The Land Geek Podcast #46

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's the man that's gonna help you do that. The Land Geek.

Hey, it's Mark Podowski, the Land Geek from your favorite Land Land investing real estate site. It's niche, but you love it. I know you love it. Www.thelandgeek.com alright, this is going to be an unbelievably informative podcast today and I'm really excited about it because I like to do this every now and again. Bring in a newbie coaching client, coaching student. So somebody who went from very little land investing knowledge to doing their first few deals in only a short 90 days. I wanted to get this student's perspective from when he started to where he is now and talk about his process. And I think it would be really helpful for those of you who might be on the fence, like, is this something that I can do? And does this thing really work? And for those of you who are actually doing it, this will help motivate you and get you to send out those offers. So I am pleased and privileged to rope in coaching student big dog, Jonathan Kennedy from Florida. Jonathan, how are you?

Hey, Mark, I'm doing great. Thanks for the introduction. How are you doing?

Pulse is still normal, respiration is still fine. I can't complain. All right, let's talk about you. What's your background? Where are you from originally?

Well, originally I was born in Belfast, Northern Ireland, and I moved to the States when I was about 12, went to school down in Florida and then moved up to Washington D.C. about six years ago. Went to grad school there, worked for a couple of years, started grad school again, stopped grad school, moved back to Florida, and here I am working in the land business.

Nice, nice. So what really drew you to the land business as opposed to flipping houses, doing some other type of real estate niche?

Well, I actually moved down to Florida originally to start a wholesaling business with my brother and he had been working in real estate. Wholesaling houses, yeah. And he had been working in real estate down here for a couple of years. He had been pretty successful, so the idea sounded appealing to me. It was better than another four years of school making no money. So I decided to come down here and join him. And sort of coincidentally, the first deal that we was really a solid lead Ended up being a piece of land in Davie. And this piece of land used to have a house on it. It had been condemned, so the house was no longer there. The city had torn it down, and the deal actually ultimately fell through. There were tons of liens against the property. The title work was really messy, so it didn't work out. But it sort of got me thinking more about working in land and the idea of working with land as opposed to houses, not dealing with the inspections, having less competition, all that good stuff sounded appealing. So I started exploring it a little bit more. And I think the first real introduction I got to it was actually on a Bigger Pockets podcast with Seth Williams, who does some land investing. And I continued to explore, and I came across the Land Geek podcast, which was awesome for me because it was a podcast completely dedicated to land investing. So I came across that in probably, say, mid December of 2013. I listened to maybe 10 to 15 of the podcasts while I was up in Ohio with my parents over Christmas, and that sort of convinced me that this was the direction I wanted to go in. I heard a couple of your other podcasts with new students and eventually decided to invest in the toolkit myself.

Wow. Okay, great. So when you first got the toolkit, what did you think of the program?

I thought the program was great. I really liked how the toolkit, it's split into different sections, each section devoted to a major step in the entire deal flow cycle. You've got more deals than you can handle finding seller leads. You've got more buyers than you can handle finding the buyer leads. You've got the due diligence module, you've got the templates you use for your letters, all the paperwork. That stuff is really useful. So it sort of steps through from your very first day in land investing all the way through to closing your first deal and how to do it.

So let me. You know, I sometimes get these home study courses, and there are 20 DVDs, there's a huge book, a huge binder. And I look at it and I think, ay, ay, ay. And it's just overwhelming. Did you feel overwhelmed at all when you first kind of looked at this big package and all these modules and the booklet and thought, oy, oy, oi, where do I start? Was there any of that? Was there any feeling of overwhelm, or did you just kind of dive into it?

Yeah, I sort of just dived into it. I was really excited to get going, and I had a lot of time on my hands at that point, because I was in Ohio for, I don't know, probably a week. And I've never actually lived in Ohio. My parents lived there. But that means I don't have much in the way of social distraction. So, yeah, I just went right into it. I watched all the modules start to finish, probably in, I don't know, three days.

Okay, that's fast.

And went through, reviewed all the paperwork, all the contracts you use, started exploring the resources that you mentioned in the toolkit, and sort of just went from there.

Okay, great, great. So when did you, like, from when you first invested in the toolkit, how long did it take you to send out your first mailing, your first batch of offers?

My first batch of offers probably went out, say, the first week of January. And I think, yeah, I think probably maybe 10 days or so after I got the toolkit, maybe two weeks, I'd send out my first sweaters.

Right, right. You know, I think that's really special because my experience is a lot of the new coaching students want to get all their ducks in a row first before they start making offers. So I'll get emails, hey, should I set up an llc, you know, before I start doing this, or, you know, those kinds of things. Did you set up an LLC first? Did you have an llc? Did you. Were you worried about any of those sort of administrative issues before you started making offers?

Yeah, I guess I was maybe at a little bit of an advantage because I moved down here to do the wholesaling business with my brother. He had some insight into how this all works. And you do similar letter campaigns with that. So we had done a couple of those. He had helped me set up my LLC for that, and I'm just using the same LLC for the land business. So for me, the course was really useful in learning how the deal process with the land business is different than the wholesaling. But I knew sort of in terms of sending out the offers, that was what I had to do to get started. So that's what I did.

Okay, great, Great. Okay, so you sent out your first batch of offers in a county in which state?

In Florida.

Okay, so you're in your own backyard now. Were you familiar with this county? How much due diligence did you do prior to your letter writing?

Well, I was sort of familiar with it. I lived up near this county back when I was an undergrad, but I haven't been anywhere near there for the past six years or so. And in terms of due diligence, I actually, you know, I started off Focusing in south Florida. But I got the feeling that it was really, really competitive and, you know, higher prices for the land down here. So I switched strategies. I started looking for counties that were less competitive, had a lot of land, so less densely populated counties. And I came up the list of maybe 10 or 15, and I just picked a couple at random from that list, started mailing letters, and this one particular county I got a pretty good response from. So I've been focusing on that one ever since.

Great, great. And as far as scrubbing the list, was that difficult for you? Did you have any roadblocks with that?

Well, so actually the first, I'd say the first two or three mailings I.

Did, I actually did, or even getting the list. What challenges did you have or did you face when you first started doing this?

Okay, so my first few mailings, I was using lists of properties that were actually going to auction. So I was doing deed grabbing, essentially. So Florida is nice because a lot of counties post that information online. It's pretty easy to access. So I get a list of these properties from the county websites that are going to auction. Depending on the county, they'll post them anywhere from maybe three weeks to two or three months ahead of time. So I get these addresses, I locate the property owners, the address of the property owners, and I just send them a letter saying, hey, I see your property's going to auction. If that happens, you might lose it. So I'm here, I'm willing to give you a cash offer. I'll pay off the back taxes for you and you'll get some cash for it.

Nice.

So I found that I was getting a great response from those, but the, the main issue that would come up was that they would have pretty high amounts of back taxes on them.

Right, right.

So I'd be getting some properties with maybe 5, $6,000 of back taxes, when the property itself would be worth maybe, I don't know, one or two thousand dollars. So I was getting tons of leads, but relatively few of them really ended up being good deals. But I did actually get my first two good deals out of that because it was a seller who owned one property going to auction, but he also owned several other properties that weren't going to auction, but were still tax delinquent. So I managed to buy a couple of those from him rather than the one that was going to auction.

Okay, great. Now, do you have numbers as far as what your response rate was? So I typically get about 5 to 7% response rate on my mailings and get 5 to 7 deals out of every 100 letters. Did you have a similar experience?

Yeah, I'd say 5 to 7% response rate on the tax auction letters sounds about right. And, you know, in terms of offers, I actually followed up with, you know, I. Maybe 2% of all the letters I was sending.

Okay, okay. That's. Yeah, I mean, that's a little lower than average. And that might have just been either, you know, because Florida is more competitive or just the county. I don't know. It's a little lower, but it's. Look, it's still better than zero percent, right?

It is. And I'm sending a good number of letters out. So it's not like I'm struggling to find good leads. Maybe it's just because I'm being more picky about some of the leads that I'm going after. I sort of made it a goal to spend very little money on getting the deals. So I just don't have a ton of cash to be playing with right now. So I'll send out really low offers and I'll get a lot of nasty voicemails, which, you know, I think it's good. If you're not getting nasty voicemails, I think maybe you need to make your offers lower.

Right.

But on the other hand, you know, you got these voicemails, and it can be, you know, I guess, can be a bit intimidating when you're getting started, but I think it's. It's good practice to get them and then, you know, just keep on going. Or just brush them off.

Yeah, yeah, exactly. Exactly. So that's funny. Within our Gold Mastermind, I was on the Facebook, the private Facebook community page, and one of the students was like, I got a nasty letter from the owner saying that what I was doing was illegal and that they were going to call the district attorney. And she was really worried about it. I said, no, you can send out a letter. They're not out anything. They were just kind of annoyed that they got an offer on their property and you're saying they owe back taxes and they don't owe back taxes, and they're all confused and they think it's a scam and you're trying to get their property. Like, no, they're not really out of anything. So, yeah, not illegal.

Right. I definitely had a couple of calls like that. And initially I would follow up with them. I'd be like, hey, sorry, according to the records, your property was tax delinquent. But I don't know, maybe it isn't, but it's on that list for some reason. I think that happens mostly when I was using the list from Agent Pro. And those I think tend to be a little bit out of date. So that could be why. But anyway, I mean, at this point, I still get those calls sometimes and I just. Yeah, I just leave them.

Sure.

Not too worried about it.

So let me ask you, how many hours a week are you working on this business?

I would say I'm working maybe 20 to 25 hours a week on land and then 10 to 15 on the wholesaling.

Okay.

So, I mean, I'm doing this full time.

Wow.

Real estate investment.

That is okay. Okay. And so while you're putting more time into the land business than I am now, are you doing everything yourself?

Yeah. I don't have tons of eas like.

You do start working on the business. Not in the business.

I'm working towards that. You know, I do have a nice printer here that will do the yellow letters for me. Put yellow paper in and it'll print the lines on it. And I've got a font that replicates my handwriting, so that makes the yellow letters easy. And I actually use a closing company to do the closing on my deals. I'm actually affiliated with a brokerage down here and they have a title company in house, so they give me a slightly lower rate. Still not as low as if I was going to do it myself.

What are they charging you on average.

When all is said and done with the recording fees, stamp taxes, the costs that the title company takes, lean searches, all that stuff, I'm probably looking between 1,000 and $1,400.

Okay. But you think you're going to get value out of that service?

I am. I mean, certainly to begin with, when I'm not as comfortable doing all the title work myself, I think it's nice to know you're having a title company do it. They're going to give you title insurance. If they can't give you title insurance, then that's probably a property that you want to stay away from, at least in my opinion. And I've also started setting up my deals where I will. I know you like using options for yours. I've started sending out offers and I'll just put a 60 to 90 day closing period on them. And I'll have an addendum in the contract that says I can market the property as soon as that seller signs the agreement. And my deposit will be fully refundable. So I'm getting the property under contract to buy it. I have Permission to market it, and I have a refundable deposit. So as soon as I get it under contract, I'll send it to the title company, tell them to hold onto it for a little bit while I market it. If I get a good sense that I'm going to be able to sell a property, then I will tell them to proceed with the title work. And that way I can sort of tell before I put all the expense into the title work, whether I'm going to be able to get a good deal out of it. So I'm not wasting extra money on having the title company do it.

Okay, great. I like that approach. So you get your first. You do your first set of offers, you get a bunch of agreements back. How long did it take you then to close, using your title company and then start selling and then get your first deal closed?

Well, the two pieces that I have sold the title company, it took them probably about 45 days, and that's longer than usual. And the reason is because there was a typo in the paperwork for a previous mortgage holder on these pieces of land. Both these pieces of land were from the same seller, and before that seller had them, another person owned them and that person had got a mortgage on the land. The mortgage was all paid off, but there was a typo in the paperwork that was recorded at the county to say this mortgage has been paid off.

Sure.

So the title company had to track that person down, have them sign off on the corrective paperwork before they could get the title insurance and transfer the property with a warranty deed to me. So that all took about 45 days.

Okay, so that's a little longer than usual.

Right.

Okay, so 45 days to close. And how long did it take for you to market it and then get your first buyer and then close with.

Your buyer with those ones? I actually have the buyers lined up before I closed on them. Well, so I started marketing them really as soon as I got them under contract. First, I put up an ad on Craigslist looking for someone to go take photos of the properties for me. So I got those photos back in about a week. And as soon as I got that, I started just plastering Craigslist with ads for the property. I got a couple of buyers for each of them. I had them sign an agreement to purchase them. And I had a contingency in that agreement that said that the agreement was subject to me getting marketable title of that property. So then by the time that I closed on my end, I already had the sales agreement. Signed by my buyers.

Phenomenal. So you really had almost no money out of pocket. Correct. It was almost like an option because you were doing a dual close. Correct.

Sort of. My closing company didn't do the closing on the. On my sell side. So I just use them to do the closing and title work when I buy the property. As soon as they do that, I know that the property is a clear title. So I'll just. When I sell them, I'll close it myself using notary Pro like you use.

Sure.

So I'll send a notary out there, have the land contract signed and notarized. And it's cheaper on the sell side for me. Much cheaper. And I can send the buyer proof of the title insurance because I've disclosed on it previously.

Right. Did you get your money out on the down payment?

I didn't. I'm a little bit behind, but I'll get it back within probably a year. Year and a half.

Year. Year and a half. How much will you make total on both deals?

Total? I'll make over the length of the notes. Both deals are seller finance. When both are paid off, I will make just under 30,000. I was actually thinking back of that testimonial I recorded for your website and I was actually low on that estimate. I just went back and looked at the paperwork today and I'll actually net 30,000 on those.

Okay, so you're going to net 30,000 at what interest rate are you financing at?

I did 8% on these. I think I'm going to move higher next time. I've noticed that at this point I've had calls from maybe 30 people who are looking for land in the area I'm working at and they'll ask about the terms, how the seller financing works, but I'd say maybe One of those 30 people has asked what the interest rate is going to be.

Yeah, they're always focused on the payment, not the rate. Yeah, exactly. I think especially if you're not doing credit checks, it's just easy money. They should be paying a higher rate, right? Yeah. Especially if they're not putting that much down. Did they put 600 down for you?

650 down and 700 down.

Okay, so 650 down. Okay. And what were these properties like? Were they acreage? Were they lots?

They were both two acre lots. So two acre lots? No, just raw land. There were, you know, mobile homes in the area, so access to power would be pretty easy. You know, there were power poles nearby. They were close to a lake. They weren't Lake front, but they were walking distance from the lake.

Sure. So there's something compelling about the property. I love that.

Right.

There's a good story there.

Okay. Right. And yeah, I mean, I think if you look at, you know, websites like Landwatch or other real estate websites, land in that area was selling significantly higher than I sold mine for. So I think that's what made it easy for me to sell them as quickly as I did.

Right. Did you calculate your ROI? Does it give you over 1000%?

I did calculate it. I don't have it in front of me. I don't know if I hit the thousand percent mark.

Okay.

But I. It was pretty high.

Yeah, sure. It's better. It's better than 100%.

Yeah. And you know, I had 300%.

Way better. 300%.

I'd messed around with stocks previously for a few years when I was up in D.C. and I don't know, I think I ended up, I don't know, I'm definitely no savvy investor when it comes to stocks. So I ended up maybe breaking even. But it was nice because I had 100 bucks a week I just set aside to go into my brokerage account. So it helped me save, but I didn't really make anything off it. So now I'm three months into this and I'm going to have a way better return over the long run.

Yeah. At the rate you're working it, I mean, you're going to start crushing it, hopefully. Yeah. No, I know you are.

If I'm not, I'm going to be in a tough spot a year from now.

So what would you say to a newbie, someone who's on the fence, maybe thinking about getting the investors toolkit? What would you say is, you know, I don't know, what would you say?

I would say go for it. It's not that big of an investment. It's 997 bucks. I think.

Yeah. I should raise the price.

I know you're not going to sell it if you say that. So yeah, it's a thousand bucks. And I think one of the most valuable parts for me was getting the paperwork, the forms that you use. I actually have a real estate license, so I have access to the standard Florida contracts.

Sure.

But you know, they're really. These are like 10 page documents, a lot of technical details in them that aren't really pertinent to land.

Right.

So the documents that you use, and they're 12 page documents, really straightforward, yet pretty tight documents favorable to you. So it's nice to have that. So I'd say even just for that, the course is worth it. And then also the list of counties that you have, some of the techniques for doing your research, finding lists. That's all really useful information.

Okay, great. Anything you didn't like about the program? Was there anything that we thought, you know, be great if you could improve here?

You know, one thing that I don't know, I don't think this will bother everyone, but for me. So you have the list of counties that you supply, which is awesome. But I found myself wondering, you know, if I wanted to pick a new county, what's a good technique for figuring out what is a promising county to target? So there is no real explanation of how you pick those counties, which I know now. I think they're from their counties that you or your students have done deals in. So I sort of spent some time wondering how to go about that, and I actually ended up pulling some census data and just looking at population trends in different counties in Florida to pick out a few additional counties. I figured maybe there'd be less competition if they weren't on that list. So, yeah, I mean, there's some insight into how you go about picking the counties would be useful.

Okay, I will tell you right now. The secret county lists are counties where I've done deals personally. My students have done deals. My competition is the deals. And this takes all the guesswork out of it, because we know deals can get done in these counties as opposed to other counties that we just don't know. We don't know the market. We can't pull up comps really easily, and there's just more brain damage involved. Nothing wrong with it. And I like your strategy. Hey, I can go somewhere where I know there's going to be less competition. I love that. I just. Especially when you're starting out, you want to have less anxiety as to where you're starting and more of a sort of secure base that, you know, deals can be done here because all these other people have done deals here.

Sure. And, you know, that's probably a fault on my part a little bit, too. I find myself doing this with the wholesaling. Also, once you get started, you get so excited and you want to experiment with all different things, and you're like, oh, what if I try this kind of letter? Or what if I try this county that someone else hasn't tried? Just little things you can do to tweak your business model. But I've really started focusing more on a particular county doing the same strategy over and over again, trying to really figure out what works and just replicating it rather than trying to go all over the place and try new and exciting things.

Right, right. All right, great. Well, we have come to that point in the podcast where I get to put you on the spot and ask you for your tip of the week.

Okay, so I do have a tip of the week. I've listened to the podcast enough to know that this always comes up. So. So I was prepared. So my tip is a book that I read when I was getting started, and it is called how to Be a Dirt Smart Buyer of Country Property. And it is by a guy named Curtis Seltzer.

Sure. In fact, I want to get Curtis on the podcast. I know Curtis.

Ah, okay, great.

He's great. That's a great tip.

So this book, it doesn't really. He's not the kind of guy that does the same thing as we're doing. I don't think he doesn't. Right. So he talks a lot about, you know, it's more if you're a person who wants to purchase the ideal piece of farmland or hunting land, you know, what you need to do to find that perfect piece of land. And he goes into a lot of detail about all the due diligence resources and, you know, he'll have entire chapters just about surveys. I think he actually has two chapters on surveys. And yeah, I mean, some of the stuff was really useful for me. One thing I remember in particular is that he has a section where he talks about getting power to raw land, which, you know, starting this, I had no idea how that worked. If someone, if one of my buyers had called me and asked, you know, what's the situation? How do I get power out here? How much is it going to cost? I wouldn't have been able to answer the question. And at least now I know that usually power either goes overland under land. Some counties will let you pay it off in installments, monthly payments. I don't know. That stuff, to me now is pretty obvious, but getting started wasn't. And so that book contains a lot of that kind of information.

Yeah, that's great. I've got to get him on the podcast. We talked about it a while ago and I know he's busy and I got busy and I thought I just kind of forgot about it. But yeah, that's a great, great tip. So my tip of the week is going to be a simple organizational tip. I don't know if I've talked about this in the Past. But if you want to go paperless, today is the easiest time ever. And, Jonathan, you know, in this business, there's a ton of paper, but with a scanner and Dropbox, you can really go paperless. So Dropbox is phenomenal in the sense that it is all your stuff in the cloud and on all your devices. So on your cell phone, on your laptop, on your main computer, anywhere you are in the world, you can have access to your files, which, especially for our business, where we can do this from anywhere in the world, as long as we have an Internet connection and have access to your files. And my Dropbox folder is great. And I also use it for backup as well because it's in the cloud now. I wouldn't just have that as my sole backup. You want to have definitely other backups there. But if you're not using Dropbox, check it out and I'll have a link to it as well. So, Jonathan, how do you feel about this podcast, your first time podcasting?

I feel great. And if you don't mind, can I just add one more thing to your Dropbox tip?

Sure.

I've been using this thing called Genius Scan, and it's an app for your iPhone. It lets you just take photos of any documents you get, and it generates a PDF from it and it will actually sync up to your Dropbox Genius. Yeah. So with those two powers combined, there's really no stopping you.

I love it. What about Evernote? You don't like Evernote?

Evernote I haven't used.

Yeah, Evernote will do the same thing. I love Evernote. That's a whole. Wait, forget that I even said Evernote. I want to use that for a tip next week. Ignore what I just said. So, anything else you want to close with? I do want to congratulate you on completing the 180 day success challenge, getting your investment back on the investors toolkit within only 90 days, which is half the time. You know, I'm so glad that you're part of the lanky community. You're doing so well, and I'm very proud.

Well, thanks, Mark. It's been a great experience so far, and I definitely recommend anyone who's out there on the fence considering whether this is a good investment. You know, it definitely is. And you can get it back. You know, if you fulfill the 180 day success challenge, then you're not going to be out of pocket.

Right. And if you're asking, well, how's Mark going to make any money doing this? I'm not. So at some point, I will have to stop it. But I do want to have this overwhelming amount of video testimonials where I can show other people, hey, this is not pie in the sky, late night infomercial hype. This is a real viable business that you can be successful at and here's the proof. Jonathan Kennedy is the proof. And yeah, so if I can do.

It, you guys can do it.

Yeah, exactly. And although I would say that Jonathan did have a little bit of an advantage, the fact that he had his LLC already started and some experience with wholesaling with his brother, but he still didn't know anything about land. Right?

Right. Nothing. Nothing.

So, yeah, I'll leave you off on that. Anyways, if you guys want to learn more tips, tricks, techniques on how to make an incredible income like Jonathan Kennedy, actively or Passively, go to www.theleang.com and download the Passive Income blueprint. Get the ebook how to Avoid three Fatal Land Buying Mistakes. And of course, get this always fun and informative podcast delivered each week to your email inbox. And of course, give me some love. If you want to acquire some wholesale land, go to frontierpropertiesusa.com we can hook you up. Jonathan, do you have a website yet?

I do, but I'm not going to share it just yet because it's sort of a work in progress.

Okay, well, not a problem. You can always get in touch with my landing team. And if you want to get in touch with Jonathan, get more details from him about the investors toolkit and his experience. I'm sure he'll be happy to share it with you.

Sure, Yeah. I mean, feel free to send me an email, whatever.

All right, Jonathan, thanks so much. This is Mark Podolski, the Land Geek, and I'll see everybody next week.

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