Episode Transcript

The following is an auto-generated transcript of Episode 266. It has been lightly edited for readability.

Hey everybody, how's it going? This is Seth Williams. You're listening to the REtipster podcast. And today I'm joined once again by my friend, Travis King. If you've been around the land investing space for any length of time, you've probably heard Travis's name come up. He's one of the more well-known and trusted coaches in this niche. Someone who's been in the trenches for a long time, built a real business around this and helped a lot of other investors get further a lot faster. We've had him on the show before. And every time we talk, the conversation ends up being kind of a state of the union for land investors. What's working, what's not, where people are getting stuck right now. And that's really what today is about because there's a lot of people right now who are doing the work and they're sending the mail, they're making the calls, they're talking to sellers, spending the money on marketing. But for whatever reason, it's just not clicking. So the question is, what is actually broken? Is it the market? Is it the marketing? Is it the deals? Is it the follow-through? Or is it something more subtle that's throwing everything off? We're going to try to unpack that today to diagnose where things are breaking down and what to actually do about it. So Travis, welcome back. How's it going? Going great. Thanks, Seth. Yeah, I was thinking with our, our broadcaster, it's kind of tactical. We're always doing kind of a state of the union, but at the same time, it kind of turns into where it feels like it could be one of those Joe Rogan three hour, you know, if we didn't put a stop on it.

So that's always the hardest thing, right? Landing the plane and wrapping it up because we get chatting about kind of the state of the union. There's a lot going on and especially in recent years. So yeah, appreciate you having me on. Yeah, absolutely. So as we both know, you know, there's lots of people putting in the effort right now, but the results aren't quite there. And when you hear that, what do you find is usually going on? Yeah. Well, I, right now it's a lot of times it's more market related, right? So adapting to the market. So sometimes it can be like, you know, internal or operational, and then sometimes it's going, what works in this market, right? So we'll kind of try to try to identify one of those two is it the market right now that we're in that you're struggling with or is it something operationally right that we need to look at when you say the market in that context do you mean like the current economic state of the nation or do you mean like the geographic location where they're working no thanks for clarifying that kind of the the macro the current state of the economy interest rates what buyers and builders are doing kind of that when i say the market yeah okay.

And then we kind of just work through a checklist where I start going through things like, you know, market selection, lead generation, lead conversion. We kind of try to like identify either like maybe where the holes in the bucket are or maybe it's just tactical or maybe it's some big strategic change that needs to be made. Right. Maybe it's a big, a complete pivot for your business model, but kind of working through things one at a time and kind of diagnosis somebody else's business. It's the same thing in my own business outside of our land. We have other businesses. So like I'll, we'll hire a consultant, right? And then they're able to see things from like a vantage that I can't see. And I think kind of the best saying I've heard is like, you know, it's tough to read the label when you're inside the jar. And I think that's in your own business. Sometimes there's things you feel, but you don't know. So having somebody kind of have that outside advantage looking in, it's the same thing I do, you know, in our other businesses.

And that's kind of what I do, just kind of come in as a consultant, look at somebody's business and they have ideas of what's not working. They have pain points, but then ultimately you can kind of just like work through it and see for my vantage what we can clean up, what we can fix or what small tweaks need to be made or what big changes might need to happen. Is that like the most common type of coaching and consulting work you're doing right now is basically helping identify where the problems are rather than like, let's teach you the land business for the first time? Is it more like, you know, the land business, but something's broken. Let's figure it out. It's kind of twofold. I'm getting a lot of people actually that through have maybe read the book or something and maybe they're trying to build wealth, right? So I've got kind of an interesting blend right now where a number of people that go, hey, I'm not looking for the velocity of like a land flipping model, but I appreciate and understand the, equity capture you teach and the value add or forced appreciation so like hey i've got 500 grand or i've got 2 million how do i right instead of just plugging into my ira or all these other investments like how do i add land to my asset cloud like as a net worth how do i build net worth with land so i'm helping a number of people do like big subdivides that maybe wouldn't be like focused on quick resales but it's like on paper right like we're increasing their net worth.

Significantly, you know, within 12 to 24 months. So I'm helping a number. I've had a number of people like that come in and go, hey, I don't want on a big flipping company.

But I just kind of want to build wealth with land. And then the other is just through, you know, our community, through our masterminds, through being out there for a while, helping some, even some of the same people that I helped get started three, four years ago that are now going, hey, how do I pivot from doing 40 or 50 smaller flips a year? You know what I mean? In this market, what I do. So there's kind of a lot of that. So some of the people are familiar crowd that maybe have helped in years past and in different markets, kind of like we were talking about, like different economic times, right? We're kind of just making pivots or tweaks right now. And then others are people just coming in, recognizing that, Hey, I don't want to pay the capital gains. I don't want to flip, but like, if I can capture equity and force appreciation, that's going to significantly kind of increase my net worth. One of the first things you mentioned there in terms of diagnosing the problems and going on the checklist was market selection. How big of a deal is that? Or like when you're looking through the way that they're selecting the market, if at all. Maybe they're just randomly throwing darts at the dartboard. I don't know. But for people who are actually looking at it, is there like some chink in the chain? Like, is there a part in the process where it's like, oh, okay, you missed that.

That's what's wrong. I tell a lot of people, if you're somewhere local that you have like some knowledge of a hyper local market that you understand, you might not need to be as data driven. You know what I mean? If you know where you live within a two hour radius, you know it inside out and you know the areas that are growing and right then we can kind of you can invest you know it's kind of a local right with that home-filled advantage if you're kind of like agnostic or you don't you don't know where to start don't care or you're in the midwest and it doesn't feel like there's.

As many forced appreciation or value-add opportunities or something, and you need to go outside of your home state, that's kind of where you need to follow the comp data and kind of let it be your compass to point you in the right direction. And so that's where looking at some things like days on market, sell-through rates, absorption rate, things like that, where it kind of like go, where is land currently moving quickly? And it's in alignment with how quick I need it to sell. You know, like I said, some people, if they're just, if they want to get top dollar, they don't necessarily need to cycle or turn that profit.

I could put them in a market where, you know, it takes 10 or 12 months to sell. And that's not a concern to them if they're not trying to quickly get that and reinvest it. Right. Yeah. So you need to find a market that is in alignment with your goals of like, what's the velocity that you want to turn your dollars and usually sell through eight days in market, short rate, some of those things. Growth is a big one. Growth, population growth is probably the single biggest lever as far as a filter. like when you're evaluating markets. So we want to be in markets that are growing. So I think market selection is maybe kind of almost the genesis or foundational part of it, right? So we want to be really deliberate about market selection. And then when we do that, we haven't always had the data at a zip code level, the comp data. So everything used to be like done at the county level, but now we have data at a zip code level, you know, comp data. So we can kind of go in more focused, more targeted. and evaluate the faster-moving zip codes with more liquidity, the faster-moving ones. Where are you getting that zip code-level data? I use Land Portal, and the Drill Deep feature is my preferred. Under the Market Research tab, there's something called Drill Deep. Yeah, I've seen that. And that's kind of my preferred method for evaluating those markets. It used to be like Zillow, and we would manually pull the sold-to-for-sale ratio at each acreage range, and it was all manual. but now that's all just.

A couple quick clicks in land portal. And then the next thing you do is we go, okay, how about within that market at the acreage range? What acreage range is moving? Because you might find that properties over 10 acres have way higher days on market. So there's a lot of times where somebody might go, hey, this is what I've always done. I sell five acre properties, right? I do 10 or 20 acre properties. And then you find, so you kind of need to look at what acreage range is moving in the markets that you want to be in.

All right. So either you say, hey, this is the kind of asset class or acreage range I want to work in, like large rural vacant land. So we then need to find the market where that's moving. Or we go and we pick the market, we go in and then we find the acreage range that moves within that market. So that's kind of the things I go through is like the...

When I evaluate it, what liquidity, zip code targeting, and then acreage range, which ones are moving? Let's say, for example, my goal is to find 100-acre parcels that I can subdivide into five-acre parcels. In this market research, am I looking for this stuff for the 100-acre parcels or the five-acre parcels, or is it both, depending on the different reasons I'm looking for? So what I'm looking for is the child part. If you're subdividing, you're looking what you'll be reselling on the disposal side. So the child parcels is what I'm looking for. Yeah. And I'm making sure there's not a bunch of inventory is the other thing, right? Like, so given that you're looking for the child parcels, so you kind of have to actually know before you even do this, how big the child parcels are going to be, right? And can you always know that before you even find the parent parcel property? Yes. Yeah. You've got to know that ahead of time. And then you size it accordingly. I mean, you might size it according to what's selling. I'm in a market right now where it makes sense to take this 20 acre and i could see doing like 10 two acres or 21 acre like in that like the numbers work but when i look at existing inventory and days on market there's about three or four other investors who have they've got a bunch of inventory sitting at that acreage range but there's almost nothing in the four to five acre so it'll probably make more sense to do five four acres or four or five acres right than it does to do the one or two acres so yeah i look at existing inventory.

Because we don't want to add to that problem already of too much inventory.

So you're definitely looking at that on the subdivide. I'm just thinking through like, what if you find this 100-acre parent parcel, and you wanted to subdivide it into one-acre parcels, but it's like, I'm sorry, there's a huge red tape thing you have to go through or it's not feasible, you can only do 10 acres. Sorry, but you researched the one-acre parcels. Is there a way to safeguard against that? Do you have to do a lot of this research ahead of time as you're doing the market research? Like, how can you know that you have enough info on the market research stage before you get too deep into actually buying these things? Well, usually there's subdivide ordinances, you know, which is usually a big bloated PDF document that we used to actually read in Skim. And now we just throw in AI and say, summarize this, right? So there's usually like some subdivide ordinances that will tell you minimum lot sizes or the review process. And then, yeah, you're calling and making some checks. If this is specific to subdivide, right if somebody's subdividing yeah we want to know that ahead of time and not make assumption and not spend a bunch of marketing dollars making assumptions so you generally would grab a couple.

Existing parcels out there that are the same size as your child parcel and then grab some parent parcels and call directly into planning and zoning or the county and say hey i'm looking at buying this property and subdividing it is it eligible what's the process and even if it's kind of like a fictitious example, right? They can kind of tell you, you know, hey, the minimum lot size in that area is this, right? They'll kind of tell you the do's and don'ts or can't and can'ts. And then, you know, at a cursory level, you know, is it acceptable? But I think a lot of people, they start reading these ordinances and they get turned off and they read something that says they can't. And sometimes you can, you just have to pay for a permit of some sort or a test of some sort, it or it just adds to the timeline. So I generally tell people don't get discouraged or scared off by ordinances. A lot of times a quick call to planning zoning or planning development, whatever.

That county calls it will help you out. Is it possible to do everything else right, but still lose because of the market? Yeah, it's possible to lose it if you don't define what a win is ahead of time, right? So what is a, if a win is it has to be subdivided and resold within 12 months, you might say, yeah, I lost, right? It might take you nine months to get done what you thought you could do in four or five. And then it might take you a year to sell what you thought you could in six months. So I think if you kind of go into it, I'm never like the, hey, best case scenario. If I ever catch myself going, hey, if this works and this works and this works, if you have like three dependencies and they're all like.

Optimistic? No, that's the wrong pro forma to run. You kind of need to run a conservative negative Nelly pro forma right ahead of time and go, okay, if it takes twice as long as I think to subdivide and if it costs much more, and then if it takes longer to sell, does this deal still work? That's kind of the exercise I go through. It's interesting. I was at this thing at Jerry Norton's house this past week. And he lives on a like a farm homestead. It's like 40 acres. It's got a nice house and water on it and all the stuff. It was almost sort of like your version of the trophy property concept where he was saying there is a very specific market for these types of properties. He had this big list of like 20 things.

Like, for example, there's got to be a 5,000 square foot or larger house on it. There has to be at least two barns on it. There's got to be water access. It's got to be at least 25 acres. It's got to have woods and pasture on it. Like all these different things had to be true. And when you whittle it all down, there's actually not that many properties out there that fit this criteria. Like you could look statewide or even nationwide and only find like a finite number of them. But the interesting thing I was thinking as I heard him say that is like people will buy these properties even when they don't live anywhere near because the reason they're buying it is because it's a huge tax shelter because farms make it look like you lose a ton of money. As long as you show the intent to make money, you can write off tons of stuff with farms. So it's a tax move.

In that kind of situation, like if I know very specifically what I'm looking for and it's that, does the market even matter? Like, could the market look terrible? But as long as I know exactly what I'm doing, that's really it. Yeah, and I mean, you're onto something there where like for some people, yeah, like I say, when they're adding net worth, they're just wealth building, maybe the exit's three to five years. They don't care, right? So that's where like you would evaluate markets because there's markets where like a subdivide or a value add would.

Force way more appreciation. Meaning there's like maybe a 3x multiple in a market instead of like a 2x. But it takes you 15 months to resell something. So if the liquidity or velocity of the resale doesn't matter, absolutely. That opens you up to like on paper, right? You could go out there and do as many subdivides, add as much value as you want. And I'm sure there's people that do that. And then going to the bank, refire your post subdivide, right? And probably pull out non-taxable, right? Debt against it. So absolutely though, if resale isn't a consideration.

It opens the door up to like tremendous, like long-term wealth building, right? Can you think of any examples of a market that looks good on paper, but it doesn't work in reality? And if so, like what would be the problem there? Or maybe another way to ask the question is like, what is considered the wrong market? Like if there's something you would see that's kind of sneaky that the average person wouldn't see, but you would see me like, no, don't do that. Let me try to think of the most polarizing topic. Let's go politics, right? Okay, so if you walk into a room and I say, hey, who in here's a Republican? Who's a Democrat? We've got two people. And they both go, hey, I'm a Democrat, right? I go, well, 100% of the people in this house, right? Belong to this political, well, your sample size is too small, right? That doesn't reflect. If we got 10 people, we're closer to accurate, we get 100 people, we start to have a real feel for it, right? It's the same thing with like comp data. So when we're looking at comps, if we're measuring sell-through rates, days on markets, and let's say there's only three transactions that occurred in that timeframe you're measuring, there's not enough comp data, right? So the count matters. The count matters for how many comps, what's our sample size that we're measuring, right? Same with growth. You know, when I do look at growth, after I look at if a zip code is growing or a market's growing, I then come over and look at the population.

Because if it grew by 25%, but the town only has 3,000 people in it, then I go, okay, that's kind of skewed. So there is some of that where the data can kind of lie to you if you don't peel back a layer and look at it. But usually it's just not your evaluating markets with not enough comps or nothing ever comes up for sale. So it sells really quickly is why. So you kind of got to look into that a little bit. Have you figured out how to use AI for any of this market research stuff? Like just for that example, the like the statistical significance of seeing a sell through rate that like it looks good. The number's right. But oh, there's only like three properties represented here or something like that. Seems like a good use case for AI would be not just like quickly getting the information, but also being able to just catch that kind of stuff. Like, oh, and by the way, this doesn't actually mean much because it's not significant. I don't know. But any ideas come to your mind on? I haven't yet because I think the AI needs to tie to like an API with all the data. So right now I don't have a great workflow for that. It's just kind of, yeah, I know my process and then it's a trust but verify. So like I'm always calling actual land agents locally and going, here's what I'm seeing. Does that feel right to you? You know, what I'm seeing is if a five acre comes up for sale, it seems like it gets gobbled up within two months.

But these anything over 10 acres seems to be hanging around or 20 acres hanging around nine months. Is that, you know, is that in alignment with what you're thinking? So I'm kind of like starting with the data and then I'm reinforcing that with the local community. Land agent who's going to be the guy or gal that lists the property for me, right? But the main thing is what can happen here though, is if you, there's a little bit of ready, fire, aim that we have to introduce here, right? Because if you get in this loop, right? Market selection could be this loop, almost like therapy or something, right? Where like, you're never healed, you're never finished, right? So like, you know, at some point it's ready, fire, aim, you've got to pull the trigger, do some marketing, right? Because if you're just trying to pick that perfect market, you can make a lot of excuses for yourself and fall in that kind of that inaction quicksand. That's a perfect segue.

Because I think one of the problems people have right now is they might say my marketing isn't working. And I'll say like, I kind of get the hesitancy these days of somebody spending a bunch of money on stuff because like, it actually isn't working as well anymore. But I guess that begs the question, when you hear somebody say that my marketing is not working what's usually actually happening in your experience when you look at that like is there some obvious to you mistake that they're making or what's going on so that's when we after we talk about markets we kind of move to that kind of falls under the lead generation umbrella of is it the volume of leads meaning you don't have enough leads you know and that usually comes from like if you don't then marketing usually isn't consistent or we're not it's not big enough marketing lists or we're not enough i'm using the right channel or enough channels so i'm usually looking at first like how much what's your lead volume what's the frequency at that and then we can usually see like if it's a amount of leads a quality of leads right or what's going on right or if it's kind of like we've got leads but there's not a lot of great opportunities within those leads a lot of times we're kind of just pulling, we're calling it a marketing list, but a lot of times we're just pulling the assessor's tax roll of vacant land, right? Which gives us no indication about motivation or situation. We're just kind of.

Hoping that that we can tickle that out through our marketing efforts so you start to look at are all my leads unmotivated um or how many you know we move into lead conversion after that but that's kind of the first thing as i go what's the volume of leads what's the frequency or consistency of that and then how many opportunities you have real opportunities versus how many leads are coming in are we just busy talking to unmotivated people or the opportunities we do have where did they come from and why, right?

Yeah. So I don't know how specific you can get with this, because I know a lot of it depends on what kinds of properties you're going after and all this stuff. But to the extent possible, can you break down what good marketing actually looks like right now in this business? Like which marketing channel? How many times do you send them something? How much are you spending? What should you expect? What do you think a good job looks like right now? I'm kind of lumping together lead generation marketing.

They're two separate things that when I'm looking through somebody's stuff, there's kind of two separate things. But marketing creates leads, right? But the marketing precedes the leads, right? So on the marketing, again, that's like, what are you doing right now? I kind of look at consistency and somebody goes, hey, well, I sent 4,000 letters last month. And then this month I sent 1,500. So there's some of those things where you go, okay. there's some inconsistency or why did we send different at this time or it was one a big campaign and this one was a smaller hyper target or is there a reason why we're inconsistent with our marketing volume so it's not necessarily bad to be inconsistent as long as there is a logical reason behind it yeah if we have a reason like for me like if i'm doing some marketing i go hey all i want to get is like two subdivides and then i'm moving into project management and subdivide mode and I don't need to buy anymore because I don't want to flood the market with inventory in a market filled with inventory. So that's purposeful. I would stop marketing. But you want to be able to explain that not just like, well, I got busy at work or I got sent out of town or I didn't feel good, whatever. So we kind of look at why is there inconsistency.

And then the bigger thing I look at is if somebody's getting deals historically, you know i start to go like let's do the math on your cost per acquisition which is you don't see a lot about that in courses because it when somebody's beginning and they're new they don't really have any historical data they don't have a year behind them to look at that right so a lot of it it's more like operational your metrics your numbers but what does it cost you you know i say cost per acquisition but it's like what does it cost you to get a deal right like simplified meaning like how much marketing dollars do you spend per deal you get so we want to look at that because that's how we decide do we stick with the channel you're on the marketing channel you're on right or do we move you.

To a cheaper marketing channel, right? Like, because somebody might say, hey, what I'm doing is working, but I'm spending a lot on marketing. Can I accomplish the same thing with less of a marketing budget?

So yeah, we kind of move from like the cost per acquisition to marketing channels. Is there a marketing channel that you recommend, like start with this, this is the pinnacle, but if that's not going well, go down to this. Or is it more like, well, it just depends what kind of person you're going after or where the market is, Or how do you decide which marketing channel? And then if that doesn't work, what comes next? Well, I'm kind of all the above. But when somebody starts, it can be overwhelming to do everything and it can be expensive. So a lot of times I'll start somebody with cold calling and texting, like using a done for you service or something, because it gets the phone ringing today, you know, or right away. So we've now got leads, even if for somebody newer, that's kind of practice or reps, right? With mail, a lot of times you hit the send button and it's 10, 12 days before leads come in and response rates are lower. So it's a lot cheaper to start out cold calling or texting. You're going to have to process more leads because they're lower quality leads. But that's a good place to start, I think. Mail can be an expensive place to start unless you're very focused. Like you said, when you talked about that list before, that's a very small list of a specific property. Right if we were going through and picking out like all the subdivide candidate properties in specific markets maybe you only come up with 3 000 and i go hey we can afford to do all the above right we can mail.

We can cold call, we can text, right? So it's really like how big of marketing lists are we using here? And then let's make that like, let's have a marketing budget because that's the trap people fall in. You get excited early if you're a beginner and you're willing to get out the checkbook, but three to five months in, you could have spent a lot more in marketing than you planned on. So it's more just getting going, getting leads coming in and that's where the opportunities come from. But you got to look ahead and go intake. How do I handle these leads? So for somebody that's super busy with work, doesn't have time to do discovery calls, right? Maybe can't cut all these people back. I might say mail works for you. Mail's more passive. Mail is more like there's more grace with getting back to somebody. So mail might make sense for somebody. Another person might go, hey, I work from home. In reality, I probably only work three hours a day. You know what I mean with my remote job? I've got all the time in the world to call people back. So texting or cold calling, those type of leads where we're going to have a higher volume um.

That might make more sense for them. So it's not really a one size fits all. It's like what fits your situation. Do you have a abundance of time to be on the phone and talking to leads or do we need to be like more intentional and just get you the highest quality leads, but less of them, right? Using a perhaps direct mail. You mentioned the cost per deal, which is not exactly the same thing as ROAS, return on ad spend. ROAS is like literally dollars in, dollars out, whereas money spent per deal can vary depending on the deal. But what should that be? Like how much should a person be spending per deal or their ROAS and how much is too much? When can they know, all right, I'm way overspending here. It's not working. Here's where people can kind of miss the mark is if you're focused on too small of deals, like your profit potential on a deal, let's say it's costing you $4,000 to get a deal, but you're only making $10,000 per deal.

That's where I'm always pushing people and we're always having to do the same thing in our own business, moving towards bigger deals because it generally doesn't cost too much more to get a deal. But let's say you spend $15,000 or $20,000, something really high on marketing to get a subdivide deal that's going to make you $300,000. That makes a lot of sense. But if you go, hey, I only need to do two subdivides a year right the cost per deal isn't that concerning it's because of how much profit we're going to make but when somebody's trying to build like a flipping business right and we're doing lots of off-market marketing that's where you just got to have your eye on that right because otherwise you're just spending so the higher volume business you have the cost per deal matters more right but on the like the row as like a good business would have like i mean five to maybe even 12 years.

X on their marketing like you might see direct mail somebody has 400 500 however you measure it but i remember i went on a podcast years ago and at the time ours was like 12 you know 1200 and i thought he's not even gonna if i say that the host is gonna believe me so i think i said 500 or 700 percent on roas just because i'm like i don't you know what i mean but when you move like let's say you're texting your row as could be north of a thousand right.

Percent or 10. But ultimately, it's what size deals are you doing? All right. What size deals are you doing? Because cost per deal, you don't care about if you're doing very, very few deals a year, but making a lot of money, value adding, or a lot of equity capture, you don't care as much. But if you're trying to build it as a machine, a flipping business, that's a metric I see people aren't tracking, right? What do you think the future is of non-value add land flips? I mean, the bread and butter that used to work so well, effortlessly for everybody where you could just buy something, do nothing and sell it for more. Do you think those are going to like become extinct at some point where it's like, no, no, you got to add value or it's not going to work? Or any thoughts on where that's going? What I think happened is just the on the sell side and the dispo side, we lost the demand. I mean, it's kind of not that it went extinct. It's just that we had more demand than supply years back. I mean, I could tell you the month it was because we measured in our bit as April of 2022 and mortgage rates started to go up and then they doubled within 12 months. Right. And that's kind of where this new economy or market where real estate market started. But I don't think they want to extinct. It's just like right now, the high interest rates are killing demand. And that's why we have all this inventory. Right. So if you're trying to introduce a whole bunch of new inventory in a market that's pretty stagnant, it's the wrong model right now.

So value add is kind of timeless, but more expensive to get into, you know, because a lot of times you're...

There's fewer funders or capital partners that will fund subdivides. So a lot of times you're using your own money, which means you got to have that money yourself to start with. So there's more barriers to entry on value add, like subdivides. But it's a great play in this market where there's kind of a disconnect where sellers are still living in 2021, 2022, where they think everything's great. Their land's worth a bunch. and then we're living in reality where like even if i could get your property to discount could i resell it quickly right so the value add works because you can offer so much closer to market value because we're we don't make our money on the acquisition or the equity capture that we're used to we make our money on the value add same reason developers can go and pay farmers homeowners ranchers they can pay people 100 market value because all their money's made on the value add so that that's the beauty of that you just have to again you have to look ahead on the dispo and say you can cut up all the dirt you want but if there's not a demand to buy it why did you do it right so so even with value add and i say subdivide but there's other value that i teach like and we do like targeting landlocked properties that's a value add because you have a motivated seller there's some stigma they know it's probably maybe they tried to list it before right so you You can add value by getting legal access.

Getting an easement into the property, and that just adds the value, meaning it brings it to its full retail value that it should be, right? So there's some different value adds other than rezoning, right, is another value add. So I think, yeah, value add's a great spot to move to because there's way more profit per deal in it. So we're generally, it's not a high volume flipping business model.

So rather than trying to fight a tough market value, I'm a huge fan of it. It's also obviously your lead conversion, conversion rate, which is kind of our next thing up goes up significantly when you can, when the play is value add and you can offer way closer to market value. Of the different plays in your book, the Land Investors Playbook, is there one that you think is the winningest play right now? Or is it maybe just a market specific question? or is there anything there that like you see your students doing the best with today yeah there's two things that that are right now we talked a lot about subdivide that's one of them but the other is an assignment the assignment play and that's where in a market where dispositions are taking a long time to sell properties are taking a long time to move and there's no certainty right that it will resell even a lot of double closers battle getting under contract listing it And then it expiring because there wasn't the demand they had hoped there would be, right? So they're getting all these extensions and it still doesn't sell. They're price cutting. So an assignment is one. And that's for people, too, that are trying to go, hey, what's the fastest path to a payday, right? And the assignment is even faster than the double close because we're not listing it and hoping a buyer comes, right? So, yeah, the assignment play right now because you can.

And let's say I talked a lot about subdividing. But let's say you go, hey, I don't have the resources to go out and start with subdivides.

Well, if I told you my markets, right, you could build and I could give you even my marketing list. And you go out there and you'd mentioned Jerry Norton earlier. He's the king of this, of having people find deals for him, right? So like you could have somebody go out, find you a subdividable parcel, bring it to you. And then I say, hey, here's your finder's fee, right? They get paid now on the buy side escrow, right? It's the fastest path to a paycheck is an assignment.

So I think in this market, it's really timely. because you're not hoping and praying to find a buyer and listing it. And you're not getting the deal and then waiting six to eight months to see a payday, right? You're in and you're out. So yeah, assignments are really relevant right now. On the whole subject of lead generation versus reality, how do you know if you actually have enough deal flow? Like what's the difference between having quote unquote leads versus having real opportunities? How can you look at your pipeline and say like there's some actual meat here this is good versus like just kind of a busy pipeline with nothing really there well you the market gives you the feedback right so people will the leads give you the feedback and if there's a theme of like you're in an area where everybody wants retail or even in some case people are wanting 30 percent 50 percent above retail right you're kind of beating your head against the wall you either have to you have to go okay i'm going to stay in the same market, but I need to find a more motivated list or a different demographic.

Okay. Or I need to switch markets because where I'm at, right, there's not a big enough disconnect. Like there's markets you can exploit where let's say things are way under assessed and you can make your offers kind of anchoring to the assessed value. And then there's markets where they're assessed right up to almost retail, right?

And you kind of lose that negotiation lever, right? So you can't do that. So there's a lot of times that we can anchor to assessed value. And make offers in those markets where I say, well, where are you getting that number? And then they'll ask you to justify your offer and you go, well, we put a lot of weight in the assessed value. You know what I mean? When it serves us anyway. But a lot of times you're just going, I could be in too hot of a market. I might've found these metrics where things are moving and it's just people aren't motivated. So you go, do I stay in the market and let's find a motivated list like tax delinquent, inherited or probate or, you know what I mean? An actual more motivated demographic, a more motivated list within that same market? Or do I need to move to a good market, but not a great one where people are reasonable, right? And asking that, but you have a feel for it after a campaign to an area for sure. People were, you talk to 10, 12 leads, right? You're going to have some feedback. Those markets where everybody wants retail.

Do you know of any ways to see that before you spend money on marketing them? Or do you just have to pull the trigger and spend some money and find out? Yeah, you really have to. I find it's more common in those markets where their property taxes and assessed values are much closer to retail because people have a data point to go off of. They're getting taxes some and quite often and the higher the value, it might be twice a year you get your property tax coupon. Maybe you're not paying them once a year. So twice a year, you're kind of reminded or you see that going up. And if it's assessed at 85% of what retail is, that's kind of their data point or starting point, right? So if you take that away from them, though, and you're targeting markets where it's under-assessed, essentially, there's kind of some assessor-like arbitrage, you can anchor to that. And generally.

Because they would have to be online looking and shopping and comping to have any idea what their land's worth if they're not getting a property tax statement that gives them some indicator. That's why I love subdividing. Usually it's agricultural and not residential. So the assessed value has nothing to do with the actual retail value. It can be a little subjective. So there's room there. When a person has decent leads coming in, where do you most commonly see deals falling apart? Like what's the most common breakdown between the initial conversation and the contract? Is there some noticeable thing that is consistently going wrong that you see? Yeah, I would say the most consistent is cash offer only, right? Where that's the kind of like, if all you can do is offer up to 50% cash and that's it, that's your only solution. Your leads to deal ratio is going to be ugly, right? So you need to have a lot of times with people, I'll have to say like, you need to structure your offer right now. You only have one solution that's cash so you need to have some other things in your back pocket like like a double close would allow you an option to purchase at a much higher price, with the intent of double closing would be one the other would be buying it on payments with a down payment you know so buying via seller financing and those two options allow you to.

Increase your offer, right? So if we go from just defaulting to 50% of cash offer, that's 50% of retail, and we have these other options, we can usually get people, we can come closer to what they're asking and sometimes even meet what they're asking. With an option to purchase with the intent to double close, there's no risk in that really, right? Maybe tiny earnest money, but there's really no risk in that one. The buying with owner financing is still a win because you're probably going to pay 10, 20, maybe 25% down. So that's still going to be less than your cash purchase, right? So sometimes just changing how you structure the offer, sometimes you don't want to spend 50% cash even. It's better for you to buy it with an option or to owner finance, purchase it. So I think to increase lead conversion, a lot of times you have to have a better, you have to have an additional solution than just cash only, right? I've heard some people will put together like in their initial offer to a person, they'll basically have like three offers, like a cash offer.

Sell a financing offer, maybe an option, you know, whatever the things are, whatever they're willing to stomach. Do you think that's a good idea or is it like too much noise on the first offer? So I tested this years ago and again, a lot of the best ideas are borrowed or innovated upon, right? In the house world, they use a three option letter, right? And there's a number of gurus who teach that. I tried it in land five plus years ago, and it kind of overwhelmed sellers, right? Where you're introducing too much. So I find it's best to, like I said, that's why I said, kind of put them in your back pocket, right? So I tested a three option letter for years, and I moved it to two option. And for us, that was just cash was the offer, and the other was buying on payments, right? So I would give them those two options.

If we're mailing an offer out unsolicited, I would just do two. And then we have the third, which is kind of like that option to purchase, which is the double close. I find that's better explained over the phone than trying to pack it into a letter.

People can understand buying on payments, selling on payments, whatever.

They can understand cash. They can understand selling on payments. But there's some nuances with like, hey, let me put your property under contract. Give me the right to market it. So I kind of modified it to like a two option letter versus three. When you do the seller financing offer, what is the typical terms of that version of the offer look like? Because even when talking about seller financing only, there's like a million different ways to structure those, like how much down and what's the interest rate and all this stuff. So if you had an offer that you were making for, I don't know, 50,000 bucks, what would the second seller financing offer look like? How do you structure that? So I always start out with something like 10% down, 5% interest, knowing that we're probably going to want 20% to 25% down and more interest.

So you'll find some people are fixated on the interest rate they get, and others are more concerned with how big the down is. So I'm going to let them win one of those. I'm probably going to let them win one of those. And then some will even say like, hey, I can only take in. And that's why some people prefer to sell on installment. Like maybe they go, I can't have this big cash event. It'll mess with my social security or some reason or another. Right. We're like, I can't make too much. So they'll be like, the payment needs to stay under this. Right. So you can throw everything you want into your kind of mortgage calculator. But like, ultimately, the terms you want to be flexible with them. Right. Don't be fixated on how you've like written up the note. It's got to fit their situation.

A lot of people, I still remember when I was talking to a guy and I'm like amortized it over 10 years to buy on seller financing. He's like... He said, you realize I'm 90 years old, right? So, you know, that's pretty optimistic that I'm going to be around in 10 years to collect that final payment, right? So I was like, well, fair point, right? So what we usually do is to make the payment affordable to us, we amortize it over 10 years, but we have a balloon, an optional balloon at two years. So that's like buying with seller financing. And the optional balloon is like, there's situations for them where like, we're going to resell the land within two years. Like I'm confident in that because of across all companies, we've never had a property sit over 24 months, right? So I'm confident I can get it sold. The situation then becomes some people, they would want to be paid off and others would say, no, I just want to continue to get payments. So you just continue that promissory note, right? And make payments. But I usually do that could be like a balloon option at two years. It's up to them though. Do they want to exercise that?

And we pay them that or do they want to continue to get payments?

So that's again, that's where it's kind of cool because you're structuring the offer around them. There's some events. I don't do this a bunch. I'm kind of trying to find a framework that works where in the house world, there's some gurus that like will teach buying the house for 110% of retail on seller financing at 0% interest. But then you're kind of baking on appreciation and some of those things. Right. So there's even that seller financing component of you could offer them as much as you want at 0% interest. But that's the idea is that you get to structure it, right? And sometimes they have an idea of what's important to them. So if you're not rigid and you kind of let them win, you can get some terms that work for you.

So when you're giving people, again, let's go back to the $50,000 cash offer example, and then the accompanying seller financing offer. Is the seller financing offer also $50,000 or is it ever more just because of the fact of the seller financing? It's almost always 20 to 25% more. Usually 25. And this is, I don't have it perfect, but we tested this at first. And when the Delta is too skinny between them, people take the cash offer. And actually it's a problem if you're trying to steer them towards, if you really want them to take the owner finance offer, right? So I've found somewhere around 20-25% delta needs to be there to steer them, persuade them to take that, the payments option versus cash. So you might even offer lower cash than you normally, it's like 45%.

Or something. But yeah, that's generally what we do. Try to have about a 25% different. What's the decision matrix you go through to decide whether something should be a flip or a value add, subdivide, or something else? Is there ever a time where people make a mistake of switching to the wrong strategy when they should have just kept it simple or vice versa?

So when we're evaluating a property, even when it comes in off-market lead, our VA will go through our, what I call our, I'd have to do a whole different podcast or webinar, our faster choice framework that we created. It's kind of our intake and evaluation.

But after they've qualified the property or the property has not been disqualified, we move into something on our faster framework. The E and the R is exit strategy and resale. And that's where we like our VA to go through and look at what they think the exit strategy is for the property and then what it would likely resale for? And that's where I'm, we're guiding them. Like, look at the property are, is it, you know, 2X or 4X the size of nearby properties? If so, there's some subdivide potential or lot split that might be like the exit strategy. Is it next to commercial or industrial or, you know what I mean? So we're kind of go through that. Like, you know, what's the exit strategy here? So we're thinking through that ahead of time. And then they're looking at that. They're recording a loom video throw it in our crm and then i'm kind of checking over and see if their assessment is right but yeah we want to we want to look at that exit strategy absolutely ahead of time and then we look at the resale of that like we know when we picked our markets and we started marketing you know we kind of we put some thought into that but now that the lead comes in we still need to look at that acreage range in that zip code and maybe we pulled the data and didn't market for three months or six months.

You know what I mean, is let's look at the most recent freshest.

Comp data and see if that still holds true. So yeah, but we're always looking at what is the exit strategy. Generally, if it's under like 80,000 retail, seller financing might be an exit strategy. If it's much above that, we prefer cash flip because we're probably going to have to buy so deep we can't afford to seller finance it. But yeah, we kind of go through that whole like the exit strategy when we're looking at it. And I used to look when I started and didn't know better.

There's probably heard that saying like the Maslow's hammer where like, you know, if you're a hammer, everything looks like a nail. Right. And that's kind of when I started, that's all I knew was like buy single parcels, flip, flip, flip. And I didn't even have the peripheral vision to like know, right. Like to look for subdivide opportunity or to look for rezoning or to look for all these different things. And now that's kind of what we're doing is if you kind of don't just look through the lens of a straightforward flip, if you're looking at like some value adder or some other exit strategies ahead of time, you can make sense of it or it might even disqualify it. But you're not just thinking flip, flip, flip. That's what I would encourage people when they look at a property. How can I make this work? So there's wetlands on 50% of it, but it's a 10-acre property. Do we care? Maybe that's okay if the back five acres are covered in wetlands, if the front isn't. So there's some of those things that in years past, we might just say, disqualify that. It's got too much wetlands, right? Now we kind of want to case-by-case look at it and then look at it. Look at how can we offer the most, right?

If we can find exit strategies that allow us to add value or, or sell it for more, that means we can probably come at the seller with a more competitive offer. Yeah. You know, I'd never heard this, but this past week, and I saw this wetland mitigation specialist kind of, he does a bunch of stuff, but one of the things he does is wetland projects. And he was talking about how it's actually not uncommon that he sees a wetland specialist go out and do a delineation and they do it wrong. So like they call something wetlands when it's not or vice versa when I heard that I was like what? Like I mean I know the wetland mapper is pretty wrong but I figured if you at least had a professional go out there and do that like that's the gospel truth but apparently that's not even right every time.

So I don't know. It's just super frustrating. How hard it is to get real answers sometimes. It is. And if you'd asked me like three years ago, my experience at that point, I would have said that like a wetland survey is very similar to like a home appraisal where isn't it crazy when you go buy a house, you want to get a mortgage and then it has to be appraised. Somehow, somehow the appraisal always comes in right at what your loan is going to be for, right?

It felt like that with our experience with most of the wetland surveys we had had, where it would line up pretty close with the layers we would see on things like MapRite and ReGrid. And I felt like maybe like the surveyors at that time, I felt like maybe they were being conservative, right? Meaning they were like, rather than pushing the stakes farther out and there being more wetlands, they were maybe pulling them back for us so there's more buildable land. That was kind of my, like wink, wink, my impression of what might be going on. We've had some in this last year, though, and I've had clients with some where they've went out there and they've marked it with 2x the wetlands of what we saw on any platform, right?

So, you know what I mean? I don't know that you could kind of like paint with a broad brush or generalize that these surveyors, right? It might be the, just the quality of that specific employee, right?

Or what they're doing. But yeah, you're right. Sometimes you're, it looks good when you're evaluating it with layers turned on and then they get out there in the real world and stake it. And it's a different scenario. Yeah, I guess I just don't, like, how are we helpless, the layperson, land investor? How are we supposed to know any better? Like, if the professional goes out there and does it wrong, what am I supposed to see to say, nope, you're wrong, go do it again? Like, why would I not just assume they're correct? Yeah, that's where, like, how expensive is the survey? Maybe we need a second survey done and see how much, you know, acreage we gain, right, with the second one. Yeah and like i've had similar experience with civil engineers where like you pay them tens of thousands of dollars and they make like really dumb mistakes that like i have to catch it's like seriously like you would think there would be some fail safe when you're paying that kind of money that like you know it's gonna be right but it's like unfortunately no well that's what i've like i mean i used to be a project manager like i you had gantt charts you had like timelines i'm what What I'm most amazed about is the engineering firms you hire, even on subdivide projects and stuff like there's no great project management and timeline. A lot of time is best effort.

Right. There's like kind of a subdivide workflow that they're following. But, yeah, it's the end of the day. Yeah, you're kind of babysitting and project managing these things. And, yeah, fixing all the stuff that falls between the cracks. Right. Or doing what you can. But it's more common than you would think. Yeah. And it has no correlation to how big a check you cut. The quality of work has no correlation to that. Yeah, totally.

So if somebody has listened to this and they've got a deal that's listed for sale and it's not selling, I'm kind of in this boat. I've got a funded deal that's been sitting a long time. It's not selling. I'm just wondering, what are the real levers that they can pull? Like, what should they be doing? I know, like all these questions, it depends on the property and the market and all this stuff. But is there some mental checklist you start thinking through? Like, okay, first start with this. If that doesn't work, start with this. Yes, our experience has been I prefer to offer owner financing before making like how much price cuts do we want to make? Because what happens is after 12 to 15 percent price cuts, then somebody comes at you with a 85 percent cash offer of your property that's already cut. Right. So I really try to like evaluate, like, does it make sense to sell this on terms? Because usually there's no price cuts involved if you're willing to sell on terms. That's just the reality of it. I go back to this over and over. I say, walk into any new car lot, let's say, maybe not used, but walk into a car lot and ask everybody, who's buying cash today, right? Can you imagine, right? Like what percent? Like almost nobody.

Right? Like almost everyone's financing and doing payments. So that buyer pool is massive, right? When we introduce or offer owner financing. So I'm a fan of offering terms before I am of doing too many price cuts. So I always like to approach it from that way. And we learn that from doing several price cuts. And then we relist with terms and it sells. But it sold at that decreased price on terms. And I'm convinced it would have sold for their full. So that's the easiest way. But sometimes we've got to be active. Like a lot of times we're passive with our dispositions. We actively market for acquisitions, but we're passive with dispositions. So sometimes you have to generate some leads. You got to pull lists of builders beyond the neighbor letter, like people within the census track, like cash buyers, you know, in that zip code. Like sometimes you have to take an active role.

And getting a property sold. And even if that, that marketing is like driving the lead to your agent, not you, whatever. Right. But sometimes you get, if you look at like, people will make a big price cut, they'll make like a $5,000 price cut without any thought. And I would say like, what if you market, like how many letters could you send to people in that zip code or cash buyers? Right. Or you know what I mean? Like how, from marketing perspective, the big massive price cuts we make because we're too lazy to take an active role in and stirring up leads. I think that's overlooked and it's rarely used that people just default to more price cuts and then sell on payments last effort. And I think taking a more active role in dispositions. But that's also, that's kind of jumping ahead. We'll do this. I want to talk about deal type and I want to talk about dispositions, but let's skip the deal type and talk about dispo because that's a big problem like in a market like this where demand and days on market are tough, I'd say kind of the old order in a seller's market is that where we get the inventory, we list it, and then we wait for the buyer to come. People that are having success right now are kind of finding the buyer ahead of time or lining up the buyer.

Even if that's, let's say we talked earlier about an assignment. Let's say if you went to land.com and you said you looked in a state, right, or in some market you're in, and you said, this is pretty obvious. This is a broker. This is Whitetail Properties. This is Mossy Oak. These guys are brokers. And then you go, oh, wait, there's Travis Sells Land, right? Like this is a land guy, right? Let's say you went through and reached out to each land person and you saw like that they were subdividing and selling. They had multiple child parcels for sale. And you reached out to them and said, hey, I don't subdivide, but I'm really good at getting stuff under contract. If I got one of these parent parcels under contract, it looks like it's something you subdivide. Would you pay me an assignment fee? If you did that enough times, you have your buyer lined up.

It's kind of the same thing. So in the dispo world, or if you're sourcing to a builder or something, if we have communication ahead of time with a builder or an agent who has a client looking for a certain property type, if we get some indication of demand ahead of time, then instead of buying it, listing it and hoping and praying, right, we either have a buyer lined up or we have some prospective buyers. And I think that's people who are winning right now on dispositions is they have a pretty good idea who it's going to sell to versus just collecting listings, right, and collecting inventory. I think that's kind of a way to win at dispositions right now is rather than carrying a lot of inventory, having an idea who it could be sourced to ahead of time. And that's agents. A lot of times you just go to the agent and you go, hey, list this property for me. If you ask questions like, hey, I'm, you know, I'm marketing in this area, like in this zip code in this county, like, are there any areas that like, I should be looking that I'm not or you know what I mean? Any tips you want to give me or if you've got a client or a former builder or somebody that if they could get something of this size in this area, they would, you know, they'd buy it immediately.

So those are kind of the questions you have to have that second part of the conversation versus just what's your opinion of value and would you list this? So some of those things, if we can kind of have a buyer lined up or some prospective buyers, it can collapse that kind of days on market on the resale or even allow you to assign it or double close it while you're acquiring it kind of simultaneously. So I personally think that's the best thing. In this market, when interest rates are better, money's flowing more freely, you can be a little more sloppy, right? But I think right now in this market, I don't see acquisitions being the biggest problem. From my vantage, I see dispositions, resale being the biggest problem. So that's actually like most people don't spend hardly any time on dispositions. It's all an afterthought.

Everybody talks about market selection and lead generation and getting deals, but a flip has two parts, right? The buy side, the sell side. So like if you're spending all your efforts on the buy side, hardly any on the sell side, I think right now it makes sense to focus a lot more on the sell side. I mean, is that one of the functional purposes of doing market research is to understand where it's going to be easy to sell? So if you're having a hard time, does that mean you did something wrong? No. So that tells us kind of the macro as a whole, like things are moving in this market at this acreage range. We don't know the buyer yet though yet. So this is the part where we go let's let's identify prospective buyers like who has bought cash in that zip code right in the last 12 months we can pull that data right we can look up builders in that area we can talk to the agents about like you know anybody looking for something and quite often it's never even going to get listed if they they do so there's kind of this like.

Off-grid, right? Knowledge, right? Like that the agents have this tribal knowledge, you know, they have this knowledge that's not going to show up in your software that you're paying for when you're doing market research. So the market research is kind of the compass, but then ultimately we need to have those conversations with local agents and with prospective buyer, whoever we're sourcing it to. Like I said, it could be other land investors that are doing value add. Maybe you're sourcing it to them. That's kind of like a B2B approach, business, business, investor to investor versus like B2C where we're like trying to find an end buyer. So B2B is like to a builder, right? Investor to a builder. So we kind of need to work that B2B angle to find our prospective buyer versus just buying listing and moving on to the next thing. And then monitoring price cuts as we go out and gobble up more inventory.

Yeah. I guess I never really crystallized in my mind until I hear you talking about what an asset it is to be a good conversationalist. We just have a natural curiosity when you're talking to realtors. And because I think my default, like if I could just do what I wanna do, I just ask them, what's it worth? Just let's get off the phone as soon as we can. But I just being willing to like, just let them talk, you know, ask good probing questions. You can learn a ton that way. And that's where the different business models, again, if you're doing a high volume, scripts are more important framework everything's more important right the systems and processes are more important if you're doing a high number of transactions you're trying to scale it you have team members but let's say you just want to do two big subdivides a year right for example then in that situation it's like longer deeper conversations right with the sellers and with agents and we matter more because we're when we have huge volume of leads and huge volume of.

Marketing would kind of like shorten these interactions, right? Because we just don't have the bandwidth. But if you're moving to bigger deals, more profit per deal, you can invest more time in that. And then it doesn't feel like somebody is just an APN on a spreadsheet. So yeah, and that's why it's like, hey, give me your script or this or that. And I go, well, this isn't so much like portfolios. When we target portfolio owners with lots of properties, it's not about a script at all you might talk to this person seven times so i'm not going to give you a script for call one call five right like it's kind of like be a human you know what i mean like be a human have a conversation be an active listener right and so i think some of those when we get into development value add bigger numbers everything right becomes more relational than transactional and i think that's kind of the cool shift when you move from a high transaction.

Business to bigger deals and less of them, everything becomes a little bit more relational than transactional. Yeah, for sure. That's kind of what I was wanting to talk about deal type, right? When I'm looking at somebody's business and I go, what kind of deals are you doing right now? Can you think of any times when a deal looks good, but it actually isn't in terms of like the deal strategy or the deal type? Yeah, I think when you assume demand, like sometimes we've had properties where, I mean, you can do everything right and then you list it and you go, man, this should fly off the shelf.

And it doesn't. And you're just like, you might go on Zillow and the listing, you have hardly any views, right? Yeah, there are times you can do everything right. And it lines up with the data, like, you know, and the market just isn't interested or the market kind of, you know, ignores you. So it's just sometimes it takes more activity like i said like activity to get things sold but yeah i can think of like one of the we flipped probably 80 to 100 of these cheap parcels in this this big subdivision in northern arizona and and like a lot of more mountain properties and then i found like they were all one to two acres and then i found this like two adjoining parcels that were on the frontage road paved access it was like i couldn't and i thought these are going to fly off the shelf. These are the best ones I've ever bought. And they just sat and sat and sat and would not sell. And I, you know what I mean? I just, I could never put my finger on why. Right. And we ended up selling them. That's probably our worst deal. We made $200 on that deal, but it was a long time ago, but it was one of those. I just, you know what I mean? The feedback I got was there's some standing water at times. There's a lot of free range cattle nearby. Right. But my assessment, it was like, man, this is paved roads, utilities at the road versus off grid up in the mountains.

But yeah, so there's occasionally you're still going to get things wrong. And you'll hear that even from like the best funders and underwriters in the business, right? There's, oh, you know what I mean? You're never batting a thousand, but if you kind of go through your checklist, you increase your odds, right? Or your percentages. Has it ever entered your mind, this creeping thought that the land business might be harder than the house business? Or is that just absolutely not? It's not even close because you've actually been in the house business before, right? Didn't you work on houses before, house business is way it can be way more competitive meaning like the number of investors house wholesaling like it's insane how many people wholesale houses right used to a lot of them are out of it now apparently used to they're all now now a lot of them are finding land right yeah so.

I think land, the valuing land, honestly, is what I find is the hardest thing for most people is valuing it accurately, right? So that's where it's kind of the more inefficient asset class of land is trying to properly value it because comps aren't apples to apples. You might have two properties, lots that are the same size, but one's on the water and one's a half mile back.

And even the comping tools are valuing it the same because they're the same size comp, but one has all these attributes that you you'd have to look and know that right so i think valuing is where most people struggle and getting contracts signed are the two things i hear in land like oh it's it's easy to you know pick a subdivision or a neighborhood and value a house it might have some custom upgrades or something inside the house that zillow doesn't know about right but overall the price per square foot is pretty easy to figure out in like a subdivision of a house and land it's much land can be um much harder to to figure out how to value but with houses i do hear this from house wholesalers house investors that come over oh it's easy though to like to once you get in a verbal agreement show up bring them the contract they sign it you walk away with the contract land a lot of people they get a verbal yes and then it's tough because you're usually investing remotely getting that signed contract can kind of be tricky if the seller doesn't have email or there's no urgency, right? So I kind of find those are the two differences. But I think within LAN, there's just so many different niches.

There's room if everybody's just going after properties under $30,000 or $40,000 and they're all just looking at flipping it. That's where it gets super saturated. But if you have some people buying land and building glamping sites, some people actually developing it and then bringing in utilities and then putting a manufactured home on it one at a time and then continue to add a manufactured home and sell it as the last one sells. There's so many different like niches inside of land. Like I said, rezoning earlier, right?

I mean, there's just a numerous things that you can do is that you could lease out land for pasture, right? There, there's so many different things that you could do with the land that I think if there's still opportunities, but, but you kind of have to niche down a little bit versus targeting, you know, single parcel cash flips only. That's the model I think right now that's just that people are kind of beating their head against the desk. Yeah, it seems like with houses, most of the risk is tied up in the construction process, whereas with land, the risk is tied up in the due diligence process. And man, is it ever because there's so much stuff that like, I want to think I know the answers, but like seeing it on a computer does not make it true. And there's a lot of information that you just can't get by looking at whatever data service you're using. And sometimes the stuff you see is wrong. You know, like I was talking to somebody a couple of weeks ago about how apparently in some parts of the country, the USDA soil maps are wrong 80% of the time. Like it's almost more harmful to think they're true than just crazy. But it was almost funded a deal a couple of weeks ago. Like we were, I was ready to wire the money and everything looked good. But the operator called local realtor and just got some of that insight that you were talking about. Or it's just nuanced stuff. Like, yeah, there is road access, but like, it's really hard to get to and it's really steep and you get there and there's a power line going through it, which we knew, but like some people don't like the... Like, we just got enough vibes from that conversation to know.

Nope, we're not doing this. And like, what if he hadn't made that phone call to that one person who gave him that insight? You know, it's like, I hate that there has to be so many like rocks to turn over and look underneath them. And like, what if you miss one of the rocks? Like that really bugs me. The funny thing is, yeah, when we fund, right, for some reason, you give yourself a little more leeway in your own business. But when you're underwriting, like in the funding business, we like to talk to like three agents even if we obviously can only use one but right we're kind of looking for some alignment with what they're telling us but yeah when we're we want to support that there's demand and ideally if somebody can walk it so that's the things where it's like yeah you know there's a lot of stuff right we can optimize research we can optimize operations with like ai and all these things but like at the end of the day like some of the the biggest money is these things that aren't that AI and tech aren't going to touch, right? Like talking to a local agent on the phone. There's non-disclosure states where like the data you're getting is not as good or not as much of the data, right? So like where local agents experience like really matters.

So the farther, if you can kind of, usually if something can be like automated or, right, it's generally more like administrative or lower dollar value, right? Almost the highest dollar per hour activities have to do with like talking, right? Human to human speaking, right? Those conversations. So whether that's negotiating the deal, right? Or talking with the agents, the builders, like, you know, talk to some builders. What are you guys seeing right now? Is everybody not building? Or are you guys just the small builders just doing one or two spec homes at a time, but they're not, you know what I mean? They're not willing to put five or 10 out there at once. So I think like learning your market like that.

So I would say right now, yeah, being more local, having your markets and knowing your market really well works a lot better than being spread super thin and broad. But at the end of the day, you could do a lot of things right and still get things wrong. But ultimately, people try to avoid the things you don't want to do. So if you don't like to talk on the phone, you're going to avoid making those calls and look to a software or a data table or something to give you an answer you want to hear. But there's tons of money to be made and landed at every level with either solving problems or adding value. So like we've bought some inherited, our last couple have been inherited deals. So like there can be inherited, there can be probate, there can be tax delinquent, right? There can be landlocked. So there's a lot of properties where you're solving a problem or you're adding value or both, you know, and that's money can be made, right? Money can be made in those strategies that people think land flipping, that's all they're thinking is a single parcel.

But there's a lot of different approaches that work and work in this market. So that's kind of like I look at like somebody's deal type. That's kind of the biggest of all of them is like, what is your business? What was it built on and what were you doing? Does that model still work and we just need to fine tune something or do you need to completely change what you're doing? Right like we go back four years we were probably flipping like 60 parcels a year 22 25 000 a deal was like the median profit right and then right now the like there's not enough buyers i would just be flooding the market with inventory so i to make the same revenue i have to like 3x my profit per deal and then do a third as many deals so that's kind of the things i'd look what deal type are you doing? Or if somebody says, well, I'm doing these kind of deals, but nobody's motivated. Everybody I talked to is not motivated. So then we go, okay, how do we get you targeting a more motivated person?

Demographic, you know, whether we're pulling tax delinquent, pre-probate, inherited, landlocked, or, you know, there's, you know, let's get a more motivated list and let's see if we need to change the deal type you're doing. Do we need to move you into a value add or a problem solving role versus just trying to compete with everybody else for that low hanging fruit of, you know, buying for 15 and selling, reselling for 25 or 30 or something. Right. I'm wondering, when you're trying to diagnose a land investor's problem, has it ever happened where it just can't get better? This is just how it works now. Sorry. Just lower your expectations.

People are motivated to buy or sell. So yeah, just got to lower the bar a little bit. Is that ever the correct answer? Or is there always a, no, no, no, there's something you can do? Well, no, I think there's times where you go, does it make sense? Right? Like if somebody's been marketing and they're like, hey, I'm spending three grand a month of marketing and I haven't got a deal in eight months. I'm like, stop spending three grand a month marketing.

So there's usually like a pump to break, stop the bleeding. So that's usually more expense related, right? Like, hey, let's get a hold of the expenses and figure out what's going on. There's almost always an adjustment.

The biggest one I would say is things do take longer to sell. So it's kind of shedding those old expectations of previous markets if you've been doing this a while right there's just it's probably just going to the cycle is probably going to take longer so you need to see how that works for you or like i've had people that go well i used to use funders and i had no trouble four or five years ago getting everything at 50 percent man everybody wants like you know 70 percent right now there's still money to be made but like all my yeses people want it's like almost like 70 percent or so of retail so i would say to them like okay Well, how do we get access to that without a funder? So like maybe a HELOC, can you take a HELOC and not have to share in the profits, right? That would allow you to pay whatever you wanna pay if you know there's still money in the deal, right? How do we still do that deal but not share removing the funder from your previous business model so maybe maybe it's a heloc maybe it's a 401k loan right like maybe it's again we're buying on owner financing so you don't have to you only have 10 or 20 down you don't have enough to buy it cash but you can meet that price so there's usually some like adjustment but usually what the first thing i do with somebody is like let's stop all the spending we can where are there duplicate softwares or are there is there any duplication of expenses and what isn't working that we're still paying for? Sometimes you got to let team go.

We replaced a VA. I tell you, we had a part-time VA that a $20 a month chat GPT membership.

Research, you know what I mean? Market research, all that stuff we used to have somebody do manually. I can quickly throw that into price has an AI search, land portals coming out with an AI market research to chat GPT, you know, like, you know what I mean? So some of these things, the business model you had, or even the team you had was built for a different time. So we were getting leaner and leaner, right? Which is fantastic to be able to do more with less staff. All right so and that's an adjustment for some people sometimes it's mental like man i gotta let my employee go or or i gotta cut my va's hours or you know there's even some people are doing subdivides i look at how long it takes them to get a deal how much they're spending to get a deal and then their acquisitions person and then we look at that cost per deal and i'm like we could just have you buying on market deals right we could have you you if you could get on-market deals at 85% of their list price after the loaded cost of your team and your marketing and processing all those leads, that might make more sense. So there's almost always an adjustment or an adaptation that can be made. It's just more sometimes people have made their mind up. That's usually more what it is. And you're looking for a way out or an excuse.

So things still work, But there are just times where you weather the storm and the revenue is not going to be what it was, even with all the adjustments, right? You might do 2x the effort. You might optimize everything. You might shift stuff. And then instead of folding shop, you might only make half what you were four years ago. And it might take you a while to get back to where you were, right? Or find cheaper money, right? So you're just kind of going, do I give up or adapt? So usually there's something there. Just how hard do you want to work to fix this, right? how hard do you want to work to fix this? And at what point are you going to give up? For me, I've worked. And we've tried a bunch of different, you know.

Business models previous to this and I grew up working in rock quarries grew up you know getting tons of logging and firewood and you know construction like I've worked so I know what I'd call like real work so even when this is we're having to work harder at the end of the day to me it's still kind of like talking to people doing deals pushing paper and and trust me when I tell you that's that's a lot less work you know than manual labor or killing yourself with overtime yeah totally yeah So we've covered a lot here, lots of different things that could be causing people issues. I'm just wondering if somebody listening to this right now feels stuck. And if you were suddenly dropped into their business for an hour, what would you look at first? Like what's the fastest, most efficient way to diagnose this honestly and get to the bottom of whatever the issue is?

Right away, we look at, you know, what's working and what isn't. And then what are your leading expenses? What are your leading expenses? What are your best deals? Right. Let's look at that and maybe let's double down on what's working let's kill what's not but ultimately like i told you finding a buyer or let's shorten the time to a payday if you've been struggling for six to 12 months then maybe we don't want you to buy outright and wait another even if i help you with an acquisition you still got to wait several months to realize that gain so it might be like hey let's find you a quick assignment so you can get a win you can get a quick win or something right but i i'm just a i'm a fan of running lean when even we got sloppy i I would say with like, I had so many excess software, so many excess expenses, wasn't monitoring how much we were paying per letter or per text or anything on marketing when everything's, you're kind of riding the gravy train, right? But it is, yeah, like inventory sat and we kind of go through things, you realize how much excess there is, right? When you audit your business. So, you know, kind of going through and it's kind of reverse income, right? What expenses can we cut, right? And then how are we going to get the most profit on the least spend are generally the most immediate things.

And so sometimes it's like, hey, tactical to get you a deal. And then sometimes it's like an overhaul where it's like, all right, let's tear this apart and figure this out. And we're on like 3.0 of our business model. So I know that's just it. It's like it just takes kind of have to evolve if you want to continue being a land professional.

You just kind of have to evolve with the market and the economy, I think, if you want to stay doing it. Yeah, I think that's probably true of any business. But you're right. I mean, it's crazy how much you can save when you really are up against a wall and you have to start looking at that. And also just how much you can waste when things are so good, like you just don't have to think about it.

Money just pours out of your business when you're not really paying attention to it. It's really, really hard to like, and we're all guilty, just like hold up a mirror and kind of like take self-inventory. Everybody has like these biases, these limiting beliefs of some sort, like cost mentality, right? Like, well, I'm not going to pay a coach. I'm not going to pay a consultant. But like I said, somebody will drop the price of a property 10 grand, but they would never pay a coach 10 grand to come tell them how to get that property sold without making a price cut, right? Or somebody will go buy a property. Somebody will overpay on a property $20,000 on a property, but they would never pay 20 grand for a coach or a consultant. So sometimes there's like a cost mentality, like holding you back. And there's a little bit of pride of like, I can figure this out myself. It's my business. Right. So I think sometimes like when things aren't going right, even us, like with marketing and stuff, like we, years ago, we'd done some marketing and then I did a webinar. We had some sales and I'm like, oh, this is great. We had some good sales. And then I realized like it was costing us $1,200 like per acquisition, but the product we were selling was $4.97.

Does that make sense? You know what I mean? should we continue to spend on those ads and marketing to lose money on each sale we have? So sometimes you got to swallow your pride and go, hey, why don't I bring this to somebody who knows what they're doing? And they could tell me, oh, well, you have too low of a ticket for your offer, right? We need to increase the price of what we're selling. So bringing in somebody from the outside, it's just tough to like... See everything. Like I said, when you're kind of inside that jar, it's tough to read the label. So I think having somebody who's an outside advantage can tell you things, right? And you're just, you tend to be more honest with somebody else than you are like with yourself. There's just a lot of pride and ego to bring in somebody in to help you out, right? So I think a lot of people will just like struggle on their own versus kind of like, and I've even, I've had work with some, you know, some pretty big clients. And it's like, right away, it's like, okay, this is like NDA. Like, I don't want you to, I'm not a testimonial. I'm not a case study. I don't want anybody to know I coached with you, right? Type of thing. But, but it's a thing, like some people, it's just, there's some pride to that. But I think anytime we can let something go and, hey, I don't know everything like me. I don't try to be a land use consultant.

I hire one because I know enough, right? But at the same time, is that where all my efforts should be? You know? So I think getting outside expert opinions on anything, whatever business you're in, usually pays pretty good dividends. What does a land use consultant do exactly? They just look at your property and say, well, you could use it for this instead. Is that the bottom line? Or do they do something that is less obvious? They'll look at feasibility. Like they'll say like, hey, what is the feasibility of this? They'll meet with the jurisdiction, which could be the city or the county, whatever level it's at. They'll get a read from the room the ordinances say you can subdivide down to a one acre lot but you know i met with the jurisdiction i met with the city and they're really nothing has been getting approved it's less than five acres you know so yeah getting those actual insights above this we're more likely get approved but usually like they'll look at rezoning if you're going to do some rezoning right that would be like a good land use consultant thing right they're going to be fluent in all of those subdivide ordinances that you and I skim.

Or we just upload to AI to summarize for us, they're going to understand all of that and they're actually going to hopefully read it. And then they're going to interface on your behalf like with engineers, surveyors, some of those things. Well, Travis, if people want to work with you, what should they do? Is there anything you recommend they get started with? Yeah, you can go to travisking.com and kind of put in an inquiry there. I believe you've also got me up on the REtipster Certified Coaches page, right? Yep, you got it. Go to retipster.com forward slash coaching. You'll see Travis there and link to all his stuff. Awesome. Yeah, well, I know a lot of people are struggling right now and I know a lot of people are a few tweaks or pivots away from like staying in the game. But I would I hate to hear when people fold up shop or go try to find something different.

Because they couldn't figure out a pivot, right? So that's what I'd say right now is that, hey, that everybody's had to make adjustments in recent years if they're still in business. So it's not just you. It's not something that you're not doing a bunch of things wrong. It's just adjusting to the current market. Has it ever happened to you where you've been coaching or consulting somebody and the recommendation is you should fold up shop? Like you're not cut out for this. Or is it more of like, like you tell them what to do and then they make that decision? Yeah. You're not cut out for the, that usually wouldn't be my initial assessment, right? Because usually they've got some, some closed deals. You know what I mean? They've kind of got some resume or some, if they're coming to me, they probably have some deals behind them. So they've had some success. It's just, it's not successful right now. More so than, more so than yeah. Nope. Yeah. Fold shop, right? Make check payable to Travis King, but fold up shop. That's my advice. Yeah, I have talked to people like that where that's been my advice to them, but it's been because they're like, they haven't even gotten into it yet. They're just sort of telling me what they want to do and what their expectations are. And I'm just like, look, man, a reality check. That ain't how this works. Like if that's what you're expecting, don't do it. But if you're willing to realign your expectations.

That's fair. And I think I've told people, you're not ready yet. When I start to explain realistically, after maybe some group coaching or a course or some marketing, I just go, you don't have enough. You know what I mean? You don't have enough money. You're trying to get into this too cheap. You're going to be disappointed. You really work some overtime, go do some side gigs, sell some stuff, whatever, but come back in six months with another five or $10,000. You know what I mean? So there are times where you'd go, yeah, like we need to like to kind of connect, like reset expectations, you know? Yeah. What do you think is the amount of capital people should come to the table with these days if they're starting out? I think that marketing is, should be your biggest expense because I'm not a fan of buying properties outright unless you've got well above six figures just sitting. So you need to be able to afford marketing and consistent marketing for six to nine months. So probably ideally, you probably realistically, you need 10 grand or more, right? For marketing much less than that. And I think that you won't be able to get enough marketing out there to give yourself a fair chance, you know, to convert some leads. Sure. Cool. Sounds good. Travis, again, always great to talk to you. Thanks for coming back on the show. People want to see the show notes for this episode, find links to all Travis's stuff, go to retipster.com forward slash 266. Thanks everybody for listening. Travis, talk to you again. All right. Thanks for having me, Seth. All right, you bet. See ya.