Ep 492: Understanding The Land Game

Transcript

[Music] oh business I want to talk about I want

to talk about why land is so valuable because I think it's of course why it's

more valuable than any other asset class because everything else is

um I told Daniel once we get to a certain point when people understand we're better our personality I'm I'm

going to say if you're doing like houses and apartments and all that I'm going to we're going to refer to them as junk

collectors hey shots fire don't start a war now yeah don't do that I'm just kidding

I'm kidding but we I was joking because like in my mind it's all like it's depreciating literally it's depreciating

you're going to start acting like Tucker Tucker Carlson right now start start I'm kidding I'm kidding but

think the way that my mind just goes there like if you're buying houses or apartment complexes or self

storages it's always falling apart something electric pain and people are like oh no self stores they're built the

best they need no maintenance cool whatever they're depreciating assets right so and then it's also finite so if

if you buy like 100,000 square ft you're like a big winner right but 100,000 ft of land is a very small deal yeah right

so it just you know there's so much more upside out there if you think about it right there's a fixed amount of rooftops

for apartments and self storage in any major Metroplex but then just hit the L and just go in the in any direction and

it's infinite it's like 100,000 square foot building next to another one to another one to another one all the way into Infinity in all directions so just

just the amount that's out there yeah and this I think we were talking about this earlier I think it was with you earlier about how land is an underserved

community that it's hard for get financing it's hard to find it it's hard to piece it together it's hard to

understand it it's hard to comp it there's so many like facets of the land game that it makes it hard to acquire

and you talking about the banks underwriting it they can't understand how to underwrite it because it doesn't make sense yeah they don't have enough

data they don't have enough data and the thing is I think the industry and of itself doesn't have the right push for

for that data to come up and not only that but because lenders as a whole

don't want to participate to the same capacity as residential and Commercial then investors themselves they don't

want to be part of it either yeah so land becomes it becomes a commodity that

only very few like yourselves can tap into it knowing how to properly do it

anybody can tap into it so it's it's a very interesting game and we're here to play we're here to play no the mean talk

about this all the time being the biggest blue ocean out there in real estate in general because it's a big ocean there's it's so many like

different VAR variables of value ad years ago I think when I sent you a

video about how Phoenix expanded and the desert essentially cuz Phoenix is a desert how it was just nothing baren

land and now it's Scottdale you know and there's ever improving involvement of

that land as it increases and population grows and skyscrapers I saw that time lapse how like they make the 10 acre

tracks and they get smaller and smaller they get smaller and smaller and then you get density and even here in Houston we're going to record another video

about how even then it transitions over time the land transitions from regular housing 100-year-old housing because

it's an older City to now you got three three level condo houses which we'll cover that in a second but it it it the

transgression of time it elapses and creates anything over time in distance

as long as the people are there the jobs are there and people have an imagination to create what and the counties allow it

to build whatever whatever you want whatever makes sense that's when growth happens I think the land investors are

the phase one of growth yeah yeah literally and the the owners they're TR

they're they're I I think the the pre-stage because they're they've been holding it for 50 years waiting for

somebody like us to come build and create the opportunity for everybody else so there's like the different

stages of growth and involvement in any given City and it happens everywhere

yeah and it all starts with land mhm yeah it's just so interesting how

how well first the way that you put it is you know you start with you

know somebody that Inherited property yep to some degree most of it it comes

from that yep right they're you know settlers from back in the 1800s and and and even beyond that point you know you

you you have a piece of land 100 acres a th000 acres plus and there's nothing

except grass and trees and then you fast forward to the Last Descendant of you

know that family that now has a smaller piece of that and come to to a point

we're like so now now what what do I do with this you know they're 60 70 80 years old about three you know in their

retirement age what now well guess what people like us step into the plate and

we take over from there and repurpose that beautiful piece of property to make it a landscape for any

Creator to kind of put their thoughts together their s resources together and build something beautiful out of it can

you cover that story because I think you mentioned off camera but the story of the the street being named in Austin and

that's the last living air of that that street owner name can you kind cover that an interesting story what street

was it so it's called D Gabriel Collins okay Road and the story and I I may be a

little off with this but the story is that Dean Gabriel Collins was a

African-American investor land investor that acquired hundreds of Acres around that

area back in the early 1900s amazing and what happened so he acquired that with

with I think his brother at the time and the brother decided to liquidate some of

his real estate but D Gabriel decided to keep a lot of his and throughout history

he decided to part ways with some of it with his family well family some of them

or most of it they decided to to sell it cash out and do something else and

there's very few that are remaining and the ones that we have right now under

contract I think it's the last there's actually one more besides that one but we got the two other the last three M

Lots on that street on that street from the last lineage of that person

throughout the past 100 plus years that's amazing that's so cool dude what a cool story what a great piece of property too yeah yeah yeah it's uh it's

it's interesting how that kind of unfolds I mean you just never know the history behind land it's just so cool

because there's so much death behind it and it's not just the trans it's not the transaction part of things but it's the

connections that you get with Sellers and the story behind that you know it's

it's I love the storytelling behind why the why and how it became you know so I

have an interesting story too so when I lived in Georgia um I lived on like a little like it was like a one oneway

dead end Street it was a long strip property that they just cut off and the developer came in and put a road down in

the middle and cut off slices down the side textbook subdivide you know the

stuff that we look for and um I lived there for a couple years and right in the middle of the road there was like a

little pocket that we went around didn't understand what was going on and I remember the neighbor told us like you

know there's a cemetery right there right like no way and I've been I already lived there for over two years

and I've been driving by this property twice a day Cemetery right in the middle strip and those the historic land owners

of that property that they bu there and they couldn't move the bodies or remove

the grave site so they just built the road around it and we drove by it every day for years and those are the

historical landowners of that property from years ago and I remember looking up the the previous land owners when after

I got into land I was curious about it and they're the previous land owners that literally buried right there you

couldn't tell the names in the gravestones CU it's was probably over 100 years old and the last living the Senate passed it on and sold it and

somebody subdivided and built around it whoa all right I got got to ask this yeah being that we're in real estate

land everything yeah have you had any weird Supernatural incidences happen

just that one time that dog covered its [Laughter]

face no I have never seen nothing man I've been to some weird properties one we got there and it was like all

overgrown and then there's like this shed like a weird looking shed behind the house a big one like made out of stone or something and the door said if

I catch you in here I'll shoot you so we're like well turn on the camera we go

in there start getting video in there and everything it was kind of creepy but other than that like I've never seen nothing no n you what you got no I got

you sound like you seen some you're forgetting the one property so we did a deal back last year in June we filmed on

it there was a like a 1900's hoe leaned up against the tree left there she

that's that's an old that's an old lady the tree grew we're talking about farming

equipment it look like an iron barrel of some sort some kind of cart it was some type of cart like ho to till the

ground and it was leaned up against a tree it was old you can tell it was old equipment but the tree had grown around

it and it was so awesome dude it's the coolest thing you ever seen really the tree had the tree had grown around it

and it was just leaned up against the tree and it was just there and like this is it was now part of a tree there's no way to remove it anymore it was so

badass yeah it was it was literally part of the tree now H and it was one of those things like one day the farmer

stopped farming and just leaned up against the tree and never touched it again and 100 years passed and now the

trees arounded the the whole it's like schol dude wow so I have to find that picture and put it into the I was

telling Daniel I was like you know what I would rather own that tree with that thing stuck in it than like one of these

buildings wow I'd rather I'd rather have that tree on my property knows amazing piece of history and it's one of those

things where like if if you pay attention and drive around these properties there's a guy on Twitter he owns a mountain in in Tennessee and

he'll find like Civil War bunkers and they'll find like Civil War encampments in the middle of the mountains because

that's where where they're hiding in the Civil War so he now owns this land and he he he just explores literally

explores on the land finding random like muskets and stuff from that time period and caves and little hideouts from that

from that time period I think it's it's such a cool um aspect that we get to see on our side that a lot of people don't

ever get to see like you buy a 100-year-old home you oh you have to deal with city regulations about not

cutting it down and not tearing it down and rebuilding something new and like with us we kind of get like the the

before it was touch type type factor and you get really get to experience a lot of like cool stuff that a lot of people

will never even know about cuz nobody talks about the stuff but us we we we will see it firsthand whenever we get

the opportunity to go drive some ranches and stuff like that that's crazy I think

that's part of something that I'm really really enjoying about this business too y just going to the different properties and seeing what's there this last 240

acres we picked up has these massive oak trees dude and I'm walking that ranch with my family and I'm looking at these trees and it looks like something that

they would put on a movie like it feel like a fairy tale movie yeah right it's like some Enchanted Forest just these

big amazing oak trees with spiling branches I was like wow that thing has to be a thousand years old you know so

it's cool to just have like a bunch of those on the property like man this is an amazing piece of art here so like any

anybody would be proud to build a house there or have some acreage there something man this is a just a cool

business cuz you get to see some nice things I had SE I seen a property was in a Jacksonville over by Tyler it's like 120 acres and I forgot what they wanted

like 150 or something and I'm like man 150 to ride it's out in the middle of nowhere I got there bro beautiful red

dirt these freaking amazing trees on property like tons of them like I was like who in the heck would sell this for

15,000 just when I got there I was like man this thing is beautiful so it's it's just cool to go out there and see the

properties I I think the the biggest thing about that too is like all these properties have been passed down for years there's a history behind it that's

that's long gone right but you could still find remnants of it somewhere on the property I love that part of it

especially like like old farmhouses or ranches where you have out in the bunker

or whatever they have um either a shed like a big shed or something where they put their tractors in there and you know

when they're been abandoned for decades and decades and decades sometimes over 100 years you go in there you open it up

and everything's just cake full of dust but you see I guess the hole that you're were

talking about the shovel and you see all kinds of other stuff that was there you know maybe even tractor Machinery or

whatever may be the case have you gone into that shop over there for the one we bought when D yeah I took a video of it

it's so cool like everything's just so like as it was yeah and it's it I love

that man it's just like I'm afraid to just move anything cuz it just looks so cool like d if I once I clean it up it's

going to look a little different but at least it'll still have the feeling but right now it's like it's a snapshot time

exactly snap shot in time Prett cool my grandpa had the same thing I think I told you guys so my grandpa had like a I

think like 1,200 acres in Mexico on on the border and you know we all used to

you know go out there for Easter and you know all the other holidays and go hang out and I used to just get lost and I

love to get lost man that's the first thing that would happen to me they would just open up the truck door and I'd just

leave I just kept walking because what it was is the topography and and the way

that the land was laid out was very fairy tale like very um um sort of like

a bookstore you go in I felt like I was like The Hobbit like just literally going through different Pathways and the

pathways were all created by Coyotes and and goats and um uh cows and everything

in between so you got these little pathway there're going right right be you know underneath trees and bushes and

all kinds of stuff so to me it's like where's Waldo like I'm just getting lost

into this where is it leading and every time I'd go I'd get lost for like literally 30 minutes or an hour and

everybody be freaking out but I I I would know where to turn around and every time I get lost I would always

find myself to see the skeleton remainings of animals and they would be

kind of half buried in in the ground and I would be thinking to myself like a

almost like a paleontologist like from Jurassic Park and like looking at the bones as a kid like what is this cow

head horns and all this so I was like infatuated with like the whole Farm and

Ranch lifestyle as a kid and I did that for years it was like be one of my best

Liv best times of my life now come in Full Circle yeah dude I've never spent any time on a ranch so I didn't have

similar experiences growing up it's like our family didn't have it their family didn't have it none of our friends had it every we know was poor we didn't have

no land not even so oh my friends we go hunting like we never been hunting you can't hunt when you live in an apartment

right yeah yeah U but their dads know somebody that has a wrench and all that we never did um so I never really cared

to have one and especially I wasn't going to spend money to go have the ranch life right right because like no

man like I got other things going I'm not that into it but now that we're getting them and they're paying us to pick them up like dang now we're getting

used to it we already barbecued out there a bunch of times we're out there putting up target shooting clearing trees uh you know we we just like I said

just now we're enjoying it yeah four-wheeler freaking everything damn okay this is actually kind of fun so

people are hey out the ranch out the ranch people are just showing up we're just cooking out like oh dang all right it's fun stuff yeah it's cool and so I

wasn't interested in it enough to spend money on it yeah but now that it's paying us I was like if you're hey if you're going to pay me to to make make

me have this experience that was a good feeling man it dawned on me like I was just having such a good time the kids

are the freaking 4x4 thing and and I'm just like wow oh damn they paid me to do

this and people pay really really good money to have the same experience right so I feel blessed just to be in this business like whoo like this is

tremendous this is like life changing like life altering to see my little uh uh great niece just running back and

forth just having fun screaming the top of her lungs and she was like I want to go back to your at the rench it's a

different lifestyle dang we've never had this experience before man it's a blessing yeah so all we need to do is

just buck some goats man we're good to go you ever done that you get in a little goat and just try to settle

us so apparently Drake hey guys we're talking about raising Capital today um

raising capital is is we didn't know how important it was early on but now knowing what we know five and some

change years later it's become the most important thing that we focus on I think if you make raising Capital the primary

part of your business and nothing else everything else falls into place but we're going to talk today about the caveats and some some things that would

make it challenging to raise a lot of capital maybe even unethical to raise a significant amount of capital in some

cases so we're going to do a deep dive on that today should be a fun conversation absolutely absolutely so

first of all you got to have in order to raise Capital it's where do you get it first family and friends right the

reason you get family and friends is because they know I can trust you I think is the first C that's a good point actually I never actually just thought

about it that way yeah the people that already know you and trust you are cool putting some cash into your business cuz they know where you're headed absolutely

so I I think I think that's the first place to get it number two is that you got to have a record I think a lot of

family your your mother is the one's going to believe the only person that's going to believe in you the rest of your life your mom your and your mom's more

forgivable power your mom's forgive you if you lose 50 Grand on a deal it's okay

Miho it's okay right but so it's it's it's kind of it's kind of a lot harder

to do that with anybody else and not that we lose money but I think if you're just starting out you could lose money I

think yeah surveys engineering there's a lot of upfront cost earnest money you could lose out you can lose money pretty

quick in this business absolutely absolutely so I think you have to get it from people you know like can trust

people friends and family but I think once you get out of that you have to get to a point where you're doing good business and I think it takes a deal of

going through a deal like you did going through going through those hard issues and figuring out trying to figure it out

by yourself and I think we did that for a couple years where we tried

to position our lenders into a good position because we wanted a long-ter relationship where now we can have a new

lender come in like hey talk to our old lender they've been working with us for two years now yeah we just got one of

those a followup so somebody gave us a referral she did a deal with us and then that person gave us a referral to somebody else and now he's ready for his

next deal so I think having a high volume of deals is important right uh having integrity making sure that you uh

you do get your investors back the money absolutely in a timely manner and and with some upside hopefully right yes

they say there's not a in real estate like said don't concentrate on your Roi

concentrate on the return of the investment yeah like at least if you don't lose your money he did pretty good

yeah absolutely AB yeah so I think having Integrity doing good deals uh making your investors tons of money of course speed and transparency

transparency keeping in contact with your uh your investors letting them know how the deal is going and if there's hangups why kind of some of that stuff

especially if it's their first time working with you cuz they're like I don't know this guy's a scammer or what yeah he's like if hec's in or Lambo he's

looking at you sideways wait a minute I just invested a million two with you guys and you pull up in a new porch like

I don't like this one B what happened to the big truck with the big tires so one

thing one thing I I really want to tell you is that these relationships are priceless priceless so a lot of people

in the investment space they go through a hard money lender and they got a they got a 10 do 10 document with a with a

$2,500 fee to even have them look at your documents and all this stuff with a hard money lender but when you get a p

when you get a good private money lender you do good business with what do you get they wire you the funds without even

being on title it's it's literally a no doc lender like I've never heard of that

before Mak that up send the funds just call me when it closes have a nice day a

no do lender they don't they're not on title there's no lean there's no D to trust no nothing like all right thank

you isn't that crazy yeah that's insane even even Jess is the first time you heard that

one what insane wow pretty cool man and it seems like this is another little tip

and trick right here if there was a little hack for uh raising Capital uh the more money that the investor has and

the the bigger you ask them for it's a lot easier so like you say hey can I get 5 m or 2 m it's like what do you got got

to do it but if you if you ask like hey can I get 10 grand like oh dude I'm my man got to talk to my wife I I mean I

got to talk to two bankers and the guy from CPA two chickens at home I got to write the letter to the IRS they got six

weeks to respond you know for 10 grand like d let's just oh you keep the 10,000 don't help me but when it's a m

somebody's like let's do it oh dang okay so they're they're quicker to make decisions they're more trusting right

they're smarter CU they're so they're going to analyze your deal harder but once they see that it's a good solid deal then the money comes quick so we're

on the we had a lunch with one of our mentors yesterday and he was telling me how he had a 15 it

was a 10-minute conversation to raise $4 million and he's like yeah I'm in for $4 million let me know let me know the wire

instructions it hangs up like the easiest raise of your life said

you try to raise 50 Grand from an investor and just like if you lose this 50 Grand I'm going to be bankrupt you

know so like I don't want that guy's 50 Grand right not that we're going to lose it but like holding tight to it yeah I'm

afraid to even drop it so like dude that's not the money for the the rule of thumb for Investments is don't invest what you can't lose yep right so uh I

would say treat treat it almost like gambling if you can wage your 50,000 and if you lose it and nothing happens to

you then that's when it's time to invest and you'll be okay but you don't want to like put your last $10,000 into a deal

because you never know what's going to happen so in that case if that is your last dollar you partner with a guy like Jesse who has money Daniel somebody that

can get the resources and help you close the deal and that's a way to do it instead of risking your own Capital at that stage so but once you move above

there one thing one thing I'll say to this too is vet your lenders oh man yeah

vet your lenders don't be afraid to to to dismiss A lender yep so some lenders and this is from experience they they'll

come in and try and Strongarm you or though they don't understand the essence of the transaction so they'll do 90 days

of due diligence and never close yeah we're we're pretty quick to to to turn down uh funding when the person doesn't

understand our business model they have to have a really good understanding of what do exactly how we do it where the money comes from how we make profit when

we make profit and the more that the lender understands the deal then the easier it is for them to put that money

up yeah because we we've had instances where we had a lender come in and this is all time time wise we get lack to

deal up for 90 days and you have due diligence time but you're also working up that lender like there's all these

different types all these different sides of the transaction you got to doal with the seller you got to do with the lender and this is one of the things

that even our team doesn't really understand is because we handle the lender side of it is we have Capital to

deploy but it's our lenders capital and we have that relationship to deploy at the right opportunity but we need the

timeline to make sure that solidify the deal as a good deal for them to make sure they're comfortable putting it up because it's not our money we have to

make sure the lender is up to par and up up to standard of all the information that need that needs to make sure they

understand it's a good opportunity so a lot of Underwriters they'll take their time like oh I'll look at it or I need

to come see it personally and then they they drag out and then you have hey we need another $5,000 to extend you're

like is he going to close mhm I don't know I don't know so you got to V your

lenders out early and make sure they understand the timelines going into it because we've had deals like hey we need

to close next Friday oh yeah we're good we're good and then the day before they like just had one just had one they

ghost they go ghost yep and it's the that blows up the whole deal no well we still bought it it can for most people

yeah like going to perform no matter what but yeah but having having multiple lenders on staff y on on hand having a

lot of great relationships instead of just depending on one person so and that reason like I said you know it's kind of a last minute thing hey right we need 90

bands it's on the way so yeah you want to make sure that you're going to you can perform on your contracts all the

time um it's kind of part of the game is just having extra lenders in your back pocket um how do you feel about Roi that

you give to lenders Here's My Philosophy man people like to to you know talk about you know

Real Estate Investors high level Real Estate Investors making 12 to 18% Beyond 18% us right so this is great area there

but um I think that if somebody's a strong enough lender right like if they can put in a million or two or five or

10 I that deals with them 50-50 all day and and people are like what that's

y'all are paying too much for lenders well like you don't have the right to tell me that I'm paying too much for

money because you're not lending it to me yeah he said if you said hey bro don't pay that much I got you yeah right

and here's how much I want back but so they're like oh y'all are paying too much we're like how much are you charging yeah right right so you didn't

lend it to me so it's not really their concern if if the if we can pay back great returns to our lenders we make we

make great returns everybody has their opinion yeah everybody has their opinion but not their money like was that the

end of your sentence like y are overpaying for money like go

ahead are are you going to pull out your wallet sir oh I I thought you were about to write me a check never

mind oh man that's that's that's perspective it's perspective and everybody has their opinion on it and

like me and Anthony always laugh because a man everybody wants 12% with three

points underwriting and like dude that's cheap money bro can I have it yeah so

like the the one thing if you're a land investor looking at this it's very very

very hard to get in financing any type of investment on land a lot of the

people the one number one R is investing is in invest only thing that you understand nobody understands land

except people that operate in it so you if you're trying to raise money for land investing for your own business whatever

you're doing you have to be transparent you have to almost educate them on your

process we how many we had meetings with our lenders like this is what we do this is how we do it this is what we've done

in the past your part this person lended on it we gave him this Roi it took this amount of time and this is what we did

with it here's the before and after pictures you know like you really have to like educate front endwise on every

transaction every lender because these lenders don't know anything about land at all at all they we're starting from

scratch it's a brand new newbie all they have is money and you got to educate them how do you find the

deal find on MLS you you get great terms how do you get great terms well

you wait six months and you ask hey ask a bunch of times you ask a bunch of times and wait ask a bunch of different

people I think what's cool is that the the size of the returns we're getting right we we got lucky to be in the land

business right we you know it's God's favor and um the returns are tremendous

so um it's cool that we accidentally kind of stumbled into such an amazing space like we didn't sit down and run

scientific models you know about this market and Texas market and what the potential profit per year is we just got

lucky we got into the business and like w dang and so now when other investors from other asset classes see the the

returns that we can provide they're like uhoh this looks good like are you sure we we've heard too good to be true a

bunch of times right like wait a minute are you are you sure like dude it's too good to be true it's not true at all

yeah here's everything and like furthermore put the property in your own name and just pay us when it sells and

really first position like yeah we believe in it if you don't make no money you don't pay us nothing you know that's

true so and the all all the all the lenders out there like I can figure this out we've heard people losing their

losing their ass because they don't have the expert investor to guide them and they'll overpay for properties we had an

opportun we had a instance come up recently where have to build some people out we're we're trying to I don't know

if we can I don't know not even on the one I don't even I don't know if we can they got it too high so this pool of

investors it's like 10 to 15 investors they pulled together and bought like 250 acres for $3.5

million that's much they got in yes oh man that's that's a tremendous mistake

yeah they're at like 12,000 an acre per per across all the properties and

they're out a year holding it they cannot sell it they bought um the frontage isn't as nice as we'd like it

to be to cut it up to do things so now it needs a road and more money to develop and there's just in a in a

partially sinking ship and I I I really want to help them but they're kind of stuck cuz they B they bought wrong they

bought too high they bought the wrong property you got to know how to buy where to buy um you got to you got to

know what's around you resources potential rooftops populations you know distance to to import like groceries and

all that kind of stuff so knowing your product better than everybody else that's very very helpful um you know and

being able to convey that con information over to your lender and make sure you know you sound like you know what you're talking about this is this

is the other thing so one of our lenders asked us is because most of the lenders they want most underwriting like oh if

you're if I'm going to put money down put money in what you got to put money down to C sure the risk up and most of

the deals we do we don't put any money down we're zero in or we don't do the deal and for the most part any lender that wants some kind of like hey you

guys put 10 it's like well then you find one deal and I'll find one we'll work together but if we have the deal we're

in control of how that deal needs to flow and the reason why is because and we had a lender ask us this question

he's like what are you putting into the deal and we had the point BL saying like hey we got a good opportunity we got s

financing that 0% interest $400,000 off $400,000 off and we're going to get you a great Roi and he was like okay yeah

that was enough to to get that conversation going because if you're doing a house what's what's what is

their security I mean most of the time you're you're you have a 30 to $50,000 spread things can go wrong timelines can

go wrong yeah and then now you turn your you turn your private investor into a remod alert a contract you bail on the

deal now like well now I got to take over this nightmare but with land they just get to just ride on put up some

fences survey it off hire an agent it's done it's done absolutely so and this is one of the things we like our biggest

thing is that we're finding great opportunities great opportunities 50 cents on the dollar or less 30 cents 25

cents on the dollar under 50 cents on the dollar so like that's our biggest thing like we're bringing a great opportunity with a very and we talk

about this unknown upside we're at least minimum 50 cents in the dollar yeah and

we can add more things to make it more valuable but it's up to our discretion to if we want to go that far if we need

to but um one thing about land is that you can underwrite it as much we talked

about this earlier you can underwrite it as much as you can there's still going to be a wave of 25% 20% of it can go up

or it can go down right which is why we buy so cheap at 50 cents in the dollar because if if it VAR if it varies 25%

are you ready to get a haircut which is that's where that that their buyers at they bought like that 70% and really

they're at that 20% dip and now they're breaking even or losing whoa I didn't know they that's what they did yeah you

got to be careful because with like same way with houses where you got to be like 70 cents all in right similarly land it

would be 70 cents all in after everything after development roads surveys engineering flood studies

bringing in dirt you know we brought in like 20 truckloads of dirt on that one that we picked up 3 acres yep and uh you

know just to take the trash off the properties like $115,000 wow so yeah these are they're

pretty big undertakings and if you don't know what you're getting into yeah then you can be in big trouble so if you buy deep um keep looking right there's a lot

of good opportunities out there but you know I think four with all these things that um investors do I always make sure

to have two other people on standby besides everything else that you guys mentioned is a good escrow officer okay

absolutely that and a really good real estate attorney absolutely you make sure

that you have somebody you like I have a couple people yeah I need I need I need a referral today actually okay thank

you your your legal team is crazy I is the most important part of your business

those those one month we spent like $220,000 on Attorneys at once and we're

like hey most people don't even make this in a month and we're writing a check to three different attorneys oh my

God yeah got I got I got to tell this story that do I got I got to tell this

story so Anthony I don't know if you remember this but the way I met you was a while

back couple months ago several months ago we um I had this deal that I was

trying to unload and it was in Red Rock Redrock Texas it was a 9 acre piece of

property so I had it in a contract we were trying to unload it and uh remember

Anthony pinged me and said hey what's going on with this so we had a conversation back and forth and uh and

from there we we we kept talking on on some other stuff but that

deal and and this is why I said you better make sure that you have a good ESC officer so that deal turned out that

I was dealing where I thought I was dealing with a seller I was actually dealing

with somebody that was a squatter dang and the

squatter somehow legally got the deed he

he did there was a quick claimed deed that was forged by the squatter wow I

don't know how he did it and but it passed it passed through title and it did all that and then my escro officer

she's like um you know what there's some something's not right here and I didn't

catch it because everything lined up correctly we did we did um we were looking at um at the lineage as far as

you know who the owners were um yeah the chain everything and nothing threw a red

flag and she's like I don't I don't like this give me a day or two I need to I need to get

somebody else involved so she got two other attorneys involved plus her to

look at this and she's like she called me up again she's like hey this person that you're dealing

with the the owner the actual owner's son I just called him and he doesn't

know the seller which is a squatter and I'm like really like yeah

give him a call so I called the original owner's son which should have

been yes called him up I said um I I

think his name is David said hey David my name is Jesse I'm I'm actually in contract with this

property well awesome but you're not in contract your contract is not with me I

should be the one in contract with you and I'm like oh okay so who am I in

contract with it's like I don't know I don't know that person oh man and I'm like are you

serious and it it was a $150,000 deal or something like that that we're going to possibly close on

and if that would have if that would have transpired this would have been a nightmare yeah I'm like oh my God I'm

glad she she's a badass so Marshall if you're seeing this um thank you you no man great story

and U yeah I've I've had fraud happened to me one time so having a keep turning

that way and your neck is pressing into the mar microphone I adjust this real

quick as you were got him so thank you to what was her name Marshall Marshall

Marshall for for this is where like your your your title team comes in we just

did a video with our title title company yesterday go check that video out it's gonna be on on the too yeah but um I

think your your your that protection side of your team is a part of your team treat them like your team they're a part

of your team we try and take care of our Title Company in a lot of different ways because I'll just randomly call them up

like can I send you lunch Chick-fil-A they will save your butt oh

yeah they will save your butt and this is like I'm not professional title you're not professional title he's

definitely not professional title person those people a professional title person they're going to save your butt a lot of

time so make sure there you got good people on on your team working those titles yes I think if you're looking to

invest into these types of deals having uh the right team in place is probably the single most important part of all of

this because like I said you can have the what you think is the best piece of property you have all the funds ready to

go at the right price but but there's there's a lot of other moving parts and there's a lot of experts working in concert to get these things done so no

one person like not even myself has all of the information so we consult with other experts we spent a couple hours at

an engineering firm the other day going over a bunch of deals right so we're not going to be comfortable Professional Engineers we're not going to become

surveyors we we rely on the people around us and the teams to be able to help us make these deals happen so when

you're looking to invest you're looking to work with a team that actually knows what they're doing um I think we're doing a pretty good job the returns that

we we are paying out are pretty amazing so we're looking to uh put a fund together um so we got that going 506 M

credit investors it's time credit investors yeah so credited only for now we are looking at doing some sort of

crowdfunding in the future uh but for now you we're looking for placements of a million and up um and up to no more

than about 25 so we're looking to raise $100 million yeah but you know they can only take 25 that's a Max one person can

take there you go what do he said guys it's going to be fun and I I

think we have a lot of opportunity and I think we can exhausted Capital so a lot of people that invest in funds they might not have the opportunity to find

an a right deal to exhaust it I think we have a BL strategy and we have a team available to deploy it so I'm excited

about that I am two man we forgot to talk about one thing is um how it could be unethical to raise capital and when

okay so when you're when you're out there raising Capital you're you're telling these investors that you have

these deals these potential deals Investments right they're going to give you the capital and now it's your job to

go and and and do that deal see it all the way through and then pay your investors back their money right right

so let's say you had a pipeline of $10 million that's all you have $10 million worth of wrenches uh that sounds like

you should probably raise $10 million or or so right maybe 12 or 15 to short up some risk if you're going to do some

development but what you don't want to do is have $10 million worth of deals and go out and raise a100 million do

worth of capital right now you can get yourself into trouble if you end up having all that capital in hand you

already have to pay for it right or you never you never Capital call it yeah so now you're going out wasting that time

uh wasting people's time because they maybe they had $5 million that was going to go into another asset you said hey no

don't worry I got projects coming up go ahead and sign here they're good for the 5 million and then now you didn't

perform because now that deal you said you had is not ready to go dude missed a bat on something else he wanted to get

into so I think having a long pipeline like we do I would say we're well over 100 million now easy it's growing faster

by the day so if we go out and raise $100 million said we can probably place it on you know 3 to 6 months absolutely

so having a long pipeline um lots of deals in the pipeline that's I think the only ethical way to go out and justify

raising those types of numbers like 100 million or 500 million if you have that many deal is ready to go yeah absolutely

very true take care of your lenders absolutely absolutely cool man I hope

you guys stay safe out there have fun if you see anything that we are working on that you would like to put some cash into if you are accredited for now only

hit us up what we can do hi M fun.com thanks guys see you soon

[Applause] bye

Ep 492: Understanding The Land Game

Daniel Esteban Martinez

Anthony Gaona

Jesse Jimenez