Ep 347: Investing in Niche Real Estate: Land with Daniel Martinez (The Real Estate Investing Club)

0:12 And we are back with another episode of The Real Estate Investing Club. Today we have none other than Daniel Martinez. This is a repeat guest. We don't often have these but I'm super excited because it's always good to see familiar faces. We were having a laugh because we both got on the podcast before this where I was like, Wait, I've seen this background. It's a testament to why branding works because Daniels background stuck in my mind. So Daniel is the founder of hive mind CRM platform. We talked about this. We're gonna we're gonna change up our topics this time. But I'm still super excited, Daniel, thanks for coming back on the podcast. 0:50 Yeah, thanks for having me on. I like I said, I kind of feel backs. I don't remember. But man, go check out the other episode. I think it was episode 268. But we're talking about something different today. And I have a plethora of topics we've talked about. So I'm excited about this one. Here you go. 1:03 There you go. The beauty of real estate is there are so many topics to delve into. There's not just one. So we're gonna we're gonna jump around, we're gonna start with some land. But before we do that, as always, we start with stories. I know you've already been on here and shared, but I just go back through how you got into real estate and how it got you to where you are today. 1:23 Sure, I'm gonna do some more dedicated ones. Real Estate science specifically. But I was I started entrepreneurship. I was 25. I had my CDL. So I actually started a trucking company. So like the start be something I already have and put on that path. Started a trucking company ended up getting up to five trucks we needed like $540,000 in revenue in two years. That didn't really work out in my favor. So I pivoted into real estate at that time, I was transitioning from, into real estate, actually wholesaled my first deal was a wholesale, vacant lot in Florida. Never seen it to this day. I made about $6,000. But that's kind of how I ended up in the in the land space. And I've kind of been doing land ever since then. But land is my niche. I love it. And it's been life changing for me. I think it's a lot less competition. I always, always, always talk about this because I like land because it doesn't cash flow. There's no tenants, and I don't have to Alpha do showings, we're just going to see 2:25 how like it man, I like it. I didn't realize you said 550,000 In two years you did with five trucks. And so yeah, that's about 250,000 a year, just with five trucks. I had no idea that, you know, running out trucks could be so lucrative. 2:43 It's okay, so for everybody that wants to get into trucking it is it can be lucrative. But the problem is there's so much regulation that everybody has in your pockets. So yes, I generated $550,000 But I also split 650 So by the end of the two years, I lost $100,000 2:59 Wow, that's crazy. Regulations being like all the different licenses like your CDL and all that stuff. Licensing tolls. 3:07 Tolls, yeah, I always I always equate this to that in trucking, the stars have to align for you to get paid, you have to have a driver you have to have a driver that qualifies you to have a driver, the passenger drive screen, you have to add you have to get a load you have to pick up that load and it's available with a drive that load all the cars and traffic in between that load when you deliver when you deliver. They have to be there to unload you. So Gotcha. There's just too many variables and every single one of those has to live for you to get paid. And there's like like half a hat like I spent like over $200,000 in fuel 5200 of that one straight to diesel 3:46 was before the fuel costs today, which is like $5 a gallon for you know, that's unleaded we're not talking about diesel there. So 3:55 there's there's too many there's too many high expenses that just dig into your profit margin, then accidents, tolls, insurance, like it was crazy. 4:03 Yeah, yeah, that makes sense. That's funny. Family family member of mine. He you know, he has a construction or construction like he's in recycling, he has a recycling business and he started a trucking business on the side. I never really talked to him about it, but he he ended that business I think like a year after he started it and I was always curious why because it seemed like he was doing so well. But that's why too many costs makes sense. But another good reason to be in real estate because there's still cost but the upside is bigger, especially when it comes to land because the operating expenses are virtually nil if you got your taxes and honestly that's the most I can think of off the top of my head is your taxes. So let's go into land it's your niche it's your it's your passion when it comes to real estate Why did you choose land in the first place? 4:50 I really didn't chose choose it man. I kind of fell into it. I was doing I was trying to wholesale houses a contract did like three or four houses. They all fell in for different reasons. Between a A credit card debt at the closing table blew up my deal. I had a seller die that weekend before close. I wasn't making 30 grand on that one that happened. Another one I couldn't find a buyer. It was I hadn't like thing after thing after thing just happened. And when I was doing houses, I'm like, Man, this is ridiculous. So me, my partner, my partner and my partner. Now we're kind of we kind of took the same wholesale course. And we're like, let's try land. And he started doing land and I started doing land. Literally my first contract I got so easy, smooth, seamless. I was I was very introverted. So I don't really want to talk to sellers, nothing. So I literally did the whole deal through email, never talked to the seller never talked to the buyer. And I made $6,000 I'm like, Okay, this is amazing. 5:47 There's something to this. I like it. And so you guys, you predominantly wholesale? Do you buy and hold anything like that? 5:56 So we do our his strategies is crazy. So the reason why we're like clear, they're kind of mentioned earlier is because it doesn't cash flow. Well, what we do is we make a cash flow. Well, how do you make a cash flow? Well, there's a lot of people that teach that to land to go get 1020 cents on the dollar contracts, which are out there, like, I'm not gonna stop and deny that are out there. So what you do is you make a cash flow, how do you make cash flow, if you get like a 25% deal, let's say it's 10,000, you get it for 2500, you can ask for that as a down payment. And then the owner, finance the rest and sell it for what it's worth. So that's how we create cash flow with land. But we kind of kind of fell into our niche with larger properties, because you can create larger spreads and cash flows. Now that's that's what our niches we try and do we did early on was it was like a 35 $35,000 lot. Seller wanted 15, which is really up to three cents of the dollar. And we're like, we'll give you eight water for a quarter. And he's like, no, no, no came back 90 days later, he agreed for eight we sold it on marketplace in a week. For eight down 500 a month for five years. That's not bad. So that's creating cash flow like equivalent to a rental with land. Yeah. So now you're buying 7:11 the deal. And then seller financing it on the open market. Yep. 7:15 So that's our whole strategy. So last year, we actually bought 107 acres, same idea, we subdivided into 10, laughs seller financed it, and cash, cash purchases, and we may ended up making 200k in cash, okay, notes. We've done multiple deals over six figures. We just closed the deal last month that paid us 80 grand, like all our deals were like high high end higher end deals is because we're making like huge spreads on these deals. So now we're targeting like 50 acres or more million dollar deals. Like I'm literally working on a deal right now in Florida. It's nine acres. seller wants 325 It's worth 600 We're probably gonna make like 100 and 150 on it. Wow. 7:56 So you mentioned one thing in there subdividing. That is one you know, I've had a number of people on the podcast who dabble on land. And that's one of the things that's it seems like there's quite the value out there to buy land that is one contiguous parcel, and then do that legwork. Go in there, subdivide it and sell them off individually. So when you do I mean, sounds like this is part of your your tool belt there. What is this process? How much of a headache? Is it to get it subdivided? How do you actually go about doing this? 8:30 So we actually have, we actually got a million million dollar land mastermind.com We actually teach this we have our own little edge, we have our own little education that we put out for specifically this and somebody man. So for us, we're specifically in Texas only. And the reason why we're in Texas only is because it's there's a lot of land. And if they make it easy Texas is they just make things easier for investors. So in Texas, as long as it's 10 acres or more you can subdivide with a engineer and a survey. In other states and countries you have to put in I mean, other countries, but in other states that might require county approval and they might require all these different hoops you got to jump through with literally in Texas, we get 50 acres, okay, when you're gonna have to bite us in the 510 acre lots, boom, boom, survey engineer, cut them all up. To get the title we close, boom. The biggest benefit about land and this is why I tell I love land. There's more land, there's more land than houses. Think about that. So there's, there's more opportunity, there's less people doing it. And you have the upside to seller finance it because banks won't lend on it. So you're providing a opportunity in the marketplace just by seller financing. Another thing is that, especially with 10 acres, we're selling to people that buy land their cash buyers, think about this, everybody that buys houses, 90% of them are going through FHA, they're going to the burning it out and about 20% down. People that buy land, they're usually cash buyers because they're using it recreationally so our big pour Some of our buyer pool already has cash on hand. Because people that own land, it's like something add on, like, they're going to make sure they have a house before they have land, you know. So it's like an added thing. So we're looking for a certain type of buyer. And everyone is looking for million dollar, that type of buyers going for space. 10:16 Yeah, and even on the supply side, in terms of number of sellers out there, I've heard that a lot of a lot of the sellers you're interacting with, they've had this land passed down to them, you know, houses, people, you know, generally they're, they're in them, they're using them, even commercial real estate. It's not, there's not as many motivated buyers, but a lot of times in the land space, and correct me if I'm wrong here, people will get, you know, 300 acres or whatnot passed down to them through their grandpa, they don't know what to do with it. They don't want to own it. And so they're, they're motivated to get in, just sell it and cash out. 10:52 They're not motivated at all. I mean, there's motivation, there's like sub, there was somebody's motivation, because there's always taxes. There's always taxes. So we use that as a negotiation tool. Sometimes we're like, hey, what if we paid the taxes for a year and lock this up for a contract. So like, we always equate this like in houses, you got to move that deal in 30 days or less inland, we lock it up for 90 days minimum. So you really have like a stretched out, contract periods have really line up, the buyers really bring all the pieces together before you even have to close. And then when you have when you do close, you can bring in buyer fun, just like you do in a wholesale transaction. But it's actually the retail buyers. As mentioned earlier, all of our buyers, we sell straight to retail, we go from Wholesale to retail. So like, that's how it makes huge bread. So in that in the house space and all these other spaces, you gotta, you gotta you gotta take two haircuts, you got to build on your haircut to sell to an investor. And then the investors have to make their profit like No, no, forget the investors like we're selling straight to retail, we're providing we're providing an opportunity in the marketplace to sell our properties directly to the retail market, which is why our spreads are so much bigger. 11:57 Make sense? Quickly going back to subdividing, how small do you generally subdivide properties into I know here in, you know, I live in Tacoma, Washington, and lots can be as small as like 10,000 square feet, it's like, really, really small lots. And so actually, that's, that's kind of small, it's probably bigger than that. But you know, generally they can be pretty, pretty, pretty small, a quarter of an acre, something like that. Generally, what are you looking for when you're trying to subdivide the lot. 12:24 So we're generally we're looking to subdivide, we're looking for something 50 acres or more. And the reason why we're 50 acres or more, because we're looking for that 10 acre or more window. So let's say it's 60 acres, 65 acres, we can subdivide that into 11 acre lots, or 10 and a half acre lots. And that's the parameter for Texas. So we don't put in any roads. We're not putting in any utilities. We're not doing none of that. We're just literally, it's just it's really awesome. Because it's just like, it's just like wholesale. You, you add paperwork to it. And now it's more expensive. 12:53 Yeah, yep, that makes sense. So another strategy that I've heard with land is you buy it, you don't get any income from it until you sell it as a note or you sell it for cash or whatever. But some people are trying to cash flow their land by renting it out on the equivalent of Airbnb for camping. I don't know what it is. I can't remember what it is. Is that something you guys do? Is that a strategy that you've kind of looked into? 13:20 For us? Generally, our exit strategy is cash or seller finance. We're flipping all these properties. We're not holding on to anything. If anything, we're building in like we're working a deal right now. We're trying to keep some acres on property. We've got some cows with property. That was that we bought. Texas, you can get rights. mineral rights. Oh, right. Yeah. All right. So the there's a whole strategy with that, like every every deal you do in Texas, just scrape the mineral rights, if it comes with it, just don't convey it when you sell make sense to keep mineral rights forever. There's, there's a lot of like, land is its own niche. There's all these different sub niches. I have clients that do infill lots in Florida. And then we do 50 acres or more. And there's like people that do entitlements where they'll come in and add paperwork to build multifamily on it, and then they'll sell it to a developer because then after doing the paperwork, so there's different sub niches and even trouble that's triple net leases, for commercials, commercial buildings, there's all these different like subsets of land, but like land is so vast and I think it's my opinion, it is the easiest niche, and we're creating as much cashflow like for me like everybody like everybody in the real estate game is like I want 100 doors or I want 1000 doors like me like if I can cashflow the same amount and land without having to manage it. I have a lease risk. 14:51 Yeah, yeah, managing properties is definitely where the risk comes from. So I get the appeal owning just land not having to deal with any customers anytime. I didn't say anything like that. So I get it makes sense to me. I am going to push this on it looks like we have gone through our period. So it's time to jump right in a quick question round. 15:10 That was quick. Okay. All right. 15:12 Yeah, let's rock and roll. It starts with books, some big bookies will give me two recommendations one for general like wisdom, one for real estate specific. 15:21 Oh, man. 100 million dollar offers. That was what I read this year. It was a great book, it kind of tells you how to formulate your offer. That's the I guess the knowledge book, real estate book, man. Everybody read Rich Dad, Poor Dad, I can think kind of the gateway drug. And I wish I would say more. I'm not a bookie. I've read both of those, though. I have read both. So I'm not I'm not I'm by no means but I definitely read both of those. But we're working on a book right now. We'll probably release it next year. But we're kind of book ourselves. So it's just providing different concepts of the marketplace in different forms. 15:55 Cool. I love it. 100 million dollar offers. That's from the Alex guy, right? Whatever. Yep, there we go. haven't picked it up myself. But I've heard good things, moves us on to the next question. This is for your younger self. So let's go back to the Daniel, who is just starting out that trucking business, go to him, look him in the eye, give him one piece of advice moving forward. 16:19 Don't quit bad. And I think a lot of thing that separates him from everybody else is consistency. There was a quote I literally heard yesterday, I'm gonna turn into a graphic and I think it's gonna be like my motto for or education. But it's like, if you don't, I I'm gonna butcher it right now. Like I literally wrote it down. It's like, we don't have knowledge, go learn, if you have knowledge, go start it if you if you if you start it, be consistent with it. And if you're consistent with it be patient. 16:46 While it's a big one to to, to ingest, but I like it. Good quote. And absolutely. Consistency is one of the hardest things for anything that you want to accomplish. But it's definitely what separates the people who succeed and the people who don't succeed. It's not some special talent, it's because they did not give up. So I love that love that piece of advice that moves us on to the next one. This is your Superman strength. All of us are gifted with strengths that we uniquely give this world so what is your Superman strength? 17:16 I would say my Superman strength is I was left with this my partner because he was like people, there's like technological people that I get really stuck in the weeds with technology. And there's people that don't know anything about it. I think I'm like, right in the middle, where I'm like, I understand it, and I understand the power of it. But I'm not gonna get lost in the weeds. 17:34 That's good. Yeah, technology, you can definitely over over engineer over technologies, eyes, or whatever that word is. But put too much technology too much emphasis on technology. And when you do that, you just don't really see the full picture. So make sense. Being right in the middle is the sweet spot that moves us on to the next one. This is mentors, none of us are islands, we all stand on the shoulders of giants. So who is one mentor? Who has contributed significantly to your career? 18:03 Man, this is such a great question. For me, it's been I've been you move on to mentors. And if you've been doing entrepreneurship for a long time, there, I had a mentor in trucking that I've kind of he helped me when I was going through that issue. And then now I'm kind of hoping to try to go to real estate space. So as I interest in real estate, there's another mentor that kind of come in, and then you kind of pass up mentors as you come in. And like you don't have to meet these mentors, either. They're just somebody you look up to, you might watch a lot of education you might watch might consume their content. But like once you level up, not just like past them, but you kind of people like provide like newbie content, like I'm not a newbie more. So I need accelerated content beyond that. So you kind of like, screw up your mentor ladder, even though you might never meet them. And it's kind of one of those things where like, I've gotten a lot through real estate, like, I've only been a real estate for four years. And I feel like the path that went down, I've accelerated my education in my own way, just because it was the path that went down. We're like people that might do houses and flips. They're stuck in that mountain that houses and flip sector. So it's kind of hard to get out of that mentality, because that might not be the best avenue to grow the wealth you want and the lifestyle you want. So I think yeah, Lance kind of gave me my my beacon of light, and I don't think I need to do anything else. 19:20 Yeah. And I can definitely relate to, you know, you have different mentors at different stages of your career. And each one like they're so important. I remember my first mentor never met him. His name's Matt terial. I bought his course. And this was way back when he's, he's a flipper down in California. But you know, it was the first course I bought. It really was the building blocks to where I am today. And since then, I've met you know, I have mentors that I've done deals with, I've had mentors who I've partnered with, and it's just every step of the way you'll you'll find somebody who's a stage above Yeah. And they'll help you get to that next rung of the ladder. So love that. And that moves us to the next questions. The second last question. It's about the US is a good one for you, because it's about land. There's a lot of square miles out there a lot of opportunity. Give me one. Usually I say Metro, but just one area, one state that you're most excited about investing in today. 20:14 Texas. The reason why I say Texas is Atlanta in general, the reason why laid is so amazing is because as populations expand, what do they expand to, they expand it to the land. So if you're always one step ahead, you're always ahead of the curve, people are suddenly Oh, mind the wave and write it. The land space is always ever growing because populations grow in certain areas. So as populations move and shift to different parts of the country, you can always move to another state and do that as the wave and population grows in that one area. So there's always opportunity in the land space just to find that right wave and just stay ahead of it. 20:52 Absolutely. And even when it comes to land, positive net migration, it's one of my key performance indicators when I'm looking for not really key performance indicators. But one of my, my criteria that I use when it comes to buying my properties, my commercial property, self storage, mobile, home, parks, industrial, but even in land net migration, that's the one you guys got to look out for. Alright, and that wraps it up comes this brings us to the very last question, you've given us a lot of good advice, a lot of wisdom, I'm sure people want to reach out and get in contact with you, what's the best way to get in contact with you. 21:25 So we actually have a couple different ways. We're hivemind CRM literally everywhere, if you if you if it's a social media channel, you've probably touched or heard of, we're on it, I guarantee it. And then we actually provide $1 course of how to make six figures on on the handle, you can actually text course CLU, RSC, to 210-972-1842. And literally dollar go check it out. And the hive mind serum everywhere you everywhere we have a podcast. I have this podcast. 21:53 hive mind CRM, and that's dot io Correct? 21:57 I might CRM to IO IO. All right, I 22:00 will put that in the show notes. So hive mind CRM. If you want to reach out to Daniel and learn a little bit more about land investing, go ahead and click the little more in the description. It'll pull down the full description and in there you can find Daniels URL. Right on Daniel, that wraps it up. Thank you very much Robin on the show. Thank you. 22:17 Thanks for your time. Definitely look at the land space. Don't overlook it. You might regret it later. 22:22 There you go. For everybody who's here with us today. Thank you guys for showing up. You are the reason we do this. So if you guys have any questions whatsoever reach out to me gave the real estate investing club.com If you guys want to support the support the show the only way we ask is that you give us a little thumbs up a little like a little review on Apple podcasts. It's all we ask other than that and hope you guys have an absolutely fantastic week. Keep rockin real estate and I look forward to seeing you on the next episode. Thank you for joining us for another episode of The Real Estate Investing Club. I hope you guys enjoyed the episode as much as I enjoyed putting it on. And we're able to pull some actionable advice that you can apply in your own investing today in the field. For you go we have a gift for you. If you're a new investor looking to get started or an established investor looking to invest, take your investing to the next level. I've created an eBook just for you available on our website. This ebook ebook will cover how I was able to create both active and passive income in real estate with very little money to start with. 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