Land Investing Mistakes—No Big Deal

Hey, everyone, it's Scott. And welcome to the Land Geek Podcast Roundtable. Today, Mark is out. He's on vacation, actually, with his family. Someone just told me. I think he's at the Cheesecake Factory.

No, no, no, no. He's at one of my favorite factories where they make cheese. Scott.

So you guys are hearing me. The Cheesecake Factory. So next time you see Mark, make sure that you razz him about being at the Cheesecake Factory, and he won't know what he's talking about. And just tell him that I said so. Good enough. And Tate. Tate said so, too.

I didn't say so.

All right, so let's go. We have a smaller group today. We've got Scott Bossman. I forget. I don't know Mark's all his nicknames for you guys. I know, Bear Land, but come on. The Nightcap Meister. Is that what it is?

The Nightcap Meister, I believe, is my new nickname.

We got to change our headings there, so I get it. And then we have the Bear Land. I know that one. Aaron Williams. How you doing, Aaron?

I'm doing great.

What?

No, no. Roar. Come on, man.

Well, no, I thought. I thought the law of diminishing returns was applicable to it.

All right, all right, about.

How about. Hey.

We got it after all. Then with us is Eric Peterson. Eric, how's it going? Pretty good.

How are you?

All right.

Good.

And we also have Mimi. Mimi's here.

Hi, there. How are you?

I'm good. How are you?

Great.

Awesome. And then you already heard him. You know, he's on the call because he's talking about the Cheesecake Factory. Tate. Tate, how you doing? I'm good.

But let it be known that Cheesecake Factory is not my favorite. I mean, it's a. It's too loud in there. You ever tried to have a conversation in the Cheesecake Factory? You can't do it. The music's always so loud.

So.

Yeah, I can guarantee Mark's not at the Cheesecake Factory.

And the calories, man, the calories are, like, huge there, aren't they?

I mean, that's why you have a peloton. Don't you ride, so you can eat?

Yeah, I actually. Because I ride indoors, I can ride and eat at the same time as opposed to, like, outdoors, you know?

Yeah.

But the good thing about me is I'm not worried about crumbs going everywhere, Right? I can eat, make a mess, spill water all over the place, and it just. It's just for the birds, right? It's okay.

I got A mat here. The dogs love it.

It's all good. All right, all right, touche.

All right, all right, so listen, I think we have a cool topic for today. A few weeks ago we talked about kind of some case studies. We did a roundtable and some case studies, some of like our last deals. And we wanted to reverse the tables a little bit today and we wanted to really share with you guys our biggest mistakes, if you will. Because look, the reality is that we're all going to make mistakes and sometimes people make mist. And you're going to make mistakes too, if you're doing any type of real estate. The cool thing that I have found is that in the mistakes that I've made, they've all been fixable. Now, maybe for you guys it's not that way, but let's see, let's just go around and let's just first go to Scott Bossman. Scott, biggest mistake, man. I'm sure you've made one. What is it?

Oh, I've made a lot of mistakes. The biggest is I did a deal, it actually probably a year and a half ago now, I bought two properties from a guy and one of the properties was joint tenants with his deceased wife. And one of the properties was tenants in common with his deceased wife. And I got a little bit lost in the shuffle and purchased both the properties. One, the joint tenant's property, I was able to purchase with the death certificate of his wife. But the other property I then became ownership with his deceased wife because he technically should have gone through probate before I purchased that property. So that was a couple hundred dollar mistake that was a big pain. But I was able to find a resource to help me address it and utilize a paralegal who kind of helped me wade the waters, wade through the waters, if you will, to get this deal fixed. So that was one of my biggest mistakes that caused a lot of frustration and hassle. Well, I can't hear you.

Sorry. So it was fixable. It just cost you a few hundred dollars, right? Okay. All right, well, that's not too bad. I mean, you know, at least you got it fixed and, you know, resolved and you move forward and still profitable on that deal, right?

Yes, exactly.

Yeah, that's pretty cool. All right. Bear land. Bear Land. Biggest mistake, man. What is it?

I may have talked about this one before, but I bought a property that was like the letter telling the landowner that the taxes or that the property was going up for tax sale went to the person I bought it from at about the same time that I Bought the property. So I wasn't aware of it, and I didn't have a good handle on the amount of time in that particular area. That property could have back taxes before it was going to go to sale. So I bought the property, marketed it, sold it, and got a letter from a gentleman who said, hey, I just want to let you know I own this property now because I redeemed the tax certificates on it. And so all of a sudden, now I've got a customer paying a note on a property that I don't own. So I got ahold of the guy and we had a nice conversation. And, you know, luckily he was somebody that was willing to work with me, wouldn't necessarily always be that lucky. But he sold me back the property for what he had in it just because he was pretty nice guy. So unfortunately, I didn't, you know, make a huge profit on that property, but I retained the note and there's still a little bit of profit in that. So basically it became a. Instead of something I bought, you know, for a quarter of market value, it became kind of like I bought a wholesale deal. So it worked out. You know, it was a mistake that could have been a lot worse. I could have had to refund my customer all that he had paid. But know, it did work out.

So.

But that was, that was a big one. I learned. Learned good lessons from that one.

And I think that's the thing too, right? Like, I, you know, I think that we are all scared to make mistakes, right? You know, like, we all, we. No one wants to make a mistake. It's not fun making mistakes. The reality is, is that, you know, like, for me, the way I always think about this is my investment is so small in these properties, you know, my average investment, sixteen hundred dollars, that if I made a mistake, I'm gonna lose $1,600. That's my loss, but yet I've never lost one straight out. But there is that potential, right? Like anytime you're doing something, there's the potential. And like your scenario that you just did, in a way, you kind of lost the land. You were able to recover it. Lucky thing you were able to recover it. But then at the same time, you learned a very valuable lesson along the way, right? Like, this is something we gotta check on in our due diligence. Like, man, how delinquent is this? And when are the taxes really coming due?

Absolutely.

Yeah. That's cool. Well, it's not cool for you, but it's cool that you were able to recover all Right, let's go to Eric. Eric, biggest mistake, man.

I don't know.

I've got a couple I want to talk about. So the first one I was purchasing bulk properties, I think it was probably about a dozen properties from a seller and paid them. They deeded me that group of properties, we recorded it and a couple weeks later got a letter back from the assessor saying these two properties on that deed already have been sold. Or you know, there's a different owner on them. They were sold prior to you making that purchase. And in the meantime I had actually taken a deposit to wholesale. One of those. So quickly remedied that and refunded the buyer on the wholesale side and was able to reach out to the seller. This was a seller I had a relationship with. So it wasn't a huge deal, but it was frustrating more than anything else. Just kind of in the time part of it and dealing with getting it all resolved. But the seller gave me two other properties instead that were basically equivalent and we worked it out that way. So that's one that comes to mind. The other one is this one's more just kind of around the business as a whole. And I often tell my coaching students this. When I got started, I had a full time job and I was doing this on the side. And the passive income piece of this business became really important to me. You know, I didn't ever want to see that number go down. I always wanted it to go up and up. And because of that I wasn't willing to sell any notes and recoup my capital faster and redeploy it back into the business. And that would have been the ideal time to do that. I would be much farther today if I was doing that while I had another job. I didn't need that income. You know, I had a lot more flexibility though. Those numbers were great on the passive side, you know, as they were growing and getting bigger and bigger. You know, I would have just been that much further along today if I was selling those notes back then and redeploying that capital. So. So that's kind of a, you know, kind of business strategy type mistake that I think is very hard for a lot of people just getting started to let go of some of that passive income because it feels so great. Most of us don't have that outside of this business. So as it starts to accumulate, it's hard to let it go. But the reality is if you've got full time work outside of this business, that's your best time to utilize that Strategy.

And you can always, you can always sell your notes@tlfolio.com See, Mark would be proud of me for plugging that in there, right, because he's the expert, that piece. But Eric, it's kind of cool that you talk about the selling notes because I've always said that. And I did the same thing, right? I wanted that passive income, but while I didn't need the money, I went off and sold some of my notes to generate more capital to go buy more properties. And I talk about this in flight school, I talk about it. And every time I talk about my story, I talk about the fact that I leveraged other people's money. And to me, the safest way to do that is through selling just a portion of the notes. Sell 12 months of the note payment and move on. Now the other component to that is to me, it's a lot like playing Monopoly when you do that. Because if you've ever played Monopoly, you know that like you go around the board and the goal is to collect as many properties as you can. And clearly you can't go out and you can't put a hotel, just you can't buy the property and then put a hotel on it, right? Like that's not the way that the rules work. But the more of these properties that you can accumulate on your first few times around the board, well, that's going to set you up for success later on. And I look at this the same way is like if I can pair off some of that passive income that I'm generating today. And I wouldn't say pair off all of it, like I always say, like stick to a 50% maximum of 50%. So if you have 200amonth coming in, we'll only sell one of the notes or you know, $100 of that particular passive income stream. Because what you want to do is you want to be able to go around in that first few years and gather as many of these properties as you can. And then as the first 12 months come along and you cycle through it, all of a sudden now you've taken that someone else's capital and you've went out and deployed it at a much higher rate and you've bought all these other properties and then your passive income is some substantial number higher. It's 6. It's not necessarily 10x, but it all depends on how you deploy it. But if you deploy someone else's money, you're freeing up capital today to go do it. Just to me, it's a no brainer But I get it. People want to hold on to it and protect it, and I would too. So glad that you kind of looked at that and found that solution, too. That's cool.

Yeah.

Mimi.

Mimi, what's your biggest mistake?

So I talked about it the last boot camp. I had an accepted offer from a guy like 1175. 1175. He was a trucker who was traveling. So he let his friend work with me on the transaction. So, you know, it was to buy the property. Okay. So I went and it was to buy the property. Right. So I paid him for the property. 1175. And the. The guy's friend calls me back and goes, you're a zero short. You owe us like $11,000 more dollars. They thought, or he thought it was $11,750. So my stress level went through the roof. I was so stressed out, and the trucker and his friend were sending me the meanest, most obnoxious texts. And it was really upsetting to me, you know, and threatening to go to the sheriff. And as a woman, I was really upset. But I stopped reading my texts, and I would have my husband kind of scan them for anything that was important, like if my daughter come pick me up. Because I was so afraid to look at my phone. And so literally, I was so afraid. I went back the next day, I swapped it back, the deeds back, so that he had the property. And I called the guy, you're gonna send me my money back, right? Well, I'm on a four day trip. Four days later. Well, I spent the money and I was so stressed out, and I knew my husband was gonna be so upset with me. But the check did come. It took about 10 days. But I don't. I don't know. I don't know how that happened. I think it was because there was a middleman involved. He had accepted the offer on the offer letter, the piece of paper. But the friend saw how professional I was during the whole time and that I didn't get nasty in response to what they were saying to me that he's now looking at buying a really big piece of property from me. So it made a friend and a client in the process, just because I kept my cool and remained professional about the whole thing. But so stressful.

I mean, that is a very important part, like being able to, like, remain professional, remain, you know, honest and transparent about it. And if you make a mistake or if there's a confusion, just give back the money. Like, to me, that's the fastest way to build credibility around and we actually had a guy that bought a property from us back in November, and he made his down payment of like $75. Okay. And then he made his first month payment of like a couple hundred dollars. And then he stopped making payments and he was actually delinquent. We called him. We're like, hey, what's going on? And he's like, well, you know, you're not gonna give me the deed on the property, and I can't do what I want until after it's paid off. We're like, that's right. He's like, well, this isn't gonna work. And I'm like, we'll just pay off the deed or pay 50%, you know, some substantial amount so I know that you're in. He's like, no, I'm not gonna do that. And I want all my money back because you misled me. And he was after the 90 day return period, you know, like the swap period. And plus he was delinquent, which kind of negates that anyway, in my opinion. And, you know, he was talking to the sales rep that he dealt with, and she's like, I don't want to give him back his money. And I'm like, he's going to be an energy vampire. Give him back his money. And she's like, I'm not getting back his doc fee. I said, give him back his money. So she gave him back the money. I'm like, it's not. It's not worth it, right? Like, even if it to me, if. Even if it was a cash deal, if you're going to. If you're not going to be fun to work with, man, get rid of that guy and move on to somebody else because life's too short. And so like you said, like, you could have argued over and said, no, this is the way that it is. The reality is you did the, you know, did the right thing even though they were wrong. And look, you'll probably get a big sale out of it. You'll probably make more money than what you could have off the other one.

Yeah, maybe. Awesome.

That's a good story. Watch out for those truck drivers to call me, man. You don't want to mess with me. You should have been like. You should be like, listen, do you know who I am?

I don't think you realize you don't know who.

You don't know who you're messing with, Jack. I'm trash can you right now.

Look up.

You see that drone? Oh, no, you don't. That's Exactly.

Run. Run now.

You better run. And I still can see you.

I guess I realized, make sure I have the money before I file the deed. That was a big lesson in that.

Yeah, good point. Good point. All right, Tate, the big papa man. Big mistakes. What is it?

You know, I've made a few good mistakes. One mistake most recently that we made was we double sold the property for cash both times. So I guess we sold it once on terms, and then we sold it for cash, and we deeded the property to the second person, and we just made a mistake when we entered the APN into LGPass. So we had. The last digit was supposed to be a zero, and we hit one. And so LGPass didn't alert us that, hey, this property's already been sold kind of thing. So I ended up having to go to the person who bought it for cash, and I explained the situation, and, you know, he was pretty upset about it. And we told him, listen, we're going to make it right. Not only are we going to, you know, we can give you your money back, or I've got a similar property in the same area, and because we made a huge mistake, we're going to give you 10% off of it. And he ended up being okay with that. And same thing that Mimi just said, because we handled it professionally, and we just kind of owned up to it and said, listen, this is our bad. There's no excuses. We simply messed up. He was very understanding in the long run. I mean, we did have a few heated text messages exchanged, but for the most part, he kind of cooled off and realized that mistakes happened. We weren't trying to keep his money. We were trying to give him his money back, actually. And he really wanted land out in that area, so we were able to move him onto something else. And then that's a mistake that's happened once or twice now. But one of my biggest mistakes ever was when I first got started, I found this honey hole where I could buy lots for, like, 100, $150 a piece, and I could sell them for cash for, like, 4,500 bucks. And I did, like, five or six of these deals. And one of my biggest mistakes, or regrets, is I ended up wholesaling, like, 20 lots in that area to a guy for $1,000 a piece. And because he bought them for $1,000, he took them to the marketplace and ended up selling them for, like, $2,500 cash and just destroyed the market there. And I regret doing that so much because I was sitting on 20 properties. But I got distracted by the quick money and let them go for something that I shouldn't have done. Now, I was happy at the time, right? I made 800 bucks and everything was great. And then I went out and used that money and bought more land in that area. Tried marking them at 4550 because he sold all of those for so cheap, people weren't willing to pay that anymore. So that was one of my biggest mistakes.

All right, so that makes me want to, like, get on my soapbox here, right?

I know. I'm sure you do. I'm sure you've got a good lecture in there for me.

Not just you, but like, for everybody. Like, here's the thing. Like, I know I even talk about this in flight school and people are like, eh, whatever. And I know you guys are going to agree because I don't think that. I don't think anybody. I've ever seen anybody on this call do this. But here's the funny thing, is that one, you know, like, when you find kind of this little spot, it doesn't mean that, you know, like, you have to always keep it to yourselves. But there is this thing about, you know, like, you know, like, I grew up in a corporate America kind of a deal. It's company confidential, right? Like, there's certain things you don't talk about. Fight Club is one of them. You don't talk about company secrets because it gives you the competitive advantage, right? There's little things that you always need to be doing to try to keep your competitive advantage. Here's what I love. I don't love it, but here's what my pet peeve is, man. I see these groups on Facebook that are like, the lots are hot and vacant land groups that people love to post their ads on, yet nobody ever responds to them. And I think, I swear these. These groups are set up by other land investors to see where other land investors are. Why are you wasting your time posting there?

I completely agree.

I mean, does anybody disagree with me? Like, you guys have any success with that?

Oh, look.

Oh, look in the feed to see if anyone's responding. And I never really see any response.

Nobody. They're like, hey, I'm gonna post here. You're posting the other land investors, which is cool. But now I know where you are. That's one of the things I don't like about Facebook, man. Like, let's just share.

It's like, thanks for giving me an inside look at your inventory.

Right?

I mean, I guess you could argue that kind of land. Moto does the same thing, But I don't know. I don't know. I guess it doesn't really matter, right? I don't know. It depends. But look, to me, if you're gonna post on Facebook, do what Mimi teaches, which is go to the market or go to the buy sell groups, the local buy sell groups. These things that are like, lots are hot, and everybody loves land. Nobody loves land except for you and me. That's it. Even then, I'm not sure that we love land like, we love the income stream that it produces. But the land to me is like, okay, cool. All right, I got off my soapbox. Now I will talk about kind of my. A mistake that we just recently made. And this is one that was. Look, we've made mistakes along the way. We've. I've done the Scott Bossman mistake where you, you know, you buy it and it's tenants in common or something else. And I probably made all these mistakes, too. I don't know. Somewhere along the way, you can always make them better. But this one that we just did absolutely kills me. Here it is. We went out, we bought a property, and it was held joint tenants with rights of survivorship. Cool, right? The husband's deceased. No problem. Give us the death certificate. They did. So we bought this thing. We present the death certificate to the county. They record it. All is good. We sold the property for cash. The problem is, is that on the death certificate, where it says marital status, it marked that he was divorced, not married. Therefore, because that death certificate was marked divorced, the joint tense with rights of survivorship, which doesn't really make sense to me, because it should transfer. The joint tense with rights of survivorship split. And the fact is, is that we their tell us. Now we have to go through probate to clear that off. So we're fighting with the county right now to kind of get that resolved, because joint tense of rights to survivorship is joint tense with rights of survivorship, period in the story. Doesn't matter. In our opinion. Doesn't matter if they're divorced or not. They still have the right to it. So that's what we're working on. And that's kind of my biggest mistake right now. And I'll let you guys know how it works out. Okay? So I'm sure we can get it fixed. All right, let's transition over to who's got the tip of the week. I didn't ask in advance. Does Mimi have it?

I am. I don't know. If you'll like it, because if no one else has one, because I'm doing a quote.

Okay, go ahead. I love quotes. Don't tell Mike Zano that, but go ahead.

I wrote it on an email this week. I just love this. It's by Peter Drucker. Entrepreneurship is neither a science nor an art. It's a practice. Practicing.

Yeah, that's a good one. Keep practicing. Keep growing your business. And it's never, it's never done. If it's done, you're done.

I always, you know, everyone says, oh, you can do this. You just got to keep going. And I always, I doubt myself. I think they can do it, but maybe I'm not going to be a good salesman. They can do it. Maybe I'm not going to make sound business decisions. Well, I just need to keep practicing. And it's, it's. And it's working.

Yep, Yep. All right, listen, that's a good quote, by the way. Mimi. Listen, if you are interested in learning how to scale your business, check out flight school. Scott, it's the link is thelandgeek.com training training to schedule.

Call with Mike Zane or myself to talk about flight school.

You guys have got. If you're on this call and you haven't taken action, please do yourself a favor. Talk to Scott Bossman. Talk to Mike Zano. Figure out how you can plug yourself in. Whether it's flight school, the investors toolkit, other types of training are available. Understand how you can scale your business. You can do it to create the lifestyle that you want. And then you can, I don't know, beyond here. You can kind of. We can debate Facebook groups for land only or not. That's a good, that's a good question.

For the, for the, for the group, too.

Should you do it or not? Let's see what you guys say. And take, Take action. Learn more@thelandgeek.com training. I look forward to teaching you and showing you how I built my business. And that's what we do in flight school. Learn how you can grow your passive income. That's the, That's a great start to go. Also, also, you can get lots. That's looking over Tate's shoulder. Don't forget about that. Who doesn't want to look over Tate's shoulder? I'm on this call right now. I'm looking over his shoulder the other way, and I'm wondering what's on his screen right now. What's he doing? Don't you guys want to know what he's doing? Right now. I do.

I hope he's paying attention to this call.

Yeah, I'm multitasking, Eric. I'm multitasking.

Yeah, there is no such thing.

All right, so let's do this. Ready? Bear Land's got to mute himself.

One.

Three, let freedom race. All right, thanks, everybody. What? Tate, what is on right now, man?

Okay, just watching it, like, on the other screen. I mean.

Yeah, I'm not sure about that. What we need is we need the ability to, like, spot check everybody's screen. Show me what's on your screen right now.

That's why I have the iPad beside.

Me, so in case we did the spot check. Mimi's clean iPad over here, though.

That's what you need in flight school, I bet. Make sure they're paying attention. Yeah, browsing Facebook.

But you know where we won't need that is in flight school live. Because we'll be able to see them right there. We'll be able to wander the room. What are you doing? Why are you on Facebook now?

We need to get a ruler, right?

Like, oh, yeah, I got the mini bat. We got the mini bat.

Don't worry.

That's good, too.

Ruler.

We'll start breaking mini bats.

One of those electric fly swatters.

Listen, that would be the big bat.

For that weekend, Scott.

You know. You know what's what? I can see this now. Like, we got the mini bat. I need the, like, the ones that break very easily, like, these breakable mini bats. So then I'm like, you're gonna mail, and I slam it on the desk, and it breaks into pieces, but it's all, like. Maybe it's foam or something, right? Like, oh, man. Or I, like, bend it. Bam.

Be great. They're like those staged bottles. They're made from sugar.

Yeah, that's it. That's exactly what I need. Sugar to go flying around my office.

Your dog will be happy. The dog will get fine.

The dog will die from the sugar. Thanks to Bearland. Bear Land's killing my dogs over here. What's the tay. You going to the Cheesecake Factory for lunch now?

Yeah, totally.

How'd you get on? That went from the donuts. What was with the donut? Boxer donuts.

Oh, you like that? That was just, you know, I was just out eating some donuts and wanted to brag and show you guys that you could be eating donuts, too.

I mean, so funny.

No, Mark's in. He's on a vacation, and he's eating at one of my favorite places that I like to go to. Buy cheese. Not at the Cheesecake Factory.

They sell cheese at the Cheesecake Factory.

I thought it was Cheesecake Factory. Like I said, it's too loud. It's like having a meal by yourself there.

Yeah, yeah. We're going to be able to twist this for years and years and years to come. I know we are.

There is a cheesecake down the street for me. Sometimes I go and pick up cheesecake to go, though.

Yeah, you're saying it's loud, man. Like, it's so loud. But, Tate, you're acting like an old man with a hearing aid, man.

Listen, I only go to daytime movies. I go to bed, you know, late, early. I'm trying to get up early in the morning. Like I'm not, you know? To me, like seeing a movie when the teenagers are out of school, that's like the worst thing in the world. I want to be.

Well, you don't like it when the older kids are there?

Yeah, they're just loud and they're texting one another. I like it with the seniors because they're respectful. I mean, sometimes when they whisper, it's not a whisper, but other than that, they're really good moviegoers, you know, they're content. They sit down. They're not up and down. I'm an old man trapped in the body of a 29 year old scum.

All right, man. Jeez, Tate, I don't know what to do with you, but go to the Cheesecake Factory, man. All right, guys, we'll see you guys later. Bye.