavily on their local land agent or land broker, not only for selling stuff, but also on the acquisition side when they're buying a property, asking their agent like, “Hey, is this good? Is this worth what I think it is? Is there something about the local market that I'm not aware of? Any red flags, any reason I shouldn't buy this even though it looks good to me on paper?”
And a lot of times their agent can step in and be like, “No, don't do that,” or “Yeah, this is worth more than you think it is because of this.” And you can't really get that without somebody like Pat who's been around for a long time and has tons of data to look at. So, I would agree.
Pat: I agree. Yeah. And that is not just Pat by any means. Like I said, I'm pretty good at what I do. Been doing it for a long time. Got a lot of good guys that work for me. And so, we're always picking each other's brains and bouncing information and questions off of each other. We do that nonstop. We probably know the answer, but I'll still pick up the phone and call Mark or Coy or whoever and ask a question about X, Y, Z, and they'll do the same. It just sort of validates what our hunch is. And that's important.
Seth: And I'm wondering, say, if I'm looking at a market like Washington or Idaho or something like that where you don't necessarily have a presence, but I want to find somebody like you. How do I do that? How would you find yourself in another market like this? Is it just looking at local land listings or seeing who has a YouTube channel about land in those states? How would you go about doing that?
Pat: That's a good question. I get asked a lot because the internet doesn't have a boundary and so I've actually gotten calls and emails from people overseas and other countries asking me about a hector of this, that, or the other. And I'm a go-getter kind of guy, but I'm the first to tell you, “Hey, brother, I have no idea, man, no clue. I'm sorry I'm stupid as it relates to that.”
But I get asked a lot about properties all over our country. And a lot of times, I'll know a good company or an agent in an area and I'll give them the context. I've got it on my phone. I do that quite a lot. There are people I know and trust, I don't want a referral.
I just want them to find somebody that they can trust and who will serve them. That takes care of it for me. I don't need money out of that. Wasn't going to make any money at the beginning, why try to ease my way into some little referral at that point? I just want somebody to have a good contact.
If I don't know anybody, and that's frequent too, I always refer them to rliland.com, that's the realtors land institute, rliland.com. And they have the database and it's part of the National Association of Realtors. They have a database of all the agents all over the country and they can look right there in their region and they can get some names and they can at least make a call and start a point of contact and then investigate if that person can help them.
People that are in rliland.com or typically they're in it as a profession, they're professionals. A lot of them have the ALC accreditation, accredited land consultants. That's one of the National Association of Realtors designations. And anybody that's got an ALC designation and they find them in that website, they're not just fly-by-night folks. They've done the work, they've spent the time to earn that and they're probably a good source to at least start with. I've given that piece of information out hundreds of times.
Seth: Yeah, for sure. I've heard of that site and it gets referenced quite a bit in our community too. I am wondering, take a doctor, for example. A doctor who goes through medical school and they just barely graduate with Ds on everything or Cs or whatever the minimum possible grade is, they're still called the doctor and you don't know any better. You know what the grades were, you don't know how smart they are. It doesn't make them good just because they're a doctor.
I'm wondering if you were talking to a new contact who says they're a land agent in some other market, what are you looking for? What questions should you be asking? What answers do you want to hear? What would be some red flags that are like, “Uh-oh, maybe I shouldn't work with this guy?” Any thoughts on that?
Pat: I don't have a list of top five things, but you and I are both grown men and we deal with people all the time. And a lot of times, just in the first few seconds of a conversation you start to, like a buddy of mine says, his phrase for it is, "That guy's got a lot of cheese in him." That's his way of saying, “No, I'm not believing much of what he says.” And he discerns that on his own after a real short conversation.
And if those red flags go up, you might want to be a little leery, but if everything's moving along I would certainly ask him what company they're with. And while I'm on the phone with them, I'm looking at their website. I'm looking at the listings this man or woman has. I'm just starting to see, is there any cattle to go along with the hat, so to speak, when I'm talking to somebody.
And having a conversation with them over just a little short period of time sort of meets that out. You start to realize, hey, this person knows what they're talking about, or no, man, I feel like he's selling me a used car. And if you get that feeling, I'd trust that and hang up and go to the next person.
But if you're getting good information and it's validating some of the things that you think you already know, you're seeing other things that point in the right direction. Hey, this guy's got 22 listings in my state, and seven of them in my county or parish, and, oh, look this property's kind of like… He didn't get those listings by accident. He didn't hustle everybody. You know what I'm saying? So there's probably some substance there. That's just the old country boy way of me going about it. I listen to the red flags, kind of trust my gut and I look for some signs of real activity.
Seth: Got you.
Pat: If a guy, a man or woman, they don't have any listings, you go to the website, you can't even navigate it because they're with a one-stop shop, kind of a one-horse… I've got my metaphors all mixed up. They're with a little cheesy little website with a business that doesn't do anything, then I want to trust my business with them? Maybe not.
Seth: Going back to the value thing that we were talking about just a second ago. It's something that always kind of trips me up or, I guess, just frustrates me because I don't really know what to do with it exactly. It’s how to quantify the value of things like a view or unique attributes of a vacant lot that aren't necessarily monetizable, like timber. Like you can't really put a dollar amount on it but there's still worth something to most people. How do you figure out what that is? A lot of times, there is no comp that is a direct comparable to that. So, how do you think through that?
Pat: You're exactly right. There are these intangibles. These intrinsic things. These little wow factor things. The opposite of wow factor, these ugly irreparable type things that I'll add or take away value. And they have to swag it that silly wild guess kind of deal. But in my business here where we are, we sort of got our business off and running was the biggest part of our business is in Louisiana, east Texas, south Arkansas, western Mississippi and that is a very strong recreational part of the world. Deer hunting, duck hunting, fishing, turkey hunting.
Old land guys long before our businesses got established valued land as dirt and inventory. That's the only two things that mattered. Dirt and inventory. The timber on it. And they put a value on the timber, which you can do. And then there was a dirt value which people could figure out sort of set over time.
Land has always been about X dollars of value and then plus the timber. So, dirt and inventory. Well, guys like me came along and even people before me, and realized, “Hey, in Louisiana, we've got the Mississippi River, we've got the Delta with the best duck hunting in the world in central East Arkansas.” People pay a lot of money to kill a big deer and to kill a lot of ducks and the turkey hunt. Well, you've got a recreational component now that you add to dirt and inventory.
And suddenly, land that people were used to buying and selling at $1,100 and $1,200 an acre is suddenly now $1,900, $2,500, $3,000 an acre because of the recreational component. And that is new to the game. That hadn't always been around. And so, that is the same thing that you're referring to with a view or this or that. Learning just what those extra components, what value they truly add is something that is region-specific.
I don't know anything about the Pacific Northwest but I understand it's beautiful. I don't know anything about Colorado vistas, but I understand they're beautiful. And those guys out there can look at that and put value on that that I can't. So, it is going to be region-specific, property-specific, and men, women professionals in those areas, they're going to be able, from experience, to put some value on that.
Same thing, you also have to educate a buyer-seller, and I have to do this a lot, had to do it yesterday on the 120 acres that not every acre is created equal. I've said that thousands of times. Just because this property is worth this amount in this parish, it's not worth this amount in this parish just because of location.
And if you've got a lot of trees on 12 acres doesn't mean it has any timber value. I don't know a single logging operator that's going to go set up and select cut 12 acres. There's just no money in it, you can't do it. So you got a lot of great beautiful trees, but that's all they are, there's no timber value.
And learning to make those distinctions as a buyer and a seller is really critical. Not every acre's created equal and just because there's a tree doesn't mean it's timber. Just because there's a view doesn't mean somebody else is going to think it's as pretty as you do, that sort of thing. Seth, I said a lot to not answer your question because there are no clear-cut answers for that. There are regional norms, I could say, where people can apply those values and they come from real sales.
Seth: Yeah. You did answer my question in the fact that it's not a clear-cut answer, but in terms of talking to local agents and people who just understand the area, I don't know of any other way either. I just don't know how you would figure that out because you can't just do that looking at spreadsheets and comps, so to speak, whatever that means.
Pat: Now, let me give just an example to tie into that. My office, I'm sitting right now in northeast Louisiana. Well, five, six hours from here in northwest Arkansas, north central Arkansas, some of the most beautiful grounds you've ever seen. High rolling terrain, gorgeous hardwoods, rocky outcroppings. It's beautiful to me. Absolutely gorgeous. People would love it if you could get them there. And I look at some of this stuff, it's priced $800 - $900 an acre and I see it on the internet and I'm going, I'm tempted to buy that side unseen. Look at it, it's gorgeous, my stars, if we have that down here, I can sell it for $4,000 an acre.
Well, it doesn't sell up there for those prices or it's having to be priced that low because it's completely inaccessible. It's completely unbuildable. It's beautiful if you can get to it with a helicopter. And those are the types of things that it's apples and oranges depending on the region that you're in, and depending on its functionality. I look at it and think it's a beautiful thing. It's worth many thousands an acre.
Everybody else up there that lives there goes, “No, man, I wouldn't give you $1,000 an acre for it because I can't get to it. It's hard to rock. I can't take my family, my dog can't even climb the hill.” That kind of thing.
Seth: Yeah, I know it's frustrating because I've used the illustration of the land in my backyard. I've got a pretty heavily densely wooded backyard, but I actually don't own it. It's my neighbor kitty-corner across the way that owns it. And sometimes they talk about, “What if we just cut all these trees down and developed back there?” And I'm like, “No, don't do it." That land is worth a lot to me.”
But I'm the only person in the world that it's worth much to. Maybe them and me and that's it. Nobody else would care about it. There are a lot of properties that they're worth a lot to some people, but that doesn't mean it's worth that much to everybody. It's not an objective value. So, I don't know what I'm saying other than just I understand the frustration. It's hard to really figure that out.
Pat: To your example there, we sell a number of tracks every year that are just gar holes. Gar holes is just an expression I use for. It is just holding the world together. It has no legal access. It's low. You can't do squat with it. It's just holding the earth together and nobody's going to buy that. We will list it. We have to get the seller down to some reasonable number based on what we sold in the past because I know that I can approach the adjacent landowners.
And if the price is reasonable to them, they're going to want to try to buy it because it means something, it has value to them because it joins them just like you're saying. It joins you. That piece joins you. It adds a buffer, maybe between you and somebody else. And so, that gar hole to one person that's absolutely worth nothing to this adjacent landowner, we had a guy recently who paid $1,500 an acre for something that we couldn't get anybody else interested in for $600, $800 an acre because it had no use for them at all. But the adjacent guy bought it for $1,500 an acre. That's about $1,100 an acre more than it's really worth, in my opinion.
Seth: Yeah. It makes me wonder, do you think there's such a thing as unsellable land? Is there a property that's so bad, nobody will ever buy it?
Pat: Yes, but then I always seem to get surprised. Because even that piece I described right there, those adjacent neighbors want it, they all want it. The drawback is a lot of them don't have the money to buy it, which is nobody's fault. That's just the reality. And so, I've sold ditches that run between properties. I've sold ditches, nobody wants that. But an adjacent farmer could use it because he could create additional drainage. The only use for it was for that farmer for that use and he happened to be able to buy it. Other than that, it's unsellable. Yeah, to answer your question, yes, but there are always a lot of exceptions.
Seth: Yeah. No, it sounds about right. When you think about all the land that you list, how long does it typically take for you to sell it? Does your opinion have much weight in terms of figuring out what should this property be listed at? Say if I come to you with a property that is objectively, if that existed objectively, worth $100,000, but I'm like, “Nope, list it for $200,000.” Like would you just say, “Nope, sorry, we're not going to do it?” or would you, I don't know, meet me halfway? I guess I'm kind of asking two questions at the same time here. So, maybe we'll start with the first one. What's a typical timeframe to sell?
Pat: Yeah. I get asked that by everybody that calls or wants to list something. I don't have a quick answer for it because it just depends. It really does. What we do in this business, it takes just a little longer to marinate. That's kind of what I say to people. It's not like selling 131 Elm Street, where houses flying off the shelf, especially like the last 12, 18 months. It's not like that at all. It's got a marinate just a little. Unless it's at a ridiculous steal of a price.
And then I can make a phone call and sell it. So, it can sell in a day. But put it on the market, it takes a little time. Just to give you an answer, if somebody prices the property at what we suggest or write around at what we suggest two, three months is something fair that I tell people. If we're going to really push the high end, it may be in the four to six-month range because most of the stuff we sell is a luxury purchase.
Everybody's got to have a place to live. But not everybody's got to have 200 acres to turkey hunt. It's a luxury purchase. So those go slower. They just do. Not everybody wants to agree with that, but it's just a reality. I tell people quick is a month or two if we price it just rent a fire sale price. Three to six months if it's priced at market. And if you're really shooting for the moon, I don't have an answer.
To answer the second part of your question, about I suggest it's a $100,000 asking price and you say, “No, I want to ask $200,000.” If it's a certain kind of property, I may go, man, I'm good, but I'm not that good. I'm sorry. But that means we've sold 100 of them. If we know it's going to sell in this range, there's nothing magic about it, it's not special.
But there are some properties that are, hey, you may be right. It's got some unique features. It's got that view. It's got some of those intangibles you mentioned. Somebody comes along and falls in love with it, they may pay close to that ridiculously high number. And I hope they do for the seller. So, I may be wrong, they may be right. And I'm willing to concede that and go, let's try that.
My approach is, “Hey, you may be right. Let's try it for a period of time. But after six or eight weeks, if the market is quiet, then that's the market telling us we're way out of line and we need to listen to the market.” The market is not wrong. The market is more right than you and I will ever be. So if the market's telling us we're way out of whack, then let's listen and move our price down just a little bit. That doesn't mean we go all the way to $100,000 but maybe we go from $200,000 to, let's lower it to $170,000 and see what the market says.
And if we start getting some activity, let's just keep working until we get to that sweet spot. And it may be down at $100,000 where I was right, it may be closer to $200,000 where you were right. But let's work until the market engages and then we know where we're supposed to be.
And a lot of sellers, if I approach them that way, when they want to ask way up here for something, most people are reasonable and go, “Hey, I appreciate that. Let's give it a try. If it doesn't work for a couple of months, we'll move down.” And if we've got that understanding going in, we'll represent the property and go for it and try. And a lot of times, that works a lot. You keep moving the price a little bit where the market notices and engages, you can make deals.
Seth: Did you say six months be the timeframe at which it's like, okay, if we haven't sold this thing by then, we're doing something wrong. We got to make some changes. Did I hear you right? Is that what you said? What would be the timeframe at which you would want to start reevaluating whatever you're doing?
Pat: Two months. I usually tell people, what I was telling you was sort of my speech on the phone with a client is, “Hey, if we hadn't gotten any activity at all in five, six, eight weeks, let's listen and adjust.” So that month and a half, two months, if it's dead, nothing going on. That's a tell-tale indicator to me. It's the price. The price for what it is. And it may be a terrible property, but even a terrible property has a price. So, it's the price for what we're trying to sell. So, let's adjust after a couple of months.
Seth: I don't know how much data you have on this, if anything, maybe just a gut feeling, and I haven't even looked at some of your typical land listings that you put out there. But with a good listing, there are things like really good photos of the property and then there's the information you provide and then there's the price. And in some cases, there's a headline. In your opinion, which of those things is most important to get right? If you don't get this right, it's going to have a much harder time selling. Would it be pictures, you think, or price? I don't know, any ideas?
Pat: My gut is to say price. Because people will be interested in a property without a picture. We never represent a thing without a picture. Some of the residential agents that try to do land, I've seen some of their stuff that has hand-drawn maps, which makes me want to just die. It gives me the red so bad I can't stand it in one or two pictures. And I can tell from the picture they're on the road. They never even got on the property. They took a picture this way on the road, took a picture that way. Makes me want to just scream.
But if the price is right, I'll investigate the property. So I think it's price. But in this day and time, because people are shopping here, they're shopping on their computer, you got to have good mapping, you got to have good imagery. Drones. You got to be able to tell the story in 8, 10, 12, 20 pictures with somebody clicking on the internet because they're not going to look very long. They're going to go to the next one.
Seth: With some of these higher-end properties, is video important at all? Do you go through those motions to make kind of like a one-minute video with drone pictures or anything like that? Or is it not really that crucial of a thing?
Pat: I put myself in the place of the consumer and if I'm looking at a property and it's got a video, I'm going to watch the video. Because it could be something there that I pick up that I'm not getting from the information. So yeah, video is hugely important. It's just the world we live in. I mean, grandma's scrolling through Facebook and she's watching a cat video. They're the people that buy property and sell property. So yeah, video.
We don't video everything. I certainly don't drone video everything. I used to, but getting video of a pine plantation is about the most boring thing you can see. You look just a canopy of green. But if a property's got some character to it, we want to capture that in video and we'll do ground video, we'll do drone. Not every property, but the ones that have a story to tell.
Seth: Yeah. This is another question that you may or may not have any precise idea on, but when you consider all the different ways that potential buyers find your listings and buy your properties, you've got texts, you've got emails, you get listings on different websites. Do you have any idea, the sales that you do, what percentage are attributable to the text you send out versus a website, or how often do you pick up the phone?
Like you know a specific person who's going to buy this thing and be like, “Hey, you want to buy it?” And to say yeah and then you sell it that way. Just to figure out for the typical land seller, whether they're a licensed broker or not, what really packs the most punch in your selling efforts? Is it having that network of people, or is it just listing on the right website? I don't know, what would you say?
Pat: I think it's the websites because that's where people are going to actually investigate a property. Now, the emails, the social posts, the text blast, the Facebook ads, they all link to a website. So, most people, I don't think, look at a text post on our land for sale Instagram page and go, “Oh, man,” and call. No. I think if they're interested, they then go to the site and look at the details. It's like a two-step deal. This teases them, gets them in the door. And then the door, I believe, door to the website that's got the information.
And then that's when they will hit the button and send us an email or pick up the phone and call the agent. But I think it probably started with social. It started with the internet in some way or emails, text, social, got them into the door of the website before they make the initial contact. I think it probably is 7 out of 10.
Seth: Yeah. This is actually something that I have been learning a lot about this year. It's taken me 10 years to get around to it. And this is certainly the geeky stuff that the average land investor might not care about. But there are actually a lot of ways that you can figure out where is traffic coming from? Is it coming from LinkedIn or Instagram? And it's with UTM codes, you basically just bake it into the link and then you can figure out, okay, these number of people that are coming from this platform.
But anyway, if anybody's ever curious about that kind of stuff, just do some Google searching for UTM codes. You can kind of learn how they work and it's a little complicated to figure out in the beginning, but once you grasp it, it's a pretty useful way to track where business is coming from.
Pat: I do not disagree. In fact, I agree with you 100%. I'm very familiar with it. I listen to a lot of tech nerds that they train on Facebook and Instagram. They really get into the weeds, into the minutiae, and that's their business. The reason I don't do it, and I'm familiar with them is I got this much time in a day, this much time left on the planet. I can only do so much. I know the analytics of my website and I see where stuff is coming to my website. So, I try to major in the major. I can't do everything. So what I do, I do well. But I agree with that 100% if somebody is of that mind.
Seth: Yeah. I completely agree with that too. I've spent an embarrassing amount of time trying to implement this stuff this year and honestly, I don't know if it's worth it. I do sort of feel like I've wasted a ton of time and time will tell if it was wasted or not. Because it takes time to aggregate this data. But for sure, I don't think I could say it's the most important thing. It's more just like yeah, it's useful to know.
Pat: Yeah. And if we got John sitting in the next office and that's his job. And John's good at that, that's great. I'd love to hear the information John collates from that, but to do it myself, I can't do it anymore.
Seth: On the subject of selling land, how often do you see seller financing getting involved with these deals? What kind of impact does that have on how quickly and how much you can sell it for and what percentage of your clients, the people selling land through you, are willing to do that?
Pat: We'll have of our listings a handful. So, to put a number on it, if I had to guess a number out of 100 listings, there may be 6, 8, 10 that the seller is legitimately willing to do some sort of seller financing. Most of the time when it gets to us, they're ready to divest. They want in, out. Get it done, get it sold. They don't want to continue the activity with seller financing. A small percentage of people that are actually listing it.
There are a lot of sellers out there that do seller financing is what they want. They're trying to build an annuity, they're trying to build long-term passive income, so to speak. That's their business model and that's all they do primarily. We do those deals on and off through the year for our clients and we occasionally do some ourselves. We used to do a whole lot ourselves, but like my buddy said, partner, he said, “Hey, if we're going to live another 300 years, that'd be a great way to do it.” But time is short. So we're looking at turning over cash.
I give a lot of information and advice to both buyers and sellers regarding seller financing. Because I've done it so much. I understand a lot of the mechanisms and tools and there are a lot of pitfalls in it. I do more steering buyers away from it because most buyers, to them, it's a bandaid. I don't have any money, but this is a way I can buy this property. And they get hurt and tricked. They do something too soon. It's a negative for most people. And I'll stand on that. And I've got videos and books out there that get into the details of that.
I seller finance land. I know it can be done, know it to be the right way to do it. But there are a lot of unscrupulous sellers. There are a lot of very naive buyers. And so, I steer most buyers away from it.
Seth: Makes me wonder, how would you get paid your commission if somebody's doing seller financing? Would that buyer just have to do a bigger down payment to cover that? Or how would that work?
Pat: Yeah. One of our agents sold a really nice piece of property, a large piece of property recently, where the sellers did owner financing on it. And just the down payment was just enough to cover the commission. That's how the seller wanted to do it. And so, it works for us if he's happy with it. If everybody's happy, that's fine.
Seth: How often do you see bank financing getting involved in these deals? I have to imagine there are certain circumstances where banks are willing to finance it. Is that accurate? And if so, when? What would make them comfortable with that?
Pat: In our world, in the southeast and the Midwest, our really big part of the country, there are a lot of lenders. That's all they do. And they have great products for rural real estate. It used to be they had to have a huge amount down. And that is only financed at a short period, 5, 10 years. Not anymore. You can get a 30-year mortgage on rural real estate, just straight-up timberland, farmland, hunting track with 15%, 20% down. And just credit like anybody else, as long as you've got the financials to be able to show you can pay it. Out of 10 deals, probably six or seven of them are lender financed.
Seth: Oh, wow. That's amazing.
Pat: Oh my goodness. Yeah, it's very common. The Louisiana Land Bank. And the Louisiana Land Bank, it's a federal charter for lending for rural land. It'll have different names in different states. I can just go on and on naming banks that are all part of that same federal charter. It's primarily what they do is loaning against unimproved rural property, farmland, timberland, recreational property.
Seth: With both farmland and timberland, there is some fairly concrete ways to value that and appraise it and understand what it's worth in terms of the bank's collateral value and risk they're taking. Recreational land, I have to imagine there are probably ways to do that too.
I think, at least in the parts of the country I've worked, the reason most banks want nothing to do with land that doesn't have an immediate plan for some kind of development is because of the whole collateral value issue. They don't understand what it's worth. Appraisers can do appraisals, but they don't really understand what it's worth either. So it's like, how do we lend on something when we don't know what it's worth?
And there are ways to ignore the collateral value and just look at the borrower themselves. Is this a rich guy or girl? Because if so, we could just get their personal guarantee, and that makes it okay. And maybe this is a question for those lenders, but do you have any idea, how are they able to get comfortable with that? What is it that they are using to underwrite that borrower and get comfortable with the deal?
Pat: Straight up answer is comparable sales. Keep in mind, in our region of the world, and I'm talking about not just Louisiana but the south, southeast, south-central, Midwest. All of these are great recreational areas/timber areas, farmland, comparable sales. I talked to an appraiser right before I got on the phone with you about just a piece of pasture land in Texas, 600 odd acres, the appraiser's doing a deal for us. And he's just going to go pull comps because they're going to be a dozen of them out there he can use.
If I'm selling hunting property on the Mississippi River, my goodness, I personally could give him 50 comps. And I'm in a tiny little part of the world there. He's going to be able to pull comps, all the comps he needs to do it just like he's doing 131 Elm Street. Your point's a good point. Let's say you're in the Pacific Northwest somewhere there and there are 150 acres of just completely undeveloped rural land, there might not be many comps. And so, I get the point there, but in our part of the world, man, this is common as a Coca-Cola.
Seth: Man, that's awesome to know, though. It sounds like because of the existence of comps that sort of solves all the problems, which makes sense. That really is the issue in terms of valuing it, are there good comps or not?
Pat: As far as a third-party appraiser, yeah. Because a lender is reaching out to a third party appraiser and they're taking their word for it and if that third party appraiser can put his hands on comp, everybody's happy.
Seth: Kind of heading into the last little section of our interview here. I wanted to ask you some questions about just your profession of being a land broker. Was there a reason why, and maybe you sort of already answered this, but why did you choose to focus on land specifically instead of houses? Was it because of your friend who kind of convinced you to, or is there something about land? Can you make more money? Is it easier to understand? Is it better people to work with? What are your thoughts on that?
Pat: Look at me, man. I'm a fat country boy with a beard. I'm wearing boots. Look around me, I've got deer and duck. I'd rather be stomping around on 120 acres getting wet up to my waist like I did yesterday than arguing with a lady about the color of the paint in a bathroom on a house. So, it's absolutely just quality of life for me. It really is. And selling rural real estate, it's more of a business decision than it is “Well, I don't like the tile in the hallway.” I'm sorry you don't like it. I'm sorry.
It's that left brain, right brain. It's men are from Mars, women are from Venus kind of deal. I just don't want no part of it, man. I really don't. I can't answer it better than that. It's definitely not more money. It is harder work. It is frustrating, and when you're out in the middle of Louisiana or a Southern July or August summer stomping through a pine plantation with ticks and red bugs, I kind of wish sometimes I was doing something else, but I wouldn't trade it for the world because it's quality of life. How sophisticated is that answer, Seth?
Seth: One of my questions was going to be, what is your most and least favorite thing about what you do? And it sounds like you kind of answered that. Well, maybe you didn't fully answer it, but do you have any other thoughts on that? What is the best and worst part about being a land broker?
Pat: In my opinion, the best part is no two pieces of land are the same, like fingerprints. And so, if you truly enjoy the outdoors, if you enjoy wildlife, you enjoy conservation, nature, all of those things, I do. I enjoy hard work. I'd rather ride around in my Polaris side by side than in Lexus. Again, that's just personality. Putting people together with a property.
Because a lot of times we're selling property to first-time buyers. They've always wanted to own their own land to hunt on. They've always wanted a place to build a house out in a secluded area where they can just be out of the rat race a little bit. And to put people together, even if it's 20 acres, their own first piece of personal property. Oh my goodness, they're happy as they can be. You can't beat that.
But the worst part about it is just like in anything. You got the ups and downs. You got deals that fall through sometimes over the most ridiculous, piddly things. It is hard. It's ridiculously hard work, especially the older you get in the summers. Some of the areas we have to go in that are just very difficult to access. It's just hard work and it's demanding.
A residential agent may show six properties to somebody today. It may take me all day to show one by the time we get there. Get to all the things that are involved in it. Everything is a little bit of a trade-off in life, as you know. And even in this business, as great as it is, it's hard.
And especially when things get hard. Right now, the last couple of years, everybody wants to be in the land business. It's sexy, it's fun. You got to ride the four-wheeler and you got your new Timberland boots and your little hat. And I make fun of these guys. These new land guys. Because everything's great. They're making money hand over fist. But they haven't been punched in the mouth. They haven't gone through those tough years like we did four or five, six years ago when nobody's buying anything. Nobody's selling. On the house side of it, there's always a little more action, but still, I wouldn't trade it.
Seth: No, that makes total sense. You got into this a little bit, well, you mentioned it in passing, how lucrative is this compared to people selling houses? And I know this is a super broad open-ended question with a lot of “it depends” in there, but if somebody just wants to make a ton of money, is this the business for them, or should they be doing commercial or houses or something else?
Pat: I'd make you have to define a ton of money, but I get your question. The way I look at it, I have a handful of guys that are full-time. This is all they do 24/7, 365. And they're six-figure guys. But I'm thinking of a few using some of their examples, they never miss a hunt. They never miss a daughter's volleyball game. They live the life they want to live and make a really good living doing it. Now, there are other people, they just want money, money, money, money as much as they want to make and their quality of life is different and that's okay. It's whatever they want.
If that's what that person wants to do and they want to get from six figures to seven figures and up in the sevens, they probably need to go do commercial real estate in a big metropolitan area. I’ll be honest with you.
If you want quality of life, to be able to live your own life, set your own schedule, work hard, but work when you want to. You can make a very good living doing this and never miss a duck hunt, never miss your daughter's softball game. Because like I say, as long as you got one of these in your pocket, because I've been in duck blinds where I've answered the call and say, “Hey, yeah, I can show that property to you, but it'll be about one o'clock today. Can that work for you? Because I'm in the duck blind, I'm going to be here till 10:30.” That kind of thing. If that matters, this is a great industry to be in. If it's surely money and volume, residential, commercial might be where you want to be.
Seth: Got you. No, that's a good answer. Let's pretend for a second that I'm 22 years old, I'm fresh out of school or whatever I did and I want to start my career. I want to be a licensed land agent or broker like you. Do I need to focus on a specific market? Is there a right in a wrong market to try to do this? Or where would I go to find somebody like you to try to work under them and then sort of start my own thing and my career path that way?
Pat: Ah, that's a good question. I talk to a lot of people throughout the year. A lot of folks that call and they're investigating, moving into our business, moving their license to us or getting licensed to do what we do. And some people, as I talk to them on the phone, I realize, “Hey, this is a good fit, potentially a good fit.” And others, I realize, “Man, it's going to be very difficult.”
The ones that I realize are going to be very difficult other than just red flag stuff are locale. If they are in a metropolitan area, for instance, I had a guy call me from St. Louis, Missouri. Wife's the school teacher. They live there. That's where their home is. He's going to have, and like I told you, you can have a very difficult time because yeah, you can sell a lot of great land in Missouri, but you got to get out of St. Louis to do it. And that means either two-hour, three-hour drive all the time or you got to relocate.
So, the locale matters. Because you brought up some things about some scenarios you're familiar with and those parts of the country just might not lend themselves to enough volume that a person can get their slice of it and make a comfortable living. There are regions of the country down here where I am. The southeast, Alabama, Georgia, Florida, oh my goodness, even the Carolinas, Virginia, definitely in parts of the Midwest, Kentucky, Tennessee. Dude, those are great, great places because, by and large, they're rural states. They have large metropolitan areas, but they're vastly rural areas, vastly rural states. So, the locale is, I've come to learn is extremely important to make it to do this full-time.
Seth: Are you talking about where the person lives, just where they sleep every night? That's important? I guess maybe another way of asking the question is, let's say I live in Franklin County or Parish in Louisiana. I'm looking at your website right now, one of your listings here. What would be a radius around there that I could serve? Is it like the surrounding three counties or something? How would you pick the correct coordinates on earth to be like, I need to live here because then I can serve these areas which have a high volume of land sales. What would the logic be to figuring that out?
Pat: Yeah, good question. You mentioned Franklin Parish, one of our top guys is there. He makes a great living selling primarily the property that he lists in Franklin Parish. And it's a tiny little rural parish, but he also serves, I don't know, five, six parishes around it there. Mostly Franklin Parish, but he's got listings and all of those others ones, these twosies around. So, he sleeps in Franklin Parish, but he can also drive to Catahoula and Concordia parish that are an hour, hour and a half, two hours away.
You got to sleep somewhere that you can get up and work hard that morning. And so, to get up every day and drive two or three hours somewhere, maybe because you got a 20-acre listing that's three hours away, it just starts getting difficult. It becomes financially impractical. You see my point there. You got to be able to wake up and do business in your locale or figure out a way to get somewhere. And to convince those people where you're getting that you can represent them even though you're three hours away. That's part of it too, which goes back to one of my points I made earlier that we'd say no to some stuff because I don't have guys that are right there, boots on the ground, close by. So, in my opinion, a guy's got to be able to wake up and go to work.
Seth: Yes. I think kind of what it's getting at is the importance of actually having boots on the ground, with your own two feet being able to walk a property. And I know for a lot of land investors or land flippers in our community, they don't do that. They buy and sell stuff in states across the country that they've never even been to. I think there is a point you can get doing that just using Google Earth and other data, but there is something you just can't see any other way without getting somebody on-site to see it.
But it makes me wonder, I know one way that I've often tried to deal with the problem is just getting a local photographer or agent to swing by and get pictures for me. It's still not the same as walking it. And there is something about using your own two eyes in the real world versus looking at pictures on a screen. You just have a different perspective of what's going on. But what are some issues that you can identify with boots on the ground that you just can't see any other way and you can't hire somebody to go see it any other way? It needs to be you.
Pat: Yeah. Topography, utilities, amazingly, you can't just make a phone call and quickly ascertain exactly how utilities are going to work. You just can't do that. There may be water right down the road, but the water company is not expanding anymore unless somebody puts in a six-inch line. Well, nobody that's buying a two-acre lot, a tax property is going to spend $48,000 to put in a six-inch water line. So, there are a ton of things like that.
Terrain and topography are the things that I've swerved into where people will call me from the other side of the universe and they want to make an offer on the property. And the first question I always ask is, “Have you seen this? Have you seen the property? - No, no, but we da, da, da, da.” And I know they've been watching videos or infomercials and they've got their one, two, three checklists of how to buy tax properties and flip them down, all that kind of stuff. I've seen the stuff too, and not disparaging that, but most people can't do it well. They're going to get hurt, burned, and embarrassed. Most people are.
And so, I don't even take an offer on a property unless they come to look at it. Unless I know they're a pro and they assure me, hey, they know what they're doing, they understand the risks. They got to get on an airplane, come look at it before I'm even going to write a contract. I'm sorry. Because they're doing it blindly and foolishly. Most people are.
So, being able to walk the property, you quickly can get an idea. You don't even have to walk the whole thing. You just got to be there and go, yes, this fits what I think the highest and best use for this property is, whatever that may be. And the only way to do that is real good information and part of that real good information, not exclusively, but part of it is being able to look at it with your own two eyes.
And again, most properties we represent, and this is a little bit of the chasm between, when you use the phrase a lot of investors and thin properties that we represent investors buy them, but maybe 300 acres of timberland where a lot of investors that we may be referring to may be people that are buying a tax property that's 2.7 acres somewhere in Colorado. There's a whole lot of that for $3,000 or $1,500 or $10,000. That's different than $1.25 million. That guy's not going to make that deal without more information. Did I make the connection, or did I broaden the gap too much for you there?
Seth: No, I kind of knew the answer and what you said corroborated that. It made sense. Yeah.
Pat: We talk about investors, there are a lot of different type of investors. Again, I keep referencing the 1.7-acre tax property in Colorado and you send out 2,700 letters to tax roll in somewhere in Colorado and you're going to offer $2,500 an acre for that. I do some of that stuff blind just for the sport of it. But before I buy the $100,000 property somewhere, I'm going to have more information.
Seth: Yeah. That makes sense.
Pat: I did that one time. I bought a property in Missouri, sight unseen, $20,000 for the experiment. And I had the information, like I say, I'm a licensed broker there. I know the area. It seemed to fit, but my whole goal was the experiment. I figured for $20,000 I wasn't going to get hurt much if I got hurt. We ended up making a little bit on it and I learned the process, but I put my money where my mouth was to try that one time.
Seth: Yeah. I imagine somebody with your experience where you just have the benefit of using your own eyes to see so much and being there on-site, you have the benefit of good information. So, it's probably hard to unpack that and go about it a different way without all the information and be satisfied with that. I would've a hard time with that. So, that makes sense.
In your experience, what are the most common deal killers that make a deal stop that otherwise would've happened? And when I say deal killers, what I'm talking about is, say, if you have a client who's thinking of buying a property and they think they understand it. But then one of your guys or girls goes out and sees an issue and “Oh, don't do it because of this.” Or maybe you have a client who's trying to sell a property and it's almost there, but then something kills the deal. What are the most common problems that ought to be addressed upfront before it's too late?
Pat: Let me address the seller part of it first. In my mind, the biggest deal killer from the seller’s side is not making a counteroffer. It drives me nuts. Now, I understand if somebody makes a ridiculous low ball totally out-of-the-park offer, the thing to say is, “Thank you, but no thank you. We're just too far apart. No, thank you.” I understand that.
But somebody makes a reasonable offer and a seller won't make a counter of any sort, just fries my bacon. And it is a deal killer because I know what the value is, we know where it's going to sell ballpark range. This buyer is coming in good faith. He wants to pay the least amount he can. The seller wants to get the most he can. But there's a number in there that's reasonable that is a win-win. And I'm all for win-wins. And when the seller won't make a counter, even when it's right on the cusp of being his number, just because, “Well, I just blah blah blah” that kind of deal, that's a deal killer. I have no patience with that anymore because it's just not smart, it's not good business. They can call it principled if they want to, but in my mind, it's arrogant obnoxiousness. They won't make any kind of counter to a reasonable offer.
Seth: So, it is driven by pride and ego? Is that what it is, basically?
Pat: Yeah. Well, here's my asking price. If they want it, here's my number. What? No, it's not. You already told me what you're going to sell it for. Make a counter. We can get them to that number. That's what counters do. It's a jockey to get to a point. That's all it is.
From the buyer's side, keep in mind, most of the time when we have an offer on a property, when we've got a deal that's starting to come together, they have looked at the property, they have been there. On the buyer side, I would have to say something falls apart with the appraisal or the lending. Just a glitch that nobody that either wasn't disclosed by the buyer to start with, or we get a really bad appraisal that it’s just a one-off bad appraisal and a lot of times we got to go back and challenge it, and we can get that changed a lot of times, but sometimes you just can't.
Those two things are the financing lender part of it because the lender wants the appraiser. Another piece that calls it to fall apart from the buyer's side, something they just didn't know about. Something that really couldn't be known until you got further in the deal. Doing one right now. There's an encroachment on the property. After the survey, there's a fence across the line. It's a non-issue. I've done this a thousand times. It's a non-issue.
But to the buyer it's a big issue because it's their first time. They've never dealt with an encroachment. Oh, somebody's got a fence across my property. It's a hundredth of an acre, it's nothing. But those are the things that if you can't just reason with them to bridge the gap, it'll kill the deal. Now, I'm going to go try to work with the guy that's encroaching on the property and see if we can come up with a good solution. I'm not going to make him tear his life apart and move this fence for a hundredth of an acre. But we got to figure something out. But that very well may kill this deal. And it was something that nobody knew until we got into the deal.
Seth: Yeah. Those things really disturb me as a land investor. And I guess the reason they disturbed me is in cases when I don't have somebody like you because, yeah, there are absolutely things that no reasonable person could ever figure out without really digging deep and getting on the property and researching everything. And that doesn't happen a lot, but it definitely happens with land and it's unlike a house where a lot of these questions are already answered. Does it perc? Is it buildable? Are the utilities there, this and that?
With land, there are a lot of questions that are unanswered that you got to figure out. And sometimes it's really hard to get those answers. And you don't want to just assume the answer is yes until you really know. Things like wetlands, for example. You can look at this wetlands map, but it's wrong a lot. To really know, you need somebody outside to really evaluate it, who knows what they're looking at. And I hate that stuff about land. It's one of the few things I don't like.
Pat: I agree. You brought up a number of things like the wetlands deal, especially in our part. The only way to know for sure is you have to have a wetlands determination done. And that is a process that you can't just pick up the phone and call and ask a general question. It's a process and the only way to know is to do it. And you don't know the answer until the NRCS goes and does or the court goes and does it. Oh, gosh, yeah, you opened up a whole other avenue of things just with mentioning wetlands. Putting in a bridge you're crossing for a creek.
Seth: Yeah. I know in Louisiana that's a big deal and Florida and Michigan where I'm at. But in other states, it's not an issue at all. I guess that's one of those local issues that you would want to get a local expert input on.
Pat: You mentioned perc. There are a lot of states that are critical. In our part of the country that's not. Because if you got an acre and a quarter, you can get a mechanical septic system. There are just a thousand things you swerve into. And that's why I think the average investor who's watched some videos and watched some infomercials, they get hurt, and embarrassed. They go, “This is just terrible, why would I ever get into this again?” Because they don't look that deep.
Seth: Last question. Back when I used to buy rental properties, I evaluated lots of different deals and a really important part of that evaluation process is understanding what would this property rent for? Not just what rentometer.com tells me, but really knowing from a local property manager what could you rent this thing for given the size and bedrooms and bathrooms and all that stuff. And so, I had a local property manager and I would just hound them every day sending them all these different properties and asking them what would it rent for? And they were gracious enough to respond with their input to me.
But I'm pretty sure I annoyed them with all my questions and wasted a ton of their time and it makes me think about you. Somebody like you probably has a really good handle on what properties are worth, vacant land in particular, which is a really important thing to understand when you're making an offer to somebody, especially if that's a discounted offer or just understanding what is our starting point? What is the basis for this?
And I know what you were talking about earlier, just sending out offers blind to people. A land investor can send a lot of offers before they actually get somebody to say yes, especially when it's a deeply discounted offer.
I'm thinking through a hypothetical situation where I want to use you, Pat, to help me understand what are the values of these properties before I make an offer. What should I already know before I start wasting your time? Should I already have established communication and I'm in a conversation with this seller and I know all these things? Or could I just send you a spreadsheet of a thousand properties and say, “Hey, Pat, give me values for all these things?” Just as an extreme example. How much groundwork should I be doing before I come to you and start asking for your help?
Pat: It's got to be property-specific. I get those calls and emails frequently, as you can imagine. And I put myself out there on the internet and so I understand that's just part of it. And I quickly can discern from the caller email, just like I talked before the gut feeling, the red flags, the cheese factor. Somebody's got a legitimate question about a piece of property, you can tell that I'm not their first thought because they've got a map, they've got some information. Quickly in my office, I'll pull it up on our mapping software and I'll look at it and I'll answer whatever questions I can answer in five minutes from the computer screen.
Now, I'm not going to go drive across the country to give them a free opinion. I get tricked into that sometimes because maybe they own the property and they're thinking about listing it and I've learned to see through a lot of that. But even sometimes, I'll still get tricked, but that's okay. That's just part of the business. I'll go and look at it and give them my two cents and really tear it apart and give them good information. A lot of times I'll list that property, but a lot of times I just got tricked because they're trying to sell it to a friend and they want to know.
But it's got to be property specific. If somebody sent me a list like you described there, not a thousand, but hey, I'm thinking about just making offers on these properties, I'm going to go, “I don't know, you probably need to get somebody that knows those properties better.” I'm going to be polite and defer. Because you know you're just being used for free information.
And the only way to know for sure is for me to go look at that property. I can give a ballpark idea on aerial, but I got to go look at it to really tear it apart. And I can't do that unless I know that I'm doing it for my business and not just for some stranger's benefit a thousand miles away. I get those letters because we own property in a couple of states.
And so, I get all those letters making us offers. And some of them, I know what they're worth because we're selling them. I understand that game. If that's what somebody wants to do, that's fine. I'm not throwing rocks at that. It is a numbers game. You send out a thousand letters, you might get a few phone calls back, but I'm not going to do their work for them for free anymore. I used to, but again, I was hustling, trying to make stuff happen.
Seth: Yeah. Sorry, one last question just out of curiosity. When somebody lists their property with you, is it a six-month commitment or something? Is there a contract? How does that work?
Pat: Yeah, by law you have to have a signed agreement. It's just state law they have to sign to say you can be a third-party representative. There's a listing agreement. Our listing agreements are 12 months simply because, again, we're not selling necessities, we're selling luxuries for the most part. And it takes time to marinate, especially if it's a larger property that they're trying to get top-end retail for, it takes time to marinate. And so, all our listing agreements are 12 months.
If they beat me up because their sister is a residential agent and all they've ever heard is six months, 6%. Yeah, we'll list something six months or nine months. Never list anything less than six months. I've had people try to say hey, I want you to list this for 90 days. No, I'm good but I'm not that good. Thank you. I don't waste my time with that. So, mostly 12 months.
Seth: Cool. Makes perfect sense.
Pat: There's a lot of work to go, because it may take a few days for us to get out there, drone and all the work that's involved. It may take a week or two weeks to get the property on the market just because of what's involved in getting it together.
Seth: Yeah, yeah. What kind of costs are there on your side? I'm sure there are listing fees for different land.com websites and costs of getting photographers out there. How much money do you have to invest into a typical listing just to get it out there?
Pat: That's a good question. So many of our costs are, you'll understand this, a sunk cost, that we already are premium subscribers on all these sites. We've already got all of the economies in place to do our business. And maybe to tear those apart down to the number, I don't know exactly, it's just sunk cost. We do our own photography and video. We're not selling Wilshire Boulevard kind of stuff, so my goodness, the pictures you could take on these things and the 4K video on the drone can improve on that. So, we do all that.
Really it's just time and gas that you're investing in a particular listing. There are some listings because of what they are that I will really hammer some paid advertisements on the internet to drive traffic to that webpage and those are onesies, twosies. I got Facebook ads and stuff running all the time. I look at those as sunk costs too. But we may list a premier sexy marquee property that I'll want to do $1,000 worth of Facebook ads just for that property, so to speak. But for the most part, it's just time and gas.
Seth: Got you. Pat, it's been awesome to talk to you. Thanks for doing this with me. Learned a lot.
Pat: I’m happy to.
Seth: Yeah, yeah. If people want to learn more about you or list property with you or whatever, where should they go? Is that recland.net? Is that the place to go or YouTuber?
Pat: Recland.net is our main site for all of our listings. And it's also got all of our company information. They got links to the blog stuff. If they want to know just general land stuff, our YouTube channel is a good place. I don't sell anything on our social platforms. All I do is give information and they can follow the cookie crumbs back to the website if they want to buy something. I don't sell on our social. And so, they can go watch the videos that RecLand talks on YouTube. Won't sell them a thing. It'll just be talking about the land business.
Seth: What made you do that? I don't know a lot of, I certainly know some, but I wouldn't say it's a normal thing for most real estate brokers or agents to build this big presence on YouTube and spend all the time it takes to do that. What made you gravitate towards that and how big of a role does that play in the grand scheme of RecLand?
Pat: I can answer your main question in three syllables. Gary V, Gary V. Six, seven years ago, I remember exactly where I was. I was on the road, I was listening to Gary V. We just started dabbling in social. Of course, we're on all the websites and stuff, but I had started to dabble in social media because it just seemed like it's what you're supposed to do. And if you've ever listened to him or read him, he's pretty energetic and got a strong opinion.
But he really captured me when he said, “If you're going to do this, you do it. And when you do it, you do it hard. And you don't sell stuff, you give away stuff.” In a nutshell, I'm paraphrasing him. And it all made perfect sense to me. It resonated with me because I hate when I would go online and I would look and all I'm doing is somebody's trying to sell me something and I'm just trying to get information.
I took him to heart and I jumped all in that April, whatever year that was, I can't remember what year it was. That's when I wrote the first couple of eBooks to get those out there and just really started doing as best I could on social, giving the information away. And it's not near where I want it to be, but, but it is there and it's significant. We're way ahead of where most people are. A lot of guys you see now, I've talked to them. They've called me for questions. I'm not saying I'm a grandfather of any of that, but I was the first one, one of the first people in the pool doing it that way. Doing it hard a number of years ago. So that's why.
And I've come to learn that at the end of the day, if I help somebody, the business is going to come to me at some point. What people may need today is information, they might need to make a buy or sell two years from now, but today they need information. Well, I'm going to give them that information so maybe they'll remember me when it comes time to make a transaction down the road.
That's the whole method right there. I just want to be top of mind when the day comes. Because we're selling expensive stuff. We're not selling a gallon of milk that somebody goes and buys one every week. We're selling half a million, expensive stuff, once in a lifetime stuff most of the time. And when that moment comes, I just want to be top of mind if I can when that moment comes. Because it's only going to come once and if it comes at all. So, I want to be there when I can.
Seth: I'm sure it's effective. From my perspective, I know there are lots of land agents out there, but when I think of who would I call? Who would I ask the question? Pat Porter is an obvious answer because there are not many people who have taken the time to put a lot of trustworthy content out on YouTube that's not selling stuff. It makes a person likable when they just give without asking for anything back. And that can go a long way towards being top of mind when somebody actually needs what you have to offer. I've seen that first-hand myself with what I do too.
Pat: I agree, I agree. You look at me, I'm not very likable as I am. I got to do what I can to feed it.
Seth: Folks, Pat told me earlier that he's got a book that he can give away for free to the first say 50 people who reach out to him. If you want to do that, you can email him at firstname.lastname@example.org. I'll have that email address on the show notes as well if you want to check it out. Again, that’s retipster.com/153. And feel free to hit him up and see if you can get one of those.
Pat: I'm glad to do it.
Seth: Pat, if there was one specific book that you recommended for everybody by you, what would that be? I could link to that in the show notes too.
Pat: It just depends on if they're buying or selling or if they're buying and selling for profit. We've got Land Buying Tips From the Pros, Land Buying Tips From the Pros, part two, How to Sell Your Land Faster by Adding Value. And the fourth one that's in print is How to Profit By Buying and Selling Rural Real Estate. So, it kind of depends on which angle you're coming from.
Seth: Yeah. No, that makes sense. I will link up at least a few of those in this show notes as well if anybody's interested in checking those out directly from Amazon too.
Pat, thanks again. Appreciate having you, and hopefully, we can talk again sometime. It's been great to get to know you and I'm sure you add a ton of value to the people that you work with. And again, if people want to check out Pat's site, recland.net or RecLand Talks on YouTube. I'll link up to both of those things on our show notes.
Pat: Thank you.
Seth: Yeah. I hope you guys enjoyed this, and we'll talk to you next time.
Pat: Seth, thank you, brother. Appreciate it very much. Enjoyed it.
Seth: You bet.
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