Ep 558: Anyone Can Do It, But It Isn't For Everyone It Is Really Hard To Be Us

Chapter 1: The Realities of Big Land Investing.)
0:00
so today's episode is
0:03
called anyone can do land
0:06
investing anyone can do big land
0:09
investing but big land investing is
0:12
very it's tough gig that's for
0:15
[Music]
0:17
sure why is it so hard there's just a
0:20
lot of curb balls I posted I guess uh
0:23
Anthony finally told me that somebody
0:25
tore on our signs on one of our Lots
0:27
there a big sign I say we probably have
0:30
a grand into it and maybe more based on
0:32
the labor and the price of everything
0:34
and all that stuff yeah so somebody turn
0:37
our ,000 sign big checks big
0:41
invoices um let's let's talk about the
0:43
bad stuff yeah so when our inv when our
0:45
invoices come in oh yeah yeah like we
0:47
just got one right now for
0:49
$62,000 cuz we're building a road at a
0:51
site and that's just like one payment um
0:55
engineering engineering so the engineer
0:57
sends us a bill for we have like 100
0:59
grand
1:01
no I mean it's multiple hundreds but uh
1:03
what did they send us a bill for and we
1:05
overpaid them we sent them back on a
1:06
larger amount I think we s them like it
1:09
was like 35 and you sent them like 50
1:11
something like that yeah so on our big
1:13
accounts we try to keep them paid ahead
1:14
of time so that's another thing so they
1:16
can work have a lot of cash on hand
1:18
right so like people building a road uh
1:20
your engineers that are uh designing the
1:22
project you can't get behind on those
1:24
bills yep cuz they'll start your project
1:26
yeah so like most entrepreneurs like
1:28
they have Debt Service like monthly Debt
1:30
Service of like a grand on a house or
1:31
500 bucks or like $110,000 on marketing
1:34
and overhead and our stuff sometimes
1:36
it's 100 Grand
1:38
150 I think right now we have like 150
1:41
for an engineering bill that we're about
1:42
to take care of yeah U and then we got
1:45
hit with that $61,000 road bill so I
1:48
mean you're talking about 250 350 like
1:51
nothing back into these projects you're
1:52
kicking the
1:54
camera can down the road yeah so it's
1:57
it's it's a lot of invoices you have to
1:59
have a lot of
2:00
you have to have somebody back and you
2:01
have to have a lot of cash in hand and
2:02
cash reserves lots of deals working lots
2:05
of deals working you can't just do one
2:07
deal I think there's those Oldtimer
2:09
investors developers that kind of do one
2:10
deal a year type thing or two deals a
2:12
year yeah they find their little niche
2:13
and they they entitle 500 acres and turn
2:16
it into a subdivision and you can do
2:17
that that's the beauty about this is you
2:19
can 100% take on one big deal a year but
2:22
if you're doing multiple stuff like we
2:24
are it's it gets crazy crazy crazy long
2:28
timelines that's a thing nothing happens
2:30
quick yeah everything on this deal like
2:32
we'll have a wholesal they'll hit us
2:33
with the deal and then they'll blow us
2:34
up like hey what you think what you
2:35
think what you think like hey slow down
2:37
there that size a deal just to
2:39
underwrite it might take a week or two
2:40
weeks like slow down it is hilarious cuz
2:43
everybody's like oh I have a $4 million
2:46
deal you want it needs to close in 30
2:50
days and I'm like dude like that's why
2:53
you're supposed to come to our training
2:54
man so you can come take a look and see
2:56
what we're doing and we walk you through
2:57
step by step how to go out and find the
2:59
how to package it up correctly for us if
3:01
you bring me a seven fig deal that needs
3:05
to close in 30 days it better be with
3:07
like under 10% down then we're talking
Chapter 2: Managing High Costs and Long Timelines.)
3:11
if it's not that don't even don't even
3:13
yeah Cash 5 million and they need to
3:16
close in 30 days like golly that's a lot
3:18
you have a lot going against you because
3:20
those deal deals are dime a dozen I can
3:22
get on Google and I can find 50 of those
3:24
today yeah and then people people start
3:27
hunting gzilla like million dollars or
3:28
more and let me send the Anon like what
3:30
are you
3:31
doing yeah call them and and get some
3:34
kind of uh reassurance say hey what you
3:36
know we're willing to give you full
3:38
price we need some terms we can pay you
3:39
off in a certain amount of time or you
3:41
say you know hey we we'll pay cash but
3:44
it's going to be you know a lot less and
3:45
what you have it listed for and and
3:48
figure out what they're trying to do
3:49
with that money cuz sometimes like a
3:50
broker just told them hey I could list
3:52
it for 5 million Knowing damn well like
3:54
that two thing's only going to bring 2
3:55
million cash 2 and a half million cash
3:58
so then that's where you would come in
3:59
and say hey what do you think about the
4:01
price yep right build from there it's
4:03
been listed for so long why hasn't it
4:06
moved if you think it's such a good
4:07
price
4:09
mhm and then then we broke the question
4:11
like all right well I'll pay your price
4:13
but it's going to be on these terms and
4:14
then you have that conversation that's
4:15
just fun stuff but the it's it's really
4:18
hard man if you're okay waiting to get
4:20
paid like real estate in general has
4:22
longer
4:23
timelines but I oh a funny thing I I
4:26
talked to one of the a student that came
4:28
in a new student he's a California real
4:30
estate agent that does what we do he
4:32
works with developers like us and he
4:35
said he made he said he made like 250
4:39
Grand it it was something crazy 250
4:41
Grand like half a million agent fee
4:43
that's a big deal right damn yeah that
4:45
sounds like a lot of but took him seven
4:48
years to get paid oh my goodness cuz it
4:51
was California welcome to the beautiful
4:53
state of California 250,000 on a deal
4:55
that took seven years yep oh no count me
4:58
out 7 years count me all the way out so
5:01
if if you're not okay with getting paid
5:04
months maybe years multiple years don't
5:08
do it I think that's a beauty of land
5:10
and it's like we I think we've got
5:11
ourselves to a point now where I feel
5:13
like we are at the promised land because
5:15
we we've embarked in a lot of long deals
5:18
and now we're like on the receiving end
5:19
of a lot of those deals all at the same
5:20
time absolutely so that's what's pretty
5:22
cool is that you know if you're if
5:24
you're looking to do a quick flip you
5:25
know if your game is selling lots to the
5:28
builders that's quick turn game and it
5:30
happens like it can happen in days which
5:32
I love because it keep it gets a new
5:34
person paid quick but with our game it
5:36
takes a really long time to build up the
5:38
momentum that we have and to have
5:40
projects at all stages end stage
5:42
beginning stage mid stage so let's talk
5:44
about this we learned this from we went
5:45
to roods event uh was it this year or
5:47
last year it was this year this year it
5:49
was this year went to Chris ruds event
5:50
in Louisiana and he's talking about
5:52
having different levels of money and
5:54
different speeds of what they come
5:55
because you can't just do 10 big deals
Chapter 3: Balancing Quick and Long-Term Deals.)
5:59
and hope to and nothing else and nothing
6:02
else so you have to like meter your flow
6:05
and we're trying to do better with this
6:07
too is that we usually
6:09
do large there's larger deals than us we
6:12
do medium medium and slow money we need
6:15
to start working more on fast money yeah
6:17
yeah so that that's the thing so we need
6:19
we need a fast money engine created
6:21
because we do a lot of medium-sized
6:22
deals in large transactions yep and we
6:24
just RW dogged it the whole way through
6:26
we just RW dogged it we just did it from
6:30
scratch with our own money we it hurt
6:32
lots of pain and suffering but now like
6:34
I said we're on the back end of the
6:35
receiving end where things aren't so
6:37
brutal but to just throw up a business
6:39
like that man you're asking for trouble
6:41
asking for trouble a lot of people told
6:42
us that your land company's going to
6:43
fail because now I know what they mean
6:45
like there's a high probability that
6:46
it's going to fail because the land
6:48
business is a hungry machine especially
6:50
if you start moving into like
6:51
entitlements and development it's a
6:53
blood of capital so like everybody you
6:55
think you think of like uh the single
6:56
housewife at home they have a spending
6:58
problem
7:00
mhm they have a spending problem with
7:02
Amazon boxes piling up the front door
7:04
this B has a spending problem this land
7:07
business has a spending problem and it's
7:10
to the tune of five to six figures yeah
7:13
my my road contractor calls me he's like
7:15
hey uh I got a a truck coming next week
7:16
with a couple coverts you know we bought
7:18
a couple coverts you know 1,500 bucks
7:20
1,000 bucks 2,000 bucks CU I got a truck
7:23
coming with some CS tomorrow like a limb
7:25
in the and low areas like low water
7:27
crossing areas I said okay that sounds
7:29
good do you want the like the middle the
7:30
cheapest most expensive let's go with
7:32
something middle range okay sounds good
7:34
perfect okay all right hey um I'll call
Chapter 4: The Importance of Capital and Team Infrastructure.)
7:37
you Monday and let you know what time
7:38
the truck's going to be here and how
7:39
much the total will be with fright so I
7:41
said okay cool yeah I don't know 5 10 20
7:43
CS I don't know 10 grand 20 grand
7:45
whatever so he calls me back he's like
7:47
okay trucks going to be here tomorrow uh
7:49
they they need $60,000 61,000 I said
7:52
what by when
7:55
tomorrow oh man I don't care how much
7:57
cash you're sitting on like that's not
7:59
good news
8:00
you know like I said I was expecting 5G
8:02
7 you know 12,000 he probably wholesal
8:04
them to us he I'm sure he did 61,000 I
8:08
said
8:10
golly yes there's an assignment view we
8:12
paid in there we just don't know about
8:13
it we don't know how much the assignment
8:14
was
8:15
but who paid an assignment fee on a on a
8:18
cob that's what you get when you're out
8:21
there building a big road you like that
8:22
you know like there's nothing nothing's
8:25
cheap nothing's cheap you can order uh
8:27
just trucks of of kich you know hey I
8:29
need 100 trucks of kicha Boom 30 grand
8:32
50 40 Grand how much did you spend on
8:35
that little mobile home deal that was
8:37
trashed where we brought in all the
8:39
loads of dirt and we took up like loads
8:41
of trash that one yeah so let's say we
8:44
bought it for like 90ish or
8:46
something uh I don't even remember what
8:48
we got it for like 90 between 90 and 100
8:51
I feel like I spent about 15,000 on
8:53
dumpsters or something like that 12 to
8:55
15,000 there like a week what's that the
8:57
dumpster guy was there like a week week
8:58
at least a week maybe two weeks on and
9:00
off on and off cuz it was some rain and
9:02
then I have a friend that runs gravel
9:04
like he runs gravel trucks and dirt
9:06
trucks so like let's say you excavate a
9:07
big thing cuz you're going to do a pool
9:08
in your backyard or they'll call and say
9:10
hey I got you know 50 loads of black
9:12
dirt you know need somewhere to dump it
9:14
if they don't find somewhere to dump it
9:16
to they got to pay to dump it so he'll
9:18
call me whenever he has a load and says
9:20
hey I got something so I ordered
9:22
multiple loads of like khichi and just
9:25
like some fi dirt from him yeah I want
9:28
to say we probably brought out about at
9:30
least 15 trucks so that was I would say
9:32
like another five grand or something so
9:34
all in all we got like 15K in cleanup
9:36
and then like 5K to level land and then
9:38
plus a skid steer guy so it might have
9:40
been like $25,000 Rehab on 2.7
9:44
Acres it's crazy so anything else you
9:49
can think of that's a good
9:50
one timelines
9:53
money it's hard negotiating good terms
9:55
some of these people are
9:57
ridiculous that's another thing I think
9:59
well it's actually I think it works in
10:01
our favor because there's a lot of
10:02
people out there that have land that
10:03
they don't know what they're going to do
10:04
with it yep they have no exit yeah
10:06
there's not an exit plan in place so it
10:08
makes it real easy when we come along
10:10
and say hey what are you going to do
10:11
with this like well I never have to sell
10:12
it like we don't say it's actually
10:14
pretty good because uh we weren't trying
10:16
to close in two weeks or 3 weeks we want
10:18
you to stay here for another two or 3
10:20
years while we do some stuff on here and
10:22
make this thing happen yeah that's it
10:24
finding out what kind of cash they're at
10:25
but I think you have to like scale up or
10:28
raise a lot of money
10:30
there's no other way around
10:31
it yeah I think this is the ultimate
10:34
business where you need to keep Capital
10:35
raised because especially if you're
10:37
going to try to do it at any reputable
10:39
scale right so if we're trying to build
10:40
10 or 20 you know neighborhoods at once
10:44
yeah then you need to raise a lot of
10:45
capital you have a lot of capital behind
10:47
you and you have lots of people making
10:48
offers lots of negotiations happening so
10:51
to those who want to compete with us
10:53
you're welcome to the game there's
10:54
plenty out here but it's hard it's very
10:57
tough yeah it's better if you have Squad
10:59
everything that we have in place all the
11:01
automations we have in place through
11:03
through our people through our team
11:05
State side and uh overseas overseas uh
Chapter 5: Risks and Rewards in Big Land Investing.)
11:08
we have a lot of infrastructure so for a
11:11
new person to come on board with us
11:13
bring a deal and just like go through
11:14
the Royal Treatment like damn that's a
11:17
that's a lot of infrastructure to take
11:18
advantage of you get a lot of
11:20
infrastructure yeah lot lots of
11:22
knowledge lots of experience yeah so I
11:26
hope you learned a lot like I said it's
11:28
a good game lot of zeros on it you can
11:31
lose a lot you could lose a lot and you
11:32
can gain a lot yeah lots to win lots to
11:35
lose so yeah you go further faster
11:38
together right together was it all
11:41
Rising tide raises what is it ship
11:43
raises All Ships there you go we'll see
11:45
you next time
11:47
[Music]