0:04 Welcome to the How did they do it real estate podcast? Have you ever wondered how people succeed in real estate and what steps they took to get there? If so, this podcast is for you. Your hosts Ceylan, Eileen prac interviewed top experts in the real estate community to share with you their real estate journey and how they achieved massive success. Our goal is to provide you with valuable real estate resources and to help you apply it to your own real estate goal. Welcome to the How did they do it real estate podcast. I'm your host, Eileen prac. And today, we brought on a fantastic guest for you Daniel Martinez. Welcome to the show. Daniel, how you doing? 0:40 Thanks for having me. I'm excited to be here. I love doing this. And I appreciate everybody listens. And hopefully you guys learned something today. I don't know what she's gonna ask me. 0:49 I'll keep you on your toes. It'll be fun. It'll be fun. 0:52 You could try 0:55 to do it. Daniel, let's start off with something easy. Let's start off with if you can share a little bit about your background and how you got into real estate? 1:04 That is a great question. I like answering this question because I was a truck driver. And I like bringing that up. Because people that usually come into real estate. It's like, oh, it's only for people that had a leg up and they had money when they came in. And like, I didn't have any I didn't have any of that. I actually started my first company was a trucking driving company. And I started I was my first journey. I kind of pivoted into real estate, once that didn't work out. And I think it was for me as an entrepreneur, you kind of have to pivot and learn new things and adapt your strategy and adapt your target market per se, whatever you're doing in entrepreneurship. So it's kind of like a ever changing journey. And people always ask, what do you do in five years? You might ask me that. But my answer right now is I have no idea. Whatever path opens up in front of me, I'll be on that path. The Entrepreneurship journey is kind of zigs and zags, and it goes up and down. And you never know what's gonna lead you. You have to kind of I always say this too, is entrepreneurship. If you survive long enough, you'll get there. Entrepreneurship journey, in a nutshell. 2:06 So truck driving, you must have seen quite a bit. I have to ask what was the longest trip that you've ever had to do? 2:15 I drove regional for a very long time which regionals? I was living in Atlanta time. So I'll travel like Florida, Alabama, North Carolina, Texas, not Texas, but North Carolina, South Carolina, Tennessee. And that's pretty much it. When I started with the company, that was another story. So I still live in Atlanta at the time I drove down to Miami, I drove down to Vermont, I drove to Phoenix, I drove to Salt Lake City. And that was the furthest extent from my truck driving endeavors. But they're all for good reasons. I actually drove to Salt Lake City for a real estate mastermind in my truck. Oh, really. I don't want to pay a ticket. And I'm like, let me work while doing this thing. So that was one of my trucking endeavors. 2:57 So after your trucking business, how do you decide which asset class you're going to focus on in real estate? Because there's so many things that you can get into? 3:06 That is another great question. And this is where like, I kind of pivoted so actually locked up like three houses and all of them fell through for different reasons, 3:15 like a personal home or for investing. For I was wholesaling. 3:18 I actually learned about real estate through podcasting because I was truck driving, listening to something to find something to pivot to. So loud, drunk driving, I listen to podcasts and YouTube, about real estate, learn about wholesaling. And then from there, once I got out of the truck, and hired drivers are still operating the business and doing real estate. So I get locked up a few wholesale deals that I thought were wholesale deals. One was just a bad deal learning lesson. Another one I thought was a great deal. I put $1,000 earnest money turns up being a terrible deal and I lost my earnest money. A third one, the seller passed away. Monday before closing I had assigned already I was gonna make like $27,000 When I was broke, and they passed away. I had another deal. That was family members living in their extra house that they were renting. They stopped paying so they couldn't afford the mortgage and their mortgage. I evicted their family members took it all the way out, got them out, trashed the property out. Got it to closing and then it fell apart right at closing because there was a underlying credit card lien from the seller that they titled it and find out so closing day and that's how I got in the land. 4:32 Wow. So after wholesaling, then a couple of things didn't pan out as expected. Why land though? 4:42 It was. Here's the reason why, while I was doing those houses, me and my partner now we took the same wholesale course, from Jaylen white. I don't know if you've been in the real estate game for a while but he was a 17 year old kid teaching real estate wholesale. He got his first contract before he graduated high school. I'm like that kid It's gone places I want to learn what he knows. So I took me my partner took his course at the same time, we ended up falling into the land space somehow. He's like, everybody's talking about houses, houses, houses, houses, and like, dude, let's talk about this land stuff over here. So I kind of, after all my house deals posted, I'm like, let me try it. Let's try it. So I put up PPC ad in Atlanta when I was living at the time. And a lady hit me up. She owned a property in Florida. And people were dumping on her property. It was a city finds that she was getting mails and he finds from Florida. She's like, I just want to get rid of it. I don't know what's worth, just make me an offer. So I was so free to talk to the seller. I emailed her. So the lead came in through PPC. emailed her that, how much do you want for, like 50 emails back and forth, I figured out was worth about 20 grand, I was like, if I get this thing, it's going to be a deal, because then I can move it for 12. Because you know, the whole wholesale price to sell at a discount, so you can sell it fast. So I told her would you take $4,235.63, I just kind of made up a number and see if she took it, she's like, if you could do five, I'll take her money. By 1000. That's exactly what I wanted. So actually found a buyer marketplace two days later for 12. And the rest is history, never talked to the seller and never talked to the buyer. And I made $6,000 And I never saw or showed to anybody. And that's kind of how we got in the land, it's a lot easier. You don't have to negotiate. 6:25 It's always interesting to hear when you know the price of the land could be potentially worth about $20,000. But automatically, the mindset goes to I want it for $5,000 6:38 This is where land, you can get a 10% deal on land. Like that's not unheard of. I probably could have got that there's people out there like my partner actually got free land, the seller just gave it to him. They didn't even want it. Like it's owed them back taxes like $2,000, you can just have it my Alright, sign here, I have to give you at least $1 Because we have to change monetary value. Okay, perfect. I'll sign it for $1 Give me $1 And you take care of the taxes. Actually, we need to take care of the taxes, you actually just sold it with the taxes in place and new buyers pay for this access. 7:08 So what makes a land valuable then? Or like what's your criteria of like buying land? Or is it just anything that's available out there? 7:17 So it transitioned over time. Right now I'm at a current point where I'm looking for very large land deals that make $100,000 or more per lot. We just contracted three to 50 acres for three and a half million this week. So we're in the very large land space now. And that's what we're looking for. We're looking for very large land deals. And the reason why is because we found out is that bigger land deals actually easier. And there's less people playing with it. Most people that teach land, they teach the small side. And this is where my partner actually had a deal early on. I always like telling the story to him because it kind of gives you an insight to the land investing space as a whole. So we had a buyer seller come in have a $30,000 lot I want 50,000 For it already. 50% deal. I mean, any person out there like man, you put $10,000 in this deal right now just from buying it by partners, like I'll give you eight. And the guy's like, no, I need 15 I cannot take $8,000. So one of the beauties of Atlanta is that it doesn't move. Like there's no buyers for it. And people that are buyers for our cash. So 90 days pass, he comes back. Hey, I remember you wanted to buy my land. Are you still interested? He's like, Yeah, of course. He's like, I want 15 for it. He's like, do I remember you? I told you eight. He's like, wow, it's like eight. So we got them a contract for eight. What do we do with it? We sold our marketplace for $8,000. Down 500 a month for five years was the actual numbers on that? Well $8,000 went straight to the seller. And now we click $500 a month for doing nothing. That's equivalent to a rental cashflow on a $35,000 lot. So we're like okay, I don't want any houses anymore. I want land that I can be the bank on because I don't want to manage tenants toilets. I'm the bank payment an interest. That's it. 9:07 So what's the difference between take that story that you just told us just now you take the seller who was looking to sell his land for 15 but couldn't get a buyer for it? And what did you guys do differently that you were able to find a buyer for what you bought it for? 9:26 So here's the problem with land no one finances it. So if you can finance it via seller financing you can sell it for whatever you want. So as houses there's five house comps in the same area that sold this year like it's a three bed two bath neighborhood you know what it's gonna sell for like there's no top, you know what the top is with land. There might not be verifiable comps. There might not be verifiable buyers. So if you can fix the financing, and low cash down payment, it's a win win. You can find any buyer at any price point And who are the buyers, blue collar immigrants minorities, we essentially take our land that isn't affordable 100 acres, million dollars plus that not many people can afford, will subdivide that down into bite sized portions, let's say 1010 acre tracts. And we'll sell those two individuals, blue collar people that have money today that employees, maybe agents, investors, they want that. And this is we like landlords within 60 minutes of any major city because they're willing to travel further paradise, whether they build a house where they hunt on it, they want something within a reasonable distance from where they live, because most people live in the city because there's work there. Right. So as long as they can travel, their commute there, they can live there, they can put a mobile home on or they can go plant a vineyard or something on it, whatever. It's within reasonable distance. That's where the sweet spot is. 10:51 So when you're looking for land, what are the things you mentioned, within an hour distance from the city and things like that? What other things do you look for? That makes it a good land property. 11:04 So it depends what type of land so if it's smaller, reasonably looking for a discount, we use to try and buy 50 cents on the dollar or less. So if it's worth 100, we're gonna try and pick it up for 50,000 or less. The reason why is because this is a simple, really good cash on cash return is if you can sell it for 10 $20,000 down, you're only into the deal 30,000 That financing might be 800 900 a month, you're gonna get like a 40% cash on cash return. With a deal like that, I'm not even doing the math right now, that's probably gonna be a 40 50% cash on cash transfer. Somebody can call me out later and figure that out. But what $20,000 down on $100,000 lot $30,000 finance of your own capital, and you're selling it for 100 There's so many $1,000 Cat potentially seller financed, that's probably gonna paid seven 800 bucks a month or more. 11:54 Where are you finding the buyers, 11:57 Facebook marketplace, and we text agents. And if we get the title, we'll listen to MLS. And we just offer seller financing. So all the deals that don't live in the MLS because they want to cash those checks that one problem. Every landlord sent them MLS for a year or two years. And it's not even like, it's just happens. So when we contract these land parcels, we ask for 90 days minimum, because we need time, it's gonna sit on that list for two years anyway, 90 days from see what I can do. And that's usually gives us enough time to create the Win Win win scenario we used to get the buyers or price. And we'll come in and create a financing or whatever we need to do at that point to a seller finance it to the end buyers were the blue collar people come in and buy it. 12:40 What's the typical structure that you have for your seller financing. 12:43 It depends on the buyer and what they can afford, usually instructions, whatever they can afford, like we sold a lot last year, he wanted like 10 year financing, which is like 2000 a month, he paid us off in a year used to give us like $8,000 a month. A lot of these people and especially minorities, they have these construction workers or contractors, they have a high income, but they just need that extra stretch of seller financing and they can pay it off. And they usually pay off very quickly. 13:11 We love hosting this show. When we started this podcast, we were doing all the editing and post production ourselves. Now we are very excited to have this particular company as a partner of the show to do all the post production for us. Because it gives us the freedom to focus on the two things we care about serving your listener at a higher level and growing our own multifamily business. If you are like sailing me, then you want to add value to others while scaling your business. A podcast is the best way to do both and we invite you to contact Adam Adams, he can help you launch your podcast, market your show for more listeners and take all the post production off your plate so you can focus on your business instead of in it. Listeners of this show can get a free consultation with Adam, to schedule your free consultation, find the link in the show notes. What are some of the things that as someone looking to get into land or do something similar to this? What are some of the I guess the biggest mistakes that they would typically make as they get started in land? 14:15 I would say buying the wrong deals, there's a risk with anything. You have to know the basics by floodplain properties, I wouldn't recommend it. Like when you first start off, you got to know you know, suddenly you're buying at a good price. There can be a lot of stuff that comes up in different markets, like in Florida, that could be like endangered animals. So you might have to do like an endangered animal study to make sure that there's no like endangered turtles or bird species on your property and especially for places like Florida, other states like Texas, they might not care as far as subdividing and all that stuff over certain size acreage. So it really depends on each market. And like I said, we're mostly Texas. We're now venturing into a lot of different markets. Right now we have a deal in Florida. We have a deal in North Carolina right now. And we have a deal with two deals in Tennessee. So we're kind of venturing out into other markets. But Texas is probably the easiest thing, in my opinion, this because that's where we done most of our deals as a whole. 15:07 When you first got started in land, how did you start building out? How do you start building up the deal flow? And then how did you start to scale it to build it up even further. 15:17 That's where hive mind comes in. So hive mind, CRM is our automation platform, we actually have been doing land for about four years, we launched hive minds here two years ago. And that was out of necessity, because, like staying organized, and marketing is just a pain for most businesses. So we launched that. And then now we help other entrepreneurs, whether land investors, or other entrepreneurs in general, automate their business through marketing. So it's texting, emailing, website hosting, with text blasts, or agents using it, we text our sellers using it. We text a lot of people cold call RVM. We do a lot of different versions of that strategy using our CRM. 15:52 Awesome. So land came first and then hive mind with a product of your land entrepreneurship business. 16:00 100%. Yeah, land was first and then we kind of learned our path and our strategy and honed in on our strategy. And that's to the point where we kind of do a lot of different things right now. But 100% land, I don't want any houses. I don't want any doors. I don't want anything else. I'm 400%, land investor. 16:18 When you first got started, especially how did you choose the market? Because right now, you said you're primarily focused in the Texas market? How did you choose Texas as your primary market? And then how did you start to expand? 16:32 That is a great question. I'm a hybrid visionary and a hybrid integrator. So actually met my partner and he's a visionary 100%. So actually, my partner in real estate, so I helped the back end of systems. And he's a Texas based so it gave me the ability to work from home. And that's what I like, that's what I wanted at the time. And I still work from home even now. I work from home since I started going to church, because all but they gave me the ability to leverage my skill set without having to go sign contracts. 17:02 When you were first getting started, you said that land is primarily cash buyers only. And so there's not a lot of financing, especially when you first got started, how are you financing the deals to be able to purchase all cash, as you're growing your business, get to the point where you're able to start offering seller financing, 17:21 we all try and get a great deal like the $8,000 deal. That's always number one failure to keep an up deal. And to get that as a down payment. That is a homerun deal. I interviewed another investor on my podcast. He's did that for five years. And he created 50,000 a month in cash flow. So the small baby steps, but it could build a lot of traction over time, what we started doing is we started focusing on bigger deals, because there's not a lot of people that can afford a million dollar property. And once you figured out our niche, we're able to bring any private capital into pay off the seller. And we're able to sell or finance at that point. And then we what we started doing was with softer notes, there's a whole nother like third party market. Like I said, real estate so vast, there's a whole nother third party market of Note buyers that will buy your note. So we've been liquidating all our notes, to essentially seller finance all everything we have, because seller financing is the key to selling land. 18:10 At what point did you decide to make that transition and go into land investing in real estate full time? And do you still have your trucking company as well? 18:21 I mentioned company went under I lost 100 grand on that. And it was a hard pivot into real estate and just to survive. That is a short answer. 18:31 Got it. And so what's the been the biggest struggle within real estate so far? 18:37 Right now it's been a lot of capital, capital doesn't understand land, like no one like everybody else in real estate. So you kind of have to educate your capital resources of what you're doing and how you're doing it. And then one of the struggles we had was getting enough. As these deals get bigger, you have to bring in capital in place to buy and acquire. So that's kind of been our struggling point, which I think we've getting a handle on. And now there's one I'll say a little growing point. So this is where I think a lot of entrepreneurs struggle, as a whole is financing. If you can get the financing in real real estate business, it unlocks unlimited possibilities, 19:15 especially in today's market where the financing is just kind of all ups and downs. As you're going up your business to one of the things you mentioned was you met a lot, you met your partner who's a visionary. And you also were able to make other connections and build your network. What has been the best place for you to find those people that you wanted to surround yourself with and work with in this business? 19:41 In my opinion, I feel like we've learned 30 years of real estate in four years, and now exaggerating in any way shape or form. Like we've learned so much about a lot of things, and it might take years to acquire the knowledge we've learned and a lot of that we paid With deals, like a lot of people were like, Oh, I'm not gonna sell to that buyer because he's gonna lowball me. We paid mentorship with deals, like we got this deal, how much you want for it, I don't know, just teach me something. And we paid, we literally paid in deals to our mentors. Because people struggle with three things depends on what level you're at, in real estate in general, like when you're first starting out, the big struggle is knowledge, you have no information, you don't know what a deal is, you don't know deal looks like, then you got to come to a point where you need time, let's get the knowledge, you got time. And then the last part you need is lunch, once you get the time and knowledge and there, they need capital to buy and accelerate your business. So it's kind of like different stages of pain that you go through as a land investor, or as an investor in general, that you kind of grow through. And the education is I think, we've kind of reinvested in our education versus and other things. Because education, I think, accelerated us to another level as well, just because the things I know in here is priceless. Like, you're not going to learn that in any other course or you're not going to learn anywhere. Bottom line, 21:12 I think that's incredible that you are able to think about ways to add value to in exchange for knowledge, because knowledge is powerful knowledge can get you so much further. And so you said you paid for mentorships in deals, which is really interesting. 21:30 It's a trade off. This is one of those things where like, I want all the money, I want all the money, I'm like, no teach me something. Because you can learn a lot from a 20 year, you can learn a lot from a 10 year event right in that space to receive it, and you're ready to receive it. You don't even have to spend that much time with them. And this is where like a lot of our mentors, we can call them up and like, Hey, we got a problem. Oh, this is how you solve it. Boom. Oh, thank you. Like having that at your fingertips prices. We paid for that with deals like they were offering mentorship, you said to serve them up something. And sometimes this deal you have on hand might feature for a while. But as I got take it, teach me something via my rolodex Can I call you when I have an opportunity like this? Because the funny thing is like, the deals we served up were stuff we couldn't even solve anyway. We just served it up. And they taught us how to fix it. So now we know how to fix that problem. And we don't necessarily have to rely on them to fix it. But we still do we pay it forward even now. Like instead of giving you the whole deal, hey, we'll give you 510 grand to solve it for us. Thank you. 22:35 I think a lot of times people are so afraid to get started and to even ask the question whether or not it's possible. And approach, like you said a 20 year event and ask them or mentorship and exchange for something else. But it's so surprising time and time and time again, especially in real estate, how willing people are to share their knowledge and to want to help other people around them. It's such an interesting place to be in. 23:03 It really is like these people weren't like offering mentorship, like you couldn't pay them for a mentorship. They just weren't doing it didn't have the capacity to to handle mentorship. And this is one of the things really get it you gotta be creative, like if they if somebody has knowledge that you want get to be a creative to require it because money might not be the thing they need. 23:23 Absolutely. And you guys were definitely creative about that. 23:27 That's where it comes down to. I tweet a lot. I'm on Twitter. A lot of people think real estate is about houses or doors or multifamily or storage or square footage, or industrial space. It is not about any one of those things. It's about finance. Because if you can unlock the financing, you can buy whatever you want. 23:48 Daniel, for you, in real estate in this upcoming year. Are you still moving forward? And what are you looking forward to next? 23:58 This year is going to be our biggest year of real estate. It all came down to us pivoting to larger deals. People think $100 million sounds impossible. But if you're doing after going after million dollar deals. So 100 deals. Like if you really think about it that way. Those little seeds were like we're going after any deal we could find. And when we focused and honed in on bigger deals now all the stuff are coming in where right now we have like $14 million of land under contract right now that we might do 20 million of land acquisition this year. We're 20 million 100 million. If I did this for five years. That's $100 million. Whoa. It's crazy how that works. 24:42 Daniel, how is real estate investing impacted your life? 24:45 It changed everything. It changed how I thought it sees how I think about every financing in general. I look at everything through a different lens. I mean, I walk into I think my kids My oldest is five I took a trip to school and I'm counting the school's pockets. How many kids you got reclass how many classrooms you got yet two teachers? Okay, I want you to charge him for tuition, my number side of my brain just goes nuts. Whenever I walk into any situation where I can analyze probably this, I still have a 10 cap, it's probably worth about $200 million. Okay? Our brain just goes to the math, it's kind of a bad place to be in when talking about my kids schoolwork. As the work goes to, and then like the admissions sort of like, they asked us to come in at a Tuesday afternoon to go, what parents come in to go talk to the counselor. And they're like, you get off work today. I was like, Yeah, I had a six my boss, if I can get off today. Stop it. But he's self employed. He's messing with you. 25:46 So Daniel, what is the one thing that you know now about real estate that you wish you knew when you first started? 25:53 In my opinion, land is the best asset class, because it's given me an opportunity to create infinite returns, which every other asset class almost impossible to do? 26:06 And what is the one thing that sets successful people apart in real estate investing? 26:11 How fast you can absorb other people's knowledge and information, because you can shortcut years of pain and suffering and experience through other people's stories and knowledge? 26:22 I have to follow up with this question, Daniel, how do you have this drive to seek out knowledge to find out what other people are doing and try to soak in as much as you can? Like, where does that come from? 26:37 It comes from the stem of I only have so much time on this planet. And people and other races and generations are passed down this information. And I want to make sure I can do that to my kids, because I only have however much time I have left on this earth to do. And I'm going to do that, hopefully through my family and my teachings and my podcast and my education because not everyone is afforded the same privileges as anybody else. 27:07 And Daniel, where can our listeners find out more about you and what you're doing? 27:11 I am at hive mind CRM almost on every platform that has content out there to consume. I have her own podcast handle this podcast. Best place to find me is a private Facebook group that had mine CRM posted out there. We share a lot of information there and you can DM me on Facebook. I talk a lot of stuff on Twitter, if you like drama side. I just like having fun and nobody cares about a 4% ROI. 27:34 Well, 4% Right now you can get that just putting in savings. 27:37 It's too close to inflation. Like I'm good. 27:43 Daniel, this has been so much fun. Thank you so much for all of your time today. 27:47 No, thanks for having me. I hope everybody learned something today. And thank 27:50 you for listening to our podcast today brought to you by bonobos capital. We'd really appreciate it if you can go to iTunes right now and leave a rating and written review. Also, please don't forget to subscribe so you can always get the latest episodes. You can also connect with us on Facebook. How did they do it real estate. We'd love to hear your feedback and any topics that you're interested in for future episodes. If you're anything like Sayla and me and believe that real estate investing is a great way to create passive income and build long term wealth. Check out our free apartment syndication due diligence checklist for passive investors at bonobos capital.com forward slash checklist. Failing, I created this checklist for ourselves as we evaluated different multifamily syndication opportunities as a passive investor. So we would love to share it with you so you can use as resources well, download your free copy today at bonobos capital.com Ford slash checklist. Lastly, to learn more about us, you can go to bonobos capital.com and fill out the contact us page so you can speak to us directly. Nothing on the show should be considered as specific personal advice. Please consult your legal tax and real estate professionals for individualized advice