Scaling a land business involves more than identifying the right parcels; it’s about building a team that drives your vision forward.

A key role in this team is that of a land acquisition manager, who finds business for your business. After all, these professionals are in charge of acquisition—the crucial part of the business that finds and buys properties. The question is, how should we compensate this key player? Should it be hourly? A salary with a quarterly bonus?

While there's no one-size-fits-all answer here, I've found a commission-only structure incredibly effective for my land business. This compensation model attracts the kind of go-getter I need—someone resilient, ready to ride the highs and lows, and motivated by an “eat what you kill” model.

Below, I’ll walk you through my proven strategy for attracting and recruiting a 100% commission-based land acquisition manager.

What Does a Land Acquisition Manager Do?

First, it is important to understand what a land acquisition manager does to understand why a commission-based compensation approach works well for this role.

Here’s a summary of what they do:

• Lead generation: They use available marketing channels (e.g., direct mail, cold calling, SMS, voicemail drops, etc.) to find and discover potential deals.
• Deal analysis: They conduct initial due diligence to determine the deal’s feasibility and potential profitability.
• Negotiations: They are the frontline negotiators with landowners, aiming to secure terms that favor your business’s growth.
• Transaction management: They oversee the process from agreement to closing, coordinating with title companies to ensure smooth transitions.

These are among their primary responsibilities, as highlighted in our downloadable job posting template.

The best land acquisition managers have the drive and character to weather the ups and downs of a business and take personal accountability for it.

How Does Commission-Based Compensation Work?

So what’s in a commission-based model?

In my business, the compensation we pay to our land acquisition manager consists of two things:

1. Commission: Usually set at 10% of the gross profit from each deal the manager closes.
2. Advance: We also provide a $500 advance for each acquisition.

Let me explain each of these things.

10% Commission

A 10% commission simply means they get 10% of the sale they close.

This amount is more or less subjective, and you can tweak it depending on your business. Other land business models may find this commission percentage too aggressive, while others may find it insufficient.

Personally, I find that 10% works perfectly in my business model. It matches the standard commission rate for land-specific realtors, whom we exclusively use as our disposition channel.

$500 Advance

We also pay our land acquisition managers a $500 advance for every deal they acquire. This component of the compensation package balances motivation with financial stability.

The $500 advance serves a dual purpose:

• Incentivizes deal-finding: Upon securing a property, the advance is an instant reward for effort while allowing the acquisition manager to build up a pipeline of future compensation.
• Mitigates risks: The advance mitigates the inherent risks associated with a purely commission-based role. Since deals sometimes take months to close and even longer to generate profit, an advance ensures a measure of income stability. This keeps the manager working toward closing more deals and seeing them through to profitability.

The $500 advance is reconciled with the final commission upon sale. Once that property is sold, the $500 advance will be deducted from the total 10% commission due at the completion of the sale. Essentially, it's an advance against the future earnings that the manager will receive from the purchase of the property.

Suppose they close a deal with a total expected commission at sale of $5,000. Upon the acquisition, they receive a flat-rate $500 advance. Once the property is sold through disposition efforts, the balance paid would be $4,500, completing the full commission payment.

This advance acts as a financial cushion, allowing them to focus on acquiring more deals without the immediate pressure of short-term financial needs.

Benefits of Commission-Based Compensation

When considering how to structure compensation for a Land Acquisition Manager, it's essential to understand the unique dynamics and requirements of such positions.

1. Motivation boost: This model directly ties earnings to performance, pushing managers to sharpen their skills and close deals efficiently. Unlike fixed wages, it creates a powerful incentive to excel.
2. Attracting top talent: Commission-based pay appeals to self-driven professionals who thrive on results. It draws in skilled negotiators and deal-closers—exactly the type of go-getters a land business needs.
3. Financial flexibility: For growing businesses with unpredictable cash flow, this model is a godsend. You only pay when profits are realized, reducing the risk of carrying unproductive overhead.
4. Goal alignment: With this structure, your manager's success is tied directly to the company's. This natural alignment fosters a deeper commitment to achieving business objectives.

How Commissions Compare to Other Compensation Models

• Hourly or Salary-Based: These offer steady income, but they often fail to motivate peak performance. In the fast-paced world of land acquisition, we need people ready to pounce on opportunities at any hour. Fixed wages also burden the business with consistent costs, regardless of revenue, potentially straining resources during slow periods.
• Hybrid: This approach combines salary compensation with commissions or bonuses, providing a financial safety net. However, this might dampen the urgency and drive of a commission-only model and draw candidates with lower risk tolerance, which isn't ideal for the feast-or-famine nature of the land business. This model can attract good salespeople, but it likely won’t lure the best salespeople.

RELATED: 122: How to 10X Your Land Investing Revenue w/ Travis King

What Happens If a Property Doesn’t Sell or Sells at a Loss?

The manager should still get the $500 advance without revocation, minus additional commission or compensation.

Here’s why: a land acquisition manager can only acquire property if the company leadership approves the purchase price. Therefore, if we lose money on a deal, it’s on the company and not the manager—meaning the company should absorb the loss of the $500 advance.

Some companies may structure this differently, granting the manager authority to determine offer amounts without oversight. In this case, the $500 advance could be deducted from a future commission tied to the next property that sells profitably.

For example, say Deal A had a projected commission of $5,000, of which a $500 advance was granted to the manager upon the acquisition. However, the property sells at a loss, causing the land acquisition manager to forfeit their remaining $4,500 commission.

A week later, Deal B sells, this time profitably, with a gross commission amount of $5,000 (again), of which another $500 was paid in advance. However, since Deal A had a $500 balance outstanding the previous week, it can be deducted from the commission from Deal B. This results in the manager earning $4,000 from the Deal B sale instead of $4,500.

In this structure, if a series of properties sells at a loss, the balances for the $500 advance fees could perpetually carry over until a property sells profitably.

This approach balances financial responsibilities between the company and acquisition. The goal is that the acquisition side is accountable for the overall performance of the business’s portfolio and the prices they offer.

The Land Acquisition Manager Hiring Roadmap

Hiring styles and processes differ from one company to the next, but here’s what we use at Land Mavericks:

1. We first create an application form on Google Forms (here are some relevant questions on the form; add or modify as needed).
2. Then, list a job with a clear job description on job marketplaces, such as Indeed, Hire My Mom, the BiggerPockets Marketplace, or the REtipster Forum and Facebook Community.
3. Next, we respond to applicants by asking them to submit a one- to three-minute Loom video introducing themselves and answering specific questions (like this Loom video interview template I prepared).
4. We screen from videos and conduct an interview. You can use these round 1 interview questions.
5. We send those who pass the interview a link to the DISC personality test and have them take it.
6. We engage the top candidates in a practical test. In this test, we have them cold-call 100 landowners and compensate them hourly for the trouble.
   1. Pull a list from DataTree, Propstream, or some equivalent
   2. Skiptrace owner contact information from Kind Skiptracing, Propstream, DirectSkip, or some equivalent
7. Based on engagement with the seller, confidence on the phone, and overall communication quality, select the final candidate for a 90-day trial period.
8. Send the new hire with these onboarding documents and ask them to review and sign them if they agree with the terms and conditions of their prospective employment:
   1. Compensation plan template
   2. Service agreement template
   3. Unofficial non-compete. Note that non-competes aren’t legally enforceable, but you can include this as an unofficial way to retain exclusivity to your contractor’s service. This document is entirely optional. Legal disclaimer: This article is for informational purposes only and does not constitute legal advice. I am not an attorney. Before implementing any non-compete agreements, it is recommended to consult with a qualified legal professional to ensure compliance with local laws and regulations.
9. If they sign the documents, you can start the 90-day trial period and set measurable and specific milestones, such as obtaining a certain amount of signed purchase agreements, increasing inventory count, improving total company revenue, etc.
10. Review after 90 days. You can grant permanent employment when the manager achieves specified milestones; otherwise, go back to step 2.

Harnessing a Commission-Based Structure for Long-Term Success

Adopting a commission-based compensation strategy for a land acquisition manager not only aligns their interests directly with those of your company but also ensures that they are as committed to the profitability of each transaction as you are.

By incentivizing a land acquisition manager this way while safeguarding their efforts with a $500 advance, you foster an environment ripe for aggressive growth and sustainable success.

Ultimately, this strategy sets the stage for sustainable growth and positions your land investment business to thrive in a competitive market. It's an investment in human capital that pays dividends in drive, dedication, and results.

Before you go…

Now that you've fixed a system where you pay your land acquisition manager, perhaps it's time to pay yourself. Check out this enlightening article from the same author, Jaren Barnes, Profit First Changed My Life. It Will Change Yours Too, and learn why, before anything else, you should pay yourself first.