Seth: Hey, everybody, how's it going? This is Seth Williams and Neil Clements. You're listening to the REtipster podcast. And I've got kind of a special big announcement today. I don't usually have big announcements, but today I do. It's a historic milestone for the REtipster brand as we're starting our second podcast. So REtipster officially has a podcast network. The podcast is called "The Real Deal with Neil Clements." And that's why Neil is here.

Neil and I have been friends now for well over a year, talked about a lot of things. It's been pretty clear to me he has a knack for this. He's very good at speaking and just communicating ideas. He's got a ton of experience, super successful in both land and as a real estate agent, even in the house flipping business. He just has a wealth of experience to draw from. And I thought, you know what? You should have a platform too, and we should get the word out there for you. So Neil, welcome. How's it going?

Neil: Awesome, Seth. Hey, so delighted to be here. As always, a pleasure. Yeah, it's been in the works for a while and super delighted to be here. I'm just honored—that's the best word I can use to describe it—for your contribution to the industry over the last decade. Everything you've done with the Land Investing Masterclass, with your masterminds, with your community. Gosh, man, I'm just honored. I'm super, super excited to be here and launch this podcast alongside you and partner with it. Gosh, yeah, just happy to do it.

Seth: Yeah. Awesome. So I know there's a ton of stuff you can talk about and you will be talking about on that podcast. By the way, if anybody wants to check that out right now, you can go to retipster.com/neil, N-E-I-L. That's what'll take you right there if you want to check it out. But what should people expect from this? Like how often are you going to be posting? What are you going to be talking about? How long are the episodes? Who's this for?

Neil: Yeah, awesome. So my heart in this is to have the most value per second on the internet, especially for land investors, house flippers, real estate agents—anybody engaged in the practice of real estate who's, I guess, a salesman, right? And so it's probably not going to look incredibly similar to what Seth does with the longer podcast episodes. We might have a handful of those, but it's primarily going to be shorter videos, you know, 10 to 20 minutes in length, incredibly valuable, incredibly quick.

And kind of my whole theme, and you'll hear it on the first few videos is like, I'm not going to say any fluff. I'm not going to try to pad the videos and make them longer. We're going to get straight to the point. We're going to hit the value. And my goal is that everybody who watches the video at least gets something valuable from it. And so we're going to be putting out content, hopefully at least once a week. Everything from market updates to how to make more money in land investing, to how to flip houses, to how to be a real estate agent, and also how to build wealth. And so that's going to be what we're going to be going through. I'm super pumped for it. And Seth, I believe the first, maybe even two or three episodes by the time this airs are already out, maybe more.

Seth: Yeah, for sure. And yes, if you listen to your podcasts on Spotify or Apple Podcasts or any audio-only podcast platform, just look for "The Real Deal with Neil Clements" and you'll find it. And the video versions of his episodes are also going to be airing on the main REtipster YouTube channel. It has its own podcast feed through that channel, but it's also going to show up right in the main YouTube channel for REtipster, so you can always check that out too.

So yeah, I'm looking forward to it, Neil. I've already obviously seen the first few episodes and they're awesome. He's not joking around. There's a ton of value in a very short amount of time, especially if you're a land investor or if you want to do the things that Neil has a lot of expertise in, which is—remind us—you've been a real estate agent for years. You're a big land investor. You do huge deals. You do subdivides. What else am I missing?

Neil: House flips. I own a pretty decent-sized single-family portfolio. Very fortunate to have become a millionaire on net worth by 30 years old a few years ago and now multimillionaire. And so I'm not trying to brag at all. That's not my heart in it. I just want you all to know that everything that I'm saying comes from experience and everything that I'm saying comes from things that I've done. And so I'm trying to share as quickly as I can value bits and pieces of the few businesses that I run on how y'all can make significantly more money. And that's my heart in it.

Seth: I remember the first time that I got on a call with him, he was part of one of the monthly mindshare meetups that we're doing for the members of the Land Investing Masterclass. And I was looking for people who knew subdividing so I could talk to him. He raised his hand, and our first hour on the phone, like my mind was blown. Like it was just crazy how much this guy knew. And I thoroughly understood exactly how his process worked in Texas. I think if you check out the podcast, you'll see what I'm talking about. The authority, the knowledge is there. He's an awesome guy. So I'm looking forward to seeing where this podcast takes you, Neil.

Neil: Thanks, Seth. I really appreciate it. Like I said, I'm humbled and honored. And I look forward to the feedback. I look forward to the growth that people have watching the videos and can't think of a more perfect name, "The Real Deal with Neil." It just rolls off the tongue. So y'all go check it out and we'd love to have you.

And what we're going to be talking about today—so the value piece that we're going to get out of today, as you mentioned, Seth, we do a lot of bigger deals, right? We're doing subdivides primarily in Texas, even primarily in North and Northeast Texas, Dallas and Tyler metros. And what I wanted to go through is how to do bigger deals. I've seen your podcast. I've been a huge follower of it for years and years. And I've heard many people come on the show and say, "As my business grows, I want to do less deals with higher profit." And that's what I want to go through today. That's what I want to hit on—how do you do that? What are the upsides? What are the downsides also, and make sure that you're prepared for this.

But the question I want to pose to everybody listening is: what if one deal could change the financial trajectory of your life? How hard would you work to get it? How big would that be for you? What number would that be for you? Is that $100,000? Is that $500,000? Is that a million? Or is it $10,000? Or is it $5,000? Right? I mean, everybody has different levels of financial thermostat. But today, specifically, I'm going to be talking about how to do six-figure-plus deals, which my business currently operates on. And we're doing essentially one to two of those a month. And when I say six figures, I mean net profit, not talking about revenue. I'm not trying to fluff it up to make it look huge or anything like that. I'm talking about no fluff, no crap. How do we do six-figure net profit land deals? So that's what we're going to go through today.

Seth: Well, and on that, so thanks for spelling out we're talking net profit. We're talking six figures. Those were my first two questions—like, what does this mean exactly? "Bigger deals." Why do you think people don't just immediately go here in the first place? Maybe some people do, but I know I certainly didn't. I was very stuck in teeny tiny deals. And part of my problem was I just didn't have any money. So I had very little cash to work with. Funders weren't really a thing back then. Some of it was probably limiting beliefs. Like, I'm only... I only have the right to do small stuff right now because I'm a little guy.

So there's probably a lot of different reasons why people don't just immediately go there. But some people stick with the small stuff almost like permanently. And maybe that's a strategic decision. Maybe it's just an ongoing limiting belief. But why do you think people do that? Or what do you think they're missing by not intentionally seeking out the bigger deals? What are the costs of staying with the small stuff?

Neil: So, I mean, I heard even just... I heard your podcast a few days ago with Dave Denniston that came out. Super good guy, had an opportunity to talk with him a few months back. I think at one of Ajay's events. I don't know him personally, but just got to say hi. He said something very insightful, which was, you know, it's not that he didn't want to do bigger deals. It's just that the ones that profited lower were the ones that he had access to, the ones that his marketing worked for, and it's what he's trying to do in his business. And I have no issues with that at all. Very incredible entrepreneur, very successful person. And I'm sure that there are several other examples that you could probably spew off, Seth, of other people doing small deals and having incredibly successful businesses.

That's just not me though. I've always wanted to run a high profit, low staff, basically bigger deal business. And we're very fortunate to get there, but beyond your anomalies, such as Dave or somebody like that, why do people not do bigger deals? Well, I mean, I think number one is the capital—100%. Like you hit the nail on the head because it is so much harder to get money to do the bigger deals. And I don't think I'm saying anything mind-blowing by saying that. It's like, especially if you buy a $500,000 deal, you want to get a bank loan, you might have to put 25% to 35% down. You know, that's almost $200,000 potentially you have to have out of pocket. How many people have $200,000? Not many. How many people have $20,000? Not many either. So it's like, how do we do that?

And then like you said, at the time when you were getting into it, funders didn't really exist. But even with funding, how many funders will fund a $500,000 deal? A handful, maybe. And in addition to that, gosh, you got to give away what—half of the take, half of the equity on doing that. I mean, I will tell you that, what is the saying? 100% of nothing is still nothing. Right? So like 50% of something huge is still monumental.

But the other flip side of this is that for our deals, they take longer. We average 6 to 12 months to get paid for any deal that we do from the time we contract on it. You know, you have to be more intentional. You have to do due diligence. I give myself 90 to 120 days to close. We're going to do a development plan that hopefully we do during due diligence, but a lot of times it carries over for one to three months. And then these bigger properties are going to take longer to sell. And so in addition to that, they're drastically more risky—drastically, drastically, drastically. So you have to know your numbers, you have to know your stuff. And so why doesn't everybody do it? Well, there's a huge wall that you have to climb over to be able to do it in the first place is what I'm trying to say.

Seth: When you say they're drastically more risky. So do you just mean like the amount of money you stand to lose is higher or like, it's actually way harder to find buyers? Like you might not sell this thing. Like, is that what you mean?

Neil: All of the above. All of the above, right? So it's way harder to get funding. You have way more capital on the line. With my business, I'm doing bank loans. And so I'm typically putting a personal guarantee. So meaning that even though I buy in an LLC, I'm not getting like a non-recourse loan, it's full recourse. And if things go south and I get foreclosed on and they lose money, well, it's out of my pocket. Right?

And so, yeah, that's what happens. And then, yeah, it's just... man, it's also harder to sell. I mean, barring like a subdivide or something that might be a little bit easier, but like, if you're going out... we bought a deal. It was like sell for $600,000, buy for $350,000-$360,000. You know, we thought all day long, "Oh, this is going to sell for $600,000." And then you come to realize $600,000 ain't the number. Maybe it's $550,000. $550,000 ain't the number. Oh, maybe it's $500,000. And then you kind of keep on just going down the value chain and it's like, "Oh my gosh!" Right? I mean, I'm still blessed. We're still gonna make a huge amount of money. Don't hear me wrong. At the same time, expectations are not always reality with the bigger deals if you're not subdividing it. And that's very difficult because markets are so slow.

Seth: Yeah, I am curious. Of these bigger deals, what percentage of them involve subdividing versus just "we're doing nothing, we're buying and selling"?

Neil: For me personally, 90% of them are going to involve subdividing. I looked at our numbers before this podcast because I knew we'd be talking about this. And we've done 25-plus deals in the past three years and made $75,000 net profit or more. This is our business model. In fact, for us in land, it is rare that we net less than $75,000. But our purchase prices are higher than the average person. So are our margins, meaning we're not buying at 50% of value. Even after our subdivides, we're still buying at maybe 60% to 70% of after repair value. And that's just being in one of the hottest markets in the nation for land in Dallas-Fort Worth, Texas. That's the reality. And even if we go rural, that's still the reality.

And so we've just found that the deals that we resonate with are the ones that subdivide. We didn't set out on this thing two or three years ago and say we're only going to do subdivides. We had the skills and knowledge from doing one or two in the past, but we cold-called full counties. And we came to realize the only people who would accept our offers were people that we could add value to through subdividing because we could offer 90% to 100% versus, say, 50% to 70%. And that's how this business started. Just grinding, getting out there, doing it.

Seth: Sure. And when we're talking about six-figure deals, whether that means $100,000 or $200,000, if we try to reverse engineer this... So what assumptions are we making about what the acquisition price is and what the disposition price is? Like earlier, you said, I think you said you're going to need like $200,000 out of pocket if you get a bank loan. So that makes me think these are like pretty huge deals.

Like if we were to try to target a specific dollar range of property, like we want to go after the acreage that's this size and this value so that we can make these types of offers and make this much money. Like what kinds of properties are we intentionally targeting and what kinds are we not trying to go after? Like how do we filter our list to make sure the wrong properties aren't even on there?

Neil: Yeah, really good question. So I'll tell you this, I don't think you're targeting properties $100,000 or less. That maybe should be obvious, but maybe it also isn't. It is a very rare opportunity where we can buy a property for $100,000 and sell for $200,000. Now, I'm not saying we haven't done it, but that is by and large not our current model. We are more buying for, say, $250,000 to $400,000 and then trying to sell for $400,000 to $600,000. That is really our sweet spot.

On the subdivides, we're attempting to do six lots or less—that's our sweet spot. I mean, don't get me wrong. I love to buy 20 acres and make two 10-acre pieces and try to make a double out of that. That's a home run. Those are just becoming harder to find. And I'm finding that in Texas, the exempt subdivides, meaning the 10 acres plus where we have a state exemption to do that, there's a lot of competition there. A lot of competition. And so much so like, absolutely, we'll do those deals with the right numbers. But we've even done a lot more entitlements recently to try to get back to those numbers.

So for instance, we'll go buy 12 acres and make two six-acre lots and we'll actually plat it, or we'll buy 20 acres, make four five-acre lots, etc. Right? But for me, everything that we're doing is kind of my version of affordable housing. And so my philosophy is, if we can… for instance, we'll go buy 12 acres and make two six-acre lots and we'll actually plat it, or we'll buy 20 acres, make four five-acre lots, etc. Right? But for me, everything that we're doing is kind of my version of affordable housing. And so my philosophy is, if we can—because nobody else is going to solve that problem, by the way, if we think the government's going to bail us out of that, like we're just, it's not going to happen. And so how do we solve affordable housing? Well, we create half-acre to two-acre mobile home lots with no deed restrictions. And we sell or finance them or we sell them off at say $100,000 or less in my area. If I could do that all day, I would. The trouble is, it's very, very difficult to find those properties that already have the road frontage, already have the utilities, and we can make the margin work. However, that is our business.

Seth: And another big thing, and you've already mentioned it, but a big consideration to keep in mind as we hear you speak in the things that you say do and don't work well is the market where you're working, which is around the Dallas area, which is a very hot area, has been for a long time, which basically means it's harder to find properties. It's easier to sell properties in general when you compare it to every other market in the country. So like if you're trying to pick up and do this in central Michigan, where there's just cornfields everywhere, like you might want to make some different assumptions about the ease of finding properties, the ease of selling them, the spreads. It's just kind of a different game. So it's just a big thing to think about is the competitiveness and the easy-to-sellness, easy to, whatever the word is, how easy it is to sell property in the market where you're working.

Neil: Yeah, 100%. And so, we did an episode on this, Seth, you and I did maybe a year ago or so potentially where we went through step-by-step-by-step my strategy on subdividing. So I don't want to get too deep into that and repeat it, but y'all go check that episode out if you want to know more in-depth on that.

Seth: Yeah. That's episode, I believe it's 180, retipster.com/180. That's another great one to listen to.

Neil: Love it. Yeah. So that details my strategy step-by-step-by-step. And so if you want kind of the meat and bones of how we're doing these six-figure deals, that's how you do them. That's how you target them. That's how you add the value. So just FYI there.

As we talk about subdivides and as we talk about other things, one of the things I've written down—six tips that'll help you do bigger deals. One of the things I've written down is it's going to be drastically easier for you to do bigger deals if you can find a way to add value. So for instance, with subdividing, like I said earlier, you can offer 90% to 100% of current market value because you know, after your subdivide, your price breaker is going to be drastically higher.

So with that, imagine being able to cold call everybody you talk to and being able to give them essentially market value for their property. Yeah, it's a lot easier. Trust me. But even when we were talking a year ago, I kind of told you, I said, you know, Seth, my marketing just doesn't seem to be working at the same level that everybody else's is, right? Everybody says, well, you need to get one contract for 5,000 mailers, 10,000 mailers, 20,000, God forbid. But another tip here is that you have to adjust your expectations when you work with these bigger properties on marketing.

What is more important than how much you pay per lead or how much you pay per conversion is what your return on ad spend is or your ROAS. And so I had a big mind shift on that, even after you and I talked about it last time. And I talked to a few guys in my mastermind group about it that you put together. Thank you for that, by the way, as a part of your course. What is drastically more important is ROAS. And the reason I say that is because if we're going to go out, we're going to net $200,000, and I'm trying to use the same numbers as somebody who tries to net maybe $10,000 and, you know, tries to spend $500 per conversion, well, I'm just not—it's not going to happen.

These owners are too sophisticated, which is another tip. Like these owners are too sophisticated. You got to have more conversations. Your conversion rates are going to go down drastically. Like you're going to have to spend the money. But as long as you stay above a 10x return on ad spend, even a 5x return on ad spend. I mean, we're currently looking at ways on almost like how can we spend the most amount of money to reach these people? Can we do a FedEx mailer, like the, you know, the big ones that all the important documents come in? I heard somebody talk about, can you like, send them a pizza?

Not pizza because it would spoil. But it's like, yeah, it was like, so I think somebody at like a marketing company said, like, if you want to get somebody's attention, send them a pizza. It's like, man, that's freaking genius. But anyways, like my mind is not going to how can I compete with everybody else? My mind's going to how can I dominate everybody else? Because I can spend so much more per conversion than anybody else can. Right? I can spend $20,000 to $30,000 and still make a 10x return on ad spend to get one person to sell to me. Nobody else can do that. And so you're going to have to adjust your expectations on marketing. It's going to have to be done.

Seth: So if somebody is not getting that kind of ROAS, you know, say if they're spending a lot more for every dollar that they make, does that mean they're doing something wrong? Or what does that boil down to? What should they be thinking about or changing, if anything?

Neil: Doing something wrong? No. I mean, my observation with land investors is that most people don't give themselves a fighting chance because they haven't done the thing long enough to actually get good at it and actually to see returns. And so I think most people that I've spoken to at least get stuck in analysis paralysis—including me. You know, we want to make sure our mailers are perfect. We want to make sure that they're priced well. We want to make sure that everything is done the best way it can be done. But I've had to adopt the philosophy—done is better than perfect.

We just have to get—whether it's mail, cold calling, texting, RVMs, like whatever you're into and whatever you're doing—done is better than perfect. We have to get it out there. If you're not getting the ROAS that you expect, and you've done it for say six months to a year, let's reevaluate, right? Let's reevaluate what we're sending. Let's reevaluate our marketing messages. Let's reevaluate our speed to lead whenever they reply to us. Actually reevaluate our target market.

But the only way you're going to know a lot of this stuff is you've got to be in a community such as REtipster, right? You have to be somewhere in a mastermind. You have to be in a Facebook group. You have to have a course. You got to have people around you to tell you what to expect. And I think that for the longest time I operated as a Lone Ranger, which is probably why nobody knew about me until you and I started talking, Seth. It's like, man, I just operated by myself and I was having this team and I was having all the success, but it wasn't until I got plugged more into the community that I started to see more feedback and I started to get more insight that allowed me to scale and grow my business. So I think that that more than anything is invaluable.

Seth: Yeah, I think I would agree. Like if it could boil it all down to a single word, people is what it is. And when I say people, it's almost like as much feedback from as many people who are actively in the business as possible, because it's one thing to listen to a podcast where you get one person's insights and that may be true for their thing, but it's like getting a lot of different feedback from different people in different markets, different situations, trying different things. It just allows you to kind of make more sense of the world when you can lick your finger, put it up in the wind and just figure which way the wind is blowing more. You can do that in different situations. It just helps a lot.

Neil: 100%. And I mean, there is a huge difference between, I guess, getting coaching from us on a call—and not a call like this, a video like this—versus getting custom one-on-one coaching from either a mastermind or even heck an office hour that you have. I mean, like there is just so much of a difference between getting your custom questions answered for your personal situation.

Now, the other hand of that is that we all like to think we're unique, but in reality, land investors struggle with almost all the exact same thing, which is lead generation and conversion. And so I'm not saying you can't go to YouTube and that can be your school. You can definitely do that. But once you get to a certain level, you need other people helping you.

And that's really going to segue here into my next tip: you got to have better people, whether it's a coach, whether it's salespeople on your team. I mean, think about this. Like if you're trying to do a $500,000 deal, heck even a million dollar deal—is your VA from the Philippines going to be able to have that conversation? No, the answer is no. I will go ahead and fill that in for you. No matter how great you think they are, it's not going to happen.

As far as a lead comes in, they want to sell. Is somebody who is not an American and candidly not a salesperson, is that person going to be able to convert that to a deal of a lifetime for you? The answer is no. It's just not going to happen. And so you either need better people on your team or you're going to have to get better yourself until you can have the team. You're going to have to have higher quality conversations and you're going to have to have a system for follow-up because guess what? These people who own these multi-hundred thousand or million dollar properties don't always sell to the first person who calls them.

And in reality, my business does not operate off distressed landowners, like most people's business does. My business buys at market value from people who are just wanting to sell their land. In fact, before we mailed them or called them, they had no motivation to sell at all. They were just ready to sell on market. And so it's like, you have to be able to have those good quality conversations and you have to grow.

Seth: Help me understand, what do you mean by higher quality conversations? Is it something you're saying? Is it the length of the call? Is it building rapport? What does that mean? And why can't somebody from the Philippines or wherever do that?

Neil: "Can't" is a strong word, right? I mean, in general, you're not going to pay somebody $5 to $10 an hour to make you a multi-hundred thousand dollar profit, right? Now, hey, somebody prove me wrong. Somebody go out there and prove me wrong. But at the same time, I have noticed with our operation that we have Americans in-house. All of our acquisitions agents are also real estate agents and actually seasoned people. Now, they may be younger in their 20s, but I'd put them up against anybody.

And so I think with these bigger deals and these bigger properties, you have to take more of a consultative approach. You have to review options with them. It's not just like, for instance, "My offer is $500,000 on your $700,000 land. Take it or leave it. Do you want to do it? Okay, I'm going to bug you every single day for the next three days, every hour." It ain't going to happen.

And so your tactics that maybe you use in a high-pressure situation with somebody who's incredibly motivated, who owns a $10,000 property in the middle of nowhere that they never want to see again, it's not going to work with the people who are drastically more sophisticated and drastically more wealthy. They're going to see through your sales pushiness. They're going to see through your current tactics and strategies, and they're not going to resonate with it. There's going to be no trust there.

And so in general, you're going to have to have a higher quality, consultative salesperson who can go through their goals and objectives over somebody who's just trying to push them selflessly into a sale and honestly try to rob them of their equity.

Seth: And you are a, you know, you're a licensed realtor. Are you able to do this better? Because you can, you actually can provide them with a plan B and a plan C like, "Hey, I'll list your property for you." Whereas like myself, I could do that. It's like, "Hey, this is my offer. If it doesn't work, I can point you somewhere else, but I can't help you in that direction," whereas you actually could?

Neil: Yes, that's correct. And our acquisitions team, who is primarily handling the conversions at this point, are also all licensed real estate agents. And so, yeah, we have had several very, very good listing appointments and actually listings come from properties that we maybe even contracted on, but figured out it was too high for us to purchase. Or people who we talked with and we saw they wanted market value and we knew that we just could not get them there even via our subdivide plan.

We've also had conversations with people about partnering with them, you know, taking ownership of their property and then giving them a profit split on the back end. That has not been incredibly successful just because it's been hard to convince the seller to do that, especially when real estate agents can execute that plan for them for substantially lower cost. But yes, it helps.

And truly, my objective, and this probably hurts my conversion, by the way, but my objective when I'm talking with a property owner is truly to do what's best for them. And I think that that resonates through. I would love to buy their property because I make 10 times or 20 times as much if I buy their property and actually do the subdivide plan or do whatever my plans are with the property versus if I take a real estate commission. Yet at the same time, we can pay for a good amount of our marketing and again, help our return on ad spend because we are able to optimize as real estate agents and take listings from the people who won't sell to us at low values.

Anyways, it does help. Is it like a huge solution? And am I recommending everybody on this video go do it? No, I'm not. But if you already have a real estate agent business, there's no reason not to combine the two.

Seth: Yeah, so if you were not a licensed realtor, what would that change, if anything, about these conversations? Like would you almost like downplay the option of listing it yourself until the very end and then point them to somebody else, or what would you do differently?

Neil: Well, I feel... So I would probably feel this way if I'm not a realtor. You know, I can only speculate right because I've been a realtor before I was an investor, so I can only speculate. I've been in this mindset for 10 years. But I want an informed seller. Maybe there's a lot of people who don't agree with me on this video, but I want an informed seller and I believe that that is one of my responsibilities as a real estate agent. In fact, I know it is—to have an informed seller whether I buy it or whether I help them sell it.

But I'm not sure—I believe in an informed seller who makes a good decision with their property, who knows that they may be selling it for below market value to an investor—is going to pay dividends. And whether you believe in karma or for me, it's Christ or Christianity. I believe that doing the right thing for people, which I believe is kind of talking to them about their values and what they could get in other means.

I believe that that's the right thing to do. And like I said, could that hurt my conversion? I'm sure it does. But I would rather sell—or sorry, I'd rather buy from an informed seller than anybody else. And so I think, you know, I'm not claiming to be the greatest salesperson in the world. I will tell you though, I think I win with people because I am transparent and I am honest and I am no fluff—the exact same way that we're talking about "The Real Deal with Neil" and doing that podcast.

In addition to these videos that you and I do together, Seth, is I treat everybody the way that I would want to be treated. And I treat my sellers the same way as if I'm talking to anybody else. And I think that that transparency resonates with the people that it does. And it turns off the people who just want to take advantage of me.

Seth: Yeah. No, that makes sense to me. So higher quality conversations. And then what's the next thing?

Neil: You got to have funding ready. I mean, we talked about that at the very beginning of this call. It's like, why do people not do this? There's such a huge opportunity. What if one deal could change your life? Why do people not do this? Well, you got to have funding ready. I mean, we talked about that at the very beginning of this call. It's like, why do people not do this? There's such a huge opportunity. What if one deal could change your life? Why do people not do this? Well, it's funding. And so there's no secret that bigger deals are hard to fund. You've got to be able...

So with bigger deals, I'll say this. Double closings work. They're an incredible strategy. So is wholesaling. With bigger deals to make the most profit possible, you've got to be able to buy it. Either that or you've got to be able to go on market with the seller before you own it or something. You have to expose it to the market.

But for us and our team, we buy every single thing. We're not wholesaling. We're not assigning. We're not going on market before we own it. We buy every single thing. We take down every single thing. And there are just some parts of entitlements that we can't do until we own it. There are other things like that where our value-add deals just require our ownership. And it's very unfortunate. I wish it wasn't the case. But you've got to realize that you've got to have money ready to be able to act on this. So yeah, anyways, that's my next tip is you got to have the funding ready or at least know how.

For most people doing smaller deals, I recommend you start with marketing and then you find the funding once you get a deal. For these kind of deals, six-figure deals, I think you have to have funding ready on the front end.

Seth: Yeah. And when you say funding, you're talking about bank financing specifically, right?

Neil: Bank financing. You could even reduce your risk by obviously doing a funder. But you're going to have to give away a huge equity portion. And so I think you just got to ask yourself like on these deals, what are you optimizing for?

For the longest time in my business, I ran a house flipping business with a partner. I gave away 50% of it. He funded everything. And that allowed me to focus on acquisitions. And I would not be where I am today if not for that partner. Now, two or three years after doing that, I'd had enough saved up to where I could self-fund and that's what I currently do. So you don't always start the way you want to end. But you at least have to start with the end in mind.

And you have to ask yourself, is me giving up potentially $200,000 out of a $400,000 profit, just to say outrageous numbers, me giving up 50% of the profit here to a funder, should I do that? Or could I go to a bank and then could I go find a private investor to put my down payment of $100,000? And could I maybe only give them $50,000 to $100,000? Could I double the private investor's return to do that? I mean, heck, most private investors might even do a 12% to 15% return. The question is, how much risk do you want to take and how much reward do you want to get? And that's hard.

Seth: Yeah. If you're working with a funder, you are giving up a bunch of equity, but your risk of capital or cost of capital is nothing, essentially, other than the money you put into the marketing. That also affects your return on ad spend because you also got to think about that—if my net profit is reduced by half, or honestly, like a majority of funders that I've seen, like for that big of a deal, they're not even giving you a 50% split. They want more, right? It's more risk, so they want more. So is your ROAS still at an acceptable level?

But there's other people on this call who probably, right? I mean, $10,000 would change your life. $50,000, $100,000 is just unfathomable in one deal, like it was for me a few years ago, right? For those people, I would say, heck, if you can get the experience of having done a six-figure deal, even if you have to give away a ton of equity, if you can just see the procedure, even if you just had to take on a knowledge partner or somebody like that with no risk, don't bet the farm on one deal. But at the same time, you need to get the experience of doing the deal so that next time you can do it yourself. So if you have to partner with somebody a handful of times, that's fine. But especially if you give yourself enough time—four months or so to close—if you're resourceful of any kind, you can probably put together something pretty lucrative for yourself.

Neil: Yeah, that's... two things I want to not forget about. So first of all, we just said there about being resourceful and having time—like it is amazing what you can do if you have the will to do it. Like in a day, you could probably do more than you think just by picking up the phone, calling people, like making it your life's purpose to get the funding. You know, a lot of people, I don't know if they just give themselves too much time or they're lazy or they're scared or what the problem is. But if you just, you know, make it a point of getting the job done, you can probably do it.

Seth: But the other thing worth acknowledging is this funding piece, it's a huge mental block for a lot of people, as it was for me. Whether you're doing bank financing or using a funder, because both of those paths have kind of some biggish obstacles to get over if you've never done it before in terms of, let's say we're going to go find a bank. How do you find the right bank? How do you convince them that you're a good bet? Just a lot of conversations that go into that. And especially if you don't have a big track record of big deals. It's like, how do you prove that you've done this and that kind of thing?

And then on the—and I know you probably have tons to say about that, Neil—but even on the funder side, like I was surprised to learn about six months ago, talking to a couple funders that the number of land funders out there that even have the ability to fund a deal over $200K is very, very small. Most of them are looking for sub-$100,000 deals to fund. But if you have a big deal that truly needs funding on a big level, there's only a few players out there that can really do this kind of thing. And even then, they have a lot of scrutinization that they're going to be doing to the deal as well. So they might say no.

And shopping around for the right funder that you can depend on can be kind of difficult. And a lot of them require a signed purchase agreement before you can even submit the deal to them. And it creates this chicken and egg thing where it's like, do I want to sign a purchase agreement with somebody when I don't know if I have the money to do it? It's just a weird thing. Mental obstacle course to get through. You have any thoughts on that, Neil?

Neil: Yeah, I'll give you, I'll tell you a story. And I think that this will kind of hit it home. Really, really good points, by the way, Seth. Really good thing to dive into.

So my very first house flip, I promise, stay with me. This will be relevant. This is 2019 going into 2020. I went in by myself. It was a listing appointment from a personal referral. Unfortunately, the house was very torn up. It needed a lot of work. I advised them they could go on market at say, just for example, numbers $225,000, or I'd buy it for like $185,000, my best recollection. I did not have the money. I own a rental property or two, but I did not have the money to buy this.

And what happened was they said, "Okay, let's go to market." They came back, reconsidered. They said, "Okay, cool. Let's just sell it to you." So we went under contract. I gave myself a 60-day option period, which in Texas means that I had 60 days to walk away and I put a hundred bucks up. I also had a 60-day closing. And my profit estimation on the deal was $40,000 at the time. And freaking huge. I mean, that was a huge amount of money at that time—still is to me today. But even back then, that was like, "Wow, that's a huge amount of money."

And so the reason I did that was because I did not have the funding, I didn't have the bank, heck, I had never renovated a house before, I didn't have the contractor. I knew real estate. So like, I at least had some competency. I knew what it was going to be worth after I renovated it. And I knew what I was buying it for—a really good deal.

But my question to anybody listening is, would you have done that same deal? Maybe you're not a house flipper, maybe you're a land flipper, but change it to land, right? Same numbers. Would you have bought that deal to make $40,000 and would you have risked $100 for 60 days to bet on yourself that you could find somebody to do this for you? I think anybody on this phone call would say that's a no-brainer, unless you're incredibly spoiled and run a huge business, right? That is an absolute no-brainer.

So in the same way, and during that time, during the option period, I went out and I courted, I went to several banks. I think I called 50 local banks. If you haven't noticed, I'm a little stubborn and I'm going to try to find somebody to do this. And I'm not exaggerating. I called 50 banks. Five of them said yes. And the one that I went with lent me the money at 5% interest, zero down, covered my renovations.

And in addition to that, before I'd even found that bank, I found a partner willing to fund the whole thing and a general contractor. And so I found my partner. He was the general contractor. He was also a realtor. So he confirmed my numbers. He walked it with me. My bank came in and said, "I'll fund 100% of your deal at 5% interest." No brainer. Gosh. And by the end of it, it was like, "Wow, this actually works."

And so I know that's in house flipping, but again, you equivalent to this. And you're only limited in funding. From what I've realized, you're only limited in funding to the amount of effort and time and relationships that you can build. And a lot of people don't invest enough time into their funding, and they don't treat fundraising as a business.

And so what I mean by that is they're still giving up 50% of deals, 40% of deals, even though they're doing multi six figures a year. At some point, you're making enough money and you have enough resourcefulness and you have a big enough team. It's time to stop splitting with funders. And I'm sorry, funders. I'm sorry that you're on this call and you're listening to this. But you got to stop. Either that or you got to renegotiate because to me banks are far superior. To me, private lenders especially are far superior. And there has never been a deal where I have wanted funding where I've not been able to get it. And I've even bought up to three million dollars of property within three months. That was late '23 going into '24. And I'm telling you I did not have the money to do that. I did not have a funder. I did not give up any equity position and the loans I got were between 8% to 12% interest with no points.

If there's a will, there's a way. I know that was a really long way to get to explain my point, but I can't hit it enough that once you are mature in your business, you have to stop giving away equity.

Seth: A few things came to mind as you were talking there. One thing I just want to point out, calling 50 banks—wow. That's a lot of phone calls. I was talking to Anshul Sharma in episode 217, and he was talking about the first time he did, I think it was a double closing. He called 14 title companies until he found the right one. And I remember thinking 14, holy cow, 14 title companies. That's a lot to call. Most people would give up. And we're talking about 50 banks. That's just a lot. I can't remember the last time I called even 10 of anything to get to the bottom of something. Most people just give up. They don't have the tenacity to stick with it.

And I'm curious, do you remember of those 50 that you called, do you remember what number it was? How many calls did it take to find the bank that you ended up working with? Like, was it the 26th, 19th or something?

Neil: No, it was... Well, so I started getting yeses at like within 10, right? I started... So here was my trouble was that I was a house flipper with no house flipping experience. And I think a lot of people listening to this probably resonate with that. You're a land flipper with no land flipping experience or et cetera, right?

And so I was a realtor and I leaned on that. And I leaned on—I was a pretty successful realtor even at that time. And I leaned on that. I had sold over a hundred houses before and knew what the heck I was talking about. And that resonated with some people and didn't with others. I also learned very quickly that you're not calling Chase and Wells Fargo to get this done. That was a heck no.

And so that was part of my learning was I was like, "Yeah, I currently bank with you. Will you lend on this?" And the answer was heck no. Great. Great. All my relationships are gone. And so I actually learned that the banks you have to go with are local community banks with less than five branches in the county that you want to invest in.

And as far as what number, it didn't, you know, I was looking for a very specific product. I was looking for ideally 0% down for a flip at the $200,000 price point, which at that time was actually kind of high. And I was somebody who had never done it before. And so I used at that time, it was like the house flipping spreadsheet. And I put together this whole spreadsheet. It's Flipper Force. And if you haven't heard of them, Seth, man, killer software, I use it every day. And I basically printed out a detailed 10-page report that they have pre-configured. I inputted my numbers and put the suit on, sat down with bankers and went to town, had some fun.

But I'll tell you this, what was even harder than raising money for that deal was raising money, private money. And I'll tell you quickly how I did that. I'll tell you how I got credit lines since we're on the topic.

Seth: Is there some website of private money lenders or how did you find them?

Neil: No, no, these are friends and family, man. And so there's a book out there. I believe it's called Getting the Money. I forget the author. Monumental book. So simple, so straightforward. Best 100 pages I've read on private fundraising. And forgive me if I'm butchering that title. I'll get it to you later, Seth. Finding the Money, Getting the Money, something like that.

And the reason that book is monumental, because basically the premise is if you want to raise money, you make a list of 40 people: 10 people that like you, know you, love you; 10 business associates you've worked with before; 10 people who you know who have money, who other people might know of; and then 10 banks. And now I didn't have the book at the time I went first, but it's like 40 people. And from those 40 people, I raised close to $750,000 from having conversations. Right.

And that's what fuels my business today. In addition to that, I've also got bank credit lines, lines of credit. I called every single bank within a 60-mile radius of my location in South Dallas. I even went out to East Texas where I do other deals. My list was about 100 banks. And I was able to get about $500,000 of lines of credit unsecured doing that way. Now, only from four banks.

And so if you haven't gotten the gist here, like I said, I'm pretty darn stubborn. But I also know what I want. And I know that there are people out there who are going to resonate with what I have to offer because my business has a track record of doing this. At the time I got my first credit line in 2020, it was actually a $600,000 credit line. And I had only done three flips, three house flips. Now I had a partner who helped me secure that with 20%, but that was $600,000 that helped us operate our business for the next two years.

So anyways, I know I'm talking about a lot of concepts that might be a little bit fuzzy to some people, but bottom line is banks will give you very, very high limit, essentially credit cards, but they're called a line of credit. They're multi six figures. You can use that to do a deal like this. You can go to private investors, your friends and family, you can ask them for money. Typically, they're interested at 10% to 12% in my experience, or you can go to banks and you can kind of do the same thing at say 8% to 10% interest, or hard money lenders. And for me, what's worked best is a combination of all of those.

Seth: I think I found the book. It's "Getting the Money" by Susan Lasseter Lyons.

Neil: That's it.

Seth: I'll include a link to that in the show notes. And also, as I hear you talk, Neil, this reminds me of the, and I've mentioned this before on the show in the past, but Albert Einstein has this quote. He says, "It's not that I'm so smart. It's just that I stay with problems longer." And man, is that true for so many things in life? So many people give up way too early. Like if you just stick to it and just keep going, you'll probably get there and you'll probably learn pretty quickly like you did with, you know, the wrong banks to go after in the first place. There's a lot of inspiration from that.

Neil: Success is just simply consistency over time. And if I look at the people who I admire as land investors, house flippers, real estate agents, you name it in real estate, they have been incredibly consistent over decades. And if you stopped looking at what you think you can accomplish in a year and you started focusing on what you can accomplish in five years, your life would change drastically.

Seth: Yeah. I think part of what keeps people like you going, maybe it's like, I don't know if it's true for you, but for a lot of people, it's hunger. Like they're just hungry. Like they need it to work and they'll keep going. I think a lot of people, when they experience a certain level of success, they kind of lose that hunger. And it becomes easier to give up really quickly when you get fat and happy. But yeah, I mean, I think the longer a person can stay hungry, there's a lot of power in that because it keeps you moving forward with stuff like this.

Neil: I actually had... I heard something the other day, I was kind of asking myself, candidly I'm getting a little bit of boredom in my business and I was trying to figure out why. Why am I getting bored? And I heard somebody—I don't remember if it's Hari Masi or who it was—but somebody said something along the lines of, you can either be a cow or you can be a lion.

A cow essentially grazes fields all day. The grass is already there. They just graze the fields all day. They chew slow, they spit it back up, they chew it again, right? It's just, you can kind of go through your day, just kind of chewing the grass and doing your thing. And the analogy was, he was trying to say that that was, I guess, somebody who works for somebody else or somebody who kind of does the same thing all day, every day. "I'm just grazing, man. I'm just grazing."

Whereas a lion is hunting. And no, it's actually—it was Naval who was saying it. The lion goes out and hunts. And the lion, whenever it sees a target, spends an incredible amount of energy, right? Calling 40 banks, calling 100, calling 40 different people to raise private money—examples of that. The lion spends incredible energy in small doses to get the kill. The lion does not graze all day. The lion enjoys its spoils, and it eats. But it has to have that huge, like a cheetah, right? Has to just absolutely turn it on when the time is right. And I think that the entrepreneurs with the most success have that ability to turn it on when it's time.

Seth: Yeah, I've heard a similar analogy, the hunter and the farmer, whereas hunters are kind of like the lions. The farmers are like the cows, although the cow doesn't sound like that glamorous of a life. Honestly, when I hear you explain it, I've identified with the cow or the farmer more in my life, which I think is actually kind of rare. I feel like most people who do really well in business are more of the type A hunters. They love the thrill of the chase type thing, but for all the farmers out there, just know you can do it too. There's just different costs associated with that.

Neil: Absolutely. You can. So anyway, Seth, really appreciate your time today, guys. Thanks for tuning in. Please tune in to "The Real Deal with Neil." If you liked this and you want to see more of it, straightforward value, incredibly quick, please tune in. I would love nothing more than just to add value to you and where you are in your journey. Anything else to add, Seth?

Seth: No, I would echo that, though. Yeah, be sure to check out the podcast, subscribe, follow, wherever you're listening to it. You know, stay tuned. And Neil's got a ton of good stuff to say, as you can probably tell from this episode we just did here. And I'm looking forward to hearing more from him. So thanks again, Neil, for being part of this.

Neil: Thanks, guys. See ya.