The Land Geek Podcast #2

Welcome to the Land Geek Podcast, your resource for information and tips to making money by buying and selling land. Let the Land Geek show you how to make a passive income by working smart, not working hard. Learn strategies and tricks to make money buying and selling raw land today. And here is the man that's going to help you do that, the Land Geek.

Hey, it's Mark the Land Geek. And I'm back this week again with Duran Fraser from Reserve Land Management. And Duran, I think before we get started with our podcast, I think we should mention the horrific events of this week, the Boston bombings, and just, you know, it's just horrific. I don't even know what to say. Just our hearts and prayers go out to the entire city and those who have suffered. I think that whole city and the whole country is scratching our heads and wondering how this could happen.

I totally agree with you. And then of course, the explosion this morning or yesterday that they had in Texas as well, obviously several people died there as well. Not sure if that was a just a simple miscue at the fertilizer plant or if it was more, more of a plot, but I'm not sure. Again, we don't know much information about that. But again, thoughts and prayers. Both the Boston and of course, and I think it's called West Texas. So.

Yeah, West Texas, that's right. Yeah. So on that happy note, let's get started with what you've been doing this week because I think our, our potential land listeners or land investors are going to know what's it like to go to an actual land auction. So, Duran, kind of fill us in what you, what you did last week, and I'll explain from my perspective how I prepared for it as well, because we both took two different strategies. One was more successful than the other. So let's talk about that. So Duran took. You took your wife, didn't you? And the kids.

Oh, man, I'll tell you, you know, it sounded so good, too good to be true, to be able to get my wife and kids to go on a 2,000 mile Jo journey. But over, over five days. And when I say 2,000 miles, I mean literally, I think it was 1975 miles, maybe 1980 miles. So we got really close to 2,000 miles. We averaged about, I think about 400 miles a day of driving. But when you're driving a big RV and the kids are supposed to be strapped down, so I did my very best to do that, but you have, when you have two wild kids, it doesn't work out that way. So yeah, we did. We did a little stop at Zion national park on the way up to Northern Nevada. We did another stop in Park City, Utah, which we got a little, couple little unexpected turbulence issues there. Snowed six inches overnight, we were there. So having an RV hooked up or not, you know, it's kind of nice to actually be in a hotel room. So I just happened to jump on Priceline that day and I got in late in Utah on a Sunday night, which is a little bit of a negative when people are going home at about 4 or 5 o' clock night on Sunday. So booked a hotel there and we stayed at a beautiful place at Park City on the slopes, which is amazing for a night. And then we headed over to the Oxford Elko and met with everybody. We did dinners and you know, had a, had a couple conversations with some of the people that we, we've been in touch with over the years. And the auction was Tuesday morning.

How many people were at that auction?

Well, all I can say is that it was the craziest auction I've ever been to. Probably between 150 and 200 people, which scared the daylights out of me.

Why were there so many people there?

I actually have no clue because prices were still pretty reasonable. In fact, I picked up property cheaper this year than I picked up last year at the auction. But again, I think they had some this year. A lot of properties on auction, but a lot of them were larger parcels that were selling for 4, 5, 6,000 for some of the larger parcels. So there was plenty of due diligence that was needed before making a commitment to some of these parcels.

Yeah. Let me ask you, so what was your approach to doing the due diligence? How did you go about it? You got the list from, I assume either the county treasurer or taxsale lists.com and then how did you go about. I know you didn't do the research. How did you go about doing it?

Well, actually I did do a lot of the research myself. I'm very handy when it comes to Google Maps and the county assessor, I'm sorry, the county treasurer actually sent over a list of GPS coordinates. So what I did is I took each coordinate and I did have one of my employees help me with that. So this is, you know, when it comes time to go to an auction that I enjoy going or enjoy spending some money at, I generally do a little bit more research on my end. So my five hour work weeks actually turned into like maybe a ten hour workweek for me. So I went through and just took the GPS coordinates, went through a lot of the coordinates. My personal assistant actually helped me with a lot of that, putting it together. But I did go through some of the stuff myself. And we just sort of plotted, you know, good, good, bad, and fair, and, you know, picked up based accordingly to that. That little strategy that I put in place.

So what, what do you consider good? What do you consider bad? What do you consider fair when you're looking at. At the map because you're not physically going out and stopping on this property?

At times I do. In fact, generally I like to take a car out there and do it. Unfortunately, weather. Weather permitting is when I. When I make that commitment. And this time it wasn't happening. It was snowy, raining, and just, you know, one of. One of the guys that was out there at the auction, he got stuck. It took him three hours to fix a flat tire, and he was in the middle of nowhere, so. And he couldn't find his jack in the car. So, you know, there are. There are times where it's a little bit scary, but I do like to. I do like to go out there and check. But, you know, what I'll do is I'll work with some of the other guys that I know have done the homework. And, you know, like, if you're in class sometimes and you're looking over at your friend's paper and you cheat, I do the auction sheet once in a while.

Yeah, I'll say I'm guilty as charged on that as well. So I'll tell you, the way I approached that auction was very, very different than you did. So you physically went up, you wanted to bid for yourself. I actually contacted a local real estate agent and sent her my auction list, what my maximum bid would be. And I paid her, I think I paid her $100 for her time and effort to go to the auction bid for me. And then I gave her a check made out to the treasurer, so if she bought me anything, she could make payment that day. So typically I only do that if I think the auction is going to be a bust from. For me. And for whatever reason, I wasn't real excited about this auction. So I hired the. The agent. But it wasn't a bus for you. You were able to. Out of what, 150 lots, you were able to pick up 10, correct?

Correct.

And you're going to make how much money on those lots?

Let's see if I do the math. Let's see, let's see, let's see, let's see, let's we could. I'll probably make around on. On a. On a term basis, meaning over five or ten years, I'll probably make between 50 and 60,000 bucks on the problem on that, on what I picked up.

Okay, so Duran's make 50 or 60 thousand dollars on that auction. I'm going to make zero. Am I bitter? No. Because the way I look at it is a lot of my competitors went out there and they spent how much money you think on average our competitors spent out there?

I think there was probably our competitors between 30 and 50,000 each on some property. And in fact, what's interesting and unique about watching that auction is I watch people overpay for property. In fact, overpay so much that I knew they would have a hard time selling. When we say competitors, we mean. We mean people that not only do terms, but also do cash. And we know what cash or what properties sell for according to several different strategies allow us to compare the property. So I saw some of that stuff happening and it's. And you know, some people bid other. Other people up that they know each other and simply because it's almost. What's. What's the word? Like, I'm. I'm a little more powerful than you. Right.

Egos get in the way.

Big egos, yeah. So.

So I try to avoid those types of auctions. The way I would approach that type of situation where, you know, there's gonna be so many people. There's, you know, I'm contrarian. I want to. I want to find property where, you know, people aren't going to and get a better deal. Would I like to make $50,000 and $60,000 the way you're going to on that property? Absolutely. But there's so much out there that it's better for me not to overpay and miss out than go and get swept up and feel like, oh, I'm going to miss out on a deal if I don't overbid. I think that's what happens a lot of times at these auctions. Would you agree with 100%?

100%. I think it happens quite often. In fact, more often than not, where people walk up to these auctions and they get caught up in the emotion of the bid. And that's one thing I don't ever do. In fact, I like to watch what happens for the first 10 or 15, even if it's something I want. I kind of watch the momentum of the auction. And if I see it swinging one way in a direction, I don't like I just kind of back off and sit in my seat. People know at these auctions that I've been in the land game for quite some time. So there's several 10, 15 people that are at those auctions bidding and everyone knows who. Everybody see somebody bidding, I think generally questioning, oh, does he not have the money? What's going on? What's the situation? So it's really interesting the way I approach an auction compared to, you know, what I see out there. And I stay away from that ego bidding.

Right, right. So now just so everybody knows the difference between cash and terms. Cash is when you buy a piece of property at a auction and then you flip it for a cash sale. Terms means that you're going to carry the note. So they're going to make a down payment of say $1,000 and then Duran will carry that paper at maybe easy terms, 10% interest rate, $200 a month for maybe 10 years. And you know, he may actually get out his initial investment just on the down payment. So all those payments down the line are just pure profit, which is why he's making so much money. Even only on 10 lots of. Is that right?

That's correct. You know, and I'm not a big fan of profit. You know, that's just my goal to break even.

Right.

I'm just kidding.

Yeah. No, but, but it's, you know, it's fantastic because it's a one time sale and you get passive income every month. There's really nothing better where I think if you're gonna, if you sell for cash, then you've got to keep buying property because you need to keep filling up your inventory to keep making money. Now when you first start out in this, it's really important to build up a cash base. Wouldn't you agree? I mean you can't just do everything on terms you're not going to, you're going to run out of cash real fast. Right?

Correct, correct. It does need, you know, finding those diamond and a rough properties and there are several auctions that have those. If you do your due diligence where you'll find a property where you pick it up for, you know, 3, 2, 3, 4, 5000 bucks and it's worth 25 or 30 even online at an auction. Auction that you can sell quickly. So there are those and they, they do happen. They're not, they're not flukes, they're not, you know, it's not like hitting the lottery. They're out there. You just have to do your due diligence.

Right, right. Okay, so let's get back to the due diligence. So you plot out everything on the GPS coordinates on Google Earth and you did it yourself. You didn't have a virtual assistant? I had my virtual assistant do everything and, and that's how I came up with my bidding structure, which wasn't real successful, obviously, but that kind of surprised me. I mean, do you, do you typically do all your own due diligence?

I like to be the one to make the decision as to, so I'll look at it. So I don't have a virtual assistant. I have a personal assistant, actually sits at my, sits next to me at my desk every day. And when I say at my desk, she actually comes to my house and helps me, which is kind of like, you know, it's really interesting. You know, I guess the dynamic for me not having to go to an office, but to have an assistant that comes for 50 hours a week and help me, it's pretty neat. But she comes in really, really talented and smart girl, and she helps me sit down and sort of plot things out. And then either she'll go to the auction for me or of course I'll go to the auction. So it's kind of hands on for me. So I enjoy it.

Oh, that's great. That's great. So now when you're looking at Google Earth, what types of things are you looking for? So you say, okay, I'm going to avoid that property. This property I really like just by looking at the screen. What are you looking for typically?

Generally I'm looking for roads. So access, access obviously being the key ingredient to a potential good, bad or fair property. But access, no access or minimal access is something I'll put either at bad or maybe a D minus on my card. But I'm always looking for something if it's got a. How far is that road from the main highway? Is it something that's 25 miles off a dirt road? Is it impossible for your potential clients to get to? And those are all things I look for when I'm buying a property. Because what you want to do is you don't want to buy property in the middle of nowhere where your client can't get to or they're looking, hey, I'm interested in the property. You've got a price to this price. But I can't get to it. And I think that a lot of people understand when they're looking at land, how that works. But for me it's all about access. And of course the other Benefits are power, paved road, that kind of stuff. And those are, those are the things that kind of generally. I'll, I'll go, you know, I'll, I'll. Geez. What's, what's the word I'm looking for?

Qualify.

Qualify. There we go. Qualify it as at either as a, as a, you know, a plus good property or a D minus or F property, bad property.

Now what about, how do you do your lean searches?

Are you talking about searching lean properties?

No, no, actually, I mean, okay, so we could talk about that too. Between tax deed states and tax lien states, this is actually a tax deed property where you actually get the deed for the property, not on a lien. And that's a whole other ball game. But what I mean by, you know, how do you know there weren't any liens or encumbrances on the title of that property?

Oh, gotcha. Okay. I thought you were referring to a lien auction. Generally the best way to go about it is going to a county and doing your research the day of or the day before, spending time, because it's a, where you've got to sit in the county office. You look at, you look at what you want and it's hard, it's harder than the auction that's this large to generally go through every single property. You can generally assume, and again, we know what assuming does, but you can, you can generally assume that these smaller lots that are going for, let's say five or six hundred dollars are not going to have those liens. But that can happen. There could be liens against it. And at that point you may have to do quiet title or, and I don't know, you know, every state is different. And so there is due diligence that needs to be, you know, that needs to be done in every state because some states actually wipe off any, you know, I'm not sure. Are you familiar with which states do and don't, Mark?

Yes, I am. I mean, so you know, the tax deed states, you know, I know. You know, for example, like New Mexico has a six month redemption period. Texas has a redemption period, I believe Arizona has a redemption period. Nevada I don't believe has a redemption period. So you buy that property at auction, all the liens get wiped out. So you're basically paying for the back taxes. The only lien that can stay on that property in Nevada, and I believe in Arizona and some other states is an IRS lien. So when I do my searches, I'm not worried about any other liens. On the property, except for irs, because all those other people get wiped out. So they have their shot before the auction to make payment. Make payment for taxes. They get notified by the treasurer. If they don't pay it, they're getting wiped out and got it.

Yeah, that's. In general. That's what I'm. I'm looking for. And I actually.

But not an IRS lien. I call the treasurer and I always ask, because the IRS notifies the county and they know. So I always ask is, are there any IRS liens on any properties?

Got it. Yeah. And it's. For me, my due diligence aspect is more along the lines of, is there could there be a home on the property? Which, you know, if there's a home on the property, there's mortgage against the property. You could be buying a more valuable property if you haven't had a chance to go out and actually visit the property, if that makes sense.

Yeah, no, yeah, exactly. Now, I always avoid properties with homes on them simply because I'm not a maintenance guy. And if I'm in Arizona, I don't want to buy a house in Nevada. I don't want to have to maintain that. And, you know, it could be a sad situation where somebody has to. You have to evict somebody from their home because they lost it to back taxes. I think that's pretty rare, actually, because usually before that, the bank will come in and pay off the taxes on that type of situation. Wouldn't you agree?

I would. I will say something interesting that happened at the Elko auction. There was a woman there that. That was living, I think, maybe with a trailer on a property. And she had. She had been crying prior to the auction and asked if people wouldn't bid on that lot. And that if. If she could just tap that for $400 because she couldn't pay the taxes or whatever the opening bid was. I think it was $400. So. So that was the only property that nobody bid on. And it was literally 150, 200 people there, and everybody was quiet. She bid it 400 bucks and she won it. So it's pretty ne. You're right. Dealing with homes, you know, again, it all depends because there are certain areas, of course, around the country where you go to a tax deed auction and you can't pick up homes for 30, 40 grand that are worth 100, 110,000. And maybe you have to get creative where you go back and you finance them or you create some sort of mortgage with the old owners, but you now own the property. So there are situations like that, but again, in what we do, it's a little bit harder, but there are opportunities like that.

Right, right. Yeah. I mean, I personally avoid those situations. It's not my niche. I just stick with the raw land. But in that whole, that's a completely different model because that's buying houses on the courthouse steps. There's a lot more competition and you can make a lot of money doing it. You need to have a lot of cash up front. It's a completely different ballgame. I mean, how much money total did you spend on that auction?

I spent right around, I think, $11,000.

$11,000? You're gonna make 50 to $60,000. It's a pretty good return on your investment.

I agree, I agree.

So, yeah, but you wouldn't be able to buy a house for $11,000, typically.

That's correct. And you know, to be honest, yeah, I would have spent more money, but it's at this auction, it was just too many people, too many egos. I just let a lot of things go and I saw a lot of things go overpriced. But I do agree that there are auctions where I'll walk in and I know I'm going to spend 30 or 40, 50,000. And I know most of the listeners here probably go, well, gosh, 30 or 40, that's way out of my league. But that doesn't matter. I mean, you can go to an auction and bring $1,000 with you and pick up a lot or two and start from there.

Yeah, I mean, you've got to start somewhere. I started with $3,000, you started with $800. So you build and you build doing this, and you start flipping for cash. You save your cash and then you'll get that big hit. It may be at an auction, it may be doing a letter writing campaign, it may be going after a distressed company that has 100 lots in their name. But as long as you're hustling out there and finding the deal, you're going to do well.

Yeah. Speaking of big hits, Mark, why don't, why don't you tell us some of your big hits? What have you done? Tell me where some of the big hits have come from.

Well, you know that, you know, Nevada has been my bread and butter as well. 40 acre parcels have been, you know, very, very good to me. And the tens and the twenties and the fives. Lately I've really been focused on Colorado, Florida and more Nevada property. I haven't really found a Whole lot in New Mexico lately. And because they changed the whole tax structure there with the back taxes, they really raised the taxes. So I'm really avoiding New Mexico. And I've got a bunch of letter writing campaigns going in all these areas so that I constantly have deal flow coming in and I just want to be overwhelmed by it so that I never feel like I've got to close a deal because I'm low on inventory.

Got it, got it. So. But now you didn't really, you kind of, as a politician, you sort of brushed around that question. I want to know some dollars.

You want to know exactly how?

I want to know specifically some big hitter deals that you've made where you paid, let's say 30 grand for a property, you sold it for 200 grand.

Okay, so I just closed this week deal. I just paid, I believe, I want to say I bought fourteen 40 acre parcels from one distressed company in Pershing County, Nevada. My profit on that if I liquidate is going to be about 45 to 50,000. And my profit if I do terms is going to be over 200,000. I'm really excited about that property. It's got a great story, it's got excellent access, it's near the foothills, and you've got rye patch reservoir views. And you know how I got it was the letter writing campaign. And that was actually a crazy story. It was more a deed grabber situation because if we didn't close it that day, it was going to go to auction and we'd have to bid on it like everybody else. So it was really a special deal and I feel very fortunate to have gotten it. But yeah, I mean, it's a constant process, constantly hustling, looking for deals. I know you only work four or five hours a week, but that doesn't mean that deal flow stops. That just means that you've got the systems in place so that you constantly have deals coming in. You have your marketing, you have your deal analysis, you have your due diligence, and it all comes together and it doesn't take a lot of time once you put these systems in place.

Exactly, exactly. And we started, you know, you and I started with lan when we did. And not understanding several aspects of the due diligence process. Man, I tell you, I have a tough time with those two words. Due, diligent, diligence. Okay. My problem is I speak too fast.

Yeah. So let me ask you, so you bought these properties. Elko. Now do you, when you start marketing it, right away, do you contact neighbors first? Do you just say, hey, I bought your. I've got property right next to you. You want to buy it? How do you. How do you. What's your strategy right away out of the gate when you buy these new properties?

Generally, I'm putting ads together. So I got lucky at this auction, where I picked up two separate locations. I picked up three contiguous lots, so I got three and a half acres in each subdivision, which was. Both were pretty nice subdivisions, and I paid a very, very good price for all six lots. But so what I'll do is I'll put ads together.

Yeah, when you say very good price, I mean, you're paying, like 20 cents on the dollar on these, aren't you?

Yeah. You could say, you know, if I could take one of those parcels and sell it for. Let's say, in this case, I think I paid about seven or eight hundred dollars a lot, and I bought three lots together, so $2,400. And I can probably turn those for about, let's say, you know, maybe 4,500, maybe 5,000 in cash, which I think I could do better than that, but that's liquidation value. And then I. And then I could. I could. In terms, I can probably roughly about 14 or 15,000 off of the $2,400,000 investment. And that's without interest. So you add interest, and it's probably a little bit higher than that.

Right, right.

And, you know, some people. I'm different, where some people instantly contact the owner next door. Are you interested? But generally speaking, I haven't had a ton of success with that. I focus on what doesn't waste time.

Right, right. So you're very efficient. All right, well, I think we've really covered a lot of topics. I mean, we really covered the Elko auction, the due diligence aspect of it, the excitement of it for you, the agony of defeat for me. You got any tips of the week you want to give our listeners?

You know, I just always, always think creatively. Always think outside the box. How can I market better than the next guy? And that's where I want a specific tip.

Like a website. Like, where do you go?

Gosh, well, you know, there's a. There's a really cool website, and I don't know the name of it right off the top of my head, but it's. It's a website. You probably do know it, Mark. It's that website where you can learn just about every. Everything. It's a woman's name. It's. What is it called? Have you not Heard it. Where you can go and you can literally, like, if you want to learn HTML, if you want to learn certain aspects of marketing or advertising, I think it's like, I don't know.

I have no idea what you're talking about.

Gosh, I got to find that website anyways. It's really cool.

Stop messing with me.

No, it's really cool because you can go learn about how to build a site using HTML. You can learn about different aspects. How to use Photoshop, how to do design, how to shoot photos, all these different things. And I think it's like. It's like Diane's. I don't know what. No, no, no. I don't know what it is. I got it. It's a woman's name. I'm gonna find out, but I'm giving it to you.

I can't believe you're teasing us. This is this great website, but I can't remember the name of it.

Yeah, I'm sorry. This is your tip.

Give me another tip.

Gosh. What is another tip for you? Geez, Mark, you put me on the spot.

All right, you think about it. I'll give the listeners my tip. Okay, so my tip of the day or the week is a due diligence tip. So Duran goes out, and when he does his due diligence, he rents the rv. He goes and looks out of property. I do things a little bit differently. I hire people to do that. So I use a site called WeGoLook.com and for about 75 to 80 bucks, they'll send out somebody to follow those GPS coordinates where Duran was looking at that auction. And they'll tell me there's access, there's mountain views, there's good soil. They'll take pictures. They'll prepare a whole report. And it saved me so much time and so much money by having to drive. How many miles did you drive out there?

2000 total.

2000 miles. So that saves me 2000 miles and all that time so that I can spend more time doing deals.

But here's. Here's the difference between me and you. I got to hang out my family, buddy. Come on.

Well, look, you're gonna make 50 to 60 thousand dollars for taking the time to drive out there and do it. I'm making nothing on that auction. So who benefited?

I found out my tip. I just hit my. It hit me on top of my head. Lynda dot com. L Y N D A L Y.

N D A dot com.

Lynd dot com. You can go there to learn anything and if you're. And for me, it's all about letting your brain expand it, you know, becoming a wealth of knowledge. So that when you're trying to figure out, how do I do Photoshop, how do I learn HTML? You can go to the site for, I think it's accessed for like, whatever, 30 bucks a month. You can, you can actually take any course you want. So it opens it up, it goes the entire course. It's really neat. So you can learn, you can learn different aspects of marketing. So say you're, you know, you're 45 years old and you're like, well, I just, I'm not very proficient at Photoshop. Well, great. This will teach you how to be proficient in Photoshop and you can utilize that on your ads when you're putting ads together.

All right, well, this has been our second podcast and Duran Frazier from Reserve Land Management and Duran, where we can find you. What's your website?

Reserveland.com Reserveland.com. correct.

And he's also a serial entrepreneur. He sent me today. What's the, what's the name of the, the startup? It's really cool. You're contributing at it. Was it the surf magazine? Which magazine was that?

Oh, it's called 4L Magazine. F, F, O, U, R and then the next word is L, E, L, which is for him. And then it's, it's basically being in San Diego. It's a little bit of a. Got a little Spanish, you know, a little Spanish splash to it, but it's, it's basically a lifestyle, men's fashion, fitness, health, business magazine for San Diego based on San Diego. So it's not like a, you know, like a Fortune meets Men's Health on a national level, but it's more based in San Diego. So it's pretty neat.

That's cool. This is Mark Podolski, the Land Geek. You can find me@thelandgeek.com and go ahead and put in your email address and first name and download the investors passive blueprint. And it's really good information. Thanks for listening. This is Mark Podolski, the Land Geek, signing off with Joanne Frazier. Hope this is a productive week for you. We'll see you next week. Thanks a lot.

Take care, guys.

Land Geek out.

Thank you for listening to another episode of the Land Geek. Join us next time for more tips, secrets and information that will help you succeed. Stay connected with the Land Geek on facebook@facebook.com thelandgeek.