Hey everybody, how's it going? This is Seth Williams from the REtipster podcast. Today I'm talking with Rick Sheldon. So I met Rick recently at a Mastermind event and he caught my attention because of the way he explained his pay-per-click marketing strategy for land deals. It wasn't flashy or overly complicated. In fact, it was kind of the opposite. It was simple and logical and very intentional in the way that it filtered out bad leads and avoided wasting money. And as he was explaining it, I kept thinking, And this is one of those ideas that sounds obvious once you hear it, but most people probably aren't doing it this way. Rick also comes from the household selling world, so he's seen both sides of the real estate investing business. Over the past year and a half, he's gone deep into land investing. He built systems around it and developed a process that seems extremely dialed in. So today we're going to talk about how he made that transition, how his business actually works, how he's finding and selling deals, and what he thinks most investors are getting wrong right now. And we're going to spend a good amount of time unpacking his PPC, pay-per-click strategy, because I think a lot of people listening are going to hear it and kind of immediately start to rethink how they market for land deals. So, Rick, welcome to the show. How's it going? Yep. Thank you for having me.

Doing very well. And I'm excited to share what I've learned over the last 12 months or so as we've really focused on PPC pretty much entirely. Yeah, that's awesome, man. So why don't you tell me the origin story? So when did land first show up on your radar and what made you decide to shift away from the household sailing world?

So I had a bit of a transition period from the residential, wholesaling, creative finance, all that type of stuff. I had a bit of a two-year period maybe where I was selling tech product and I got a lot of exposure during that time into what was working for other people and what maybe didn't.

One of those things that did work for people was direct-to-agent outreach. So I thought, hey, let's give that a try. There's, Not much marketing overhead involved. Let me try to pull together a partnership, launch a land company, do it in a low-cost way with direct-to-agent outreach. We built a really cool system. Some might call it over-engineered. But it was really smooth as far as how we were getting agents into the platform and reaching out to them and asking about the land and making offers and things like that. But we just spun our wheels for about six months. And then at our Q2 leadership review, basically, we're like, okay, something's going to have to change here. What is it? We came up with a new model, a PPC model, and we really just hit the ground running. We actually got a little bit misled on our very first campaign, which is one of the lessons I can explain to you guys on filtering out scammers and bad actors. You will run into that a little bit with Inbound, but as long as you've got your radar up, it's just a gut feeling. And you can always kind of tell with that type of person and then just implement some best practices to verify people's.

Identity and things like that. But ultimately, that false flag kind of gave me the hope that PPC was amazing and a cheat code. So I stuck with it and kept building more campaigns and developing that strategy. And I learned just how to build the proper funnel and how to set up the conversion tracking and all those things. And overall, it did pretty quickly.

Kind of hockey stick to business, ultimately. Wow, there's a lot to unpack there. So you mentioned this direct-to-agent outreach. I think that's what you said. So how were you reaching out directly to agents? And are these agents specifically who have land listed for sale? Or what kinds of agents are you trying and able to target? Yeah, at that time, I had developed, I hired a developer because AI wasn't really all that big and useful yet. So I hired a third-party developer. He built this way of kind of pulling from a lot of the major data sources. And I could really see all the on-market parcels of land from within my dashboard. And I could choose which ones. I could even filter for like keywords or acre ranges and things like that and choose which ones I wanted to push into my outreach sequence. And again, it was a pretty smooth system, but we had three agents in a row kill deals for us. Looking back at it, there's maybe some things we could have done better, but we had three deals in a row die. And, you know, from my point of view, it was because of the agent involved and the translation issues that can happen with one extra party involved. So ultimately our goal was to transition direct to seller. So the question just became, which lead gen strategy do we use as we get the agent out of the way and want to negotiate directly with the seller?

And just to make sure we're on the same page, are we talking about when you are trying to acquire a property or when you're trying to sell a property? Acquire properties. Yeah. So all of what we've spoken about so far, I'm thinking in terms of lead generation. So reaching out for the agents to make an offer on a piece of land that a listing agent was already on the market representing. That's the first strategy that we kind of spun our wheels with for about six months and.

Prior, like, yeah, transitioning into the PPC direct-to-selling model. So when you say reaching out to agents, so you mean you are manually contacting them? They are not clicking on some PPC link somewhere and filling out a form. You are finding them where they are and starting the conversation that way? Yep, exactly. We used a GoHigh-level-based system. So we would start with email and just see who would reply to our interests. It's like we would express our interest in an email and then just begin the conversation that way. We had a closing, we had an acquisition team as well. So they were very active in jumping into those responsive conversations and really just jumping onto a phone call and making the offer based on comps and real data. So not over automating the full process, but we did automate that initial touch point to just see which agents would respond to our email and begin that conversation with us. Were you scraping Zillow or something? Where do you get these agents? Well, good question for that developer that I no longer work with. Basically, as the transition to PPC happened, we just kind of let that system get neglected and we no longer use it. But we hired a developer and he had all the.

All the backend connections figured out. And you said part of the reason it was not working was because the agents were killing deals for you. Is that accurate? Yeah, so I also believe we could have maybe done better because our position was, let's save the seller some money. We don't need to be represented on our side.

If you're willing to pass that savings back to the seller, then we could move forward that way. And looking back, I think we should have always pushed for them taking both sides of the commission. Even though the approach that we did take was around getting their buy into it first, like we would offer to them, hey, do you want the full commission or do you mind passing the savings to the seller? They would almost always say, oh, I don't mind. And then turns out throughout the process, I feel like they did mind. Why were you ever even trying to do this? Like most of the land investors I know, they would never start with reaching out to agents. They would start with reaching out to sellers in the first place. So did you like have some education that told you to reach out to agents or what made you even try to get on that path? It was John Josniak. I think he has a lot of success on market. And my business partner on the land company is Rachel Burnett. She's amazing. And she introduced me to John Josniak's content when we first began. And he has a lot of success on market. You know, it's just a different conversation that he must have with those agents or a different relationship. But there were a few influencers who seemed to have it all figured out that we were kind of modeling after with that and yeah, just didn't quite have as much success on our side with it.

Any idea what John or those other people are doing different than you, if they're able to make it work and you weren't able to? I'm not sure exactly, but I do feel like if we had to do it again and we really pushed for the agent capturing both sides of the commission, I think they would have been a little bit more on our team. I think that's the single biggest lesson I took from it. And I think it would maybe work if you were starting out and doing it that way. And I can't speak to if that's how John does it or if it's just, you know, he speaks better to the agents or what it might be. But I do think that commission issue is the biggest friction point that we ran into with them. Were you making offers like discounted from their asking price or something? Yes. Okay.

Do you think that's part of it too or no? Well, it might have been, but we had contracts. You know, we would get them under contract. We would be moving towards closing. And then those three deals that I mentioned were deals that we were anticipating closings within a week or so each time of the deal falling apart. And you think the agent somehow sabotaged it because they weren't getting both sides of the commission? Yeah, you didn't say that, but I'm just thinking out loud. Maybe that's what you were. Yeah, that's the clearest dot I can connect to. Transitioning over to the pay-per-click model, how does that work? When we were talking at the Mastermind event, you explained the process that people go through. And it seems like you have a very well-thought-out funnel that people go through based on who they are and that kind of thing. Did you just kind of like figure that out on the first try? Or was this like the 20th iteration that you arrived at your current model? Or I don't know where we want to start. Maybe you can stop by explaining how it works and then we can talk about how you got there. One thing that I learned even before getting into land, I had done some Facebook marketing for inbound leads on houses, and I did the same thing for that tech product that I mentioned briefly. So I knew some of the basics when it came to running an ad funnel. And one of the key things is the conversion tracking.

So when do you tell the ad platform that that was a good lead or when don't you? So if you are just getting into ads and you want to just set it up and you're not overly confident yet, you probably just want to set up their recommended conversion tracking on the page that people land on when they engage with your ad.

And just keep it simple. tell Google or Facebook whenever that type of person who at least clicked on the ad lands on your page.

But if you want to get a little bit deeper with it, what you can actually do is start to use systems and technology to guide people down different paths based on the answers that they give you, for example, on the first form of a website. So if I were to lay out the architecture, just high level of our PPC or Facebook ad funnel, it's really a landing page with a form on it. And when they fill out that form, they go to a second page. That second page is where we ask them a lot more questions. So we've already captured their information from the first form. And based on the answers to that first form, we can kind of already tell if they're a good fit for our offer or if they're not a good fit for our offer. So if they are a good fit for our offer, which actually touching on the point we just discussed, if they are already on market with a realtor, that's an indication that they're not a good fit for our offer. So if they're not yet on the market with a realtor, that's a good indication that they are a good fit. So that's one of the two questions that we use to differentiate which second page they land on.

On that second page, we have the same survey on both pages. The only difference between the two pages is that the one that they land on, if they answer the question properly, has the conversion tracking code on it. So now if you can extrapolate, you've got hundreds of leads coming through and only the ones who answer how you want them to answer.

Or who kind of indicate that they're a good fit for your business, those are the only ones that report back to the ad platform and tell them that we want more of that type of person. So overall, we've now optimized the data going back to the ad platform. That's going to result in us getting more and more qualified leads over time. But the other part of this is that whether it was on the market or we didn't really think it was a great lead, we still want to capture it. So the full survey that's on the second page is the same survey. And if they go through that full survey, they converge back into the standard process. So they land on a third page with a calendar on it. So now they're actually looking at our acquisition team in a picture of the person who's going to call them with their calendar right below that. So now the three pages is the first page is the form that helps you qualify them and reroute them. Only those who answer properly land on the page that we tell the ad platform that that was a good lead. And then regardless of whether they answered the first form in our favor or not, we're still pulling them in. we're still reaching out to them and making an offer to them. And we're still guiding them to the third page, which is a major improvement for your audience. If you implement something like this, put the calendar on that third page for two reasons. One, now you can track the conversion of the full survey as well. And of course, you're just going to result in.

Appointments on your calendar if you do that too. And you said that third page with the calendar, that is the page on which it's confirming with Google or Facebook. Good job. This is who we're looking for, right? So a little bit of a technicality. I use the second page to do that. The third page is an even further reinforcing data point. So if you were to, let's say, retarget them on Facebook ads, so they come in through a Google ad, and then you want to put them onto a list and say.

Hey, you landed on my website, so now you're going to start seeing my Facebook ads. I'm sure that happens to you all the time. You just landed on somebody's website, you're seeing their ads. That's retargeting. So we use the second conversion from survey to calendar page as a retargeting tool. Let me walk through what I think I understand. Let me know if I'm missing anything. So a person sees your ad on Google or Facebook, they click it on the first page, It's very simple. There's just a form, right? There's literally nothing else on the page but this form. Is that accurate? Is there like a video or anything or just the form itself? We do some split testing. So it might be just a form. It might be a full authority site with different menu pages, including a blog and an FAQ and testimonials and things like that. So we've split tested. And just if you want to go down that route, we can. But high level, I find that on Facebook, you want to keep it simple with the form only. Don't distract them at all because you were kind of, they weren't seeking you out if they come into a Facebook ad. They were just scrolling. You intrigued them. They click in. You don't want to distract them too much. But if they're Googling how to sell this land, then they're wanting to research a little bit. So it's not just filling out a form that they're looking for. So you just have to put yourself into the seller's shoes and think about, you know, the full life cycle that you're trying to walk them through.

So one of the questions on the first page is, is your property currently listed with a realtor or something to that effect? Is that accurate? Yeah, we ask a few different things, contact information, property, location. Is it listed with a realtor? And then just a couple other questions that we use to make that first determination. Sure. And if they say, yes, it is, you send them to another page that says, get out of here, we don't care. Or like, what does the next page say for that? If they say yes, and it's not exactly who you're looking for. Yeah, good question.

It's a little bit nuanced. So if they answered it how we do want, we're like, great news. This sounds awesome. I can't wait for you to finish the survey. If they answer in a negative way, maybe it's very tiny. It's a tiny lot. That's another one. If it's a tiny lot, that's an indication that it's not going to be a great deal for us. Even if we could make some money, not really what we're looking for with our subdivide heavy model. So we're trying to optimize for off-market large land so if they answered that it was tiny for example, or on market they would land on a page that says step two is to give us more information it doesn't really scare them away from thinking that we are not interested because imagine the scenario that somebody puts on a beautiful development piece that's on the market and it's under an acre because it's in, dallas you know it's like a great piece that could be a deal We don't want to just make them think that we're not interested at all. But we also don't want to tell the ad platform that we want to see more of that type of person. So I guess that goes into a pod that you might look at closer. Probably not, but maybe. And if they say, no, it is not currently listed with the realtor, that takes them to a second page where you ask probably even more clarifying questions about the property and have them fill out all that stuff. And I think you said there's some other question in that second page form that.

Could disqualify them? Did I hear you right? Yeah, not so much. It's just that there's multiple on the first form. So we can have different questions that may disqualify them from that first point. But once they land on the second page, either version of it, we're just putting them through the same survey. It's several questions where we ask about what's the situation? What's the timeline? What's the condition of the land? Do you have a survey? you know, a bunch of questions. And most people will fill that all the way out. I think the important piece there is actually to limit the distractions. We don't have a menu that they can navigate away from. It's like, thanks for filling out the first page. Now you're on the second page. Stay here, please. And then that third page, that's where there's a calendar and it's a page with literally just the calendar with the picture of the person they'd be talking to and they can find a time to get on a call with them. Yep. And then if they book that call, that is a great indication that they're even a better lead. But we never want to really wait until that call. We want to still treat them with speak to lead, call them right away, and just frame up how that call they just booked could be canceled or could be rescheduled to a sooner date. Or maybe we give you the offer on that call, but I need some preliminary info now. But really connecting with them immediately is still the goal, even if they book a call for tomorrow.

And with both Facebook and Google, the thing that goes back and tells them, good job, Facebook and Google. You sound as a good person. That's simply like code that's on the page that loads on the page when somebody gets there, right? It's not like you have to go back and manually say, hey, this was a good one. Like, none of that. It just happens automatically. Yeah, exactly. Yeah. And Google and Facebook, they each have their own processes. You just go into their platforms. They might look a little scary, but they guide you through how to create the campaigns and they'll give you the snippet that you need to put onto the pages. And.

I know whether you're doing Facebook or Google, kind of a different mentality in terms of like how you design the ad copy and what you're saying and that kind of thing. Because Google, it's, if I'm understanding it right, it's mostly people who are doing a Google search, right? That's where your ads show up. So you want to say something that makes sense based on what they're searching for. Whereas Facebook, somebody's scrolling through their feed, so you need like a video or an image or something that catches their attention and then they click it. Am I on the right track? Perfect, exactly right. So which one do you like better? Like, does one perform better than the other? Yes, I started with Facebook because it's what I was familiar with. I made my first Google campaign. Actually, this is a good story, you know, not a great story, I guess, but a good little tidbit is that my very first Google campaign I created was for land. So all of the money that I've ever put into Google campaigns is between May of last year and now. I just looked at my numbers before I jumped on here and we put $98,000 into Google ads.

From my very first point until where we're at now. And from that, we've generated a pipeline looking at 1.5, a little bit over 1.5 million of net profit that the company will receive overall. And I did the math on that. It's a little over 15X. So we haven't made 15X yet because of the long cash conversion cycle involved. But I feel like we've historically done a good job of underwriting our deals. And I'm pretty confident about kind of locking in the profit when we buy. Maybe we end up a little bit less than 1.5. Maybe we end up more. But...

I'm calculating kind of the upside involved in deals that we've purchased and have on the market. You know, we have several deals where it was a subdivide, for example. We sold off two or three of the four or five lots. We have a couple free and clear. So it's kind of like a balance sheet item, but we will eventually sell those things. So about $1.5 million of projected profit from that first $98,000 of Google Ads. I guess. So Google is the better one between the two? Oh, yes. To answer that question. Absolutely. So when I tested that, I quickly abandoned Facebook because the metrics just took off right away.

And I even came back to experimenting with Facebook, testing about six months later, a second campaign. And again, I just, it was quickly proven to me that Google was where the higher intent sellers were coming from. So you don't do Facebook ads at all anymore. Correct. Even the retargeting, the way I've explained it, where you kind of push them into an audience and then you can hit them on Facebook ads after they've come in. I find that that budget is better put into Google. Now with Google, you can also come up with like an image ad that gets displayed as a banner in different places, right? Is that something you ever do or is it always just like text ads? You know what's interesting about Google is that I believe the campaigns are pretty flexible. So there's different types of campaigns. I'm not an expert on all types, but the type that we've used, I know that when you configure it, it allows you to deselect any locations that you don't really care for it to show up. But by default, it's showing you all the places that it will show up, which includes YouTube.

It includes those banner images and several other locations that they'll show up. I just kind of let Google do its thing with that. I think as long as you're using the right terms for the searches so the search terms that you set up are good, You really focus a lot on negative keywords to filter out wholesalers and realtors and lenders and scammers. Like I can maybe share something to help people with that, but that was a big challenge is how do we make sure that our ad doesn't show up to people who Google, has certain data points about. So setting up the positive search terms, the negative keywords, and then the media and the conversion tracking has really been all I focused on. I haven't gone out and split tested a ton of different types of campaigns yet.

But maybe that'll be a 2027 type of project. This reinforcement process where the code goes back and tells Google, good job, you did good with this one. Does that actually show notable improvement in your leads? Like, it seems like logically, yeah, that would help, but like, does it really? Like, have you seen it just get better and better and better and better and better every single month? Yes, we have noticed consistent improvement overall. Overall, I can attribute it to a couple different things. One of the main ones, I don't want to downplay the negative keywords. That's major. That's very important to figure out and set negative keywords that help avoid showing up to people that you don't want to show up for. So in addition to that, I think the tracking is doing a great job. I had my marketing coordinator pull a report and use Claude to analyze it and things like that. And what we found is that when we look at those two parameters that we're really trying to optimize around mostly, the lot size and the market status on market or off, we've noticed a very steady trend of getting more and more off market properties. Whereas what I need to focus on moving forward is improving the ongoing improvement of the lot size range. So that has held pretty steady, though we've done a great job at getting more off market properties over time. The whole thing with the right keywords and then the negative keywords and all that. So like.

How do you figure that out? Like, are you kind of just poking around in the dark for a while until you start seeing data come back and then, oh, OK, so let's stop doing that keyword and boost this one instead? Or is there some magic process for that? So testing is one thing, just setting things up to be tracked, even if you don't know everything that you're going to extrapolate from, you know, the data, if you track a lot of data, you don't really need to know yet at that time what you're going to use it for. So we've been tracking a lot of these data points as leads come in. And yeah, so I would break it down into a couple of categories, maybe AI and testing. So if we first talk about AI, Claude helped me come up with the initial list pretty easily, not rocket science to pull together a list. As you've told it, hey, I want to avoid showing up for realtors. I want to avoid showing up for wholesalers. I don't want to show up for people with small lots. And just getting that initial set of media from something like Claude. And then that'll help you right out of the gate very well. And then beyond that, we want to be testing things. So let's take that list, set up one campaign, make sure that we're tracking things as the leads come in. For example, how many leads came in from campaign number one? How much money did we put into campaign one? What percentage of those leads had less than one acre? How many had $1?

A realtor already, we track all those different data points so that we can later come back to them and run some statistical analysis on it. So at any given time, you know, multiple times per week, really, we're taking a look at the numbers, making sure that the cost per lead isn't really getting out of hand, as long as it's staying steady or going down. And as long as the percentage of leads that come in are qualified leads, we'll keep that campaign on. And if it ever starts to drift, we'll just replace it and intentionally replace some of the keywords or some of the phrases or things like that and then we'll track it again measure it again come back and compare that to the previous campaign so over the course of the last 12 months we've got, let's say 30 or 40 campaigns that we've got different data points about and we can compare those campaigns to each other and see what we had changed on each one to lead to those differences and then double into to those ones that work. So when you said you're using Claude, I'm glad you said that because I've been getting a lot of experience doing a similar thing. Are you using Claude Cowork or just the normal Claude that you chat with? So like it tells you what to do and then you do it. Or is it more like, no, Claude Cowork, you just do it. Like, I'm going to give you access to all of it. Go for it. Do whatever you want to do. Like, which version of it are you doing? So I don't think I've ever used Claude Chat.

I tried Claude Cowork and it's really cool, but I almost live exclusively in cloud code. Even for some of the projects that some people might set up in cloud co-work.

I just see that as a better thread as a cloud code conversation because I feel like it just remembers the context a little bit better and I can maneuver a little bit more flexibly. So I really hang out in cloud code all day. Are they kind of the same thing? Or is it mostly the interface that's different between the two? Yeah. Yeah, exactly. The interface and then the way that you engage them and some of the parameters that the project might have as constraints. Cloud code, you can turn on a dime and work on a whole different project if you wanted to. But within a cloud co-work project, it has a little bit more bounds or a little bit more boundaries. So you might want one of your employees, for example, to use a Claude Cowork project that you built for them. But me, I find that Claude Code gives me the most flexibility as an operator or as a founder. That's really interesting because I totally separate thing. It has nothing to do with land, but I've got a children's book that I wrote about a year ago. And it's just I don't really know how to promote the thing. It's just there for my Storyland podcast that I run. And I started getting into Amazon ads a few months back. And when I started doing this, I was using ChatGPT and I would just go back and forth and back and forth and back and forth and make screenshots. And here's what I'm doing. Is this good? And it would tell me, no, fix this. And when CloudCodeCode came out of the scene, and I guess I got to try CloudCode now, but oh my word, it was just so much easier. It would tell me what it was going to do and I could just say, OK, do it.

You know, and it would ask me, is it OK to increase your daily ad spend to 20 bucks a day? And I'd be like, yes, do it. there's so much knowledge and just understanding that Claude Cowork or Claude Code has that is just so beyond me. And it can not only understand it and tell you what to do, but it can just do the thing. I don't know. It's just an amazing unlock for this kind of thing. And I'm sure it's the same kind of thing with Google Ads, right? Yeah. I mean, if we wanted to pivot hard right into the AI side of things, that's where I live actually on my team. I'm kind of the technical co-founder. My partner is more of the operational leader and we have a great acquisition team. We have, internal team members to help take care of a lot of the deal research. So I really do focus mostly on building that enterprise-level application-based environment that our team works within using code. So that's where I have a little bit higher.

Demands of it because i'm building something really crazy ultimately we're building a multi-app tech you know land platform which not really a, crm or anything like that just kind of for our own internal use that's where i've landed as far as getting out of the tech product that i sold before now really just going a mile deep in our own business instead of helping others so much i mean And helping others is amazing, but.

It spread me so thin across hundreds of accounts. Tell me more about this way that you are avoiding scammers and realtors and the wrong people. Are you doing that specifically by using negative keywords? Like, is that what it boils it down to? Or is there some other information that Google has and you're able to say, hey, I don't know if this person searched for this or something, then don't send them here. I don't know. How does that work? Well, if anybody knows of a way that I haven't mentioned, please let me know because I absolutely don't know everything. But all I've really focused on and I've seen good results over the course of the year is the negative keywords. And then the only other thing I can point to is I have a little bit of a banner above our initial form that says, hey, don't fill this out if you're a wholesaler. Don't waste everybody's time. And I was hesitant to put that in front of a seller because I'm like, we don't want to, you know, say something that confuses a seller and maybe it's not the best, but that's another way that we do that. So we have a banner above our initial form that says, do not submit this if you're a wholesaler and we also use the negative keywords. I mean, what are some examples of specific negative keywords that would say, go away, scammer, I don't want to see you. Like, is there, because a negative keyword just means if they search for this, then don't make my ad show up in front of them. Like, that's the bottom line, right? Yeah, you know, I cracked the code on this probably eight months ago, nine months ago, so I don't remember exactly which code.

Negative keywords helped with that, but I could pull a list and shoot it over to you and let you see what the current status is and what's working for us here. Well, how about this? If you're able to recall any of those, I will put them in the show notes for this episode, which is retipster.com forward slash 278. So listeners out there, we don't have them right now in this conversation, but if we're able to get them, we'll put them in the show notes if you want to check it out. Yeah, and again, it's, I'm sorry to cut in there, but AI was the problem solver on that. So I took what it said and tracked things and implemented things, but it really just took a month or two of editing those keywords until that problem was resolved. So nothing too crazy. And when we say scammers, we're talking about people pretending to be the owner when they're not, correct? Or is there some other version of a scammer that you're thinking of? No, that's spot on. They actually have quite a similar story a lot of the times, which is how you'll develop a bit of a sense for it. But quite often it's somebody who's not in the location where the land is they have to sell quickly they've got another opportunity within a couple of weeks they need to sell very quickly that's kind of.

The through line on a lot of these guys again going back to claude separate thing again but i've got claude in charge of moderating the re tipster forum right now and when everybody registers, they got to answer one question put their name and email address and it tracks the ip address of wherever they're from in the world and that's it i was shocked at how much claude was able to do with just that information to understand if it's most likely a spammer or a real person it's just it's crazy so yeah i would not underestimate the intelligence of that system and being able to figure this stuff out and you said scammers are here you're trying to avoid and then realtors.

Anybody else? Or are those the two groups that you don't want to see? Well, all along the way, I think we had in mind just kind of limiting the groups of people that we know aren't the best fit. We only had issues really with scammers and wholesalers. But the whole time we were like, we don't need to see or we don't need to show our ads to lenders or realtors or contractors or, you know, these different random types of people who may have an interest in talking to us. Wholesalers are the best example because a lot of the times they'll have a deal and it's not even under contract they want us to look at it and give them feedback and now it's back to the same issue we were running into with the agent model where there's somebody in between us and the seller and it just makes a deal much less likely google i'm sure knows pretty much everything there is to know about all of us so if somebody just the day before had been googling how to sell property as a fraudulent owner and scams somebody out of their money. But then the next day, they were to search for just the right thing. They could still see your ad, right? It's not like Google deeply understands every single human's intent and will intentionally thwart the wrong people. It really just comes down to, oh, they hit that negative keyword, so don't show them the ad this one time, right? Actually, I think now that you mentioned that, you're reminding me about those negative keywords that did work because some of them, to counteract or, you know.

Counter to your point there is that Google actually does have that data and they can contextualize it into a bit more of a profile per user, I would imagine, because those keywords that we did use are things that are positive keywords for that type of person, like the lingo, that a wholesaler might use in other searches across their internet profile. So if they're searching for flipping land, that might be a great negative keyword for us. So it doesn't mean that they were going to see our ad because they Googled flipping land, but we would put negative keywords that imply that they were, at another time making searches that we wouldn't have wanted our ideal avatar to have been making. You know how far back in time that goes? Like if somebody Googled land flipping six months ago, but not since then? I'm not sure, but it could be a parameter in the Google campaign. And sometimes they'll give you the attribution settings. So you can say like, hey, optimize for this conversion code, but only for those who have triggered this conversion code in the last 30 days, for example. So maybe it's one of those types of settings, but.

If I had to get a little bit conspiratorial, I think they probably have that data ever since we started using Google. You had mentioned earlier this idea of split testing. So if you have one version of the page one form where it's just the form, nothing else. And then another version that maybe has this little banner above it, no wholesalers. And then another version that's, no, no, it's like a whole authority website. There's all this stuff. So how much split testing is necessary before you can know, okay, this one works better. We can go with that. Like, do you need a thousand leads to go through it to know which is better or a hundred or 10 or a million? Like, and have you gotten there yet? Like, are you to the point where it's like, no, we know definitively we've tested it enough. This is the version that will work better. So I do feel pretty confident that we have landed on a model where if I start a campaign with these variables, I can pretty consistently count on it generating results within a certain band of cost per lead.

And I can kind of count on them mostly being off market, mostly being relatively large. So I feel like we have put enough cash through the system to have reliable data in that way and enough split tests that we've tracked to feel confident in that. But I do think of it as a mindset, like I'll never stop split testing. It's always the next time I want to make a campaign, what is one thing that I've been thinking about that I want to try to optimize for? It's just a hypothesis. I think if I swap these four phrases for these four phrases then I might show up to people with more valuable land for example so I kind of have that hypothesis I run it on the next test.

Maybe we run it for a minimum of two weeks I think that is a bit of a rule that I like to use I don't like to turn a campaign off if it hasn't been on for at least two weeks so leave it on for a couple weeks.

See how it compared to the hypothesis. If it's performing, it doesn't even matter if it's a little bit worse than the previous one. I might keep it on until it starts to drift again. Like I mentioned earlier, if it's within the target cost per lead, the leads are coming in mostly qualified, I'm probably going to leave it on and just add something else to my list to test the next time I notice it drifting. But yeah, I'm always in a mindset of testing some variable. When you say when you see it drifting, does that mean like you could be doing something in the ads that are working like clockwork, but all of a sudden, oh, no, they're not working this month. Is that what you mean by drifting? Yeah, exactly. Without any change to the campaign, it just starts to cost more per lead. And then once it costs too much per lead for the course of maybe a week or so, that's like, OK, something's going on here. If it's more dramatic than that, it might even be like, hey, three days have gone by and we haven't noticed any leads from this campaign. So let's pause it, turn a new one on and test one new variable that we've been thinking about. What makes it cost more per lead? Is that just the competition for the same keywords that you're going after? Mostly. Okay. Is there something else or?

Who knows what else? You know, I think there's probably a hundred variables that all tie into it. Maybe even day of the week. You know, maybe it's, I actually have noticed Saturdays we get fewer leads compared to all other days. Saturdays just historically drop off. So there's a lot of variables that go into it. So I try not to be too confident in my assumptions and just more so reactive to the performance of the campaign while being proactive and testing more variables.

The use case of this is, let's say that you start a new campaign, you have a hypothesis, you notice a campaign drifting, you start a new campaign, and your hypothesis is wrong. So your campaign doesn't really catch on. Okay, let's notice that, pause it after we've given it a couple of weeks.

Pause it, and then go back to one of our best performing sets of variables. So maybe the fourth campaign that we ran last August was our best one. So let's take a breather, reset, put that one in place just to make sure we have some steady lead flow coming in while we conjure up the next concept to test. How many legitimate good leads, I want to say that, I mean, the ones who answer the right way to go down the tree to where they schedule and book an appointment on the calendar, Like how many of those come through each month with the way you're doing this? We have been scaling pretty nicely. So if I do some quick math here, about 150 leads per month is what we're at right now as a function of the ad budget that we're at. So we've been scaling our ad budget pretty steadily. So with that, we're at about $80 a lead right now, which by that I mean $80 per submission coming into us. Not all of them are qualified. Some of them have junk land. So we kind of track two different things. We track marketing qualified submissions, essentially, and then the sales qualified opportunities. So the salespeople don't care about how many submissions we get if half of them are junk land that we're not even going to make an offer on. They care more about their performance, what's their close rate. So we track how many leads come in. That's right around $80 per lead across the board right now, across all of our campaigns, pretty steady.

And with our ad budget, that's about 150 leads a month. What is the ad spend required to get those 150 leads? That is at $12,000 for this month. And then of those 150, how many of them end up as closed deals? The way that I think about that is we're tracking different metrics per acquisition team member. So the number of leads per contract, the cost per contract, the number of contracts to get a deal closed, all these variables are. Vary per JV partner that we work with. And it's about $3,000 for our highest performing JV partner to get a deal to the closing table. It's about $6,000 for our lowest performing JV partner to get a deal to the closing table. So what that breaks down to is about $1,500 per contract and about one in three contracts actually close because we're really de-risking these deals during due diligence. So a lot of deals fall out during due diligence. So about $5,000 per deal to the closing table is what we've seen across the whole $100,000 that we've put in. So did you say $12,000 per month is what you spend for those 150 leads? Yeah. Okay. The interesting thing about this funnel, the way you have it set up, is that it seems like there's a lot of effort put into repelling the wrong people instead of necessarily maximizing lead volume, and maybe I'm wrong about that, but if you wanted to just like 10x this thing or 100x it, like we want just.

Countless good leads, just shove as much money as possible. Like, why not do that? Is there a point where, well, there's only so many good leads to go around. If you were to spend a million bucks on ads per month, like the quality of your lead would eventually deteriorate or the submissions would go down. I don't know, like why not spend more on this? Yep. We're increasing pretty much every single month. Our goal is to get up to $150,000 per month over the course of, let's say, the next three years. I think it's important to have a nice organic growth. I don't think we would be equipped to handle that lead flow right now. We need more acquisition team members. We need more internal deal researchers. We probably need an operations manager. So we need to kind of grow into that. But our goal is to continue scaling this ad spend. And I'm not too worried about the amount of ad spend either i think, after we 10x 10 more people could do the same thing and i still wouldn't really be overly concerned about competition and you say you use jv partners does that mean you're not buying these yourself like what role do these jv partners play.

Yeah, so we are the principals in the deals. I sign the contracts. I buy the deals. We fund them. We sell them. We work with agents, but we also have our own proprietary disposition systems. I run Facebook ads a lot for selling lots. We have our own kind of inventory app as well. So we buy the deal. We fund it. We sell it for the acquisition person who is our JV partner. So our JV partners contribute in ad spend to me and our company. We take that Google ad budget, we put it all into Google ads.

I don't mark up the platform at all. No admin fees at all. All the tech, all the systems are included, the team, the support, and of course, the experience and the mentorship of how to handle the tougher deals and how to structure offers and things. So we attract acquisition-focused JV partners. We give them a ton of support. I generate leads with their budget. They work the leads with our support. And then we buy it, we fund it, we sell it, and then we distribute the profits fairly according to whichever plan they kind of chose when they signed up with us. Okay, so the JV partner is basically an operator and you help them with the marketing side of it through the PPC ads and with the funding side of it. And I guess they also can use your proprietary systems or something. Is that right? Yep. And also just the deal structuring is a big piece too. If we have an experienced partner who's already able to structure seller finance deals and things like that, that's great. But my business partner, Rachel, she's got a lot of experience with land. Even well before I came into the land picture, she's been doing land deals. She has experience with entitlement deals. She's been doing subdivides before I came.

Got into land at all. So she helps really structure the right deal and de-risk it throughout that due diligence process. So there's a lot that goes into that, getting all the jobs coordinated with vendors to go out and get the soil tested and get the surveys scheduled and get the transaction coordinated. So there's a lot that goes into it from contract to close that is really her domain. And then together we attract private money, we fund the deals, we sell them, and then pay off the lenders and then split the profits accordingly. So do you charge like a fee as an ad agency when you're wearing that hat in the process for running their ads or you don't? Nope. So they pay us a monthly fee. Every single dollar goes into Google ads. Well, I'm curious, as I hear this stuff, my brain always goes to running a land business in another country that's not the U.S. Because, you know, a big part of the reason why people do this in the U.S. Is because I think it's one of the only countries in the world, maybe the only one where it's easy to get property owner information. Going to a website like Land Portal and being able to find the owner of every property and download all those lists, like that's not a thing in Canada. You literally can't do it. But you don't need to do it for what you're doing because you're not sending direct mail or cold calling or any of that stuff. You're just running ads and letting Google be your source of information.

So it makes you wonder, like, could you do this in Canada? And why not? Because there'd be like no competition up there because there's no other land flippers or not Canada, but just anywhere. I mean, any place in the world where...

You know, it's a first world country and there's the laws are such that this makes sense to do. You ever thought about doing that? I had not really before, but you've given me a great idea to spend my weekend on this weekend. And now I'm sure I'll be looking at running ads for land in Italy soon enough because I mean, I don't see any reason not to. That's a great idea. I think you're totally right. Back to my business partner again, she's actually a digital nomad. She hasn't been in one place in the U.S. for more than, I think, three or four months at a time over the last five or six years. She's been in four or five countries since we've started our business a year and a half ago. So she's a testament to the remote nature of what we do.

And yeah, I would love to own properties in another country. So good idea. Yeah, I think you would still have additional challenges beyond just the list getting, which would be not necessary with your strategy. Like when it comes time to do the due diligence, like that's also a factor. Just having that information so readily available on something like LAN portal, for example, that also would not be available in Canada. I don't think. I mean, you could probably do some of it like with Google Earth and that kind of stuff, but the depth and breadth of information would not be as easily accessible. But maybe that's okay if there's zero competition because it would be so much easier from that standpoint. I don't know. Yeah, and maybe it's less of an investment strategy and a little bit more of a lifestyle move. Now, you run ads to sell properties as well, correct? And you said you do that on Facebook, but not on Google? Or tell me about that whole process. Yep, so always learning, always trying to get better. I haven't yet tried selling them on Google. Maybe I'll try that as well, but I do know that our buyers for these lots are on Facebook quite a bit. And some of those reasons why I prefer Google over Facebook for the seller intake don't really apply. And I am comfortable and familiar with running Facebook ads. so what we do is.

I generally just pull out my phone, take a selfie video, and say, hey, we've got a few lots in South Carolina. We've got this type of lot in Aiken County. We've got this type of lot over here. We've got this type of lot over there. We sell them on seller finance. We sell them on cash. We're very flexible. If you're interested in any of these, which you probably are in those areas because I'm targeting these areas that we have lots, then click the button, send us a message. We'll figure out if it's a good fit. And then when they message us, we have a AI chatbot kick in that really does a great job because it understands all of our inventory, all of our pricing.

It knows who our exclusive agent partners are when we have an agent representing us. So the chatbot we poured a lot into. So it does a great job at handling that initial text-based conversation from a Facebook lead. So we ultimately try to connect them with our agent. if we don't have an agent on that deal then our transaction coordinator will kind of take the lead but we generate conversations using facebook in a couple different ways facebook ads and free facebook posts, so into groups or on facebook marketplace those are a couple free methods to post your deals, but then facebook ads work nicely as well so now those three facebook strategies in addition to working with an mls agent in addition to putting it on our inventory page in addition to maybe putting it on a couple other listing websites, land.com potentially. We found another one, landsearch.com, recently that I wanted to try out. Oh, I don't want to recommend them because I haven't even used them yet, but putting these on various channels.

But really driving people into a core process where we accept our offers, which is our inventory app. So all of our deals are on our app. The people who come in through any of those sales channels, we will direct them towards making an offer in our inventory app. When you say inventory, is this like a website or something? Yeah, I just call it an app because as I've gotten into Cloud Code, I actually learned what an app is, which is just kind of a collection of files and folders, and you host those on an app like Replit. So that's how we use Claude to build the code to host on Replit. And it's truly an app with a login system so the buyers can save properties. They can track the offers that they make. So it's a little bit more than just a website, which is why I call it an app. But it's a web app, pretty straightforward to build. You mentioned a bunch of stuff there. You said some of the Facebook posts are organic Facebook posts in groups and that kind of thing. What would you say the pie chart looks like in terms of like actual sales that are generated? How many of those come from a paid Facebook ad versus a organic Facebook post versus neither? Like just putting it on your website and they come that way. Do you have a way of tracking like this sale was attributed to that?

That's a great suggestion. I'll start tracking that better. If I had to guess, I would say that at least 40% or so are from the MLS. That's my favorite strategy at the end of the day. Working with a great agent who can get out there and show buyers years. It's well worth the commission. So selling on the MLS is our core strategy. The inventory app is something that we put all of our deals on, and then we supplement the MLS listing. So we might run ads, we might do those free posts. So between those, I would say more come in from the paid ads, but the free posting is something that we're trying to get better at. So I can't say that's worse just we haven't done it as much as running an ad for every single deal that we try to sell so i would say you know, distribution wise maybe it's about 40 or so towards the mls maybe it's about 30 or so on the paid ads maybe 15 between, various other strategies and then these free posts so kind of both those are.

So tertiary paid ads are a great supplement to the MLS. When you are posting, let's just say one of these free organic Facebook posts in a group, what exactly is the post? Is it just a link to something? If so, what do you link it to? Like the Realtors listing, LandSearch listing, your website? Or is it like you're putting a picture there with text and then the link is in the first comment? I've seen people do that. Like, what does one of these posts look like? Yeah, actually, the way to kill two birds with one stone here is to create a marketplace listing. And while you're listing it, it asks if you want to post it to any groups as well. So when you promote it to a group, it's just kind of put onto their page as a marketplace listing, as a for sale item. So it's like land for sale, and that's about it. So what you're linking to is a Facebook marketplace listing that just happens to go into a group. Yep, exactly. How many groups can you post it to at once that way? Is it just one or like 50? It depends on your foresight because you want to join no more than maybe four or five groups per day on Facebook. So you need to join groups that you may need to post to preemptively. So as long as you join the groups that you often post to, I would say that when you make your marketplace post, you are likely in a couple of groups that are relevant to that deal. And if you have a deal in a rural market, you might want to post in like.

The closest large city. So don't post it into like the very rural small markets, local groups, but the nearest tertiary market, for example, you might want to post it there instead. When you're doing a paid Facebook ad, what are you linking to in that case? Because that's not a Facebook marketplace thing, right? Are you sending them to some other website or how does that work? So we test a couple different strategies. You can send us a message. That's one type of Facebook ad, or you can fill out a web form. That's another type. We've leaned more towards the low cost per lead of sending us a Facebook message. So that integrates with the CRM and those messages come in, our AI bot jumps on them. And it's really trying to do a few things. One is figure out which deal are you interested in? Where are you looking to buy? What are you looking to buy land for? What's your contact info? And would you, if you want to learn more, you should go to this website. The website it directs them to is a form that collects that same stuff. So name, phone, email, what states you want to buy land in, and what you're looking to do with that land. So we ultimately use the conversation to guide them into a bit of a qualification, either.

Conversationally or through this form. And then we've got their contact info and a bit of a qualified buyer. At that point, if it's a state or a land deal that we have an exclusive listing agent, we want to get them referred over to that person. And that AI bot thing is pretty awesome. And you can actually set that up yourself through Stride if you're using the CRM or if you just want that by itself, go to strideagents.co. It's pretty sweet how much workload it can take off your plate and that can like intelligently handle a lot of conversations. I'm wondering for the conversations that your AI bot handles, I imagine it asks all these questions. Is there some trigger at which it's like, okay, you've said the right thing to this many number of questions. Send a notification to Rick now. Or like, where does that go? What does that process look like? Yeah, the target state is the main one. And by the way, you're totally right. Once we've implemented that text chat bot, you can look back at our list of buyers that were coming in in these ways. And before we implemented that bot, we were not really collecting a lot of contact information properly. Once we've implemented it, now we can see a lot more contact information on our leads. So it's just very visual of how effective it is. So setting those types of automated systems up are very important. And the main thing that we're using as a handoff point is the target state. If we can collect, hey, what state were you interested in? Now we know which agent to assign them to.

If it's a state where we have multiple agents representing us throughout the state, We might have to go a little bit deeper, like which deal were you looking for or which county are you buying in? But really, like, where are you looking to buy? That's the main thing that we're trying to solve first. So we know who should be working that buyer lead. Is it an internal lead? Is it an agent lead? Who gets to work that lead? But then quickly after that, we want, what do you want to do with the land?

And what's your contact information? Those are our first few touch points. When you are listing a property for sale with a realtor, are you also simultaneously paying for Facebook ads? Or is it like, no, if it's a realtor, they're doing it? Each deal, we decide on a full marketing strategy. But most of the time, yes, we will be willing to run ads to supplement the agent and just support them and really get them into our CRM. Two of our agents so far, we're trying to build more of these relationships. But two of our agents so far are actually inside our CRM and working these buyer leads from within our CRM. So we're trying to build what we call the exclusivity matrix across all vendors, actually, our land clearing guys, soil testing, surveys, agents, all of these guys. We want an exclusive go-to partner per region. That's our goal. So yeah, I think, I'm not sure if I answered your question fully there. So if a realtor is listing it, you will pay for Facebook ads on top of it? Yep. For a couple of reasons, actually, I did want to point out that we actually sometimes run ads before we even buy the property to do a demand test.

So we can tell if we post an ad on a property before we buy it and we're getting conversations started at 20 bucks per conversation, that's a bad sign. If we're able to get people to message us for $4 per conversation, that's a very good indicator that it's a highly demanded area. Does it ever backfire to pay for ads before you've bought the property? In terms of like the seller saying, what are you doing? Are you losing my property for yourself? You haven't bought it yet? That kind of thing. No, we like to be very transparent with those types of things. So even when I was wholesaling properties, my go-to strategy was kind of to frame the option contract in a way that they would relate to. Like, hey, I don't want to buy this property at that price. I might know somebody who does, but I can only market to them if I am legally allowed to this way. Just give me a chance. If it doesn't work, I won't hold you up. You know, it's transparent and fair. But always being transparent about those types of things is.

Probably best. That kind of thing is like specifically outlawed in certain states now, right? Like some of the anti-wholesaling. So you just got to make sure if you're doing that, you're not doing it in one of those states that won't let you do it without being licensed, right? Exactly. And unfortunately, I mean, not unfortunately, I love how the fact that South Carolina is our main market. We run ads statewide. Actually, I should have mentioned that we do statewide ads in multiple states. South Carolina, for some reason, just performs better for us. A higher percentage of leads go to contract, higher percentage of contracts actually close.

And maybe it does point to the fact, or maybe it stems from the fact that we actually can't do this pre-marketing in South Carolina. We are a true buyer. We can fund the deals and buy them. So maybe that's why we have such luck in South Carolina, because it's outlawed. You can't pre-market in South Carolina, as an example. So, you know, it just so happens that is our target that is our highest performing state. Suddenly backtracking to the acquisition Google ad conversation we were having about how you can avoid scammers and realtors and that kind of thing with negative keywords. So if you can do that, and if you're able to do it based on what Google understands about every individual user and the things that they've searched for in the past and all this stuff, could you also like hyper target very specific people in certain situations? Like I want somebody who owns 1.5 acres of land and has delinquent taxes in Alachua County, Florida. Only them. Could you actually go that far? Or is that simply not possible? Like they can't possibly know that much about a person? I'm sure there's a lot of things about Google ads that I haven't yet discovered. But my point of view, I only do that through my positive search targeting and then the landing page that they land on. I didn't really mention that either. But let's say that you're going after the pain point of people who are selling land because they're going through a divorce. People who are Googling that, they're Googling how to sell this because I'm going through a divorce.

More often than how to sell this land or how to sell my property. You know, it's like if they land on a page that says we buy real estate, that's going to convert much less than a page that says we buy land. And that's going to convert much less than a page that says we buy land for people who go through divorce because we are uniquely equipped to work on their timeframe. Like that messaging to the right audience that you're trying to show up for. And then just the conversion tracking. I think just giving Google the autonomy.

To figure out who that should be shown to is what I've relied on. Yeah, I know whenever I do my Google searches, I try to go out of my way to reveal every possible insecurity and fear that I have as I'm searching for things so that Google can figure out who I am and show me the right things. That's my whole mindset. Yeah, exactly. I guess part of where I was going with that is, say if your strategy is, I do subdivides. That's it. I do subdivides. So like, send me properties where I can do a subdivide. Have you been able to whittle that down at all? Or is it pretty much like everything across the board comes in? Of those 150 leads you get per month, some of them are small, cheap flips. Some of them are entitlements. Some of them are subdivide. Some of them are this and that. And is it kind of just all over the place? Or are there ways to like narrow it down in any way? It is like a magnet where you attract people who want to sell the land because they're going through the situation that you've optimized for. Regardless, maybe it's small, maybe it's large, Maybe it's very valuable. Maybe it's junk land. I think continuing to optimize and refine things will be a big part of, you know, always striving to do better in this area. We do get a mix of all of those. And I think at that point it becomes, how do we maximize or how do we know what to do with each type of lead? So we disqualify a good chunk right off the bat. We would never bother, no interest in sending text messages or emails or anything. They're.

Land flips, rural subdivides, and then entitlement slash development deals. And then if you want to add in land home package, that's becoming pretty popular. But we have these different buckets that we put people into. Each one has a bit of a different underwriting strategy, a different due diligence process, different time that we would actually purchase the deal.

How we handle the entitlement strategy would be more about pushing it through the approval process and coordinating a double close with the end builder at that approved stage. So each deal type has its own strategy. And we just want to optimize and be nimble enough to do all of them as long as they meet a certain profit threshold or as long as it's worth the energy investment, then we'll need to handle it according to the bucket that it falls into. Now, why did you decide to build this business around partnerships and JV partners instead of trying to vertically integrate everything yourself because it sounds like you're almost going out of your way to find these people that you can jv with i think i know why but what are your reasons why yep cash, so cash conversion cycle is in my opinion the main issue with the land business model is actually, a good problem in the sense that it creates a large moat and it reduces competition, so it's good in that sense but the issue that all land investors deal with if you're doing these subdivides and entitlement deals in particular. If you're doing flips or innovations or things, maybe less so, but if you're doing these deal types where you're buying the deal, adding value, and reselling on the market, you're going to have a very long time before your cash comes back to you. The average deal.

Takes maybe six months. So it takes a little bit of time to get it under contract. We might do two months or so of due diligence. We might close within 30 days or so of finishing our due diligence. Once we've bought it, we might have a couple of improvement projects, land clearing, things like that. Once we put it on the market, hopefully it sells right away, but maybe it takes a few months. So any given deal, the cash conversion cycle is so long that if you extrapolate as a new business owner and say, okay, hopefully I get one of those juicy deals that only takes eight months right away. So hopefully I can start making money in eight months, but maybe that deal falls through. Maybe I got four deals in the books or in the works, and then a couple of them fall through. So how do we stabilize throughout the long entry point of becoming a land investor? That's the question we were trying to answer when we were pivoting away from the direct agent model into direct-to-seller and the question became how do we really meaningfully invest a ton of ad budget this year in a way that allows us to limit the downside risk of that long cash conversion cycle so now our model involves bringing in jv.

Partners who focus on acquisitions they fund their ad spend that goes dollar for dollar into the google campaign all those benefits we talked about earlier but then when we put this model together we also realized that that same person is now a very effective closer like if we're, selecting for that right type of partner who can come in kind of weather that six-month storm they understand that.

There's a ton of potential in these deals but maybe a lot of challenges they can come in focus on closing deals. And then we now limit our downside risk throughout that cash conversion cycle. And we can share in that risk mitigation strategy with those partners because of the different models that we offer. So for example, one of them, they get a lower percentage of the profit, but that's after they get all of their ad spend back. So if they've put $15,000 of ad spend in over five months, then we profit on a deal. They could choose to get all of that back and then a lower percentage of the profits than if they had left that unpaid, for example. So, but you fund these deals too, right? That's part of how this all works. So I guess the benefit you're getting is you don't have to spend the money on the ads, but you do still have to front the cash for everything and it doesn't necessarily sell faster and you don't even get all the profit. So like, doesn't it kind of just cancel itself out in the end, the whole cash conversion cycle issue? Maybe you could expand because for us, I feel like it definitely solved the cash conversion cycle. And so one way to solve the cash conversion cycle is to speed it up, right? Make it sell faster. But that's not what we're talking about here. This doesn't sell faster just because you have a JV partner, right? So there's that. So that problem is not solved. And then we have the issue of, well, maybe if you don't have to put all the money into it, but you do. You're the funder, right?

So that problem's not solved either. So we've got, okay, well, we got the money for the ads. I guess the JV partner, they can pay for that. There you go. That problem's solved. But when you go back to the profit you'd make from the deals, you don't get all the profit. You got to split it with them. So like, doesn't it, the benefit you're getting from that, doesn't it kind of cancel itself out? Or how do you come out so much further ahead with the cash conversion cycle just because you have these JV partners involved when they're not contributing money to actually take down the deal? Yep. So when it comes to the risk mitigation on our internal side, we have a lot lower outlay. For example, that $100,000 of ads that we've put in this last 12 months didn't come out of our bank account. So we have a lot easier of a storm to weather along the way, though we do have a lot of expenses with the internal tools and the team and the salaries and all that stuff, plus funding the deals. So it doesn't get us out of everything, but it really helps with the overhead or the burn rate across that first 12 months, for example.

For the JV partner, we have a couple options that they don't help speed up their cash conversion cycle because it takes just as long to sell, but they reduce their risk of that outlay because we can recover their ad spend. So it's reduced the risk of both parties, but more broadly, what it allows us to do as a business model is to stick with my trajectory, or my goal for the company, which is over the course of between now and 2030, getting 50 JV partners.

So at that point, we would have $150,000 per month of ad spend going out. According to our metrics, even if we account for a degradation of conversion rate and things like that, we'll be a multi-hundred million dollar company in valuation. And along the way, we've now had American-based closers with experienced closing land deals all along the way to fill that acquisition seat. So it's solving the cash conversion cycle for us. It's limiting risk for them, but ultimately it just fits cohesively into a very, cohesive vision on getting to where I want to go. Yeah. What is the profit split when you fund a deal? So when we fund a deal, it's actually done by attracting private money. So we borrow money at 12% interest, first position. Generally, based on the discounts we're negotiating, We're never at over 65% loan to value, sometimes less. So we attract our PML from our network and they fund the deal.

And that's the payment to them from that gets repaid from the deal profits as we're calculating the deal profits. Then the deal profits, if they've chosen a plan that involves recovering some of their ad spend, then that's deducted after paying off the lender. And then the remaining net profit gets distributed. It's a different percentage according to how much of their ad spend they want recovered from that deal.

In terms of these JV partners you work with, what makes a good or a bad JV partner? Like, have you had any bad ones? And if so, like, what went wrong? Yeah, I think the cash conversion cycle may be not quite the perfect term to summarize it, but liquidity overall is a big problem that's been solved with this model. So liquidity on the part of that investor is one of the constraints here. So we have a great model that allows everybody to make a lot of money together, but it does still involve that JV partner being able to weather their own personal burn rate for six months or so. Because even if we get a contract that first week, we've got due diligence, sales time, and things like that. And that's assuming they get a contract pretty quickly. So we do select for the partner who's already capable of getting a contract because they've already done sales, they've already done land deals maybe. So if they have that internal confidence that they can fill that acquisition seat and they have the means of weathering that six-month run rate, then we can set up a joint model here where everybody benefits pretty nicely together. Well, Rick, fascinating talk out of all this. I've never met anybody who's doing something quite like you, but learned a lot here. If people want to reach out to you or get connected or talk more about this business you got, what's the best way they can do that?

So on LinkedIn or Facebook, I'm just ricksheldon. On Instagram, it's ricksheldon underscore REI. And I think we can leave some links or some freebies in the show notes, maybe some resources that the users could check out, and maybe they can connect that way as well.

Yeah, the show notes again, retipster.com forward slash 278. Are there any particular freebies or links you want us to leave? Well, one thing that I was thinking we could offer to anybody who's listening would be, you know, a thousand bucks off of the entry fee to get started on that program. So I'm not sure if that's something that you could help facilitate, but if you point them towards the right link, then I can track it on my end and make sure that they get a thousand bucks off. Yeah, can totally do that. Yeah. So I'll get this special link and I'll be sure to put that as the first bullet point in the links and resources section in the show notes. So I'll be sure to go through that if you want to save a thousand bucks. Well, Rick, again, thanks for chatting with me here. It's great to know you and all the listeners out there. We will talk to you next time. Thank you, sir.