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JB is a land investor who nets, not grosses, but NETS well over seven figures in the land business, year after year. And you know what's interesting? He doesn’t want or need anyone else to know about it.
He’s not trying to be an influencer. He’s not trying to build an audience or sell coaching services. He keeps to himself and plugs away, and he doesn’t need your or my approval to keep himself motivated.
Whenever I hear about a land investor doing this well, I’m always curious to know more about how they do it… but you gotta admit, there’s something pretty cool about someone who does this well, and they aren't going out of their way to seek extra attention or pats on the back.
I’ve been emailing back and forth with JB since 2017, and the first time I talked with him on Zoom call a couple of years ago, I invited him to the podcast… but he didn’t seem excited about doing it.
Luckily for me, I was finally able to meet him face-to-face at a conference recently, where I got to know him a bit better, and he actually agreed to do this interview! Can you believe it?!
So… we’re going to sit down with JB and get a peek into the world of an undercover millionaire land investor and learn more about his recipe for success.
Links and Resources
- BCPLand.com (JB's Website)
- BiggerPockets Podcast 039: Dirt Cheap Land Flipping and Reaching Motivated Sellers w/ Seth Williams
- Rocket Print & Mail (REtipster Affiliate Link)
- DataTree (REtipster Affiliate Link)
- Simple Real Estate Postcards That Work
- A Closer Look At My Blind Offer Template
- Text Marketing 101 for Land Investors
- How to Build a Buying Website for Your Real Estate Business
- OpenPhone (REtipster Affiliate Link)
- PATLive (REtipster Affiliate Link)
- PATLive Review
- RingCentral (REtipster Affiliate Link)
- What Are Capital Gains?
- How Does a 1031 Exchange Work?
- The 4 Components of a Will Explained
- What Is a Self-Directed IRA?
- How Does a Quiet Title Action Work?
- What Does a Virtual Assistant (VA) Do?
- 110: Our Best Advice on Hiring Virtual Assistants
- REVA Global
- Self-Storage Development YouTube Series
- Rich Dad, Poor Dad by Robert Kiyosaki
- The Intelligent Investor by Benjamin Graham
- The Richest Man in Babylon by George S. Clason
- The Millionaire Next Door
- The 7 Habits of Highly Effective People by Stephen R. Covey
- The Choice by Og Mandino
- Outliers by Malcolm Gladwell
- The Purpose Driven Life by Rick Warren
- Dave Ramsey
In this episode, you will learn:
- The Power of Direct Mail Campaigns: In this episode, you will learn how consistent direct mail campaigns can play a significant role in finding motivated sellers and driving success in land investing.
- Identifying the Right Niche and Capital Allocation: You will learn about the importance of strategically choosing the right niche in land investing and making smart decisions when it comes to deploying capital.
- Maximizing the Role of Real Estate Agents: Learn how real estate agents can be leveraged in selling properties and filtering out non-serious buyers, emphasizing the importance of establishing strong networks and partnerships.
- Subdividing for Higher Returns: You will gain insights into how subdividing land can act as a powerful strategy to maximize returns on real estate investments.
- Cash Flow Management in Land Investing: This episode sheds light on the critical aspect of managing cash flow in the land business, particularly when transitioning from a traditional job to full-time investing.
- Leveraging External Resources for Efficiency: Learn about the value of external resources, such as VAs, title companies, banks, and CPAs, in streamlining the investing process and enhancing efficiency.
- Diversification and Long-Term Planning: You will learn from JB's long-term plans for real estate investing, underscoring the importance of diversifying into different types of properties for risk mitigation and potential returns.
- Service-Oriented Business Philosophy: In this episode, you will understand JB's service-oriented business philosophy that emphasizes the importance of helping others, reflecting the spirit of selflessness and service.
Editor's note: This transcript has been lightly edited for clarity.
Seth: Hey, folks, how's it going? This is Seth Williams, and you're listening to the REtipster podcast.
Today I have the pleasure of talking with my friend JB. So why is this an important conversation to me? Because JB Is one of these guys who nets—not grosses—well over seven figures in his land business, year after year. But you know what? He doesn't really want or need anyone else to know about it. He's not trying to be an influencer. He's not trying to build an audience or sell coaching services. This guy just keeps to himself and keeps his head down, and he plugs away day after day, and he doesn't need your or my approval to keep himself motivated.
Anytime I hear about a land investor who is doing this, well, I'm always really curious to know more about what they're doing and how they're doing it. But you got to admit, there's something kind of cool about someone who does this well. And they also don't really care what you think or need the attention. They're self-motivated. They know how to work hard, and they're not really doing this to attract attention or get the glory from how well they're doing.
And I've been emailing back and forth with JB since about 2017 and the first time I finally got on a Zoom call with him a couple of years ago. I invited him to come on the podcast back then, but he didn't really seem that excited about doing it. Which, honestly, I completely understand, given his disposition and his lack of interest in being public about his success. But luckily for me, I was finally able to meet this guy face-to-face at a conference earlier this year, and I got to know him a little bit better. Got to shake his hand, we even got to have a meal together.
And you know what? He actually agreed to do this interview. Can you believe it? So we're going to sit down and get a peek into the world of an undercover land investor and figure out one man's recipe for success. Let's get into it.
Hey, JB. How's it going? Welcome to the show.
JB: Seth. How are you, sir? By the way, I get to say this, I've always wanted to. I'm a longtime listener and first-time caller. Been following your content for a long time. You do fantastic work, and that's why I agreed to do this, was that I wanted to help you out and help out your listeners.
Seth: Yeah, well, I and we appreciate it, and I'm sure by the time we get to the end of this, everybody will agree this is going to be a pretty value-packed conversation. Let's just start from the very beginning. How'd you first learn about land investing? What made you decide to give this a shot, and where were you coming from? What was your prior career before you got into the land world?
JB: Sure. Always been a real estate guy. So when I was in high school, there was a guy called, I think, it was Robert Allen, who wrote a book called Nothing Down and read all that.
Always wanted to be in real estate. Bought my first piece of property when I was 23. It was a little two-bedroom condo and realized I could lease it pretty quickly. I'd come back from college, all right, I'm moving out. I'm buying a place. I bought it. Wait a second, I can rent that. So I rented it and then bought a second one. I'm 23 years old. I own two pieces of property, and I've always kind of dabbled in it and wanted to do that if I could.
So fast forward. I was in IT, sales, extreme high end, very large transactions. They take a year to complete. Lots of zeros, lots of lawyers, lots of technologies, and was doing that and was very successful at it and made good money. But I was always looking for something more, especially when you wake up this year and people who are award-winning, successful colleagues are laid off and the next year the other group is laid off and it's like my day is coming where the music stops and I don't have a chair.
So I said, I really need to get back into real estate and do more of that. And I've always been a runner. So in 2015 or so, they had these things that were kind of new called a podcast. What the heck is a podcast? Like, you know what? I'm going to listen to a podcast. I got to run anyway, so let's be productive with our time. And I said, okay, let's do this. If you're going to listen to a podcast, what are you going to listen to? Okay, business subset of that. I like real estate. Let's do real estate.
Which led me to a thing called The REtipster Podcast. Then on The REtipster Podcast, okay, there's multifamily, there's fix-and-flip, there's whatever, and there's this land thing, and there's this guy named Seth Williams talking about land, and okay, let's listen to that and you run the numbers on it. Wait a second. These returns are not 8% or 12%. And my background is if I walk into Home Depot, I fall asleep. I have no interest, have no ability. I have no talent to fix anything. I'm a finance guy.
So I said, okay. I like the fact that there's not a building involved and just kind of started on that journey, listening to podcasts and learning about it, and kind of went from there.
Seth: Awesome. So sounds like it was episode 39 of The REtipster Podcast. You were one of those who kind of discovered it.
So take us through the evolution of this. So you heard about the idea, and then how did you get to the point of actually having the confidence to give it a shot and trying this thing? That was probably a very foreign idea to you, right? I mean, getting these lists and sending out mail and like, most of us, when we got started in this, it's like, what am I doing? Am I crazy for thinking this can work?
JB: Yes, you are crazy for thinking this can work. It's like, okay, you're telling me that I'm going to buy an asset and I'm going to turn around and sell it for essentially double the price in less than a year. That doesn't happen. There's no way.
I don't have a broker. I'm pretty darn good at managing and scrutinizing investments and making decisions for placing my money. And so I looked at this and I said, okay, if I buy a piece of property, it's essentially the same as clicking on a brokerage website and purchasing X number of shares. Let's say I spend $10,000 on X number of shares. It’s the same thing if I buy a piece of property. The only difference is I can't click to sell it. I'm going to have to unwind that. There are times when I've spent ten grand on a stock and I ended up with eight grand at the end of it. So I'm like, okay, let's try some other asset class. Let's just kind of see how this goes.
For your listeners. You get people on here who talk about their business. I'm not selling coaching. I'm not selling a book. I'm not selling anything. I'm not here to benefit myself in any way. Your content is phenomenal, and anybody who's listening to this needs to drill down into as much as they can possibly consume. And that's what I did. I just said, okay, this guy seems genuine. He seems honest. He gives you the good and bad of whatever he looks at, pros and cons of whatever he's reviewing that day. So I spent six months or so looking through that. You used to do RingCentral, and you would advise yellow postcards, hey, I want to buy your property, whatever. So I did some of that in 2016 and failed terribly.
What I ended up getting was, hey, I want to buy your property. People would call me, sure, you get 1,000 people call you who say, I want a million dollars and all you're doing is burning time. I'm not doing that. So I ended up purchasing, at that time, I don't think you even had a coaching program.
Seth: Yeah, there was no course back in the early days.
JB: So I had a coaching that I purchased from one of the several gurus out there. In fact, in preparation for this, I went and looked. It seems like the number of land guru coaches has exploded.
Seth: There are a lot of them out there.
JB: Now, and I can name them… I'm going to call them the OGs of five or ten years ago. Either know them personally or have worked with them or reviewed their stuff.
But anyway, I bought one of those and got started, and that's really how I got into it. Let's get formal about this. And that started in December of 2016.
Seth: And on that, the whole evolution of where your business has gone. So before we started recording here, you told me that in 2022 you had 4.5 million in top-line sales and your net income was 1.1 million. And you started this in 2016, I think you said.
So take us through year by year. Where did it start in year one, year two, year three? How did it grow so much and why did it grow so much? What happened there in terms of how you brought this to where it is?
JB: So, yeah, the headline is in FY 2022 (and I'm giving you rounded numbers, but they're really close), we did 4.5 million in gross sales, and net income was $1.1 million. So that's what I paid taxes on, and I reported every stinking penny of it, and I wrote a very large check…
Seth: Sure, that hurts.
JB: …which led me to some different decisions how to prepare for taxes going forward. So rewind in 2016 was when I really started doing this and listening to your stuff, and I don't have any numbers for that, didn't have any sales, hadn't really invested a few hundred dollars, whatever.
In 2017, I did $40,000 in gross sales. I think I did two deals with a gross profit of $13,000. Now, what I don't have, because I was just getting started, I don't have the numbers up far back was what was my net income for the business? I don't know. I mean, you've got startup costs for buying a coaching plan, setting up a website, paying PATLive, which I use to this day, sending out mail, which is extremely expensive, buying data, all that. So I want to say I lost ten grand, maybe, but I failed miserably for a good six months, maybe even more than that, and finally got a deal and said, okay, I know I've lost money this year, but I see the potential. I see this does work, and there are unique reasons why it works. And we can get into that if you want. So 2017 was $40,000, gross profit was $13,000.
In 2018, which is when I have full numbers. I did a half a million in sales with a net income of $110,000. 2019, I did 1.1 million in gross sales, top-line with a net income of quarter mil. So we did $250,000.
Seth: As you're saying this stuff, I don't know if you have this data, but how many deals does this consist of? Is this like 1,000 little deals or like three big deals?
JB: So if you want it by year, I do everything by quarter. I came from the corporate world. Everything is quarterly driven. Did you hit your numbers this quarter, etc.
Seth: You don't have to get too specific, but just trying to figure out what size range are we talking about here? What is the deal volume, I guess, that it takes to get to these numbers?
JB: Yeah. So deal volume, 2018, we did 11 deals. 2019 was 20 deals. 2020 was 18.
Seth: What were those gross and net numbers in 2020?
JB: 2020 was $1.9 million in sales with net income of $600,000. Okay, so let me finish up the sales numbers, the dollars, and we'll talk about deal quantity. 2021 was $3.4 million and a net income of $900,000. 2022 was $4.5 million and a net income of $1.1 million.
Seth: Got you. So these are some pretty meaty deals, right? I mean, you're not going after little base heads. Sounds like you're specifically focusing on big stuff that's going to give you a big bang for your buck. Yes or no?
JB: It depends on your definition of big. So here's one of the decisions I made. I only use agents. And if you're going to make money in this business, I believe you only use real estate agents. That's one of the mistakes I made early on, having to learn really what it takes to be successful.
When I studied, reviewed, looked at my costs. Let's say your cost for your mail is I pick a number 60 cents. Well, if I'm spending 60 cents per piece for direct mail, whether I make $2,000 on that deal or $200,000, that piece of mail still cost me 60 cents. So you've got some fixed costs that you're not going to impact. If you're going to impact the bottom line, you need to get more money for each transaction. That's number one.
Number two is an agent is not going to… if you say, “I got a tract I bought for $2,000, I'm going to sell it for five.” An agent is not going to touch that. And if you're going to leverage those folks, you need to have a number where they're going to be interested. So I have done million dollar deals, and I will, and I'm happy to do a deal that's, 40-50 grand. An agent will look at that.
Let's say it's a number that's 40 grand. Let's say I buy it for 20 and sell it for 40. But the next deal I'm talking about is a half a million. Okay. I don't ever look at it and say, well, I'm too good for that. If I buy it for 20 and sell it for 40 and I make $20,000 on it, I always look at myself in the mirror and say, “That's a car. You're going to turn down a car?”
Do the deal, and, oh, by the way, it's reps. It's more opportunities to learn, to get better, to grow your network, to expand, to see transactions you get. People in any industry, they've never seen the end of it. They've never seen the end of a transaction. The transactions you see, the more you learn, the better you get.
So it's just got to be a number that's high enough that an agent will get involved, which typically the floor there is 25 or 30 grand. And then after that, as long as it meets the criteria and it works for my investment dollar and my return goals, great, let's do the deal.
Seth: Yeah. When you mentioned, like, a million-dollar deal, is this just like a flip? Like, are you doing anything to the property? And what kind of margin is there on a deal of that size?
JB: 40%? 50%? Well, I guess 100%. So if you buy it for $500,000 and sell it for a million.
Seth: It was this done in the past year or like a few years ago? Or how long ago is this example deal we're talking about?
JB: Yes. I mean, I've got two running right now that are roughly a million dollars each on the buy side.
Seth: Yeah. Do you find that there's less competition in that type of land? Like, fewer people going after those bigger deals?
JB: I kind of laid out my numbers, and when you got a good job and you're getting paid, you're doing well, and then you wake up one day and you just made 100 or 200 grand in your side hustle, do you go buy a boat? I don't. I drive a pickup truck, and I'll drive a pickup truck for ten years before I trade it in. I don't own a Rolex. I don't own a lake house. I put my money back in my business, and I just kept doing that. You get the point. I’m saying there are not very many people who can write those checks.
Well, because I invested every penny back in the business all day long, every day for years and stacked it, now I can write that check, and there's a limited buying pool for that.
Seth: So you don't get any outside funding. You just fund these all yourself?
JB: Yeah. So I come from a sports background. You hear these all the time. “There is no I in Team,” and “We Over Me,” and all these cliches. If you ever hear me talk, I say, “We.” There ain't nobody else It's just me. It's just my money. There are no outside investors. I don't do LPs and GPs. I am fiercely independent. I'll say perturbed if you know the term—I don't know what our restrictions are on language—but I don't want anybody telling me what to do. So I don't have partners, and that's how I approach it.
Your question was, do you do anything to the property? So I mentioned I have two deals that are roughly a million dollars each on the buy side today, and I should close on both of those in the next two to four weeks. One of those is through direct mail, and one of those I found online.
So as you grow the business and you look at it, you say, all right, I got to find the next deal. Well, this is going to sound strange, but if you have a million dollars to place, that's not a good thing. That's a bad thing. You have a million dollars sitting in the bank. And if you look at M2 money supply and you look at inflation year over year, if you have a million dollars at 9% inflation, you're looking at $900,000, $910,000, whatever, At the end of the year, your money's lost value. It has to be working for you.
Okay, I got to go place a million in capital. How do I do that?
Seth: This kind of sounds like a first-world problem to me. Just that little comment there. But keep going.
JB: I mean, it's business. You want to be successful. This is what we're doing.
So do the numbers. These deals are hard to find. They're not easy, and it takes a lot of work every day.
By the way, I don't play golf. I kind of laugh at the four-hour work week. I don't do that. I get up every day. I go to work. I sit in my office. I work. And I will usually work at least one day on a weekend, sometimes not 12 hours, although that has happened. But you'll put in two to four hours and review some things and write some checks and get people going for the next week or whatever. But we do that.
So if you're trying to place, let's say you're trying to place a half a million dollars, you have to find ten deals at $50,000 each in order to fully deploy that capital. That is hard to do. It takes a lot of mail, a lot of time, or you can accelerate the whole thing and find one deal for half a million bucks.
So your question is, do you do anything to it? The only thing I've done is subdivides. That's kind of the next step in the evolution. Once you've learned what you're doing and you're growing your business and you're looking to grow.
The bottom line, you start doing subdivides. Like I said, I've got the ability to write that check. So one of the things I do there is I will leverage banks. They're going to want to see your personal financial statements, your tax returns. You have to document all of that to memorialize and prove that.
And once you've been in business for two or three years and you've made those numbers, then yeah. They're interested in talking to you.
Seth: Are those loans collateralized by the property, or is it like a business line of credit that they're given to you?
JB: It's primarily by the asset, like most things in real estate.
Seth: So it's like a mortgage on the property, right?
JB: Yeah. I won't get into the term sheet that I use with my bank, but they're helpful and it's a great deal for them. I always pay my bills, and my goal is and I tell them flat out what I'm doing, and I'm trying to get out of it in under certainly under a year, but probably more like under six months.
So really, that's it. I survey it in sort of a plat map way, chop it up, and not putting in utilities, not putting in roads, not putting in anything, and saying, here we go, let's go sell them.
And in that situation, a good example might be let's say you're buying a million-dollar deal. Well, let's say it's a 75-25 loan. So 75%, 25%. So 25% down of a million dollars is $250,000. So I'll put up $250,000 with a note against that. And I want to be the favorite customer of my vendors, whoever that is, including my banks.
So if you ever look at waterfalls and partnerships and that kind of stuff, oh, I get a management fee and then I get this part. No, every stinking penny goes to the bank first, and I tell them, you're going to get paid off first. I don't see a dime until you're taken care of, which they appreciate.
So every dime goes into it and they'll pay it off. Well if I—I don't know, pick a number—in for a million and I sell it for—out net of fees, net of commissions, everything—at 1.25. Well, my cash on cash is 100% return because I put in $250,000. I sold net at $1.25 million. So I made 250 on my 250 and I did it in six months.
But if you're doing it right and you're buying them right, really you're selling it for 1.4 million or 1.5 million net of fees. And so you really accelerate your percentage return on those deals. But again, they're extremely hard to find.
Seth: Yeah. Man, so many questions are coming up as you're talking. I wish we could get them to all of them, but one of the things you mentioned was that you've got $2 million deals in the pipeline, and one of them you found through mail and one of them was online. Does that mean you found it on the MLS? Where did you find this thing? And I guess if it was maybe just answer that first question and then I'll get to the next one, depending on what you say.
JB: Well, we can schedule a second conversation if you want to do that. I'm okay with that.
So anything that's a subdivide I find online on MLS. I will mail on large tracts and I will scrutinize them with an eye for subdivide. So let's say I overpriced it, but I look at it and say, what could I do with this? Well, hey, I could chop this one up.
Now, to be clear, I think I found one that I'm potentially working on, but normally they don't work that way. You really need to see the map. You need to see a whole list of things that you're looking for, but it really just helps if it's an MLS deal. The problem is, when COVID hit, everybody wanted to be out of the cities, so the demand for rural property exploded. If you're sensitive to COVID, you shouldn’t be around other people.
Great, you've got the summer of 2020 and all the violence that went on. You've got, hey, I can work from home now, so I don't need to fight 45 minutes in a traffic commute one way every day for decades. And I've always wanted to live in the country, et cetera. So the demand just shot up, essentially.
When that happened, these folks who own 100, 200, 500,000 acres, their broker started telling them, well, the people who buy this from you, they're just going to chop it up. So you need to multiply your ask price by 1.5. Then it kind of killed a ton of deals. Everybody's pricing their property, assuming it's going to be subdivided, and it's made it very difficult to find deals, so it's not easy.
Seth: Yeah. You mentioned the importance of the agents in your business who are selling properties on your behalf. Like when you tell your bank, yeah, it's going to be turned around in six months, or that's kind of the assumption you're making.
Evidently, agents are very important for you. It's like the whole half of your business on getting properties disposed and sold on time and that kind of thing. Which makes me wonder, how do you find an agent you can trust? If you were looking for a new one right now and they're just telling you, yeah, I think it's worth this. I think it'll sell for this amount, do this and this. How do you know you can trust them? Do you have to, like, cross-check what they tell you?
And at what point are you confident with like, yes, I can take this person's word as the truth? And what are your thoughts on that?
JB: First of all, do they return your phone call? And Seth, you laugh, if you're a real estate agent and you're listening to this, if you're willing to hustle, you can make all the money you want to make. And it shocks me, and I guess this is any industry, I don't care what it is. I have a standing rule. I have to call three agents before I pick one. So we do business in multiple states. We go into a new market where I need an agent in this area. I don't have one. I got to go find one. Okay?
My standing rule is I have to call three agents. Here’s typically the way it works. I'm going to call three people. One is never going to call me back. I don't understand. Somebody's calling you saying, hey, I want to give you a listing. I want to give you money. They don't return the call.
The second calls you, but they're flaky. They don't really know. You could just, in a five-minute conversation, figure out this person does not know what they're talking about.
And the third one, they call you back. They're hustling. They say, Well, I'll check something. Let me look at comps. You get an email within 24 hours. They're texting you. They're on it. You could just feel it. It's obvious.
And my agents are a key part of my business. When I first started, I did a couple of times with list on my own, on, like, LandWatch.com or something. I wanted to feel it and understand it. But hey, I don't spend a dime for marketing. I don't pay to put it on MLS. I don't pay to put it on Facebook, Marketplace. I don't pay anybody to go out and take pictures. My agents handle all of that. If we get ten people who call who say, I want to buy the property, and eight of them are tire kickers and wasting time, they're not wasting my time. They're wasting my agents' time. They filter that. They negotiate the deals. They do all that. One of the great things about my business is I don't deal with customers. The agents do that.
I literally have an agent—I have a couple of agents—I'm his biggest customer. We do millions, two or two and a half last year. And we worked together for years. He's phenomenal. I can't stress enough how important it is to have those great business partners, and that's the way I consider them. I'm so appreciative that they help me feed my family. I'm so appreciative of the hard work that they put in, the ones that are good. And let me tell you what, they make a ton of money, and God bless them.
And I'll say this on agents. So in certain parts of the country, land agents charge 6%. For some reason, when you go east of the Mississippi, they want 10%. And I don't know why. And if I'd closed a million dollars with an agent, and my commission is 6% versus 10%, that's $40,000 out of my pocket. That's a lot of money when I can get the same service, the same partnership for 6%, which I think is fair.
Now, what I will not do is I will never try. “Well, I've done three deals with you, so now you got to charge me 5% or 4%.” I never negotiate that down, but have I paid eight? And I think I've done it once, but typically if they're saying, well, you don't understand, I've got to have 10% because I've had a couple of states where like, hey, he's got to look on land.com and he's got 20 listings. And you're like, “All right, dude, I'll give you 8%. Well, I go to the gym every day so you can't reach me from like eleven to one. Are you going to show the property this week?”
“Well, no, I don't work on weekends.”
I'm like, “Okay, let me get this straight. You wanted 10%, and you're telling me you work part-time, essentially, and you're just killing in all of these listings. So that's something that I would caution people about. I think 6% is fair.”
I do it in other states all day long, and nobody ever pushes back on that. But some states, for some reason east of the Mississippi, they have decided in the marketplace that if they all demand it at the same time, they can get it. And the way around that is, you call a residential lady who drives her little four, she's got her SUV and she's showing single families, but it's a rural market, and she'll also list land if she gets a chance. And they're great and they work hard and they'll do 6% and we go forward.
Seth: So you're actually having okay luck with people who sell residential households?
JB: Yes, but what do I need? Let's go down the checklist. I need marketing. I need it on MLS. I need a sign on the property. I need pictures taken. Whether you're looking at the living room in the kitchen or you're looking at a stand of trees, what difference does it make? They're publishing at the MLS, they're putting a sign on the property. They're answering questions when people call.
Seth: Are they getting good pictures for you?
JB: Yeah, I mean, it's good enough. You just need a presence. My deal is not about, look, do you need to be, I'm going to date Ansel Adams. I mean, you don't have to have the greatest photography, but do you have a presence?
And when I initially interview them, I'll say, all right, where do you put it? And the answers I'm listening for are it ends up on MLS, it ends up on all of the… land.com, landwatch.com, all those. And then it also will publish to Zillow and Trulia and Realtor and all of that stuff, and then Facebook Marketplace. Are you leveraging that?
And another thing I do with agents, and we've all had this. Even if you've sold your own home. You've seen this. Somebody tells you it's pick a number. 100 grand. Somebody else tells you it'll list and sell for 100 grand. The next person tells you it'll list and sell for 200 grand. Okay, wait a second. One of them is wildly out. Well, people want to believe they're going to get the most for their property, right? We all see that. Well, I tell them, “Look, here's the deal. I need a contract in 45 days. And I also want to know what your bottom number is.” What is the number? You list this at so that your phone blows up and in 72 hours, you have a contract. And they come back and they say, well, if that's really how you want to do it, then your number is going to be X.
And I look at X and I say, okay, here's what I'm in for. Here's my buy side. If X still is profitable, great. Anything else is gravy. We can go.
And that local market knowledge. That boots on the ground, as some people say. Like foreclosures and that kind of stuff, that is invaluable. I don't know that market. I don't live in that state. I couldn't tell you. But that value that an agent brings, you can't put a price on that.
Seth: It's interesting, this concept. Just going back to what you said about just finding a residential person who can get it on the MLS for you, who can get decent pictures, and be responsive to buyers and just checking those boxes.
I think where I've seen it fall apart is where it comes to understanding land values because they just don't work with land that much. When you found residential people like this to fill in and just serve the purpose, do they understand? Like when you ask that question of, “I want this thing sold in 72 hours.” Do they really understand what it's going to take if they're not familiar with land?
JB: Yeah, because either there's a couple of things maybe I already know, kind of, the market. Maybe I've done enough research that I can fill in the blanks.
But let's say you're a residential agent in Detroit and there 2 million people in the MSA. They don't have a clue, and I don't want them. But if you go to a rural county they're just trying to make a living. They will list the local Dairy Queen that went out of business. And so now they're a commercial broker. Then they'll go show a 322, then they're going to show a mobile home, and then they got four dirt listings. They're limited. They'll take what they can get.
So it's not uncommon. They have some land experience or they want to. And sometimes I'll get the youngest, newest agent because they're not busy. They'll answer my call, and they're hungry, and they will work their rear end off. And all I need them to do is go knock on their broker's door and ask questions. Well, that lady or gentleman has 30 years of experience as a broker. They do know the answers to those questions. They can leverage that knowledge, and we can come up with what a sales price is.
Really, I need them to market it. I need them to talk to buyers. I need to put the contracts together and let's go get it sold.
Seth: Yeah. Now, I know earlier on you were talking about how you take all your money. You don't buy boats, you don't buy new cars. You just put it back into your business. That makes me wonder, how do you decide when and how much to pay yourself versus putting it back into the business? I know this is something every land flipper has to figure out, especially when they're doing it full time, and it's their primary source of income. Because you can drill money back into the business forever and never pay yourself, especially when there's this constant need for funding.
How do you decide, okay, I'm going to pay myself this amount? And just how do you rationalize that? Because if I remember right, your prior career with your W-2 was a job that paid fairly well. So I imagine this land business needed to pay you pretty well as well in order for this to work as your full-time gig, right?
JB: Yes. So global, massive Fortune 500, publicly traded. It was the major leagues of the technology world.
But also, remember what we talked about earlier. I would have team members that were just incredible people that would, if the political winds changed, and they got laid off. And being sort of an abrasive. I'll give you my opinion, boss, whether you like it or not kind of guy. I always figured I'm going to make the wrong person upset at some point.
One of the things that was driving me to was, “I got to go find something else.” Well, in 2019, I got a new boss who was about 20 years younger than me, had never had my job, didn't have a clue. I had come up through the ranks as a middle manager managing interns and 22-year olds out of college and that kind of stuff. And he walks in and made it very clear that he was the new sheriff in town. And if I didn't do exactly what he said, my days were numbered.
And I'm like, you know what? I went back and looked at my PNL and said, I think we're to that day where the money might be okay, but I know I don't need to be doing this anymore. So I closed a bunch of really big transactions, cashed a nice commission check, doubled my number for the quarter, did a mic drop and quit and said, I'm going to take the summer off and just kind of see how it goes.
And what I figured out was, now I have a lot more time and a lot less stress to focus on this business, and now I do a lot more than I did back then, and I never looked back and don't regret it.
Seth: Yeah, that's a very common thing. I've experienced it too, where when a person quits and goes full time, they end up making way more because they've suddenly got all the time and free mental space to advance their business that they didn't have before. And it's kind of like the opposite of what a person's fear might be that they're not going to make it.
JB: Yeah, well, you're exactly right. And what I'm saying is nothing new to the world. You get layoffs and what they call riffs or you get a boss that's incompetent, and all that stuff happens. But then, yes, what you said is exactly right. My logic was, let's spend three or four months focusing on this and let's see how it goes. And it just took off.
And I said, Why would I ever go back to that? And dude, it's hard. It is hard to figure out how to be independent, self-employed, financially successful, and I don't want to imply somebody says a sentence, “Oh, I did it and I'm great.” No, man, it's hard. But if you put in the time and the effort and work and you're consistent, yes, you can get there.
And now I look back on it, the risk. Anybody who has one job and they're W-2, the winds could change tomorrow. And now you're trying to figure out how to pay your car note, pay your mortgage, and pay your credit card bill and pay for your kid’s college, or your kid's dental bill, or whatever it is. Whereas if I lose a deal today, I got ten more of them. It's not 100% of my income, it's 5% or 2% or whatever the number is.
Seth: Yeah. So in terms of how you do pay yourself, do you just kind of set like, “Okay, I need—I don't know what your number is, but—100 grand a year. So I'm going to set up some kind of W-2 payroll software to do that on autopilot. And then if I ever do need more money for a car or something to just take a distribution?”
Is that how you would think through it? Or do you have some other logic for when and how you take money from the business?
JB: I wish it were that difficult. Basically, I look at my checking account and I have a minimum number. I manage cash flow. And we can get into people say, hey, I want to do this. You got to be able to manage your own checking account real basic.
I just have always lived frugally and, I'm going to say, nesting. You're kind of preparing for that day so that you don't have a lot of debt. And I'm in that boat now. So what I did was I just said, okay, I'm getting low on that number. I write an owner's equity check out of my business account, and I need to pay myself this week, and I move money over, and I do that once or twice a month just based on what's going on. That's it.
Seth: Yeah. I know you say you live frugally. That means different things to different people. But on that note, I found when I quit my job and I was prepared to live as frugally as I needed to, which is very frugal. Honestly, I didn't find that limiting. I found that very exciting because of the fact that it empowered me to just say, I don't need you, boss. I'm okay on my own. The freedom is worth so much more than the money. Just the ability to kind of dictate my schedule and do what I want to do that day. I was almost proud to live frugally, if I had to.
JB: The term you used is freedom. I'm a big freedom guy. I want my freedom. I want to come and go as I please. And part of that is, if you're tied to, I need to know how much money I'm going to make this month because I've got a payment for however much money. We can get into that we can get into the books I've read and the things that I recommend to anybody. If I'm talking to someone who's high school or college, I'll tell you this, this is me talking. But I've always said there's three types of people. There's a consumer, a producer, and an investor. And a consumer is, I may have made 60 grand this month, this year, but I spent 80 grand. Because you have to have the latest iPhone. You have to have a car every six months or a year, whatever.
The next is the producer, which is they're responsible. They have a good job, they put money in their savings. They do all that. But then they hand it over to one of the brokerage houses, and they say, okay, I had dinner with a guy on Saturday night, and he's like, I give all my money to my broker. He's like, I want to play with some money. The broker says, no, you can't take that out. Well, because it's in a 401k IRA or whatever they produce. And that's great.
But really an investor is when you can learn to save, and then once you have that bag of money, how to make that grow for you, that's the step, and that's what gives you the freedom.
Seth: Sure thing. Since we're sort of on the subject of your previous career and where you were coming from, were there any key skills from that previous career or even just unique, unfair advantages that you have as a person? Whether it's your personality, your mindset, or financial position or whatever, is there anything that you have that has made you more able to succeed than the average person? Anything come to mind about, “This is my superpower, and that's what's helped me get to where I am.”
JB: I will outwork you. That's it. I will work my rear end off to be successful and get where I need to get part of that fear. Because like you said, I keep talking about in the corporate world, somebody's going to one day walk up and say…
I mean, I'm in my mid-50s. If somebody laid me off today, I'm screwed. Nobody wants to hire a guy with my demographic, and I'm in my mid-50s, I got a problem. So I'm going to outwork you and I'm going to hustle. I basically worked two jobs for two or three years, so I had my full-time job. My employer got every penny. I was extremely successful. They never missed out on anything. And then I would work till ten or 11, 12 o'clock at night. I would work nights and weekends. I would do whatever it physically takes to stand the business up and make the business successful. And then when the day came, it's like, okay, I'm prepared for this day.
Really, that's it. I am not the smartest guy in the world. I'm not. I'm willing to go compete and fight and scratch and hustle and work when a lot of people want. And self-sacrifice, deny myself time, deny myself the next fancy car, whatever it is, to get where I want to get.
Seth: Yeah. Can you think back to anything in life that instilled those values in you? Like, I know I think you said you were a football coach in the past. I don't know what else you've done in your life, but is this something you were just born with this, or is there something that molded you into this person that you are?
JB: Yeah, part of it. I mean, family values, parents that were entrepreneurs and real estate people and worked hard and set that example. But just living in the athletics world, you got to work hard to compete, to get a spot to play and win games as a team or to play individually or whatever it is.
Seth: Now, before we started recording, you mentioned that you were taught some things in the beginning that weren't right. And we're not going to name names or anything, but I was just curious, what are some of those things that you were taught to do by a land educator or two or three that you found to be incorrect and what did you do instead?
JB: Well, one of them was agents. When I got into it, apparently agents were the bad thing.
Seth: Yeah, I figured that'd be one of the things.
JBL Yeah. “Oh, agents are terrible. You don't want to pay them, blah, blah, blah.” Okay, sure. And then just kind of beating my head against the wall figuring, like I said, if you buy for two and sell for five, you're going to have to A, manage that yourself, and then B, your cost of finding each deal. You're just not going to make any money.
So that was one of the big ones. The other thing was I look at every this is a business, guys. This is a business. I'm running a business. And so I'm scrutinizing everything every day. Question everything. What can I do better today? One of those was on the expense side of my costs. I was overpaying for data in mail and I went and interviewed, I don't know, eight mail companies and negotiated a rate.
And it's funny. Now the mail company that I use, I've recommended to people and now they kill it in land. They may be one of the leading providers. And then data, there's three data companies, you know them, but for your listeners, there's Black Knight Financial, there's CoreLogic, and there's DataTree, which is First American. And I went and talked to all of them, tried to negotiate deals with them, ended up with DataTree. And I cut my data costs in half from what I was paying through a third-party provider that was provided by one of the organizations that I was working with. I cut my mail costs.
I'm pausing because I'm thinking through it. I've cut my mail costs by 25%. Mail has really gone up, but that makes a difference.
Seth: Oh yeah. How much mail are you sending? I mean, that can add up a lot when you're sending out probably the amount that I'm assuming you are.
JB: Yeah, well, last year, I think I sent about a quarter million pieces. This year the goal is way more than that, 3,000. But to be honest, the last 30 days I've slowed down. What I call is I've throttled my mail because I had a great first quarter and sold a bunch of stuff and had a lot of capital I need to place. And I was fighting, trying to find deals.
Well, guess what, I found a bunch. So that's a good problem. But I turned the mail off. So I really held out. But let's pick a number. Let's say I send 300,000 this year. My mail cost is 52 cents. And that's all in. So to be clear, that's a window, two-page, black and white only.
And by the way, just as a side note, I do not text, I do not call, I do not email, I do not Facebook, I do not any SEO advertising, I don't do any of that. I am direct mail only. Not saying any of those things are bad. And we can kind of get into why I don't do that, but I only do direct mail.
Well, if you do 300,000 pieces and my cost is 52 cents. Let's just round it to 50 cents. What's that, 150 grand? That's not a small number. Well, let's say without pulling out a calculator, let's say I was paying 70 cents or whatever. If I pay 150 grand in 2023 for mail the old way, that would have been more like $200,000. That's $50,000 to my bottom line. So just like any business question, all your expenses.
Seth: Yeah. And you're using Rocket Print, correct?
JB: I'm using Rocket, sometimes they call it Postcard Mania.
Seth: Yeah. I believe you were a notable figure in the reason why so many people use Rocket Print, right? I mean, you were kind of the guy that discovered it.
JB: That goes back to that four or five years ago when I went and interviewed like seven or eight companies. So, yeah, it's Rocket out of Clearwater. They're phenomenal. They do a really good job. They do good service. Prices are fair, and that's who I use and will continue to use. And I like them.
Seth: Yeah. And REtipster does have an affiliate link with Rocket Print. You can get a discount on their stuff if you go through that. REtipster.com/rocketprint, this will also be in the show notes, too. REtipster.com/162. Affiliate links to DataTree and anything else we're talking about here. Just FYI, got to mention that since we're on the subject.
JB: One other thing I want to mention one thing I want to mention is a tip to anybody who's doing this, if they're not, is to keep a do not mail list.
Seth: You mean in terms of an entire county or a specific person?
JB: You know, 123 Main St., USA sends you a letter back, your letter with red writing of a bunch of foul language, never contact me.
JB: You put that into a do not mail database. Do you do that?
JB: Okay. Yeah. That's one of those things I was taught, is not to worry about it because you're never going back there again. No, you need to keep a Do Not Mail database, and it's very simple. You just put them into a spreadsheet, and then every two to four weeks, I send that to my printer, they update it, and anytime they're going to send a printing out, they will take all that, compare it against that, and be using the Do Not Mail.
It's legal, and it's the right thing to do not to bug people who don't want to be bugged.
Seth: Yeah, it's a good idea.
JB: I didn't do that the first year or so because I didn't know any better. But once I started doing it, it's super easy, and it saves on your mail costs. Why mail to people you already know don't want to hear from you, that you're not going to get a deal from, and you're not bugging people and making them upset?
Seth: What you're saying makes perfect logical sense. But I've also heard of people who they don't do that because the rationale being, like, you don't know if somebody got cancer all of a sudden. You don't know if somebody's died. Like, you don't know if some huge thing has changed, and all of a sudden they are willing to talk, and if you don't continue harassing them, you'll never know.
And I feel like maybe it's an 80-20 thing where, like, 80% of the time, that's not the case. They really don't ever want to hear from me again, and you shouldn't mail to them.
JB: If they ask me, “Put me on a Do Not Mail list.”
Seth: Yeah, you kind of have to at that point, right?
JB: Well, legally, but even if it wasn't a law, I would do that. The way we approach our business is this is a service. We will help you. We won't badger you. I'm not calling you more than twice. I'm not bugging you. We can benefit you because people view me as the publisher's clearinghouse gal with that big cardboard check. “Wait a second. I push the easy button. You deal with everything. You unwind this for me, and you write me money at the end?”
Yes. Sign me up. And if I can, with my network of title companies and attorneys and surveyors, we can help you with your transaction and provide that service for you. Fantastic. But I'm not going to bug you. And if you say, don't contact me anymore, great. I put you on the list, and I'm happy to do that for you. It's the right thing to do.
And one of the things I did when I got into this was, like I said, I was a runner and I would listen to podcasts. Well, if I'm traveling for a business trip, if it's a two-hour flight, everybody else is watching a movie, they're watching Netflix, whatever. I'm listening to podcasts with a legal pad, taking notes on the plane for 2 hours and way back 2 hours.
Same thing like in The Matrix where the guy sticks the thing in the back of Neo's head.
Seth: I think about that all the time. I wish it was that quick.
JB: I'm that guy. I'm like, when he comes out of it, they said, is that okay? What do you think? He's like, oh my gosh, give me more of that. That’s the way I was. It's like I cannot get enough information crammed in my head fast enough.
So one thing I want to be clear that you're not asking on is my costs are 52 cents. I buy, I'm going to say extreme bulk.
Seth: Yeah. I would imagine.
JB: If you're buying at 50,000 or 100,000 pieces at a time, they're going to give you a better rate. If you're buying 2,000, 5,000, 10,000, you're not going to get the rates that I pay. So you've got to make a decision.
And it's almost like the old burn the boats analogy. If you're looking at this and you say, well, I'm really trying to next level my business. And I look at you, listener, how many pieces did you send last year? First of all, you should know that number. If you don't, you need to find out.
But let's say it was ten, okay? You look and say, my goal is to be goal oriented. My goal is 20, okay? We'll burn the boats, call up Rocket or whoever you use and go buy 20,000, 30,000 pieces, have them in the bank. And now you know you spent that money. You got to get the mail out, and that'll help push you to go do that.
And I will say this. I have a saying. I cannot stress this enough. When the mail stops, the business stops. You cannot ever stop the mail. And if you're going to be in this business, you have to commit to that. You have to select counties, download data, scrub that data, get it out to the printer, deal when it comes back in, rinse, repeat. If you stop your mail, people are like, well, my business has died. Well, how much mail have you sent?
If you stop the mail and you hear something about, oh, well, I've got problems in my business, and everybody says, we'll send more mail. That's the big quote. That's great, but you have to have a consistent mailing.
What does consistent mean? You and I had dinner with one of the guys in Phoenix. I said, how do you all do your business? And we send out 100,000 in a batch about three times a year. Great. Some people, I think one of your recent podcasts, the guy said, without fail, I think he does 25,000 pieces every two weeks or something. It is that consistent self-discipline that you have to get the mail out.
Seth: Yeah. What you just mentioned, how you had to throttle back your mail because you had too many deals to work with. So that's interesting to hear you say that, because I've heard from multiple people in different places over the past several months saying things to the effect of the deals aren't there anymore. We're sending out 10,000 mail pieces. Nothing came in. Or like, maybe it's time to just take a break. Maybe it's time to shut it down.
Basically, this idea that without saying it, they're basically saying, this doesn't work anymore, or this doesn't work as well as it used to anymore, kind of this defeated attitude that “I give up,” sort of thing.
And what I'm hearing from you is totally the opposite of that. That is still completely working. And I'm just wondering, what should those people do differently, or how should they think differently? What sets you apart from these other people who aren't able to make it work?
JB: Well, now, understand, I'm not saying it had been hard to find deals, because, like I said, I had a great Q1. I had a great January for tax purposes. I took transactions that could have closed in December, closed them in January. So it pushes it all into a new tax year. I still pay my taxes and do everything aboveboard.
But yeah, well then you've got all this capital you got to go deploy and I'm freaking out. Go back to superpower. I just went and worked my rear end off to go find deals. As I mentioned earlier, I've got two deals that are about a million each on the buy side.
One of those is mail, but one of those is just MLS. It's going to be a subdivide. Well, when you go do that and I think I'm going to put 300 into that one, that eats up some capital.
But the other thing, the question is what is your rate of deals or pieces of mail sent? And I have an extremely hard time trying to quantify that. I want to say it's 10,000 pieces. And man, I could be so far off on that, it could be 2,500 or 5,000.
But let's say it's 10,000 pieces. Okay, get over it. It cost me 52 cents per piece times 10,000 pieces, that's five grand. Am I willing, for my GSA, my cost of goods sold, whatever the accounting term is that you want to look at my cost to find that transaction was $5,000. Well, say it's a buy for 50 and sell for 50. Okay, I didn't make 50, I made 45. Okay, I still made 45 grand.
Get the mail out, move up market, try to get the larger deals, expand to other markets, other states. And here's one of the things. My question to you when we were preparing for this was who is your listener? And you gave me a broad spectrum of people who are just curious and never done land to experts.
Okay, one of the mistakes that I made was everybody wants to mail to New Mexico in Arizona and have never mailed. I've never done a deal in New Mexico. Arizona actually did mail one of those one time. That was another thing. That organization that I was learning from was like, yeah, a lot of people are doing this and all that. One of the things that helped me go from “I cannot figure this out” to “I can figure this out” is local knowledge that I have.
So for example, if you live in Minnesota and you went to college at Arizona State and now you live in Tennessee, those are three states that you have intimate knowledge on. You understand the culture, you understand the geography, you understand what lakes and rivers and whatever beaches that people want to go to. There's no beach in those states, but you get it. I would say start in your own backyard. And that's one of the things that I made the decision. I said, okay, I'm going to send out like a 2,000-piece mailer to a very targeted area, applying the mistakes I've made and the lessons I have learned and how to correctly price (because I was not pricing correctly, I was totally screwing that part of it up), and I'm going to do it in an area where I know that area. I've stood in that town before.
So if you're getting started, do it in either your backyard or the state that has been your backyard, because that will help you get past it.
Seth: Yeah, I was talking with Dave Denniston a few weeks ago at his conference. We got talking about how the land business has changed in terms of the mail-to-deal ratio and all this stuff. And when I got started, I mean, it was send out 500 postcards, and you got at least a deal, maybe more, and now it's like several thousand, and maybe you'll get a deal if you're spending that kind of money to go after a little couple of $1,000 profit deals. I don't know. The numbers just don't make sense. Would you agree?
JB: Yeah. If you send 10,000 pieces at 50 cents apiece and you spend five grand, well, if you buy a deal, that's two grand, and you sell it for five. Okay, I made $3,000, but just my mail cost was five grand. The numbers don't work.
So that's one of the reasons I've gone to subdivides, because you can find those on market, on the MLS. And then, just for me as I grow my business, looking at moving into some other areas of real estate.
But if it's a new person, that question always comes up is how much money do you need to get started? I mean, you need well, you need five or ten grand, whatever, to buy a piece of property. You need some mail costs. How much those mail costs are is how good you are at scrubbing and pricing that stuff. You can do what I did. Like I said, I lost money, I think my first year, because I was just terrible at this. I was godawful. But you learn and you hustle and you talk to people, and you ask questions, and you scrub and you whittle and you work, and you finally kind of get there.
Seth: It's interesting that didn't kill your spirit. A lot of people, if they lost money a single time, you're like, I'm out. But not only did you not quit, but look where you are now.
JB: Well, I got close. I did. I mean, it was close to a year to when I actually got a deal, and I got close on it, and I was like, okay, I'm going to take everything I've learned at this point. I'm going to go in my backyard. I'm going to send a small mailer. I'm going to see if I can get better at this again.
Again, burn the boats. I can't go backward. There has to be something here. Because at that point, I had seen enough. I've gotten some responses, some phone calls, some things that had kind of helped me see, okay, maybe there is something here. But that first deal, I paid about ten and called an agent and found somebody who would list it for about 25 and within two, three, four weeks got a contract. I'm like, okay, this works. This actually works. And from then it was like, how fast can I roll?
Seth: Yeah. When you think back to when you were getting started and where you're at today, we've kind of talked about some of this stuff, but what were your biggest challenges and struggles back then and what are they now? What is the hardest part of this business for you?
JB: Wow. The hardest part was just getting it going. We talked about you need to have some money set aside to buy land. You needed some money set aside for mail, but you've got data costs. I do absolutely think you need a website. You have to have that ready to go. You've got to have I prefer phone answering service. I use PATLive and have for years. You've got to have all of those things teed up. And that was just really it was just understanding how to price, how to pick what a deal looks like, how to scrutinize the value.
So all the things we all look at is, does it have access? Is it in a floodplain? Is the slope buildable, does it have a clear title? Learning all of those components of what “good” looks like, that was really it. Once I figured that out, it's like, okay, today I've got 20 grand to play with and then a year later I've got whatever, 200 grand to play with, and you just do more of it.
Today, there are two things. One is taxes. I'm going to bore people with accounting today. When you keep a real estate asset for under twelve months, that becomes ordinary income. There's no capital gains, there's no 1031 exchange any of those tax benefits that you can leverage. So I'm just paying good old taxes. I could be selling socks or tires or whatever. That's painful. And I need to mitigate that, which means I need to move into some other areas of real estate. So I've got some long-term holds.
Probably, the second one is the thing that you and I talked about is the land hamster wheel. I do a lot of it. I pick, I price, and I'll go into my team in just a second here. But I do so much of it that I would like to have this kind of automation where I don't have to do as much and the land will never go away. Never say never. But I really enjoy it. I'm good at it. It's profitable. But I need to do some other things.
The thing that I would say you talk about time. It is just me. There are no other investors. Occasionally I'll use a bank on transactions where it makes sense. But in terms of my team, my team is great agents, great surveyors, great title companies, lawyers, banks, CPA, and those are all external vendors. But like I said, I want to be the easiest guy they work with. They love answering my phone. I pay them quick. I bring them business. My CPA audits my books. So every settlement statement or HUD-1 that I get, buy side, sell side, goes to my CPA. They have access to my bank accounts. They have access to my business credit cards. I don't intermingle funds. If I have a credit card, it's just for the business. And then they audit that, and I get a balance sheet and a PNL every month.
Seth: Do you have any employees, like assistants or anything?
JB: So I have one or two-ish. So I have a transaction coordinator. She is local. She lives in the same city that I'm in, and she does a really good job. She had found her on one of the job websites.
Seth: What does that role consist of? Because you're using title companies, right? So what is there to coordinate?
JB: Yeah. So we send out mail, call comes in, goes to PATLive. There are a couple of ways to configure that. I have it set up so that at 6 AM., the batch of yesterday's calls come to us. I get an email, she gets an email, and then she and I have a standing call every morning for deal review. And okay, we had X number of calls come in, and we go through those calls, and she's going to return all those calls. So I don't speak to those people. She does. I do not talk to the people who respond to our mailers.
And she's been with me for three years. Then I'm like, okay, she'll ask title questions and do you really own it, the typical stuff. And then, okay, this one's a deal. There's no fraud because people will try to defraud us who do this. They have clear title. They're willing and able to sign.
I have a standing rule. I don't buy land from anyone who's in a nursing home. I'm not here to steal stuff from old people. I'm not taking advantage of anyone. I provide a service because of my background and because of how long I've been doing this, I understand wills and probates and quiet title actions and how to do trusts and all of this stuff. And so we help people through those. We hold their hand through those transactions.
Some things that we buy are not listable. They can't give it to an agent because the title is too screwed up. I'll come in and write those checks, which will separate me from a lot of people who are not willing to do that, knowing that there's going to be a percentage of those deals that won't close.
And she does all of that, so she helps them. And then I say, okay, this one's a go. Send it to the title company. And I joke with her. I said, okay, you're marrying this title company, so if there's a problem, you picked them just like you picked your spouse. It's not my problem. And we joke about it, and she goes and deals with them, and she handles all of that from the sellers to the title companies.
I have a VA that scrubs, so I was really reluctant to do that. I waited forever, and I paid my teenage kids and that kind of stuff, and I now use REVA Global.
So, Seth, you have a really good podcast that I'd recommend. It's number 110. I still have my notes from that.
Seth: Oh, nice.
JB: And you went through, I don't know, probably ten or so different VAs and the pros and cons and the value of and that kind of stuff. And I was driving, and I was driving. I was listening to podcasts, trying to learn, and I was like, okay, this one is so good. I went back and re-listened to it when I was in my office where I could take notes, and then I kept that.
And when the time came, which was this calendar year, I said, all right, I've got to do this, and interviewed a bunch of them. Hired REVA. I mean, we'd get into that, but way better than I expected. Service is great value there. So, yes, I have someone scrubbing, a VA, and then I have a transaction coordinator. That's basically it in terms of on the payroll, everybody else is external.
Seth: I love that, man. As somebody who is from a similar vein, I don't have a big team, mainly because I'm not good at managing a big team. But whenever I see somebody who can make it work either on their own and just kind of hiring contractors and that kind of thing, I guess it just gives me hope to know that it's possible to do this without having a massive payroll that you have to pay.
JB: I mean, I go to the gym and work out, but I don't play golf, so, yes, I probably work a little bit more.
So let's talk about it. I don't have any partners. I don't have any accounts receivable, meaning people bought something, but they hadn't paid me yet, and I've got to go collect. I don't really have any employees that I have to handhold and babysit and all that. I wanted as much freedom as I could possibly get, and the entire business was built around that concept.
Seth: It sounds like you're very comfortable and familiar with market values in the markets where you're working. So I'm just wondering, how many markets do you work in? Do you have a state or two where it's like you just hit them again and again, or are you going all over the place all the time? Or how do you handle that?
JB: My answer is I will do any transaction in the United States, if it makes sense.
Seth: Are you actively going after those?
JB: No. Now, that's the next answer. Probably done deals in ten states. I mean, there's a lot of property out there, and I can't mail them all, and I've mailed some that I've never done deals in, looked at them and they're fundamentally, like, what their definition of access is might be different.
So at any one time, I run about eight or ten states. That's basically it.
Seth: And I know you kind of mentioned, like, for tax reasons and hamster wheel reasons, you're sort of looking for new directions to go on real estate. What is your long-term plan? I mean, for somebody who's been as successful as you have, and it seems to just be getting better and better year after year. And I know when we talked at the conference, you sort of expressed it's difficult to intentionally take some of this cash that's getting such a great ROI and park it in something that's going to get not as good of an ROI, but the money comes in more passively.
But do you have any ideas on, like, do you want to just keep growing land flipping, or do you want to divert cash and go in a different direction, or where do you want this to go?
JB: Well, yeah, and to finish the thought, I'm so blessed, I'm so thankful. I'm fortunate to have the business that I have. Last year, we did four and a half. The projection this year is between six to 10 million. Top-line probably eight, based on where we are tracking. We're in Q2 right now and where I think we'll be. And like I said, I got two that I'm spending 2 million on just on the buy side.
So the business is just growing. And if the business isn't growing, I'm going to be upset with myself. What am I not doing to make that happen? That's never going to stop. But the things I've looked at are the typical deals. So when I say deals, the typical niches: multifamily, storage, short-term rentals are the three that I'm considering, and I will probably do two of those three somewhere.
I know you're doing storage now, so for your listeners, check that out. Seth has kind of a step by step ofwhere he does a development there that's really cool. So check that out.
But through cost segmentation and the initial tax deduction that you might get that if you put up, I don't know, $400,000, you can recoup some significant majority of that number, whatever that is. And in case I hadn't said it, I'm not a lawyer, I'm not a CPA, I'm not giving legal or financial advice. So speak to your professionals. But now that we've got that safe harbor disclaimer, if you can recoup that and then still keep it running, there's maybe some value there. So my goal is and you'll hear me say that I set goals. I set goals. “What's my next goal? My next goal is I need to do at least one of those three that I just named, that I own one of those by the end of this calendar year.” Don't know that I'll get there, but that's where we are.
Seth: Do you have any game plan for how to accomplish that, or have you not gotten that far yet?
JB: Same as land. Same as I talked about with Neo and sticking that thing in the back of your head. I'm in that mode right now of learning about those different market niches and which one might make sense for me. I'm hardcore in that, and then I might end up doing a coaching course with someone. And I've got a ton of questions for you at some point, really, on the operations side, and then we'll see.
It's really about the numbers and the returns. What makes best sense in terms of a risk vs. reward.
Seth: Do you ever use, like, a self-directed Roth IRA or something like that? Or any other creative ways to fund your deals?
JB: Yeah. Talking about taxes and taxation and all that. I do have an IRA. I have a Roth. I recommend that to people. Again, not a CPA, but yes.
And I did move a portion over because I looked at the returns. You're kind of limited when you do that through a brokerage house on what your returns might be. 12% is fantastic. Warren Buffett gets about 20% to 21%. I don't know if people know that, but that's what “good” looks like.
Well, I'm getting better than that in land. And I looked into, “Can I do this myself with land?” And the answer is yes.
So it's a self-directed IRA, and I went through one of the many companies out there that will manage that for you and stood that up, and I just moved over a little money and said, okay, let me do a deal or two per year. That's my goal, it’s every year or two, I'm going to do a deal with it, try to grow that. And I have. And the returns in land, obviously, are so much better than stocks. That's one of the ways that I try to mitigate my tax hit.
Seth: Do you ever take that money after you've bought up property and then sold it and gotten you a huge chunk of tax-free profit, do you then use that to buy more land, or do you siphon any of that off into the stock market or something?
JB: Yes. So you buy 100 shares of Stock X and you sell it and you make a profit. Well, now it's sitting in your brokerage account. You just take that total capital, and then you buy two different stocks, exactly the same concept. I sold a piece of property. I made a profit. I have now more money to play with, and I go buy one or two or three tracts with that. Not a ton, but I do some through that because the reason is, remember, it's a Roth. You cannot take the money out. So most of everything goes through the business, and I keep all the expenses separate, everything separate. It's all legal and appropriate.
Seth: Which custodian are you using for this? Which company? Is it like a checkbook IRA, where you can do it yourself? Do you have to get them to get involved with every transaction?
JB: I would answer that this way—they're just okay, I don't want to say their name. A, I don't have their permission. I've never spoken with them about this kind of stuff. And B, would I recommend them again? I don't know. They're all right. They're more interested in getting their quarterly management fee than they are in customer service.
Seth: Yeah. I've worked with two different companies, and I kind of have similar thoughts. They serve a purpose. It does the job, but it's not like just an amazing experience working with them, just kind of a tool to get the job done.
JB: Yeah, they're just okay.
Seth: Have you ever had any mentors, like paid-for mentors or coaches or anything like that? Or have you figured this all out on your own? What are your thoughts on that?
JB: If you count Seth.
Seth: You haven't paid me anything, have you?
JB: Yeah, well, this is it.
Seth: There you go.
JB: Like I did say, I paid a coaching group, did that for a couple of years and finally said, I'm probably better on my own. I don't do mastermind groups. I have, a couple of times, but if you get in these mastermind groups, they tend to be people who don't know what they're doing, and you're wiping noses and tying shoes and teaching little kids, figuratively.
Seth: You just need the right people. I mean, I can totally understand how the average person would be that, just compared to you, but there's definitely people on your level out there.
JB: Or, you get that guy or girl that interrupts everything and wants to talk over everybody because you don't understand how smart they actually are and how great they are. “And here's the great thing I'm doing on Facebook!” And I'm like, shut up. If you're running your mouth, you're not learning from anybody else. And clearly, you're a person who thinks you have all the answers.
My time is so valuable. And the equation is, you take 2,000 hours in a year. That's a work year. And you look at how much you paid taxes on last year, and you divide by 2,000 hours. That's your hourly rate.
Well, I am blessed to say mine's pretty decent, so you've got to be really adding some value to my time, or I'm probably not going to do it. And I said, look, you know what? I'm growing my business. I'm successful. So I just kind of avoided that. There are a few people in the industry that I have relationships with. I have their cell number, and people say, Well, I know that, yeah. Do you have a cell number? If you got a cell number, you're probably a friend. Okay. But otherwise I don't.
And one thing I will say is I've had people reach out to me and say, hey, I heard about you, or, you're on a list, or, I met you along the way. I want your help on a deal, or would you partner with me on this deal? Or I've never partnered with anybody. I'm not saying I wouldn't, but I get people send me things that are typically junk, and I'm okay. And the frustrating thing for me is I kind of know what I'm doing, and they'll send it to me and, okay, I'm a nice guy. I'll help you out. And I'll spend a half an hour of my time, and I'll go through the deal, and I'll send them an email, or I'll talk to them on the phone: “Here are the problems I see. Here are the issues that I see. Here's what I’ll do. This deal, probably not. Here's why I give you the half hour of my time,” and I send that.
People need to have a sincere appreciation for the contribution that everybody makes. I sincerely appreciate Seth Williams, and I've shaken your hand and told you that. I will spend my time and send this to people. They won't even send something back saying thank you.
Seth: It's crazy, isn't it?
JB: So my tip out there to people, if you're trying to get somebody's help, say please and thank you. Show some appreciation for their time. Because of the people who've done that to me, how many of them do you think I'm going to respond next time? Zero. And you see that, unfortunately, a lot. So, yeah, just be thankful, say thank you, appreciate people's time. That would be my tip for the people starting out.
Seth: Gotcha. Do you have any book recommendations, anything that you've read or anything that's inspired you, that's helped you along the way?
JB: Yes, and we've all done this. You go buy a real estate book and you're super excited and you read it, you're like, okay. And then three months go by, and you're walking through the book store again like, there's no real estate book, and you buy it, but you still hadn't done a deal. And then you buy another book and you still hadn't done a deal. And I kind of got to that point in my life where I'm like, I will not buy another real estate book until I've done a transaction.
Stop doing that. And everybody's trying to make money. All the gurus are trying to make money. They're cranking out books whether they're valuable or not. Stop. Go do a transaction. And the books that I recommend, like, to people, younger folks, college kids, whatever, Rich Dad, Poor Dad, obviously, these are not new and these are not basically real estate-related, except for the first one, Rich Dad, Poor Dad, The Intelligent Investor.
Seth: That's Benjamin Graham, right.
JB: That's Benjamin Graham. And for those who don't know, Benjamin Graham was the mentor to Warren Buffett, and he looked at “How do you take an asset, scrutinize that asset, and add a value to that?” And that's where they get into value investing of, hey, this stock is undervalued. I highly recommend that.
The Richest Man in Babylon. Are you familiar with that one, Seth?
Seth: Oh, yeah. Actually, the only struggle I had with that was trying to figure out the old English it was written in or whatever. There's actually… a few people have updated that just like the same story, but they make it easier to understand. But, yeah, it's a great book. A lot of timeless principles in there.
JB: I mean, it's probably the first one on this list. I would say The Millionaire Next Door. Are you familiar with that one?
Seth: Oh, yeah.
JB: The author has passed. It was published 20-plus years ago.
Seth: You kind of seem like the Millionaire Next Door to me.
JB: I guess. I mean, I read that, it impacted me, and I said, I'm going to fit that profile.
JB: A couple of others are The 7 Habits of Highly Effective People.
Seth: That's a great book.
JB: Great book. Again, none of these are new. There's a guy, an old writer called Og Mandino, who wrote a book called The Choice. He has several things as an author, but The Choice was the one.
There's another called Outliers. Have you read that?
Seth: Yes, I have.
JB: Okay, so Outliers is a fantastic book, talks about 10,000 hours, among other chapters.
Seth: That's Malcolm Gladwell, right?
JB: Malcolm Gladwell. Exactly. Right. And I felt like I put in my 10,000 hours now, so I can kind of say, okay, let's talk. But great book.
So I guess one other is The Purpose-Driven Life.
Seth: Rick Warren.
JB: Rick Warren. Straight-up Christian book. So heads up to those who might buy that one. But it opens with it's not about you. It's a great book, and I recommend that to everybody.
So most of those are not real estate. None of those are new, but they're all great and they've been super helpful to me.
Seth: Yeah, that sure is a hard thing to internalize and really take that on, this idea that it's not about you. I mean, humans, we are driven to be the main character of our story. Like, in our brains, we are priority number one.
Man, do you think it's really possible to think that? I mean, it must be, I'm sure. But when you think of the implications of that statement and really believing that that means your pleasure is not the most important thing, escaping pain for you is not the most important thing, what you want is not the priority anymore. To really live that way is an extremely difficult, counterintuitive way to live.
JB: It is, but millions of people do it. I mean, how many different examples? Let's start with the U.S. military. Hey, it's not about me. We've got a guy who's injured on the battlefield, and we're not leaving him behind, but I could get shot getting him. But it's not about me.
You hear about immigrants that come to the U.S. They buy some sort of business, a sandwich shop, or a donut shop, or a cleaners, or whatever, and sleep in the back for two years.
You talk about fathers who say, I hate my job, I hate my career, but it's not about me. I want to feed my family. I want to put a roof over their head. I'm stoic, I will do what it takes because I have a greater sacrifice.
We have countless examples of that, and I'm nobody special. There are millions of people out there, men and women who do this. But I'm talking about it from a personal level. That book is a spiritual level. But no, it's not about you.
Even what we talked about earlier of, well, I want a new car. Well, I want to have a Rolex. Why can't I have that? Well, you can say yes to those things and no to your success, or the thing that I lived by. And I said—I didn't make this up. It's the old saying of, I will do for two years what others won't, so that for the rest of my life, I can do what others can't. Have you heard that?
Seth: Is that a Dave Ramsey thing?
JB: I don't know, and I've never done Dave Ramsey. By the way, people, if you've got debt, you probably need to go dig into that. I've never lived in debt.
But, yeah, that's the way I've always looked at it, is I'm going to self-sacrifice because I got a goal in mind, and I'm willing to go do that. So I don't know. It's not about you in that book. It gets into the spiritual side, which we don't have to now, but I believe it.
Seth: Yeah. It seems like when I think of people who successfully do that, like, live a truly selfless life, when I think about my kids, in the fact that I can honestly say, like, I would gladly take a bullet for either one of them. And I don't know if I could ever really say that until I had kids, honestly. But I think the thing that makes that possible is love, maybe. So this thing kind of transcends the selfish nature of humanity.
And then, just reflecting back on your experience with REtipster, was there anything that was particularly helpful to you? What role did it play in your ability to pursue this business and get to where you are?
JB: Oh, gosh, I don't know. You still do a blog. But you had a very specific land blog. I consumed all of it. I mean, it was REtipster. I consumed a ton of it and then I expanded out. How much free stuff can you get from all the different gurus and coaches and all that? How many YouTube videos can you watch? It wasn't anything specific. Anything that is specific, especially, but spreadsheets that is quantifiable and can demonstrate dollars and time frames and percentages and turns and all that kind of stuff.
Those things I gravitate to so many times. I'm not a fan of it. But you get these gurus: “If you believe you can achieve, set a goal.”
Really? Thanks, bro. That's a great tip. Good advice. That's not real. Come on, man, let's go.
I can't recall anything, but mainly just your blog in general.
Seth: Awesome. Well, JB, is there any place people want to find out more about you or reach out to you or anything like that? What should they do? Should they go on any website or anything?
JB: Yeah, so my website, my company is BCP Land. That's Bob Charles Paul, so there and then they can just contact us through the email address, which is firstname.lastname@example.org.
Seth: Awesome. Well, JB, I just want to say thanks again for your willingness to share and open up and be transparent with the REtipster audience. I know this is not like top priority on your list of things to do. You're not necessarily a guy who just lets it all hang out. You're not looking for an audience or selling anything. And I just appreciate your willingness to open up and help other people figure out this business and overcome some of the challenges and just your honesty with some of your own challenges that you've had to go through to make this work.
JB: I have a saying, you want to see my scars? Done a lot of stupid things, made a lot of mistakes. And hey, I have lost money on land deals. Not very many. In fact, I'm closing on one this week that I'm going to lose money on. It does happen, but yeah, I did this because I wanted to support you and the great work you do. You have helped me, and if my story can help others, then great. I'm happy to do that.
Seth: Yeah, definitely appreciate it. We'll have to talk sometime about self-storage or anything I can help you with. Just let me know and we'll hash it out.
Well, we mentioned a ton of stuff in this conversation. This was a super-rich discussion. There's gonna be links to a lot of different resources that JB brought up in the show notes. Again, it's retipster.com/162. That's where you can find references to all the stuff we talked about.
JB, thank you again. Appreciate your willingness to chat with me and all the listeners out there. We'll talk to you again next time.
JB: Thanks, Seth.
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