Land Notes as an Asset Class: Building, Valuing, and Exiting a Land Note Portfolio

Eat baloney, buy land! Oh! Eat baloney, buy land! Play the fork or the deed in your hand! Skip the filling, let the sandwiches stand! Your fortune will grow when you buy your own land!

Good evening everyone, welcome to Land Geek Nightcap. You know, we might need to re-explain that song somewhere along the line here because I think it's probably a 6-month-old joke by now and we may need a refresher. It's an amazing song.

I dance around when that's playing.

I do too, man. So welcome to Nightcap tonight. So tonight we're talking about land notes as an asset class, right? So the notion getting into land deals is that we're gonna, you know, sell land for cash or sell land on a terms deal. But the thing is, with the terms deals, they can really turn into a portfolio of assets that bring you significant value in life, right? So sold property is great and everything, but for most of us that are in this, we're in it for the long haul to grow a portfolio of properties that pay us monthly, and that foundation of properties can really lead to freedom. So that's what we're talking about tonight, the land portfolio, not just onesie-twosie deals. How's that sound, Zeno?

One, it sounds amazing. So we're not talking about selling portfolios, we're talking about buying, we're talking about having a portfolio, or is it all the above?

Yeah, we're talking about having a portfolio, managing a portfolio, I mean, why would you want to sell the portfolio? We're not in this— I'm just kidding.

I'm just listening to your intro, trying to get synced.

I said nothing about selling a portfolio.

I'm just excited to see you tomorrow, Scott. Okay, I'm sorry.

We—

I'm very excited to see you, Mark and John.

I'm excited to see everybody. We all get to be together.

Yeah, but you're most excited for Scott.

We know.

We can't hear you, Mark.

You say nice things about me and he's muted.

Yeah, by the way, John, I'm so excited to see you.

I'm the most excited to see you, Mark.

Oh, wow.

Myself.

See how it feels?

See, it's left versus right tonight. There you see that line down the middle? It's there for a reason.

For the show, Mark, we were talking about how we're all going to get groomed tomorrow. I'm going to get everything trimmed up nice, get my hair done. Gonna look good.

Yeah, I haven't shaved all week just to get it all nice and tight. Yeah, I'm so excited. I can't wait to see you guys.

What are we doing tomorrow? Should we even tell people? Wonder why we're all getting together? Should even throw that out there? Should do that later. I don't know, they're probably wondering why we all— why are we all getting together?

Yeah, well, I think we should like— dude, buddy, you gotta like do the proper intro, like who we are, what we do.

Yeah.

Yes, let's do that. So Mike got ahead of us. He gets excited. So let's do intros. So my name is Scott Bosman. I've been a land investor now for over a decade, coming up on 11 years, right? And we get together every Tuesday night, we talk land investing. We're in kind of a niche of a niche. And Mike Zeno says this, right? Land investing is kind of a niche in itself, but We're kind of, we kind of do a little bit different model because I'd say most of the properties we buy are a little bit cheaper. They're between $1,000 and $5,000. And then we'll flip those properties for 3 to 10 times that cash. We like to owner finance these properties to create a steady stream of passive income for us. So we are land investors in this realm. And it's a lot of fun and this business can bring you Freedom. As always, I am joined by Mike Zaino, land investor, note builder.

I thought you were gonna say extraordinaire. That would have been so cool.

The dealmaker. The guy, you know what I love about Mike is within like 5 minutes, he can tell you whether a deal is good or not. So that's one of Mike's strengths. So Mike, good to see you.

Nice to be here.

John Burnett, land investor. He's the systems guy. He's the thinker. He's always coming up with good ideas.

I'm the thinker.

He's the thinker. Yeah. Good to have you here, John. And the man, the myth, the legend himself, the Godfather, Mark J. Podolsky. The reason we're all here. Mark, good to see you.

Thank you.

Cheers.

Cheers.

You were saying?

I'm just so excited. We got coaching live this week, which means the four Jamouks are going to be together in one room. Talking land investing with our one-on-one coaching clients, our Unfair Advantage clients. It's going to be absolutely epic. Do you guys know how we're starting the, uh, on Friday with, uh, we're kind of doing like the whole Hormozy thing. We're doing live business audit for 2 hours with 2 land companies. I'm so excited. And, um, you know, it's, you know, Mike's going to be able to just like thin slice it in 5 seconds. It's not a good deal.

Like that. Ninja. You guys gonna play Fruit Ninja?

Yeah, love Fruit Ninja.

Back in the day.

I like the idea, Mike, of you having like a katana and just like a big old log of bologna and just slicing those.

Yeah, we're gonna have to explain that at some point. The eat bologna by land people first time hearing that. Can you imagine what Well, well, so let's do a little recap, shall we?

So, uh, oh man, I, I'm having a hard time coming up with the context of the joke now. John, try to help me out.

John Burnett's definitely the best one explaining.

I know.

I think, I think the premise was that, uh, we were talking about how we make land affordable for people.

Yes.

And so you can buy a piece of land for less than $100 a month. And Scott's point was if somebody just foregoes a few of life's pleasures, such as coffee, or maybe like, I don't know, ground beef, ground beef, just eat some bologna and buy land.

And it's very—

yeah, perfect.

Yes. No, I love it. Cut back in some other areas and you can be a landowner, right? So that's where the baloney, the buy land comes from. And John composed that song. Love it. Play that around the house. But all right, well, let's, let's talk about the topic here, guys. So let's talk about selling land, right? So we talked about selling land for cash. That's great. Zane, oh, we had a nice cash deal yesterday.

We did it, wasn't bad.

Wasn't bad, not too shabby, right?

Not too shabby.

And then, you know, I'm sure John Burnett, you've had a terms deal this week to sell a property on owner financing, right?

Yeah, oh, 10 or 20.

You're right. But when John sells a property owner financing, it's not just selling a property, right? It creates, it becomes a note. And I think tonight, let's talk about the power of those notes. Right? So John, talk a little bit about, um, what makes a good note, like, in your mind, and why is it, uh, why is it a great asset class for people?

So a good note is more money than a cash sale. So that's the first part of a good note. A bad note would be the same money, right? Um, and so you, you know, you want to be charging a higher amount of money for, um, for the note. You know, generally we're doing, um, you know, I do kind of a rough equivalent of 11 to 12% interest, right, when I sell a property with owner financing. Um, and what you want is a good yield too, right? So ideally we're recouping our capital from acquiring the property within that first year. Right? So if I sold a property and let's say I bought a property for $1,000 and I sold it for $1 million at $1 a month, right? Not really that great of a deal, right? So even though on paper you're like, the return is incredible, but it's over such a long period of time that it's actually not that great, right? Um, so I'd say it's the yield. Um, generally I do um, you know, term lengths that aren't super long. Um, on the low end it might be 4 years, on the upper end maybe 8 years. But a lot of that comes down again to the yield, right? How quickly are you recouping that capital? Um, so that's kind of the way that, the way that I think about it.

Oh, I love that. And, and we talk yield a lot, but there are different things that make a yield better, right? Like a A higher down payment makes your yield better. A higher monthly payment makes the yield better. A shorter term makes the yield better, 48 months instead of 60 months. And we shoot for an annualized yield of 72% on these land deals, right? A lot of times we make way more than that, Mark. We're seeing coaching clients do it, you know, it's fun to see the wins in the coaching, in the WhatsApp channel, because people are posting about their 90% yields, their 130% yields. I mean, that those numbers are— can you get better numbers anywhere else?

No, not legally.

No, no.

I mean, I guess, I guess crypto is legal, maybe crypto, but then you lose it all. Yeah, in a crypto, in a crypto bull market maybe, but that's it.

Exactly.

As far as like the risk-reward ratio, I think we have the best thing going, right?

Yeah, yeah.

So Zeno, talk about— so one of these notes is great, but there's, there's like some compounding interest with these whole things that, that makes the, the whole notion of this land business really powerful.

Well, you talk about a note portfolio now, right? You get one— I tell people how I explain a bit this business is, you know, we buy these properties and we offer them an owner financing. We sell one of them on a contract for deed. We have a We have a note, but if we do it multiple times, we now have a note portfolio, and that portfolio can grow to be— to have major impact in your life. I mean, initially maybe it's paying the cable bill, or then it's electricity, then it's your mortgage, and then, wait a minute, could this actually replace my income? Yeah, like, it's not— it's these gradual wins along the way. Um, I think it's pretty powerful. You know, I often describe this business as the penny stocks of real estate that pack a powerful punch, right? I mean, if you think about our price points, $4,500 to $5,000 or $6,000, um, it's just— but these are the prices, these are the properties that we can buy at a steep discount. These are the properties that we can offer in owner financing terms where many times we're earning back— we're made whole within the first 10, 12 months. So we have all our money back and then you can redeploy it and you have this now, no income stream coming in. So there's so much power in all of this, right? And let's not forget the biggest piece of it all, that it's— I'm sorry, but it's a little boring right now. The returns aren't boring. The, the, the, the returns are not boring, but the cycle of a deal is just like, oh, here we go again, here we go again. But in that process, we begin to identify, oh, I don't have to do this. I've done this so many times, I understand it. Why don't I outsource that? Why don't I also and we start to remove ourselves from the business. We work on it and not in it. So it lets us— so many wonderful things. Um, and, you know, but yeah, that is the biggest— that's one of the best things about it, is this, uh, passive income stream. We still love— like, we did a deal, Scott and I, it was like a— maybe it was like $8,000, $9,000, we sold it for like $23,000 cash. You know, that's great too. But if we were waiting for those, those don't come all the time. They Well, maybe for John they do, but they don't come for all the time for everybody else, right? They come here and there. And if you're waiting for that to sustain your lifestyle, you're gonna hold your breath and pass out. But the recurring income is always there. And so you can mix these bigger deals in if you choose, and then you can buy smaller deal, more, more of the smaller properties. So, but the biggest thing is we have a system. I think that's a lot more than you asked me, but I wasn't sure exactly what you're looking for.

So that's why I went off on a tangent there.

As long as I see Mark shaking his head up and down, I know I'm on the right track.

Yeah, you're good, you're good.

You know you're on the right track. Oh, first concur of the evening. Oh, concur is becoming a thing. I keep hearing, uh, I hear it on people say I concur.

Yeah, yeah, we need shirts.

Yeah, we, we got merch.

Yes, we had a few on the call here. Yeah, and you know, the other great thing about these notes is it really is wealth building over time, right? And you're controlling, you know, it starts with 10 and then it grows to 50. And you know, when you've been in this for a long time, you can get to the point where you have hundreds of these notes paying you monthly.

Yeah.

And we control that note, we control that paper note, right? And like I've been telling a lot of people lately, you know, 10% of the time these assets keep paying you over time, because people— there are some defaults with these sales. And, you know, we don't sit around hoping for defaults. That's not, that's not the name of the game. Like, you know, we work with people, if somebody needs to maybe have a month break on their payment or a couple months off. Or, you know, if they've been a paying client for 3 years and they call me up and say, hey, Scott, you know, I still really want the land, can you work with me? Of course, we're going to work with them. But every once in a while, you sell to somebody and they just quit paying. And then they don't answer your texts or phone calls or emails. And it's their way, I think, of just telling you they're done with the land for whatever reason. Well, that's okay, you're done with the land, I'll take it back. And now I'll turn around and sell it again. And I, a lot of times, already made money back on it. John?

I have somebody who just stopped paying and he owes $146.

And—

No!

It's a $9,000 note.

And so— You're gonna deed that guy the property, right?

I'm just gonna deed him the property. We're just trying to get ahold of him, so.

Well, that's the thing. You gotta get ahold of him because you don't know. I know.

Yeah, I've had, you know, borrowers die. Yeah, it's weird. It's terrible.

Yeah, we've had that happen a couple times, and then we'll try to work with their family. What's that, Mike?

Suddenly nightcap takes a dark turn.

Yeah, it went dark really fast.

Yeah, it sure did.

You have a, you know, do you have a—

defaults and death.

What?

Mark has a wonderful story. I don't know, you know, if you share it here or not, but about a person that, you know, couldn't pay and, you know, you helped him out with the property. It's a beautiful story.

Oh, yeah. Les. So, so, Les, this is, you know, John, I don't know if you're probably in high school, but there's this thing called the Great Recession in 2008. And a lot of people lost their jobs in high school. He wasn't in high school.

But it was—

John, your parents suffered.

Okay, a lot of people suffered in 2008. We had a Great Recession. And so, um, you know, I, I sold this, this 40-acre parcel for like $34,000 or something. And, uh, he, he more than paid, uh, you know, he had a big down payment. He was all— every month he was Johnny on the spot with his payments. And he, and he calls me, he's like, you know, I'm true. And he even improved the land. He's like, Mark, I, I want— I love this property, but I, I can't make payments anymore. I'm like, Les, you know, what if I just lower the, the payments? Like, no problem, we'll, we'll work with you. He's like, he's like, bro, it's between, you know, food and land, and I gotta choose food. Like, I just don't have any more money, um, and I've been trying. He's not, you know, trying to, you know, do this and make it work, but I've been unemployed. And I'm like, look, you know, things are going to work out. They always do. Um, you know, things are going— you know, you're gonna get back on your feet. And I, I thought about it. I'm like, you know, I did the math. I'm like, yeah, of course I legally could default, take the property back and, and resell it. But I'm like, you know, he, he loves the property, he's improved the property, and he, he called me and told me the story. So without telling him I was going to do it, I just deeded him the property. And, uh, to this day, that testimonial is the best testimonial I've ever gotten, and it's worth more than any kind of, you know, money—

more money.

Yeah, it was great.

That's the thing that's beautiful. Like, we are the bank, right? And we're way better than working with a bank, you know. And all of us, I think, if somebody was having a hard time and they want to adjust payments, we're going to work with them. We're not in the process We're not in the business trying to take things back from people. We want to work with them as long as they communicate. You know, sometimes they don't, but, um, you know, we're humans.

Yeah, I mean, these are relationships. I think a note is a relationship versus a cash deal is a transaction.

Yeah, I like that.

Yeah, yeah.

And so you have to work that relationship. I mean, every month I send out an email, I, you know, I thank them, you got your payment, just a reminder. Of why this asset's the best asset in the world. The only thing that lasts. It's a legacy investment. Nothing to maintain, nothing to protect, can't be destroyed. And thank you for being the kind of person that honors their obligations. You're my person. And so, you know, yeah, it's smart, it's great. And then, you know, if hopefully they'll come to me and say, oh, you know, I'm having a tough time, they can't make the payment. Or they'll just pull a Burnett and not, you know, $146 left and I don't hear from him. It's amazing. It's an amazing ROI.

Yeah, well, but maybe we should talk too about like, so on the subject of defaults, when, when, because there's a certain point at which we're not helping them, like, it's not helping anybody, right? Just string something along. So what are your criteria for, I'm sorry, here's the line, we've gotta, we've gotta take the property back?

Oh, she did another dark turn. Another dark turn. Yeah, well, I mean, I think zero communication, right?

If there's zero communication You know, we're going to work with people, any kind of payment they can make, we'll work with them. But if there's just literally zero communication, you know, time goes on, then, you know, we're left with no options at that point.

Yeah, at the same time, you want to work with people. Yeah, yeah. Have you ever got— have you guys ever had an instance though where you give somebody a 2-month break and then they need another 2-month break and then maybe a little bit longer. So there are some boundaries you need to establish, right? With, okay, well, you know, we'll give you this 2-month break, but payment will resume at this time. And, and then if that doesn't happen, then it's a matter of, okay, then, then there's a hard conversation to be had about what, what do we do. Yeah, I've in the past, um, you know, uh, given maybe a partial credit to people. Hey, you know, totally understand that times are hard. You've— I know you paid some, some money toward this. I mean, I've paid— I've given a partial refund because maybe people have asked me. I've given a credit toward future land purchases. So the good news, I mean, you can, you can do whatever you want, right? It's your business. So all this stuff is negotiable.

Yeah.

Yeah, yeah.

I feel like Mike has a name for that kind of borrower. You know, they tell you they're gonna do it, then they don't do it.

Wait, is this a layup that I'm missing?

No, it's just—

you're just very creative with your games.

So I just thought you would have a name for that kind of borrower. Like, you and Scott would like be calling like, yeah, Scott, I think I got a, a middle son teen borrower here.

It's the default delay.

That felt like the time when I was in the, the, the grocery store and I was with my buddy in the fight department and we were like a couple aisles over and he turns around, he thought he'd be cool, and he throws me like the frozen peas and he yells my name. When I turn around, I'm like, ah, and it hits the ground. I was like, people are witnessing this. It's like, that's what it just felt like when Mark did a layup. And I'm like, ah, it's horrible. I just can't catch the bag of frozen peas. All I had to do was pull like this.

Oh, Rick, call it the mother-in-law. What's that? Rick Holcott, call it the mother-in-law.

Yeah, I like that.

Okay, I like that. Oh man, that's awesome.

Well, to flip it a little bit, to go on the more happy side of things, I can't tell you how many people are so excited. Like, I, I always reference this movie. Do you guys remember Far and Away? With Nicole Kidman and Tom Cruise. Did you see that? At the very end— now it's about the frontier there, and it's great, Mark, because at the very end you'd love this, because at the very end they claim their own land. They run out with this flag and they just drive it into the ground and they claim their land. Like so many people today when they buy from us are like, I can't believe I own a piece of the United States. It's different than owning a house, right? They own a piece of land out in, in the west somewhere, like That frontier spirit is still there. People get so— you guys had this— they get so excited. I own a piece of the United States. It's like super— if you haven't seen it, Mark, you're gonna at least watch that clip at the very end.

I gotta watch it. I gotta watch it.

You've seen that, John, or is that before your time?

Yeah.

Scott, you've seen it?

Yes.

Seen the movie, isn't it?

The powerful scene when Tom Cruise throws that struggle, all this strife.

Yeah, at the end they run into their land with a big flag and they go boom. This is our land. And it's like, wow, you gotta watch it.

I gotta watch it. Yeah, I, you know, for inspiration, I just watch Yellowstone.

Oh yeah, you know, what is this, like you just started, like you never watched it before, you just finally got on and watched it?

No, I just love it. It's like all that open land and—

yeah, yeah, you know, it's a great—

these great stories. I just wonder, like, you know, every, every episode it's like, is the Dutton family ever gonna get a break?

John, uh, I think we should go back to— let's go back to one other thing and then we'll get to some comments here. So Mark, I loved what you said about how, um, uh, these notes are really relationships, right? These, these land notes create relationships. And the other great thing about the relationship is that I mean, yes, you help people become landowners and they're driving the flag into their land, right? And it's helping them add some wealth to their life also. But if you cultivate that relationship, that person will come back and buy more land from you, right? And that's another great thing is that these valuable notes that you have can lead to more valuable notes with these people.

Yes.

And, you know, we had a repeat buyer yesterday as well, right? So a lot of repeat buyers coming. It's important to establish and maintain these relationships because people will keep coming back. It's important to have some type of referral program, I think, for your customers because they will bring others as well to create relationships with you and create more notes with you. So those are some things to think about, I think, in your business are, you know, what does your continued engagement look like with your current buyers, your former buyers? What does a referral program look like for your current buyers and your former buyers to create more notes? Mike, why? Mike, whenever I'm talking, Mike starts laughing.

I was sitting there like, yes, yes. Every time you said something, I just want to be like, yes, like you would like Like preaching there, like land preaching there. That was beautiful.

Oh, thank you. I appreciate that.

Caught up in my own thoughts and smiled.

Yeah, yeah, I just thought you were making fun of me because it looked like you were making fun of me.

I was like, yes, yes, like everything you're saying was hitting home.

Wow.

Well, thanks.

I concur. Yeah, wisdom bombs.

Mm, wisdom bombs.

Boss man bombs.

Now I'm blushing. All right, we got some comments coming in, uh, from Shredbot. Shredbot, I don't know, I feel like I should know you, but, uh, yeah, I don't know. But, uh, here's a great question. John Burnett: It seems like a dream to have a passive portfolio like yours, but it seems complex to manage. So how do you manage these— this NOPE portfolio, John, that you have? This very large— nope. Oh, are you there, John? Are you frozen?

Wow, that's a good phrase.

Oh, there he is.

There he goes.

That was a good one.

I can't hear you now, John. All right, we'll pivot to Mike. Michael.

No, it's Listen, if you didn't have systems, if you didn't have workflows, if you didn't have processes, yeah, it could get complex, you know. Um, but what I love about what we do, particularly when people work with us, is we get them effective out of the gate and then we give them efficiency. Now, the true efficiency, the true complete efficiency, is going to play out over time. Like to say, deal flow solves everything. One of my favorite quotes that I made up, as you know. Deal flow. The more deals you do, the more you're going to get smoother and smoother at the processes. But the thing is, there's software that, you know, Mark, you had it built years ago. We didn't have software, um, so we were managing things on all kinds of weird, like, spreadsheets and whatnot. But there is a software, LG Pass Shredbot, one that you can get. It sends out your mailers No licking and sticking. It tracks your deals. It creates the paperwork when you buy and sell property. What I think is awesome is that this literally becomes like a virtual office because the software alone will scale you. But when you bring in the proper workflows and the whos and not the hows, you begin to really become efficient. So it's like it all starts there. So absolutely, Shredbot One, we do have a CRM.

That works. Eddie Dyer.

Eddie Dyer. Eddie Dyer. Eddie, absolutely. Um, that, that is the one of the backbones of our business is having a software built for this business, you know. And it's, um, it's, uh, you know, it's funny, Mark, sometimes people think, oh, is this because you want us to get on the software so you can make a bunch of money selling us the software? I'm like, you think there's that many of us that Mark's making a ton of money selling software? This is a very small niche. It's not about that. It was made to help us, and now it's offered to other people to help as well.

Yeah, don't ever start a software business to make money. It's rough. It's rough. But to your point, uh, you know, LG Pass, GeekPay.io, it's a set-and-forget payment system. So we automate collecting and managing those note portfolios, that note portfolio. So Eddie, thank you for allowing me to shamelessly plug away GeekPay.io and LGPass.com.

I don't see the comments. John, do you see comments? Like, why am I the only one that can't see all the comments?

Like, they're, they're on the right-hand side, Mark, uh, Mike, of your screen.

That button that says comments.

Yeah, there you go.

Um, we've been hiding.

Eddie Dyer, good to see you, by the way. We've had a few conversations over the last few months, and we need to get you into the, the virtual boot camp at the end of May, one month from now. We're coming up on our, our next virtual boot camp. 3 days of coaching and content and community. And, uh, it's just a really fun event because it keeps— I think it keeps everybody kind of— it keeps us all cutting edge in the land business, right?

So, um, I showed Mark, I showed Laura, there was an email that said that I was about me hosting. Oh, look at— I'm in the email, Laura, check this out.

Yeah, this is— this would be the first boot camp that the Zen Masters are MC. How good is that going to be?

I'm a little nervous, Mark. I gotta live up to it now. But I'm gonna bring my A-game.

I noticed that internally, it's being referred to as the Nightcap Bootcamp.

Yes.

That made me happy.

Yeah, the Nightcap Bootcamp. I like that. We should definitely brand it that way.

Yes.

I love it.

Preach, brother Bossman, because I have in my head now, I can't get it out. Take Me to Church, stuck in my head now.

Oh man, what I have stuck in my head is what you said earlier. You, you bring in the who's— what'd you say? You bring in the who's and, uh, to take place of the how's.

Yeah, well, it's who, not how. I mean, yeah, this business, you— there was a book written, right? I kind of stole it, but I didn't read the book because I kind of already knew the concept, right? It's like If you want to do something, it's not how am I going to do it, who, who's going to help me get it done. You want to learn how to build a land business, you could try to figure it out, or you could come to people that have already done it and just be like, hey, can you show me how to do this so I can get up and running as quickly, efficiently as possible? And then in your business, like, how am I going to do all this? No, no, no, no, no, no. Who are the people that I'm going to bring in? They're going to help me get it done. I think it's critical, and it's all about what we do. Our business is built for that. Mark, you always say, I repeat this to people, is if we found something else that could be, you know, done this way and as productive or as profitable, we would do it. But we just haven't really found that. So we stay here.

Yeah, no, 100%. You know, we look at businesses all the time, because we just love business. And I have not found anything better than land investing? I can tell you right now, it's not software.

No way.

I know people say you just try to get us on the software. I'm like, what, really? All couple hundred of us?

Yeah, yeah.

Awesome. Well, uh, thanks everybody for the comments. Oh, Mike, check this out.

Yeah. Oh, shout out to Scott. Yeah, I said me first shout out of the night.

Dakota, Dakota Bussard. Bussard, nice to meet you and your brother. Uh, thanks for the shout out, that was nice of you. I like it when I get shout outs.

Starting their journey, Scott?

But they're just starting their journey considering, uh, considering getting on board with land investing. So, all right, well, uh, brother, uh, we, we had a, we've had a few, uh, brother teams at Land Geek. In the past.

Brothers from the same mother.

Yes, exactly. So excited to see what they do. A question from Rick Colcock. Rick, good to see you. Rick, you're going to be in, uh, you're going to be in Arizona? I hope so. Um, should I be concerned buying a note out of, out outside my county? Is that what it says? Outside of my county?

He typically works, I think. It doesn't mean where he lives. I think he's saying outside of his primary investment area? That's a good question, John.

Yes, thank you, John.

What are your thoughts?

Um, I think that I bought, uh, I bought a bunch of notes, and I bought notes that were in areas I had never worked before. And so you just need to be prepared to pivot and start working there if those properties come back. And so And then if you're buying right, like, your backup plan is to sell those properties wholesale, right? And so I had— there were some properties that were in areas where I'm like, I just—

oh, he froze again.

Oh no, he lost— he lost—

yeah, he lost, uh, it's weird. You coming back, John? No, I can't hear you.

There we go.

There we go.

Yeah, so I've had that happen where I bought a— I bought a note, uh, it defaulted, property came back, I didn't really want to move into that county, and so I just wholesaled it to another investor. And so as long as you just need to, you know, make sure that you've got that as a backup plan. But it's also a good way to start expanding and trying out new markets too, if it does get better.

Yeah, yeah, it's kind of like buying a land arb or something, you know, if you just dive it in there. I mean, the thing is, you know how to sell land now, right? Yeah, it's a new area, but you should be able to value the deal and say, okay, if things all go south, do I— am I able to resell this based on current comps, right? Or you have an exit like wholesale. So if you can build all those exit, uh, exits in there, then you're good.

Yeah, and if the numbers look good, you know, if the buyer is a seasoned buyer, Rick, if they've been paying for a number of months and they're on time, yeah, I would definitely buy. It just makes good financial sense to buy a note like that. And then knowing what you know as a land investor, you'll be able to deal with whatever the fallout is if there happens to be any.

So yeah, and Rick, since you're gonna be in Scottsdale, still, I'm gonna, I'm gonna offer you a ninja technique.

Oh yeah, I want to be in the room.

This is, this is what 22 years of land investing gets you. Not for you guys, it's just for Rick.

Oh yeah, right. Awesome. Oh, look at this, Mike. We're gonna call this a shout out from Julie Howard. Mike is so witty.

Oh, thank you, thank you. I do, I do see another shout out in the comments now that I know where they are. Are you going to bring that one up? Because I see Chris P. shout out to Zaino now that I know the comments over there.

Oh yeah, I'll get to it, I'll get to it. But thank you. Yeah, I'll get to it, I'll get to it. Uh, oh man, uh, awesome. Well, uh, any other questions out there about the, the note portfolio? The asset portfolio. Oh, here we got a, let's see. Oh, we got a win. Let's celebrate a win, shall we?

Bring it up.

From Brad Kelly. I just went under terms on my development property purchase price. Holy Lord, development property.

Wow.

Purchase price, $925,000 is the purchase price. Down payment, $550,000. Seller carry, $375,000, interest-only payments at 8%, 36-month term. I mean, that's not shabby. That's not shabby, right?

Nice. Yeah, that's great.

Brad, you're buying drinks.

Exactly.

Yes, there it is.

It's a shout out. It's got to be a shout out, right? So what do we take? What, a 2-2 now?

Uh, yeah, you're going ahead. You're pulling ahead.

Ethan Evans, I submitted a few questions on the Facebook event. I'd love to hear more about buying and selling notes within the Land Geek investor community once the land has been sold on terms. Well, let's talk about that for a few minutes. Buying and selling notes. Mark, you want to talk a little bit about that?

Yeah, I mean, you know, we'll buy those. Like, you can go to tlfolio.com. And submit your note, like, we'll, we'll buy them. But otherwise, as far as like an exchange where land investors are buying and selling notes, I don't think there's one. If there isn't one, is there? And I think to Mike's point, it's just not a big enough market for it, um, to do because the land note is a little bit different than, say, uh, like a house note, right? That's a, that's a way bigger market. And what we found is that most land investors, even though the math is absolutely compelling to sell your land note, emotionally they don't want to take the hit on their passive income. So to go to a land investor and say, hey, I know you need cash. I'm going to buy your, your note 50 cents on the dollar. The math is incredible, but most people don't want to do it. You can structure a partial, right? You know, hey, I'll buy 12 months and then it'll revert back to you. Um, but again, a lot of people, the buyers, don't want to do that either. So this is all to say in a very roundabout, boring way. Uh, there isn't like a, a land note exchange that's real big.

Now there's—

there is, there is a site that does all types of paper. I forget the name of it though, um, where you can list a note, but it's not all land notes. It's just, it's just paper notes. I forgot. Do you guys remember that? That's a big note exchange.

Yeah, I can't remember the name of it either. I've been on it before. Yeah, but yeah, so, but I think you can find opportunities.

This is where, within the community, you could just say, yeah, I mean, just, yeah, you just within the community, hey, I mean, I'm buying notes, anybody interested in selling? Or I'm selling my note, anyone interested in buying? You'll get a buyer or the seller. It's just there isn't like one note marketplace, right? And I'm not going to build it because I'm doing enough software.

You're building enough things right now.

Yeah, but if anybody is interested in selling, contact me because I'm interested.

No, contact me.

No, me.

Or contact me.

Shameless plugs right after another. Bang, bang, bang, right?

Uh, Rick Colcock wants to know if there's an open bar in Arizona. Oh, I mean, I don't know either. We'll see, Rick. Oh, Alicia, she— Alicia just created a term for us that we may need to use. Oh, concurification.

I think that's—

we need to drink to that.

Drink to that, Alicia.

Yeah, can we do that to the Red Hot Chili Peppers song, uh, California?

Californication.

Put that right in there. John, could you work on that?

I'll, I'll see what I can do.

Wasn't, wasn't there a Showtime show? Yeah, yeah, was it anything?

Oh yeah, Californication.

Yeah, yeah, that guy was like a teacher or something, I forget his name, but, uh, that was a funny show.

Was, uh, David Duchovny.

Uh, yeah, David Duchovny.

Yeah. It's kind of an NC-17 show, so just, yeah, a little bit for the mature eyes, just so you know. I've seen it.

Keep the Bernat kids away, right? Old Showtime shows, right, right.

Uh, shout out to Mark. Mark got a shout out from Don Thrasher, the Land Thrasher.

Wow, thank you.

No shout outs, just— oh, John, my little corner.

No, look, see, look, you got one. Brad Kelly gave you a shout out.

Look at that.

Nice.

I'll take it.

All right, here's, here's a technical question. Scott Christensen, also in coaching. Hope to see you in Scottsdale, Scott. Um, maybe you and your son, I'm not sure. But, uh, so how do you structure buying notes? Pay 50% of the remaining payment stream, seller transfers the loan to your GeekPay account, seller puts all the properties on one deed. Or one-offs. So yeah, I mean, I think 50% of the remaining balance is, is a great note to, to buy or sell. Um, I've seen, uh, numbers less than this, uh, less, um, profitable than that, but that's what I like buying notes at. Yeah, and then, uh, basically, Mark J. Podolsky is really great because when you buy a note from another land investor, all you have to do is send GeekPay a support email that says, hey, I'm selling this note to Scott Bosman, and GeekPay just transfers the loan over. It's really slick.

Thank you.

Yeah.

That's my shout out to you.

See that? Subtle mental persuasion. Sell to Scott Bosman. Sell to Scott Bosman. Sell to Scott Bosman. Yeah, oh man, you're looking for Scott.

Yeah, I've learned a few things from, uh, George Lucas over the years. Uh, Rick, I responded to a person who was offering notes for sale and managed to buy none. It turned out that I was in a bidding war that I had no idea I was in. Yeah, I mean, there's bidding wars that occur sometimes with these with these note sales.

Reminds me, you guys must get this— people you mail to like, oh, I've decided to sell, but I'm going to, you know, it's like a bidding thing they set up. I just like, don't even get those with the people.

They like CC, like, yeah, on an email.

Yeah.

So, you know, you're like, okay, you know what, for that reason, I'm out.

I love it. Yeah, I'm not competing. Scott just ejected.

Yeah, just did the Irish goodbye.

That was such an Irish goodbye. Now there's, you know, he's coming back.

Oh, there he is, there he is.

Oh, the nightcap shirt.

I know, bossman's gonna change.

It's, uh, it's hard when you're home alone and you have a high-maintenance dog. It's just, uh, so that's why it's the reason for my intermittent absences. Sorry about that. Awesome. Well, guys, this was fun. Any other questions, comments? Wins?

Wins?

Oh, here. Oh, it's not— it's not an embarrassing question at all. So how would you define a land note? So Well, so a land note, Alicia, is— it's basically— so we basically just sell a property to, uh, to a buyer on owner financing, and that creates a note, uh, where they basically pay us monthly on the property. And, uh, the note portfolio then is collecting, uh, many of those notes that pay us monthly.

It's kind of embarrassing because I remember when I first started, Mark, you guys will be talking about deal flow. And I was like, what's deal flow, right? Deal flow? What do they mean by deal flow? Like, there's a lot of things. And, you know, I think I was talking to Mark Bryan, he's like, maybe you guys should have like a, a Land Geek dictionary or something, because there are these little terms we throw out there that, you know, it's kind of our own little language, you know. And so, yeah, it's not embarrassing at all, Alicia, because I remember that at the boot camps in the beginning, Mark was talking about deal flow, and I'd be Jeff, what's deal flow?

Yeah, you know, it's— yeah, we, we should do that. And, and there's— I'm so glad she brought that up because there is so much inside baseball because we've been doing it for so long. Yeah, we don't even realize we're playing it, right? So we're saying these land notes when really what we should do is break it down step by step. Because, you know, when we say no, we're saying it's a promissory note, is the legal term. Right, because we're using 3 legal documents when we create this, this land note. We're using a purchase sale agreement, a land sale contract, yeah, and a promissory note. And they're all tied together, this promise that the property is $10,000, we're getting $1,000 as a down payment, and then you promise to pay the balance of that note, or $10,000, of $9,000 over a specified amount of time. And if you miss a payment, this is what happens. And you have 30 days to cure your, your— let's say, let's say your missed payment. And then if you've gone 60 days, we say it's in default, which means that you only have so much time to cure your default. Or my contract is 30 days near default. But some people go 60. And then after that, because it's a land sale contract, we still own the asset. There's not— it's not like you have to go through an attorney or a process of foreclosure to get your property back, because land contract, the asset, that land stays in your name and your company's name. Yes, until the, uh, borrower, the buyer pays off their promissory note and Lives up to the terms of their purchase sale agreement, their land sale contract, or promissory note. And then once they do that, they get the deed. They own the property. We transfer ownership through a warranty deed, which states that as from the very beginning of time, there's no breaks in the chain of title, and we haven't clouded the, the ownership in any way, shape, or form during our ownership.

See, we need this. This is really—

we should just break it down.

Yeah, I love that.

Yeah.

John, did I miss anything? I think you got it.

That was great.

Sounds like you might have been doing this for a while.

Yeah, we forget. We forget. You know, because we're living in it every day. But I think it is helpful for, you know, for people just to hear like, the basics of the machinations of of, of a land deal. And then basically you have that promissory note of that balance and you can sell it. And so, you know, in Mike's case, let's say that his cost basis was $2,000 and the cash price on that property is $4,000, but he could then sell it because there's a bigger you know, buyer pool for people at, you know, say, $500 down, $299 a month. And he's created this note, but then he could just say, oh wait, I'll make more money selling this note, 50 cents on the dollar, than I would have had it flipped for cash. And he could do that. And so the math gets really interesting on these notes.

Well, you know, they say it's not your first rodeo, it's your— not your first noteo.

Such a dad joke.

Yeah, right? Oh man. Uh, what'd I miss?

Sorry, uh, Mark just revealed all the secrets to land investing. That's all.

I literally just bored all the viewers. Like, I just could— we just see people like leaving it as I was talking.

They're just dropping out.

Yeah, yeah, no, but I thought—

never, never, never would you bore the listeners, Mark.

Oh, this is a very cool episode.

I enjoyed it.

I thought this was a good topic. Uh, not that we always don't have good topics, but I think this was a very good topic and we branched off it nicely. Don't we have— do we have some guests scheduled? We talked about guests. Are we actually— are we still working on that? I know we're going to have— we're going to show some female power. We're going to have, uh, Valerie's going to come.

Yeah, Valerie's going to come. I'm not sure what when she's coming.

We gotta work on that. Have you invited her yet, Mark?

I think the team has. I think I should.

Okay, what's up?

What's happening right now?

Geez, Scott, all right, out on that. All right.

Oh, I'm just—

let me get right on that.

You know, she— you know, you know she'll, uh, join us. No, no, no doubt. I think I'm not sure if she is. Yeah, I hope so.

We can all call her all at the same time. Yeah, we'll put her on speaker and like, like, "Valerie, when you coming on?" Yeah, we'll have another student spotlight very soon.

Um, next week, not sure what the topic is. I'm sure we'll have a coaching live roundup and talk a little bit about the weekend and, um, all of the, all the really great things we see in the room this weekend. So, um, but yeah, tonight was fun, everybody. Thank you guys. Uh, excited to see you tomorrow and the next day. Mike Zaino, tomorrow night we're having a cocktail at midnight, getting about midnight Scottsdale time.

All the time zones are, but I know I'll be there late. I don't know what time, but yeah, party!

All right guys, everybody have a good night. We'll talk soon. And Mark, as always, thank you.

Thank you everybody.

Thank you guys.

Night everybody.

Good night.