Passive Income Investing without Renters, Rehabs Renovations or Rodents with Mark Podolsky Ep - 507

If it was more than say $5,000, I would take no title risk and you close traditionally through a title company. But this is only $2,500, so I'll take a little risk. I'll send you a check for $2,300. If everything checks out, I'll send the treasurer a check for $200. I own it free and clear, and now I'm gonna sell it 30 days or less. I'm gonna make it cash flow like a rental home. So I have a built-in best buyer. Do you know who it is?

Welcome to Streams to Impact, and be inspired to engage passionately in the work of your calling while achieving financial prosperity through multiple streams of high-yield returns on investment to bring your dream of making a meaningful impact to reality. I'm your host, Dr. Allen, and I am delighted that you are joining us today. If you haven't yet, get a complimentary copy of our exclusive guide, High Yield Investment Blueprint. Secure 18%+ returns in 60 days. Go to our website, highyieldblueprint.com. That is www.highyieldblueprint.com. Just provide your email address and we'll send you a copy today. Hello, enlightened investors. Welcome back to Streams to Impact. I'm your host, Dr. Allen. And like always, I am really delighted that you are with us today, and I want you to get ready for an inspiring show today as we uncover a game-changing strategy for building passive income investing in raw land. Joining us is Mark Podolsky, also known as the Land Geek, a leading authority on buying and selling raw Undeveloped land. With over 6,000 successful land deals and an average return of 300% on cash purchases, Mark is here to share how you can achieve total freedom by creating passive income streams. So stay with us as we go into our episode today. And Mark, welcome, and would you share with Your journey, much like the equus, has been one of transcending boundaries and inspiring others through your work. So can you share with us the moment or experience that first sparked your passion and set you on your streams of impact in your life and the lives of others?

Yeah, Dr. Alan Lomax, thank you so much for having me. So, if we rewind the tape to 2000, I was a miserable, micromanaged, 45-minute commute to work and back investment banker specializing in mergers and acquisitions with private equity groups. And, uh, it got so bad for me. I didn't get the Sunday blues anticipating Monday coming around. I'd get the Friday blues anticipating the weekend going by really fast. And have you back at work on Monday. So my firm hires this guy and he's telling me that as a side hustle, he's buying up raw land, pennies on the dollar at tax deed auctions. He's flipping them online and he's making a 300% return on his money. And I'm like, 300%, that doesn't make any sense. Because I'm looking at companies all day long. In a great company, great has 15% EBITDA margins or free cash flow. Average company's 10%. I'm looking at companies all day long, less than 10%. So of course I don't believe him. And I've got $3,000 saved up for car repairs. I go with him to New Mexico. I do exactly what he tells me to do. I buy 10 half-acre parcels at an average price of $300 each. I flip them online and they all sell for an average price of $1,200 each. It worked. So I took all that money. I went to another auction where I live, which is in Arizona. And again, it's 2000. There's no one in the room. I'm buying lots and acreage for nothing. And so I sell all this land and I made over $90,000 cash. So I go to my wife and she's pregnant. I said, honey, I'm going to quit my job and become a full-time land investor. And she said, absolutely not. So I said, okay, okay, okay. So it took 18 months for land investing income to exceed The investment banking income. And then I quit. I've been doing it full-time ever since, and I absolutely love it. But to really get to the core piece of that question, which is the multiple streams, what's been the most fulfilling for me hasn't been land investing. It's really been helping people get out of what I call solo economic dependency, which means that they're personally not working, they're not making any money. So solving not just their money problems but also their time problems with passive income so that they can be totally free to work when they want, where they want, and with whom they want and move up Maslow's hierarchy of needs into self-actualization and really figure out what they want to do, their greatest purposes in life.

Well, Michael— Mark, a lot to really unpack in that. A lot of people would look at the position of an investment banker with a lot of envy. And it comes with a lot of perks, I would expect, and not too shabby a salary. And so you're probably doing pretty well. So what was it really about the job and— I mean, the 30-minute— The commute, of course, is annoying and tiring and probably heavy traffic and so on and so forth. But outside of that, what else was it that was really problematic with that?

I mean, for me, it was just a lack of autonomy, the lack of control. If I got sick, I'd have to call HR. I mean, it just felt very much like this this very prestigious prison, and I could go to parties and say, oh, I'm, I'm this investment banker and I'm working in mid-market in, you know, with these companies and, you know, mergers and acquisitions. And it sounded great, but the work itself wasn't that intellectually stimulating, and it, it just didn't stir me in, in any way. Yeah.

So, of course, you were frustrated in that situation, and then this new hire comes along and says, hey, I'm doing all of this inland investing. Of course, you don't believe him, and so you have to see the proof of concept there, and you found it, and you go, this works, and so I'm going to do it. I mean, what has really been the—

The key.

transformation in, in you, and, uh, not just in your finances there, but in your personal life and your, and your, your outlook and your perspective on life?

Yeah, I mean, I, I think for me it really happened in 2010. So if you remember 2008, we have the Great Recession. And I've really walked you through my model, but I'm owner financing a lot of land notes. And so I'm getting these payments and people are calling me and saying, Mark, it's between food and making this land payment, and I'm taking food. And so 50% of my income sort of goes away.

Hmm.

And I had Parkinson's law of money. So the more money I made, the more money I spent. And so I had a big car and the big houses and the big vacations and a nanny and a housekeeper, and I had this big, tremendous personal overhead and I couldn't sustain it. And so that ego kick to the head, I would say, really started the transformation. As I started whittling down, I had to short sell the house and go to a A smaller home, public school, fire the nanny, fire the housekeeper, sell the car. And as I'm going through all of this, I'm realizing that, oh my gosh, I had it all wrong. All this stuff, all this external stuff, none of it really is bringing me any joy or happiness. I'm really finding it in the fact that my wife and I, we can't go out. as much as we wanted to go out when we had 3 little kids. We're playing charades at home, or we're doing scavenger hunts, and we're spending more time with friends and family. And like, oh my gosh, now I kind of, you know, just like realized, like, you know, this void that I had inside me was this feeling of not being enough.

Hmm.

And I was looking for it in all these other places. And I realized they didn't fill it. And so I got into therapy. I think that really helped me really see like it's a single-player game. It's an internal game. There's nothing really out there that truly fulfills. And I think that's what I really feel like that transformation So that's interesting.

That was— so you started really in land investing in 2000, and so it was about 10 years that you had been involved in that and doing and making a whole lot of money. And that all must have felt really good, and yet it wasn't until you really lost a good portion of all of that That you really took an inside journey. I wonder how often that is the case, that, that when things are going great and wonderful, we really miss a whole lot of what is really important. So losing that, all of that, well, what, what sent you into therapy?

I think just navigating it all and managing the emotions of it all and the identity crisis of, well, if I don't have all these things and I'm not doing all these things, who am I?

Yeah.

Am I worthy of love? Am I enough just to, you know, just being? And I think that It was a long journey to get there. But I think the best sort of example of this is this book that David Brooks wrote called The Second Mountain. And he says the first mountain is egoic. And we listen to society or culture or friends or family and they say, get the good education, get the good job, get the house. Go on the vacations and do all those things. And if you're lucky, you get to the top of the mountain and it feels unfulfilling. So then you go on to the second mountain, which is other-focused. It's about vocation, your purpose, your why. It's about community. It's about your faith and spirituality. It's about love, intimacy in your relationships. And it's a way harder mountain to climb.

Hmm.

But way more fulfilling. And I think that it might just be the job of midlife where, you know, your 20s and 30s, it's important to climb that first mountain, and then in your 40s and up, you realize, oh, it's sort of the illusion, and you go on to the second mountain.

So reaching that second level and regaining the income, what was really that journey like from Going into therapy, finding yourself, finding a really different kind of foundation, and then actually with finding that that foundation, the economy started coming back and things did start turning around. Not as soon as what most people would have liked. What was it? About six years or so before it actually. started coming back around. So, uh, just take us on that journey from therapy to getting the ground and the feet back under you.

Yeah, I mean, I think it was just a, a long, slow, arduous, um, 2 steps forward, one step back journey with my therapist and the relationship I had to the business, the relationship I had to money. And it wasn't, it wasn't pretty at times. It was definitely a struggle. But I think that I finally got to a place where I had that, that real— it wasn't just intellectual clarity, it was the emotional clarity. I could feel that there's these things and this money and this false identity I was building really wasn't me in a way. And, I think that going on that spiritual journey of trying to find that out, not that I'm still not on it.

Yeah.

I don't think you ever really arrive, honestly. if you do that, I'd like to meet that person, uh, for sure. But, um, in fact, I, I always joke, like, you know, I'll look back a year from now and be so embarrassed of the person I was.

Yeah.

And so I think that, you know, that, that growth is, is really important. But I think that from that point on, the, the concept of enough was one that I formulated and I would just solve the math problem. What's important to me? I don't really need that much. And how can I get enough where if I want to work, I'll work. If I don't want to work, I don't have to work. If I lose half my income, no problem. And it's not my self-worth, my identity isn't really tied to it. Paradoxically, the less I cared, the more money and the more abundance came to me. And I still live in that, um, that quiet space of, of abundance now.

Yeah.

And, you know, people in my life, I'll, I'll feel their fear kind of pop up. What if this happens? What if that happens? Like, I'll be just fine. You know, we'll figure it out. And I think that when you have sort of an inner resilience as well, when you go through something like that, it serves in sort of a deep place that's sort of ineffable. You have to go through it, I think, to really understand it.

Yeah. Well, I know that certainly has been the case in my life and the lives of many people that I know and work with. You know, I don't know, there's just something about that dark night of the soul that takes us on that journey. And, you know, I mean, Maslow's hierarchy of needs, of course, self-actualization I think he left it at self-actualization as the top of that, but those who have followed have actually added to the top of that a transcendence, and as you were talking, it's like, well, I'm not really there yet. Well, I don't really know anybody personally who's reached that point either. I guess we can look back through history and actually see individuals who have. who did make that, but only— you can only, I guess, assess that after they've left and gone on to other worlds here. So Mark, when did— in this journey, when did you really start the educational aspect of your business?

So, I'm on vacation with my family. It's 2012. And this guy, Tori, calls my phone. And I thought he wanted to buy a piece of raw land. And he's like, hey, I'm on your website and I'd like to learn what you do and how you do it. I said, I don't really teach it. He said, well, what if I pay you this? I said, okay, well, let me think about it and I'll get back to you. So, I told my wife, hey, this guy wants me to teach him the land business. And she said, why would you do that? You're going to create your own competition. I said, oh, good point. So, I said, let's put on our investment banking hats and let's figure out how big is this market.

Hmm.

And so, when I did that, I realized there's billions of acres of raw land available. There's no private equity groups. There's no hedge funds. There's no big money in it. You, me, a million people could be in this niche. We'll all run out of money before we run outta deal flow. And you couldn't think of a less sexy real estate niche. Like you couldn't go on HGTV or the DIY Network and see flip this land. The before pictures were all land. The after pictures were all land. So I agreed to teach him and I helped him make on his first deal $300,000, which was life-changing money for him.

Yeah.

And it felt so much better and so gratifying for me, uh, than any deal that I ever did myself. It was an incredible feeling. I'm like, I love this. And so that really sparked, like, help wanting to help more people and help more people. And I really want to help as many people as I can. Become totally free and not just solve their money problems, solve their time problems. And, uh, I think the passive income and the cash flow is an antidote to financial insecurity.

Yeah, it is. Uh, it is definitely. And, and so talk to us about passive income. Um, it, uh, from what I understand from what I know about your business, the passive aspect of it is actually coming from essentially the owner financing of the properties so that you have an extended stream of income. Is that, is that right?

Yeah, if you want, I can walk you step by step through the, through the process and through the model.

Yeah, tell us about it.

Okay, we'll use you as the case study. So Um, where do you live?

In North Carolina, Western North Carolina.

Yeah, you're in Western North Carolina, and I'm going to assume that you own 5 acres of raw land where I live in Arizona, and you owe $200 in back taxes. So you're advertising 2 important things to me. Number one, you have no emotional attachment to the raw land. You're in North Carolina, property's in Arizona. And number two, you're financially distressed. In some weird way, because we don't pay for things like our property taxes, we don't value them in the same way. As a result, the county treasurer keeps sending you notices saying, Dr. Allen, if you don't pay your property taxes, you're going to lose that property to a tax deed or a tax lien investor. So all I'm going to do is look at the comparable sales on your 5-acre parcel for the last 12 to 18 months. I'm going to take the lowest comparable sale. Let's say it's $10,000 for easy math. Divide by 4. That's going to get me what Warren Buffett would call a 300% margin of safety. So now I'm going to send you an actual offer of $2,500. Now you accept it because for you, $2,500 is better than nothing. In reality, 3 to 5% of people will accept my quote unquote top dollar offer. But now that you've accepted it, I have to go through due diligence or in-depth research. I have to confirm he still owns the property, have to make sure the back taxes are only $200. I have to make sure there's no breaks in the chain of title, no liens or encumbrances. And so I have a whole big property checklist that I outsource to my team in Jamaica. They're connected to an American title company. It costs about $11. And so I do it that way. Now, if it was more than say $5,000, I would take no title risk and close traditionally through a title company, but it's only $2,500. So I take a little risk. I'll send you a check for $2,300. If everything checks out, I'll send the treasurer a check for $200. I own it free and clear, and now I'm gonna sell it 30 days or less. I'm gonna make it cash flow like a rental home. So I have a built-in best buyer. Do you know who it is?

The next door neighbor, probably.

Yes, the neighbors. You got it. The neighbors. So I'm gonna send out neighbor letters saying, hey, here's your opportunity. Protect your privacy, protect your views, know your neighbor. So oftentimes the neighbors will buy. They pass. I'll go to my buyers list. The buyers list passes. I go to the website you may have heard of called Meta or Facebook buy-sell groups in the marketplace. And then I'll go to the lands, land.com, landmodo.com, landandfarm.com, landflip.com, landhub.com, landsamerica.com. These are platforms where people buy and sell.

Mm-hmm.

Raw land, but the secret is in the pricing. So all I'm gonna ask for is a $2,500 down payment for somebody to control that 5-acre parcel of land. And then I'm just making a car payment. Let's say $2,500 down, $397 a month at 9% interest for the next 60 months. So it's a one-time sale. I get my money out on the down payment. I could go 6 to 10 months out, and then I'm getting $397 a month, 9% interest. Dr. Allen, no renters, no rehabs, no renovations, no rodents. And because I'm not dealing with a tenant, I'm exempt from Dodd-Frank, RESPA, and the SAFE Act, all this owner's real estate legislation. So then it's a simple game. Can we create enough land notes where our passive income exceeds our fixed expenses? And then we're working because we want to. Not because we have to.

Yeah. So I'm sorry, I spaced out there for a moment, but you said you're not regulated by Dodd-Frank. Tell me a little bit more about that.

We're not regulated by Dodd-Frank because there's no tenant on the property.

So, but you are financing.

But we are owner financing, correct.

Yes. And I thought Dodd-Frank covered that. It doesn't though?

Not if there's not a tenant.

Not if there's not a tenant. Oh, really? Okay. So, okay, so, but you have to own the property?

But you have to own, yeah, I have to own the property.

You have to own the property. What if your corporation owns the property? Or I assume that's what you do, right?

Yeah, yeah, the corporation owns the property.

Yeah, the corporation owns the property. And still there's no Dodd-Frank in place.

And there's no Dodd-Frank.

Wow, okay. That's pretty cool. So another question I have is that I'm also a realtor and there have been a whole lot of notices out there that there's a whole lot of fraud in conjunction with land sales in particular, that people are selling properties that they don't own. And they're doing— and, you know, they're advertising out there on Facebook and other places like that, and $500 down or what have you, I don't know. And so they get their $500 down and then they run. So is that tainting your business, or how are you dealing with that?

Yeah, my business hasn't really been affected by it. And I think, yeah, I mean, there's always, since the beginning of time, there's been land scams. But, we're not seeing a lot of it. And my community is not seeing a lot of it. In fact, you're the first person to actually mention it.

Okay.

So, I'll be on the lookout for it. But, we're not seeing it. I mean, years and years ago, I created a website called 3fatallandbuyingmistakes.com. And so, I was actually educating people how to avoid getting scammed online and doing their own due diligence, contacting the county assessor, looking at the paperwork, confirming that the person actually owns the property.

Well, yeah, I mean, I knew that was part of your training. I wasn't asking the question from that perspective, but I don't know. I mean, I know about it because I'm a realtor and they put out all of these notices to us and, you know, be sure to watch for these kinds of things. So I don't really know how prominent it is.

No.

Maybe it's, you know, it's just scare tactics. I don't know. But I guess it's enough that they put the, you know, those warnings out to us as realtors. And so But you, you've not run into it from buyers, uh, or sellers? You've not heard it really?

No, really, no. Maybe, but you know, we don't work in North Carolina. Yeah, so maybe it's more regional. I'm working in the Northwest, Southwest, California, Florida, parts of the Midwest, so I kind of avoid the Northeast.

Okay. Yeah, this, uh, People would be insulted if you called North Carolina the Northeast.

Well, sorry, Southeast or—

yeah. Yeah, that's better. Yeah, we're south of the Mason-Dixon line, so yes. So Mark, in closing here, you shared with us kind of that dark night of the soul, but share with us in terms of your land transactions what has been What has been the most difficult challenge, the, the worst deal that you've ever had, and what kind of frustrations did that cause and how did you come through that?

Yeah, so the worst deal was an area in western Pennsylvania called Treasure Lake, and it's 2005, and I'm flying out there and I'm putting on my suit, and I'm talking to the property owners association, and I'm telling them it's overdeveloped community. It's beautiful, it's gated, there's million-dollar homes. All the big money from Penn State lives in this community.

Hmm.

It's got 2 PGA-rated golf courses and 3 lakes, and they have 1,000 lots. It's overdeveloped that people aren't paying their taxes and they're not paying the property owners association dues. So water, fees and all of that.

Mm-hmm.

And so I go out there, I'm like, look, you got all this dead money and I'm gonna resurrect it. So just gimme these lots. And while I own them, gimme an abatement on the property owner association fees and the taxes. I'll sell these lots and then I'll collect for you your taxes and, and property owner association fees. And I'm gonna resurrect this dead money. And you think, oh, this is an irresistible deal. No. So there's all these politics. The golfers didn't want more people on the golf course and the, the boaters didn't want more boating people on the lake. And so it took 2 years of negotiating with the county, with the property association fee, property owners association. And so I took down 1,000 lots at $50 a lot and I started selling them.

Wow.

Well, I made about $100,000, and then it was the first time in business I couldn't keep my promise. 2008 hit, I couldn't give these lots away, and I had to give them back.

Yeah.

And so when I factored in my time, it was the first time I actually broke even on a deal and, uh, it couldn't be in integrity with my word.

Yeah, yeah, hard knocks. Well, what did you learn from that?

Well, I learned that I'm not the buyer, number one. Just because I love that community, I should have done a small bet. And why did I have to buy 1,000? Why not just buy 5 and test the market and then buy another 5 and do sort of a takedown deal and mitigated my risk? But what I really learned was that I was doing this deal. It was at that time a very big deal, all by myself, no mentorship. So I realized that, uh, I lacked humility and my ego was getting way too big. And so I— that was sort of the big lesson.

Yeah, yeah, that hubris, uh, gets in the way, doesn't it? And we do stupid things because we think we know so much more than what we do. Well, Mark, tell us about your company and how to get hold of you and find— and how we can find out more about your very rich and informative educational program.

Yeah, so if you just go to thelandgeek.com, you can learn more there. And Dr. Allen, I can actually give you a link for your listeners to get, uh, my book Dirt Rich for free. Just pay shipping, and they can go deeper into the model and see if it resonates with them. And, uh, that'd be a great place to start.

Alrighty, so that's Dirt Cheap, and we will have the link to that in our show notes. Uh, Mark Podolsky, Thank you so much for being with us today. It has been a pleasure getting to know you a bit better and learn about your business as well. And Enlightened Investors, I know you enjoyed the show today, so if you would please, uh, take a moment to subscribe and, uh, like and share, and we'd be very delighted if you would leave us a rating and a review.

Thank you.

Thanks for being with us, and we'll see you in the next episode.

Thank you for tuning into Streams to Impact, brought to you by Steed Talker Capital, a company empowering passionate professionals like you to develop multiple streams of passive income built on solid passive real estate investments. As a significant part of our endeavors to make a cosmic and meaningful impact for this world, Steed Talker Capital contributes significant portions of our profits to activities and organizations committed to better understanding the equine. These endeavors attempt to enhance the treatment of horses worldwide. Steed Talker Capital, working for a world where all creatures great and small flourish abundantly. If you are ready to learn how our passive investors have earned an average 33% annual return on their investments, schedule your complimentary Passive Income to Prideful Impact consultation. Obviously, we cannot continue indefinitely to offer these valuable consultations for free, so grab your Passive Income to Prideful Impact consultation while you still can. Go to steedtalker.com/passive.