Unveiling Land Banking Tips with Tony Taverrite

Hey, you guys. Welcome back to the podcast, The New and Experienced Investor Podcast, the real estate podcast that brings investors from all walks of life together. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

That makes me the experienced guy. My name is Joe Homs, and welcome To another week.

Yeah, we keep on going.

Yes.

It's fun. It's a lot of fun. Uh, we have another special guest in studio. We keep doing it. It's crazy. We're gonna be learning about some stuff that even the experienced guys may not even know about— the secrets of land banking. Are you ready for that one? Stick around. Um, we're gonna be dropping a lot of knowledge. We have Tony Tavarite here in the studio. Before we bring him in, Uh, let's talk about our next meetup.

Yeah, we have one, but we haven't talked about it. We haven't, uh, scheduled a speaker for it.

I know, I know it's on June 24th.

Is it?

Yeah.

That's the day after my birthday.

Okay, well, we know what we're gonna be doing. We're gonna have cake, we're gonna have, uh, I don't know, candles.

Really?

June 24th? Yeah.

Wow, it's not like Father's Day or anything like that?

Father's Day is before that.

Is it? Because I know all those holidays are there, and you know, I, I usually get one present for Father's Day and birthday because they're so close.

It's like the Christmas babies.

Yes.

It's sad. It's a sad life, actually.

It is a sad life.

I know. Yeah, it's okay. You'll get through it. Um, I do have some ideas, but we can talk about that later. But let's, uh, the last one we had was really fun.

Oh, that was fun. That, that was different and it was fun. And, uh, we got people up on a live mic and, you know, let us know what you do and what you're looking to do. And I, I thought it was tremendous fun.

Yeah. And, and an idea that you had that was great was we had a piece of paper, people put their name on the top, and then we passed that paper around as they were speaking about what they wanted. Uh, we had some people that were doing syndications, some people that were brand new that wanted to get into short-term rentals. Pass the paper around, and then whoever wanted to help that person out filled their information on it, and then we connected them.

Correct.

That's amazing.

Yeah, I thought—

That's what it's all about.

It was a lot of fun.

Yes. And so that's one of the great things about this meetup is you're going to come, you're going to network, you're going to meet a lot of people in the real estate industry. So definitely be at the next one, June 24th. Wish Joe a happy birthday, please. Okay, let's jump on into it. Just like I said, we have an amazing guest today. We're going to be talking about All sorts of things that have to do with land. So let's please welcome Tony Tavrite. Tony, how you doing?

Thank you, Alex. Doing great.

Awesome.

Doing great.

Yeah. Let's jump right on into it. Why don't you go ahead and give people sort of your background in real estate, what got you into it, and, you know, what's going on?

All right, great. Well, yeah, so I answered an ad for a sales director position from a land company. It's actually right up the street here, Professional Land Corporation. And Hit it off with the owners. And I guess I like it. I've been there over 20 years. So—

Wow, that's great.

Yeah.

So I had a little experience selling land in Florida years ago. And I have a California real estate license and I manage and oversee about, I don't know, over 50 agents and brokers.

Nice.

And we just specialize in land. That's all we do. And it's all land that our affiliate company owns. So we're kind of unique. We're the broker and the seller. They're all private listings. We have our own in-house financing. So we make it easy for people to get started in land.

That's great. Yeah.

Where is this land at?

Mostly up in the high desert where there's still some land and it's still affordable. So some people call it the high desert. Some people call it Inland Empire North. And it's just booming out there right now. So we've got some exciting news out there. So we like to share some of the sizzle of the news and stuff that's going on out there. And people, uh, it's not for everybody. They buy and hold the land in the path of growth. But historically, countless fortunes have been made by people that have just bought and held land for the future.

Mm-hmm.

And that's what the owners have done. They started in 1974, Ron and Randy Horowitz, and they started in their early 20s. And bought a piece of land up near Santa Clarita. Because what happened, they grew up in San Fernando Valley as kids, and they watched all that land disappear out from under their nose, and nobody in their family bought anything. And so they decided they didn't want to make that same mistake, and they couldn't afford that area anymore, so they had to go further out. People told them they were crazy. Why are you guys buying land way out there? There's nothing up there. And They were willing to hold it 20 years. And it wasn't 20 years, it was just a few years later, they started getting multiple offers in the mail.

Hmm.

And back then there was no Google, you know, you couldn't figure out what, what was going on. And, uh, so they finally got an offer they couldn't refuse and made a nice profit on it and started the company. And initially they were located in La Jolla. And selling, you know, areas down inland of there. So they've gone to different areas over the 50 years, obviously. And today we're selling up in the high desert and both the Inland Empire and over in the Antelope Valley as well.

Do you think the big earthquake is going to make that property beachfront property?

You know, I've joked about that before. And I always, you know, when we sell land, there's a natural hazard disclosure. And it's always no, check No, for earthquake zone. A lot of people don't believe that. They're like, that's not an earthquake zone. I'm like, no, it's not, but we are here, right? You know, so maybe it will be.

Never can tell.

Yeah, we'll find out.

Never can tell.

I can kind of relate to that story too because, um, I remember, uh, Lauren's grandma used to tell us like, yeah, like I think it was either them or her parents owned like some lots in Pasadena. And they're like, we sold them for $20. And we're like, no.

Oh my God. What?

Why didn't you just pass?

Wow.

There's like, there's nothing out there.

I was like, no.

Move to Eugene.

All they had to do was not sell.

Wow.

Right. Just keep one.

Just keep one and pass it down.

Yeah.

It's okay. How could you know back then? It was like, they're never gonna build out here. But I mean, even if you think about Rancho, what Rancho Santa Margarita was, it was all dirt. Like, Not that long ago, right? So it totally makes sense.

I was, uh, my dad bought in the first housing tract here in Lake Forest, El Toro at the time, uh, paid $13,000 for a tract home, you know? And it's like, you know, I was, I was in elementary school at the time, but like, if you think back and go, geez, I could have bought all that stuff, you know, it's like I wouldn't be sitting here at this podcast right now.

You were buying like candy apples or something.

No, I was throwing oranges.

Oh, okay.

Orange Grove fights.

It's amazing.

Yeah.

Love that.

But yeah, no, hindsight's 20/20.

Yeah, exactly. I know it's always with real estate.

Exactly.

Well, maybe you can get into it. Um, I know you do— you, you talk about a thing called land banking. I mean, what— can you give us an overview of what that is?

A lot of people don't know what land banking is. It's just the practice of buying and holding land in the path of growth. So These 2 brothers, you know, the Horowitz brothers have amassed a fortune and a lot of land holdings and have never built a thing. So there's 2 ways to make money in land, either build or just buy and hold it. And buy and hold is what we specialize in. So, you know, people know how to do that. They don't know how to build. So a lot of people start thinking about building, and if they don't have any experience doing that, it's over their head. They're not going to move forward. So we keep it simple and just show them where to buy, show them where the developments are coming in, what's going on in the area, and why they want to purchase from our company. Land is very unique. It's a niche market and you've got to know what you're buying. Most people don't know how to research it. They just want to go see it. Half the people don't even find it. You know, you're driving down a dirt road. Is this it? Is this it?

Yeah.

So, you know, So that's not research. And I can tell you, these guys aren't driving around in their Rolls-Royce or, you know, sports cars looking at land. They know how to research it, checking the prelims, dealing with the city and engineering and planning department before they pull the trigger and buy anything. So this is stuff that we teach people, and if they have patience, this could be something that they should diversify and put a little money in. Not a lot. Just something. We have, you know, 2-acre parcels starting in the $20,000 range on up, you know, to million-dollar properties. Majority of our land is residential, but we also have industrial, commercial, so something for every budget. And what's unique, we also have easy seller financing, so people can buy with an affordable down payment and monthly payment and use that as a forced savings for their future. And they can buy something now while it's affordable. And as these areas continue to develop out, you know, hopefully they'll be selling it for a lot more. We can't make promises or guarantees, but nobody can have a promise or guarantee when they bought land, even Loren's grandmother, you know.

Mm-hmm.

So, and a lot of investors are, you know, like to leave a legacy. They'll buy something today for children, grandchildren even. I have one right now buying for a 4-year-old grandchild. child. Um, that's cool. So leave them a little property for the future.

Is this property like— it's just— it's, it's not like a tract home property?

No.

It's just land, you know? Just like, what's the minimum size that you sell?

Well, I think the smallest piece we have is a quarter acre, and that's commercial. Uh, we have a few of those stuff, stuff like that. But the average size we sell is around 2.5 acres, 2 to 2.5 acres. And it's raw land. Most of it's still dirt road, doesn't have utilities yet. But when the utilities come in, that pushes the prices up.

Yeah.

And we don't want, you know, we, we advise our customers, don't put the utilities in yourself. It's not cost prohibitive, you know, to do it yourself. Let the big developers come in and do it. And they bring these utilities closer to you. And when that happens, You know, that really impacts the value. And then now the developers start knocking on their door, sending them letters, and that's the kind of thing. So you do need patience. And I would say 5 to 10 years for the majority of the areas that we're selling. So yeah. Yeah.

I mean, real estate in general is sort of a patience play, you know?

Yep.

It's— that's so if you're, if you're planning on doing that, that should just be a practice that you get used to. You mentioned you guys kind of are on the, I guess, the cutting edge of things that are being built into the future. How do you get that information? And then how are you making your decisions as far as the land that you guys are purchasing based off that?

There's a few ways we get, you know, obviously we look at the news, check with the city, things like that. So we're sending constantly, I'm emailing articles out and up, you know, announcements to people. And then I might feature a property that's nearby this project that's coming in. And then we get these letters, which, you know, some of these— I even brought a couple today just as an example. Because we own a lot of land nearby some of these projects, we get first knowledge of it. So, you know, they invite us to the city meetings, which you don't have to go anymore. They're online most of the time today.

Mm-hmm.

This is one that we just received recently that is warehouses coming, are coming in like crazy, creating thousands of jobs, and all those workers are going to need housing. So this is helping propel the growth in the area. But this is one that I am really excited about. It's a 226-acre project where they're building 3.48 million square feet of warehouses.

Wow. Wow.

In Apple Valley. And where this property is located is, you know, in an industrial corridor. Walmart has come in already and built a 1.3 million square foot warehouse. There's 1,000 employees, 1,000 trucks a day going in and out, and they deliver to the Walmarts and Sam Clubs in the area. They put the utilities in. Big Lots came in just south of them. And there's several other projects that are announced that are already approved, 2.5 million square feet, another 1.6 million square feet. So this one is, you know, just going for approval. So it's not approved yet. I don't want to, you know, say that it's going to happen, but it looks very promising. And actually the company's in Tustin, Lake Creek Industrial. Are from Tustin, and, uh, 3, 3 huge warehouses. And just the car parking alone, they're talking about 3,032 automobile parking.

Jeez.

For this project, and, uh, 1,565 trailer parking stalls for trucks, 548 dock doors, and they're going to run the sewer line from over where the Walmart is, uh, to this, to this property. We have land across the street, you know, a couple streets north. Um, so people like to position themselves in that path of growth and just hold it, you know. So yeah, and people can partner up. It doesn't have to be an individual. We have people buying with LLCs, trusts, corporations, uh, but mostly individuals. Yeah.

That's great. I mean, I guess with the seller financing, you know, it makes it so achievable.

Absolutely.

So yeah, it's like, because otherwise, um, I guess getting traditional funding on land is, is it impossible?

It's not impossible, but it's almost impossible. Yeah. Banks are, you know, most of them don't do raw land and typically it's 50% down, very short-term loan. A lot of times there's balloon payments and prepayment penalties and fees and points.

Right.

And high interest, you're talking 12-15% right now, where we're at 7 to 7.5% depending on the down payment. We work with 25% down as our minimum. And we're not doing a 30-year loan, we do 5 years, 7 years about the maximum that we do.

Nice.

But a lot of, a lot of the land I sell, I mean, people tell me, gosh, this is lower than my car payment. Yeah, where's your car going to be in the next 10 years?

Sure.

Yeah, it's going to be parked at the warehouse. Yeah. Um, do you, do you guys keep the loans? You service them yourself?

We do service them. Yep. We don't, we don't sell those.

No, you don't sell them off. We service them until the due date.

Yep. So we're holding their hands and until they pay off, uh, or sell. And we send out newsletter updates every year to all our customers. We have them all over the world. We have people from Japan, Japan and all over the world that have purchased land out in these areas. So, um, they're not planning to move out there or build, they're just buying it and holding it. Yeah, you know, and then hopefully be selling it for a lot more.

That's great. That's the name of the game.

That's right, that's the name of the game.

Yeah.

Um, can I tell you about a specific city and you tell me if anything's happening there? Sure.

Can I ask you?

Sure. Atalante.

Atalanto. Yes.

Anything going on there? I'm looking at a deal right now and it's land. And so I'm like—

There's a lot of warehouses going in.

Okay.

In 2016, that city, um, was, was not doing well. I mean, they had a deficit and, um, the mayor at the time, um, introduced medical marijuana cultivation. So they rezoned— they didn't rezone, but Uh, a few of the industrial parks out there, they allowed for cannabis cultivation. The land skyrocketed. I mean, it just went nuts. And then they have expanded that zone. So all the, all the industrial zones out there now allow for it. It's no longer medical. It just can be recreational as well. So that's created thousands of jobs.

Okay.

So yeah, and then it's very close to what's called the Southern California Logistics Airport, right on the border of Adelanto. It's actually in Victorville. Southern California Logistics Airport is a huge project. It's a multi-billion dollar project. It's the former George Air Force Base, and that base closed, you know, years ago and just sat there empty. Well, there's a history of these bases becoming airports. So, um, they are expecting 24,000 jobs alone just at that project.

Ooh.

And today there's a parade of billion-dollar companies that are there. Amazon just finished a million-square-foot fulfillment center there. Boeing is there, FedEx, Rubbermaid, Dr Pepper, Goodyear Tire, Mars Candy, Red Bull, Iron Mountain Coffee. So those are just some of the companies that are already there. And then they're planning to build on the next phase, a multimodal railroad yard. So they're going to start railing cargo from the ports of Los Angeles and Long Beach up to this facility.

Mm-hmm.

Because the rail goes right next to the airport. So they'll bring in a rail spur and that'll eliminate a lot of trucks off the road, which travel through Victorville area to get to their destination anyway. And it'll be more efficient and save time and money. So that airport is a U.S. Customs Foreign Trade Zone today, so they can fly cargo in and out duty-free, tax-free. So more and more companies are pouring into there, and that's different than Apple Valley. Apple Valley Airport has where the Walmart and these other projects I mentioned, so there's actually 2 airports there, but this is a bigger project. The logistic airport. So Atalanto is benefiting quite a bit because it's right on the border.

I'll buy it.

There you go.

Are you are you a salesman? Because it's working.

Okay.

I'm gonna get a little spell on you.

That's right. It's working.

Yeah.

No, that's that's yeah yeah because I mean you look at it on a map. I was looking at it on Google Earth or whatever you know and it's like just. Desert.

Absolutely.

But, you know, then if— I'm sure if you speed that up, all of a sudden you see the buildings start popping up, boom, boom, boom, more roads, more utilities, you know.

Exactly.

So it totally makes sense.

Yeah. And then with our financing, we're not a lender, we're just doing seller financing on our own property. So these are all private inventory that are not in the MLS, and there's no credit check, there's no income verification.

Speaking my language.

So people can buy with affordable down payment and monthly payment and pay it off early or just pay it off over the term. And, uh, nice. We're friendly and easy to work with, so it's one-stop shopping.

Yeah, that's great. Um, I guess you mentioned you've had to move to these other spots where the land is, you know. I mean, Where, when, when they first started, kind of what was like, what was available versus, you know, I guess now?

Well, they've been doing it so long and, you know, I have— I wasn't there in the beginning, but they've been selling all over. Like, you know, even down in Palm Springs before, La Quinta, areas like that when there was nothing. And today those areas have done very well. And if you look today, I mean, anything out in Inland Empire, like Corona, Rancho Cucamonga, you're over $1 million an acre and people don't know that. So they're thinking, oh, you got anything closer? And then I show them just some listings. They're not ours, just as learning examples. And they're like, okay, let's go back and look at Atalanta or Apple Valley.

Keep going.

Yeah. Yeah. So But that's the next area. And the area has, you know, Victor Valley is where we're really selling the most. That valley has 4 cities: Victorville, Apple Valley, Adelanto, and Hesperia. There's close to half a million people there today, and it's expected to hit a million in the next 10 to 15 years. So that's double. So there's only so much land. We can't make more.

Right.

So as more population and developments come in, like these warehouses and Uh, there's high-speed rail that's just broke ground that we should be talking about here soon. And, uh, so that's going to be, you know, decrease the supply and push up demand. And that's kind of how it works.

Yeah.

So if you're patient, let all these projects come in, can do very well. Very well.

Yeah.

Imagine if you were, you know, young, like Frank Sinatra and all those guys that went out to Palm Springs and built their places out there and what the heck they're worth now. You know, it's like incredible.

Yeah, that's right.

We have stories about Bob Hope on our website. He was a famous land banker. People thought he was crazy. Bob, why are you buying all this dirt? Well, dirt turns into gold. Yeah, I mean, he'd made a fortune out in Palm Desert area and There's Bob Hope Parkway, I believe, or Boulevard, whatever they call it. And we have stories about him. He was the largest landowner in San Fernando Valley. He had over 10,000 acres.

Wow.

It wasn't so crazy when those developers needed land and guess who they bought it from?

Yeah, absolutely.

So yeah, yeah.

So I guess the next question is like, when do you know when to sell? Because you'll— I'm sure you get, you know, some people kind of lowballing you. You know, it's like the typical thing in real estate is like you got to buy low. So how long do you hold out until they're finally offering you that, you know, the offer you can't refuse?

Well, yeah.

So what the best— the best exit strategy is to wait for these builders and developers to make you offers. They need your land. So what happens in many cases is they're doing assemblages Just like this warehouse was 226 acres. Well, they had to assemble properties to get to that 226 acres. What, you're not going to find a piece that big typically.

Right.

So there could be 30, 40 landowners to make up a couple hundred acres. And if you're one of them, you don't want to accept that first offer because they come in low. But a lot of people do sign. And then they do another mailing with a, with a higher offer, and then more sign, and then more sign. And then the last ones in get the highest. I've seen it 4, 5, 6 times or more what the initial price was. So you want to be the last one in. I know a lot of our customers get excited. Tony, should I take it? You know, you know, I know you're excited and it might take 6 months, a year of back and forth, but they're not going anywhere. It's like they need your piece, not one down the street or around the corner. It has to be yours.

Right.

And you want to hold out and be one of the last ones in. So Of course, you can always sell and put it up, list it. Um, but the best strategy is to wait for that and wait for those assemblages. So it's good to have some vacant land nearby.

There's an old story. Um, Walt Disney, when he decided to open up Disney World in Florida, decided that he was going to you know, buy properties. But he couldn't just say, hey, I'm Walt Disney, I want to buy your lot from you, because the prices would just shoot up.

Right.

So he used an instrument that we use nowadays. It's called the land trust. And he was buying properties in the land trust and giving it different names and stuff so that you couldn't go into the county recorder's office and say Disney 1, Disney 2, Disney 3, whatever. So he wanted to keep everything private. And then after he bought all his land, then he put it all together.

Yep.

Yeah.

And we've seen that. I mentioned that Walmart distribution center. They bought 320 acres, but they didn't use the name Walmart. When Walmart buys something, they use the— they use the Pluto Project LLC. So no one knew it was Walmart. And then once they got all their approvals and they said, hey, we're not Pluto Project, we're Walmart. You know, and then, yeah, started their project.

That's good.

Yeah.

What if you're like— because you hear these stories of the developers come in and the people refuse, so they just build around it, and then there's like one tiny house in the middle where it's like, all this— you got— okay, you don't want to be that person either.

No.

You got to get it right when they're like, okay, this is the last offer.

I don't, I don't know that that would happen with land. No, mostly like if you have a house there or something, you have an emotional attachment. With land, there's not a lot of emotional attachment to it. Yeah, unless it was inherited or something like that. But—

Oh yeah.

Oh yeah, that's, that's a good picture.

Once in a while we'll get a stubborn—

Yeah, exactly.

They won't take it. They will not take it.

You're not taking my land.

Yeah.

Yeah, and then that's what happens.

They built a mall around this.

Exactly.

They'll find a way.

They're like, no place to go at night though.

Yeah, there you go. Yeah, plenty of parking, you know.

That's hilarious.

Oh my gosh.

Wow.

Oh well.

Yep, I love it.

Sometimes you just refuse. Interesting.

Okay, people love their house. They do. It's fine, you know. Yeah.

So we've got high-speed rail coming, guys.

That's right. That was big news.

That's the big news.

I heard that. I've been promised high-speed rail for many years.

Yes.

I know it. Me too. I've been talking about it, but we didn't, we didn't, you know, we, we teach them about all these big developments like the airport where we were solid. And, you know, this thing has been in the works for years and a lot of people are confused. There's actually 2 high-speed rail projects in California. The state that's been building since 2013, they actually started. And that's the one from Northern California down to Southern California. So a lot of people get that confused. This, this project is called Brightline West, and it's going to run from Rancho Cucamonga, stop in Hesperia, which is in the area where we're selling, have another stop in Apple Valley. And then once it leaves there, it's going straight to Vegas, right to the Las Vegas Boulevard and Warm Springs.

Oh, wow.

They've got 100 acres there. So there's 4 stations and it's 200 miles an hour and it runs right in the middle of the 15 freeway. So they're, uh, they broke ground April 22nd, just about a month ago. They had the groundbreaking in Vegas. They've gotten funding. They got $3 billion, uh, in December from the Department of Transportation and more money in January from Nevada and California. So this project's a go. They've got, you know, it's going to be like 30,000 workers building this thing. They're working on it right now, doing borings in the middle of the freeway, and they can finish this project by 2028. And they want to have it finished before then because the Olympics are coming to Los Angeles in 2028. So, um, so we're pretty excited about it. It's been hot news. So it's, it saves me a lot of talking. I don't have to talk about all these other— all people want to know about is the train. Right.

Right.

You had me at the train.

Yeah.

High-speed rail.

So $3 billion. I think that's what I paid in taxes last year.

It's weird how it matches.

I was wondering where that was going.

Lined up perfectly.

Wow. I'm glad that it's going someplace useful.

Yeah.

You know?

I might be able to take a train ride soon.

Maybe. Absolutely.

Maybe.

Okay. I wonder how much this happened. So I was talking to a seller. He had a property out uh, east of Barstow or maybe west of Barstow. And he was saying, I, I bought it like 10 years ago. There was supposed to be a big casino that they were gonna be, that they were gonna be building here. And then what, for whatever reason that didn't go through.

Right.

And so there's wherever he is, there's just not a lot of development still. Right. How often does that happen where they, they get all this hype and then all of a sudden the project just, you know, goes away?

Well, yeah, it can be like a house of cards if you're, if you're you know, pinning that project, that it's an if and a maybe, and there's nothing else going on, then if that doesn't happen, you know, it could be a long, long wait.

Right.

So we have something called our 100-point formula where we're not just looking at one thing, we look at a majority of things. So first of all, is it a, is it a big area that has a lot of flat usable land? You know, does it have freeway access? Is there industry coming in? Do we see big builders coming in? Are they bringing in infrastructure and utilities? A whole host of things that we look at. And if it's— if it meets all those 10 things, then that's the area you want to go into. So that way, if one project doesn't happen here or there, you're not left holding the bag.

Yeah.

So that's very important. That's a great question.

Yeah.

Because I hear that a lot and I hear stories like that, you know, all the time. So one of the, one of the main stories I, I hear all the time is Lancaster and Palmdale. They were supposed to build the world's largest airport there. This was years and years ago. And a lot of people jumped in and bought land out there and the airport didn't, didn't get approved for environmental reasons. And Today, those areas are great. You know, the property's gone up, but they had to wait, you know, 20, 30 years.

Right.

And a lot of people threw in the towel, you know, and didn't, didn't hold it.

Right.

Like Lauren's grandma.

I know.

Sorry, Lauren.

Needed to cash out.

Yeah.

Is there any like big solar companies that are coming out there?

Tremendous, tremendous amount. Yeah. Uh, we get announcements. In fact, I got a couple like that today. So, uh, Didn't receive them today, but just in the last month we got an announcement of a huge project coming into Barstow. We have land up in Barstow as well, and this is a let's see the company here: Obra Maestra Renewables. So Euro Wind Energy. So this is thousands of acres that are coming in with wind energy and then solar as well. We get those all the time. In fact, we just had to sell one, um, that was near Rosamond in Kern County. We just sold one there that was in an assemblage where they were, they were after that piece. You know, it was just a little 2.5-acre piece that we had.

Wow.

And, uh, we were probably the last one in. I think they bought 768 parcels. It's going to be the largest solar project in Kern County.

Geez.

And, um, what happens was if they didn't get our property, you know, they, they didn't want to landlock us, so they would have had to cancel over 20 acres. I guess it's okay to landlock 20 acres but not a 2.5-acre. So We held out and they made an offer that, you know, I'm sure it was better than what the neighbors got. Yeah, but they had to have it.

Yeah.

So that's— yeah.

That's great.

So they're doing that kind of stuff all the time. And then we even have a subdivision out in Inyo County, which is right at the border of Nevada. We have 2.5-acre lots in there for only $22,000 with our financing. And we just got this letter April 18th. This is going to be, uh, I didn't bring my glasses, but it's Bonanza Peak Solar. This is going to be just across the highway from the project, 2,400-acre solar project, you know. And this creates a lot of jobs. Some of those workers are going to need housing, so it could increase the demand for the subdivision where we have some property. And it's only 53 miles from Vegas. So we even have stuff like that, that, you know, for smaller starter people, or buy a couple for the kids for their college fund, you know, park it there and let it mature and sell it later.

That's a good call. Yeah, I remember we saw it, we were at some seminar thing where they said Warren Buffett was going into Palmdale or Lancaster and buying up a bunch of stuff and putting the solar on.

He put the largest solar project there Now, now it's getting surpassed. But yeah, that's, that's already in. That was a $2 billion project.

And that's where my other $2 billion went.

Yeah, there you go.

That's a previous tax year. Yeah.

Warren Buffett's amazing. Guy doesn't stop. So yeah.

That's great.

Okay.

So, um, are you buying in Nevada then, or—

We're not buying.

Okay.

No, we still have quite a bit of land available. We have hundreds of properties. So, you know, what we do is we don't push or pressure. We just educate like we're doing right now. And it makes sense for you or it doesn't. You know, land's not for everybody.

Yeah.

Um, but a lot of people like it. We get a lot of buyers, all kinds of people— Hispanics, Asians, you name it. We're a melting pot here in Southern California. Most our buyers come from here, but we do get them from all over the world as well.

Yeah.

You know, they're following the news, and the people that live in these areas don't buy.

Yeah.

They're asleep at the wheel. They're kind of too close to the forest, so to speak, and don't see it. So they don't know about all these opportunities that are right under their nose. So it's, it's always been that way.

Yeah.

It's outside people that are buying and They're not buying to move up there. They're just buying to hold it. And one of the things that we, uh, that people are doing, we're getting quite a few sales lately, uh, people using what's called self-directed IRAs.

Mm-hmm.

So they might have an old 401 or an IRA that they currently have, uh, traditional or Roth, doesn't matter. You can transfer that account or roll it over into companies that allow you to self-direct and buy real estate. So then your IRA is actually the owner on the vesting instead of you personally. It's your IRA. You know, it would say on the vesting, Equity Trust IRA for the beneficiary of Tony Tavera. And that's, that's how you take ownership of the property. And all the money comes from your IRA, and it could be all cash or financed. Uh, as long as the monthly payments, the property taxes come from your IRA, um, it doesn't, you know, it's no penalties for early withdrawal. And then when you sell the property, hopefully for more, obviously the money goes back in your IRA, just like you bought Apple stock at $100 and sold it at $180.

Uh-huh.

Uh, in your IRA. Uh, so same thing would happen with, with the land. So there's a lot of people that like that opportunity and don't know about it.

Yeah.

So I'm glad I mentioned that.

Yeah.

Maybe some of the listeners might have— they're like looking at their IRAs right now. Yeah, let's do it.

Yeah, absolutely.

Yeah.

Are— is anybody developing on it after they get it, or, um, like subdividing or doing anything?

Most of them don't. It's expensive to subdivide. Yeah, you know, it's another expense and You know, it's usually not. Most of them, most our customers don't develop. They just buy and hold it and sell it. And that's great. We got them all, landscapers buying and hairdressers, your hairdressers and nail salon owners and managers and you name it, you know, buying. So they don't know how to build.

No, of course.

Yeah, no, it's like And that's, you know, so what happens is they say, oh geez, I don't know what I'm doing. And they just won't move forward.

Right.

But to hold, they can buy into that concept.

Yeah.

So that's what most our customers do, but there's definitely development going on nearby and that's what gives them the confidence and certainty to pull the trigger.

Yeah. How are you guys, I guess, sourcing your, um, sourcing these parcels that you can then, you know, uh, seller finance to people?

Well, what do you mean sourcing?

Um, are you reaching out to other landowners like direct mail and then, you know, purchasing it from them and then seller financing that? Or—

Our agents usually do their own marketing and networking, and we offer Generous referral fees to other real estate agents that refer people to us.

To sell?

To actually, they refer the buyers to us.

Okay.

And then we pay a generous referral fee for that. And also unlicensed people, it is legal to pay an unlicensed person. They call that a finder fee, not a referral fee.

That's me.

As long as they don't talk price, terms, location, or negotiate, they can just say, hey, Call, you know, call Roberto and—

Right.

You know, he can teach you more about the property. And, and that's kind of what happens. And then a lot of our agents do, you know, networking and marketing and YouTube and Facebook and radio and all kinds of stuff. Some agents have more budget for marketing than others, obviously. But I have some of my top agents don't Spend a dime. It's all through word of mouth and networking and splitting with agents and stuff like that. So if you're an agent out there, you know, look us up. We might have an opportunity for you right now. There's not a lot of homes for sale right now. Supply is very low. Rates are high. I mean, our rates are pretty much what housing rates are. We were always like much higher than housing rates. Now rates have gone up. We didn't raise ours. We left ours the same. So that's a good move. Yeah.

And I think what Alex was trying to ask, are you guys acquiring more properties? I think that was his question. Right now, are you just trying to get rid of—

Right now we're not. Yeah, right now we're not, but doesn't mean we won't be.

Okay.

Yeah, we have our own in-house acquisitions in the past. So, uh, with what's coming in right now, they might fire it back up, you know, but they've got— we've got a lot of inventory that we can provide yet. And, um, so yeah, it's a good question.

Yeah. Okay.

Do you guys buy bigger pieces and then subdivide and then sell that off? Is that a—

is that— No, but they have bought some sub-existing raw land subdivisions. So subdivisions are a step ahead of raw land. You know, there's, uh, several steps ahead. They've all been engineered, the roads are put in. Uh, it might not have the utilities yet, but, uh, they're all, you know, every property has access, nothing landlocked. These are things that, uh, we have, and those are primed for developers to come in and buy in the future as well.

Hmm.

So speaking of subdivisions, there's a huge one going in right now in Esperia. They're moving dirt and putting the roads and utilities in called Silverwood. And for those that are listening in Orange County, you may have heard of Ladera Ranch or Rancho Mission Viejo. Same developer, DMV Development. So it's a 9,000-acre project. They're putting in 15,663 homes in there.

Dear God.

It's a huge community, and it's right near Silverwood Lake. So that's where they get the name Silverwood. If you know that lake, it's a Pretty beautiful lake. I haven't been there yet, but I'd like to go see it from the videos and stuff. And so they're going to have a 700,000 square feet little downtown shopping, their own schools. So it's just a huge master-planned community. They're looking at first phase homes selling in the low $400,000 range this fall.

Oh, wow.

So right now they're putting in the, you know, all the All the moving, all the earth and getting the roads put in. And so we have— and I'll pull up their website and show it, you know, in our conference room. We've got a big conference room. So most of the agents bring their buyers into the office and I give them a good hour presentation showing them all these projects. And by the end they're like, I'm sold.

Yep.

And then it's, what's your budget?

Yeah.

That's the next question. What, you know, what's, what's affordable for you, your down payment, your monthly payment? And then we'll pick a few properties and I show them right on the big screen. You know, with the tools we have today, you can put in an APN number, assessor's parcel number, and show them the property, zoom in, zoom out. Instead of the old days driving out there.

Yep.

And getting lost.

Yeah. There it is.

There it is right there. And most of the people buy just without driving out.

Yeah.

And if they want to, we have signs and we can give them driving directions. They can go see it. And usually the agent will take them.

And, um— So you have land around Silverwood is what you're saying?

Yeah, we— in that area. Well, yeah, we've got land in Esperia. And, okay, I think there's going to be about 50,000 to 60,000 people living in just that one development when it's all finished. It's huge. I mean, Ladera Ranch is 4,000 acres. This is over 9,000 acres.

Wow.

So big builders and developers don't go into areas and do projects like that without doing their research, demographics and feasibility. And yeah, so we're just following the money. It's not rocket science, right? So, you know, so the, the stronger the news is, the more I'm selling. That's just how it is for sure, you know.

So yeah, that'll be interesting, a Ladera out in Hesperia.

Yeah. You moving?

I would, but she's not.

You watch this video, you're gonna want to watch— you're gonna want to move out there.

The lake is just like the beach.

That's too far from the office.

Yeah, I know, that's true.

All right, yeah, whatever.

Okay, I'll just live in OC. Um, but yeah, I can— I kind of see that. Like, um, we went— we had a flip out in Fontana, and I had been to Fontana before, uh, but I remember a different side of it. And then we went and had like golf courses and it looked like a little Ladera. And I was like, wow.

Right.

Montana really came, came up.

You know, it's expensive there now.

Yeah.

You got stuff over a million an acre that I see listed out there.

Yeah.

20 years ago it wasn't near that. Right.

So it can, I mean, it's gonna be happening fast.

So it happens, you know, and I don't wanna say you have to hold 20 years. I don't think it's gonna be that long. We've never had high-speed rail before. I mean, all these projects are great, but the high-speed rail is, is a game changer. It really is. And they're just as excited about coming from, you know, going to Vegas. People in Vegas want to come down here.

Yeah.

So who knows, there might be theme parks in the Victor Valley one day so people can go up there, hang out with the kids.

And Walt is buying properties there.

Yep.

Yeah.

There— where's the big, uh, there is a big Disney friggin— oh, like Yeah, neighborhood out in Palm Springs. Yeah, that's right.

Interesting. Keep an eye on Walt, him and Elvis, and, you know.

Yeah, yeah, yeah. In our office we have these historical photos, before and afters.

Oh yeah.

I have one in Anaheim. It's unbelievable. 1954, there's nothing in Anaheim. 1965, Disneyland's in already. Freeway exits are in every 1 mile. And it is just, you know, hardly any land available. People made a fortune doing that. So it's like a museum coming up. You guys should come up sometime just to look at those photos. It's pretty, pretty cool.

So I know it's honestly like a blink of an eye. It seems like a long time, but it's once you're past it, you're like, That happens so fast.

Absolutely crazy.

Joe wants you to buy in Hesperia. Um, okay, we got some videos. I want to get your take, Tony. Um, we got some videos from the internet and I want to hear the expert's opinion.

Okay, where do I see them?

Here? Yep.

Yeah, I'll bring it up on here.

What do we got first?

Should you refinance your mortgage? Your Three signs that say it's time.

Wait, no, no, no, no, no, no, no, no, no. We got it's no. That's wrong.

That was last last week's.

Yes, you're in the wrong.

I'm under three percent, so I'm saying no.

She's in the wrong folder.

Okay.

Oh, we got it.

Wrong folder. Yeah. Okay. Three ways. More three ways to make money.

I don't see it.

Yeah, just there you go.

Okay. How to make money from vacant land.

Do we have any, uh, audio volume?

I'm working on it.

Okay, producer. Oh, okay.

I thought there was gonna be voiceover, so I feel like I'm in the club here.

So, uh, 3 ways to make money from vacant land: lease livestock, build trails for mountain bikers, ATV off-road enthusiasts, lease to contractors to store machinery and materials. What are your thoughts on that? If you have your land, lease it out to other people.

You can.

Uh, what are your thoughts?

You know, typically land's still affordable in, in the areas we're selling, so people are going to say, why would I lease it when I can just buy this piece? You know?

Yeah. Okay.

But it can happen and it does happen. So, right, with us, as long as you pay off the property first, we don't want you leasing it out Okay, um, gotcha. But yeah, and solar— some of these solar companies and windmill companies actually lease instead of buying. They give you like a 30, 35-year lease where you're getting, you're getting some money every year coming in and royalties on the power that you're generating. So, okay, I've seen that happen.

All right, so you can cash flow on the land, hopefully. Interesting. Okay, next up.

Why you shouldn't?

Here's the reason why you don't want to buy and hold vacant land. So first of all, when you have vacant land sitting there, it's not actually producing any cash flow every single month. Also, bank doesn't like financing vacant land. I mean, you have to pay cash for the land. When you got all cash for this land and it's not producing any cash flow, that is not a good investment. And then third, if you ever want to develop it out, it takes time to get permits, it takes time to build it out, and that could take years and a lot of risk. If you're going to buy and hold, you're better off buying a whole property versus vacant land.

Thoughts?

Well, I can tell you that we buy and hold vacant land, and he's right about some of that being— it costs money to permit. And, and, um, you know, there's no, no money coming in, but it's really pretty simple. The land doesn't know you own it or care who owns it. When it's going up, whether you own it or we own it or someone else owns it, all you've got to do is pay your property taxes, which in Southern California is about 1.25%. So if you buy something for, say, $100,000, you're looking at $1,250 per year.

It's doable.

Yeah. So, and potentially could write that off, right? And if you do take advantage of our easy seller financing, you know, um, Potentially could write off the interest. So there are some advantages to it, to doing it that way.

Yeah.

And, and I think like he was saying before, I mean, he's, he's selling lots at, you know, $20,000. You're not gonna buy a house for $20,000.

No, I know.

You know, so this is just a way to, to get into the real estate market at a really low price threshold. Yeah, I mean, if you got $1 million, you may not want to buy land unless you know that high-speed rail is coming right through it. They're going to buy it from you like in a short period of time. But I think it's a longer play is what he's talking about.

Yeah, yeah, the longer play for sure. Yeah, this is not a flip thing, you know. But I just had a customer last year, maybe the year before, Time flies. But they were right from Lake Forest, referral, and they were flippers, mother and son, Chinese. And my first question was, you know, why would a flipper want to buy something, you know, and hold it 5 or 10 years? And the son said, well, my wife's pregnant, she's not with me today, but mom wants to buy land. And they bought 5 acres, 4.84 acres to be exact, uh, Multifamily zoning for 20 units per acre. So almost 100 units can go on that property. And that one was, uh, $339,000 sales price. So, and they just paid cash.

So there you go. You know, that's kind of—

That kid's gonna be a big winner one day.

Yeah, exactly.

Probably just started walking by now.

Right. And they want to build those luxury apartments.

Yeah. So we have stuff like that too. Mixed use, Apartment zone, commercial. Commercial is your highest and best use for land. So typically higher entry point. You're not going to get those for $20,000. But I still have commercial for $110,000, $115,000.

And you can seller finance those?

Yep.

Oh, yeah. Okay. We got any more? One more.

Cool. The most expensive state to buy land? Okay, we lost sound again.

Lost audio again.

Oh, I see what happened.

Florida, with an average cost per acre of $67,300. The state's booming population has sent land prices sky high. Next is Hawaii at $75,000. The rocky island chain state does not have a lot of land to work with, which makes prices very expensive. Third is Delaware at $83,000 an acre. The state is the second smallest in the country, so open land is hard to come by. The second most expensive state is New Jersey at $88,000 an acre. Located next to highly populated metro areas, land is in high demand. And the most expensive state, Rhode Island, at $93,000 an acre. The smallest state in the country is also the most expensive to buy land. Keep in mind, these numbers are just averages, and you can certainly find land for cheaper in any of these 5 states.

Yeah.

With these stats, follow for more. These are the 5 most expensive states to buy land.

I forgot what number 5 was.

Florida.

Yeah. Okay, gotcha. California wasn't even on there.

That's hard to believe.

Yeah.

So I've seen some pretty high prices, like Los Angeles. There's no supply. So I saw in 2014, 8 acres on Wilshire Boulevard. It was a former Robinson May department store. So it had development on the property, like everything up there. Um, company bought it for $170 million, that 8 acres, got it approved for high-rise luxury condos, turned around and sold that project a couple years later for $420 million. That's over $50 million an acre. That's pretty high.

Wow.

So I'm sure that brought our average up. Maybe we're number 6, I don't know, on that list.

But we do some research on that desert land, so, you know, that's got to bring the prices down.

And a lot of stuff up north, like we have one piece in Shasta County, which is way up by Oregon, 42 acres for $129,000.

Uh, 42 acres?

42 acres, $129,000, Shasta County.

Wow.

Uh, you can put one like a ranch home and you can do, um, it's mostly recreational people getting out of San Francisco and like to have a little weekend house up there.

Yeah.

And we had a whole bunch of those. We sold them all. And then one of our, one of the brothers that owns the company kept one of the lots for himself and he thought he was going to use it because he liked to go up there and salmon fish and Uh, it's close to Shasta Mountain. It's a cool area. And, uh, you decided, yeah, I'm not going to use it, put it on your inventory list, see if you can sell it. So it's not our focus area, but you know, you're talking $3,000 an acre, 42 acres. If it goes up a couple grand an acre, you're talking, you know, another $80,000 right there. So—

Somebody called me today. I told Joe about it. He didn't think it was real. Uh, so an older gentleman, he's in the hospital. He has, um, I forget how many acres in Palos Verdes. Um, and he wants to sell.

You told me about this. I don't remember.

I told you this morning.

You did?

Yeah. So, uh, he wants to sell and give it all to charity.

Remember? Oh yeah, yeah, yeah. Okay. Got it.

So he wants to sell, give it all to charity. Um, there's an attorney helping him out, of course. Uh, so the attorney has it locked up, and then this guy called me and he's like, yeah, all we gotta do is get the entitlement and it's gonna be worth $150 million. Is that true?

Could be. How big is it?

I don't know, I forget.

I just picture this whole thing. That's how come I told you I didn't believe it. This— how old do you say that guy was?

80s, high 80s.

High 80-year-old guy In the hospital and the attorney's there going, yeah, what do you want to do with this? Yeah, you can't take it with you. You want to— okay, you, you want me to set something up and, uh, you want to give this to charity? Okay, I have a really good charity. It's called Going Into My Pocket.

Oh, I see what you mean.

Yeah, it's like, I don't know, it just sounded too far-fetched. Yeah, it's like We do cold calling and buying properties, and sometimes you'll get this, yes, I'm very interested in what you're talking about. I'd love to sell my house. Would you please take $1 million and put it in a bag? Go to such and such park.

Oh my God.

Put it in a trash can. Call me when it's there. I'll go pick it up and I'll sign the deed over to you. That's what it sounds like to me, you know.

I don't know.

Um, I hear all kinds of crazy stuff like that. I really do. Yeah. And we don't take listings. We're just selling our own properties. Um, there you go. But yeah, yeah, I hear all sorts of—

$150,000. What would you do?

I'm sorry, million.

What would you do? You'd buy that house on the beach.

Yeah, it's very simple.

Yeah, but then you have to pay 165 acres. Yeah, that's all he's gonna get out of taxes.

How much? 165 acres.

I still don't believe it.

It could be worth more than that. It sounds like something's wrong with it.

Yeah.

Should we investigate? How do we—

what do I need to figure out? I mean, in that area, I would say 20 acres is worth that much if it was prime.

You need assessor's parcel numbers to verify that this guy owns it.

Okay.

Yeah. And then you need obviously to get ahold of the attorney who put all this deal together.

Yeah.

And it takes time and money to get entitlements. I don't know how much time this guy has. Hopefully he's just in there for a routine.

What if we buy it?

Alex is just looking to flip it.

We buy it, we get it entitled, entitlement, and then—

No, no, don't do that.

Just, just, just flip it.

Just flip it. Yeah. Just flip it. Piece of paper.

Just flip it.

I wonder who he's gonna donate to.

I know.

Yeah, the attorney.

Who else? He's like the Red Cross. Yeah, I know. Okay, well, um, we'll see if that turns into anything.

Do we have any guests?

If just— we got Liz.

Okay.

Hi, Liz. Um, that's Alex's.

So if, if Anybody has like, or I guess what if somebody has like a deal like that? Like, do they take it to you guys? And do you guys, are you guys buyers or?

We're not buyers anymore for stuff like that. But, um, you know, some people I get. Yeah.

Tell him he knows.

I get what he's saying.

He's got a guy.

I know he does. Okay. Good to know. That's all I need to know. Say less. Sorry.

Sorry.

Go ahead.

Yeah.

Just cool.

Okay, sweet. Nice. Um, Tony, so if people want to get ahold of you, what's the best way?

Uh, you can go to, uh, email me tony@proland.com, or you can give our company a call, 949-951-2777, and, uh, ask for Tony. And, um, you know, I mostly get work, you know, with my agents. Uh, we've got quite a variety of, uh, characters.

Nice.

That work with us that can help out.

Nice.

So perfect. And Roberto is the one who introduced me to you guys. So yeah, you know, be, uh, funneling them to him.

Roberto's the man.

Roberto's the man.

Yeah, he's the man.

He's out here in these streets getting people excited about land.

He definitely is. He's out there hustling. He's got a lot of energy. He's a great guy. Yeah, absolutely.

He came over the other day and I couldn't lock the door quick enough. You know, he snuck in. Yeah, he's good. He's fast. Yeah, he's nimble. He just sits down. Hey, Joe, how you doing? I go, oh, okay. How are you?

Yeah.

Yeah. He's persistent. That's good.

Absolutely.

You have to be.

Yeah.

That works.

Yeah, that's what it takes to be successful in real estate. Absolutely. You know, people aren't going to knock on your door, so you got to get out there and hustle.

Yeah.

Yes.

Unless you're doing an open house, and I can't imagine you sitting in a 2.5-acre parcel out in the middle of the desert doing an open house, you know.

It's like tanning.

That's not gonna work.

It doesn't happen. People ask me all the time, why isn't your office in Victorville? Why are you in Laguna Hills? Because there's no buyers out there.

True.

The buyers are here right in our backyard.

Yeah.

So that's where, you know, we invite them to the office. We literally tell them, leave your checkbook home, come and get educated. If it's for you, you'll, you'll— yeah, we'll take the next step. If it's not for you, in the worst case, we have a cup of coffee, get to meet, and yeah, you'll learn something. So knowledge is power.

I'm always up for learning.

Yeah, we should go down there.

Absolutely. Just to see the photos.

Yeah, we're gonna have to check it out. Yes. Yeah, we'll take a field trip.

There we go. I'm into it. Cool. Tony, thank you so much. This was very eye-opening.

Thank you guys. I had a good time.

Yeah, really, really good time. And, and we'll link all of your stuff in the description box and make sure people reach out to you. And okay, hopefully have you on again soon.

Absolutely.

Yeah, I'm sorry Roberto didn't tell you about the Hawaiian attire.

I know that came in.

He came with a Hawaiian shirt.

Formal today, you know.

Yeah, he didn't tell you that, you know, this every Thursday is our Hawaiian shirt day.

Pretty much.

So, but that's okay. You look really nice.

Thank you.

Very professional. Yeah, you're good. Yeah, thank you for coming. I appreciate it.

Thank you, Joe. Thank you.

Thank you guys so much. If you have any questions about land or anything, reach out to Tony. And we'll see you guys next week.

If you want some more advice on real estate investing, reach out to us one-on-one.