The Land Geek Podcast #66

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 gonna help you do that. The Land Geek.

Hey, it's Mark Podowolski, the Land Geek, with your favorite real estate niche land website for all things real estate investing as far as land is concerned. Www.thelandgeek.com and today, our regular guest. Is he even a guest anymore? He's the man, the myth. Living off the beach in Carlsbad, California. He needs no introduction, but I'm going to introduce him anyway. From reserveland.com and landhub.com and 18 other domains. Duran Frazier. Duran. What's going on, buddy?

How are you, my friend?

Pulse is normal, respiration is fine. I can't complain. I've had three cups of coffee this morning. I'm wired and my ADD is kicking in. But I'm so happy to be on this podcast with you on this fine day.

That's awesome. Like you, I'm on my third cup, but I'm actually drinking tea with honey so that I can get my voice back. I've been a little concerned that I, you know, people tell me I talk too much. Well, my wife primarily.

Sure.

And so, you know, and those who listen to podcast can probably assume that as well. So when I, when I'm talking a lot, I don't really like a singer would protect their voice. I don't do a really good job of supporting my voice. And so I have to actually go get a voice. Listen to this. I gotta get a voice coach to learn how to talk, and then I have to probably go on vocal rest for a few days. That's pathetic.

Yeah, that's a real first world problem that you have to go out and hire a vocal coach so that you can talk even more than you're talking.

Maybe if I talk slower like this, it would be better for me.

You think so? I can see how you're enunciating better when you're talking more slowly. But people are going to click off the podcast if you continue talking like this.

So tell me anything new in the world of land for you, Marcus week?

Yeah. All right, so I got a great deal. I'll tell you about it. I found a bulk seller. She had five lots, and these lots all owed two to $3,000 in back taxes. So I'm spending about 15 grand just to pay off her back taxes. They comp each, the five lots each comp at 40 grand. So I'm gonna spend $15,000. I'm probably gonna make about 150, 200,000. It's a great realtor deal. And I love when these deals come up. They don't come up often like that. We get such huge margins and such a big hit like that. But when they do come up, I'm very, very grateful.

Mark, I got a question, I got a question for you. Are you thinking, Are you thinking 40,000 short term? Are you thinking 40,000 put on the market, hopefully selling 60 to 90 days.

What are your thoughts? Yeah, yeah, 60, 90 days. I mean this is a realtor deal. It's 500ft from power. There's homes all around the area. I mean this isn't, you know, raw undeveloped land. This is in the middle of development. And which is why, which is why the, you know, the last property that sold sold for over 40 in that division.

Owner financing or no.

Yeah, I mean I'd like to, you know, get half down, so get a hundred out and then finance another hundred.

That's a beautiful deal, my friend.

Yeah, beautiful deal. So, you know, because the margins are so high, I have total flexibility and yeah, I'll definitely get my 15 out very quickly.

I like it, I like it a lot.

So that's what's going on with me. Still selling land. Texas, Arizona, Nevada, Colorado. Colorado sounds fast. Yeah, for sure. Nevada selling pretty quick. Texas, it's not that fast. But selling, yeah.

It'S interesting. You know, it ebbs and flows in terms of interest for certain states, I think. But Nevada seems like a pretty steady market. Colorado seems like a pretty steady market, which is always nice. I mean, over the years, you know, if you want to, if you want to liquidate property, you can do so in those two states. I know that for a fact.

Right, right. Where are you looking these days? Are you still sticking to Nevada? What's going on with your project? What's going off? The coal mining or the, the mining? Gold mining.

I don't want to get into too much detail, but we've got some very, very, very promising things happening right now. We've been. Anytime you're looking at raising significant capital from an investment bank, it's a challenge and a process and we're working on kind of a multi leg deal that has taken a little longer than we expected. But everything sort of come to head this past week and we are in some heavy negotiations right now. And I'm pretty excited and look to have the financing wrapped up by next week for the project. So we'll be hopefully drilling by either year's end or beginning of Q1 2015.

I love it. So, not to jinx you, but I did get this question from my coaching student Adrian, which I thought was a great question. No one's really asked me. He's like, what do you do with all your money? How do you allocate it? So let's say, for example, you get a seven figure payday on your mining hit, right? And I make 200 grand or whatever it is. What percentage of that goes back into the business? Okay. What percentage of that do you save for taxes? What percentage of that do you then maybe diversify into other investments? And how do you handle that as far as cash allocation.

In a situation like that? The mining project, which would be a fairly significant number for me on an exit now. So it's a little different now because we're actually just taking investment in. So it wouldn't necessarily be a bigger paycheck to me initially, but it will a couple years down the line. But in a situation like that, I would first put aside what I believe to be the tax ramifications of that sale in an account and just don't touch the money. And then sit down with my tax attorney and my CPAs and discuss how to pay that money back to the IRS and some strategies there. And then in terms of the way I would spend it and the way you would spend it, Mark, we're a little different because I have a couple of businesses that are currently running, but all things right now are sort of focused on real estate. So I would probably put. I would probably put 10 to 15% back into my land business. And then I would probably diversify a little bit into some businesses that I'm currently invested in now and. And then of course, keep some cash on hand because, you know, you always want to have a good chunk of change for that deal when it comes along. I mean, it's always nice to not use your own capital, but if there's a deal that needs to close in 24 hours and you've got the cash, it's nice to have in the bank.

You know, it's so funny because that's pretty much the same type of answer I gave Adrian. This is the problem with our business. We can't find a better investment, right? Yeah, you just can't. You can't get a higher return anywhere else than land. If we're making 300 to a thousand percent. Let's just say, worst case scenario, we're making 100. Where else do you get those returns? Honestly?

Yeah, I agree. I agree.

I mean, I guess, I guess if you, if you, you know, got an ipo, that was a high flying ipo. I don't know.

That's, that's legalized gambling. So.

Yeah, I mean, so for doing a little bit of extra work and hustling, we make these huge returns. And I was telling Adrian, once you get to $10,000 a month passive, right. That's literally like saving $2.4 million. That's, that's, that's hard to do. To save $2.4 million, buy a bond at 4% and have $10,000 a month coming in. Passive. That's really tough for most people to do. That could literally take. If you're working a job, that could take a lifetime.

Unless you worked at Instagram.

Yeah, I mean, so if you have. Exactly. So if you have this huge exit, then you take your 2.4 million or whatever it is and you put into an account. So that's the beauty of this business is the passive income and the notes and getting that cash flow in because it's literally like saving millions of dollars and it doesn't take that long.

Yeah, no, I agree. I agree 100%. I think, I think land is probably the safest investment you can make. Of course, you have to do your due diligence. And we've talked about it before, the cheaper you buy the land, the safer it is in terms of, again, you just have to know the market. So if you're spending $50,000 on a piece of land, really do your due diligence and know what you're buying. You know, if you're buying a. You know, I'm not saying that you don't do your due diligence buying a $5,000 piece of land. It's just that, generally speaking, you know, there's, there's, there's a, there's a lot of things you have to uncover on a $50,000 piece of land, because that's a huge risk. You could be sitting on that 50 grand for 20 years if you buy. Wrong, right.

Yeah, exactly.

And I'll give you, I'll actually give you, for instance, or an example, my grand what. And it's really interesting and there might be some people interested actually on the podcast listening. My grandfather owns a lake up in Spokane, Washington. It's called Horseshoe Lake. I actually have it on my website at Reserve Land and It's one of the things I've been trying to help him for years market and it's a gorgeous piece of land. It's literally got, it's an 80 acre lake. It's got 22 subdivided parcels, I think like 15 on the lake.

And he's trying to sell power on all those parcels.

There's power, I think to several of them.

Correct.

Okay. Beautiful, beautiful property. He wanted to sell it as a whole piece of land for a while. I think he spent about, I want to say over time probably five or six hundred grand on that land, which is kind of, but he's asking I think one million bucks for it.

That's it, that's it.

And he's had a hard time getting it but I think at the top of the market he turned down a couple offers that were a lot more than that. So I think it's kind of in hindsight, like in our business, Mark, we look at the margin go, hey, if I'm making, you know, and it's not just margin, if I take, if I got a million dollar property that I've got under option I can sell for 1.5 million, I'm going to go, hey, that's a good deal. That's a 50% return, you know, short term. So for him, I think because he had the property for so long mentally and I think it just kind of comes with that, kind of comes with that like old school real estate mentality that I'm just going to hang on, right, hang on, hang on and price it. And I think because the way the market fluctuates these days, a lot different. I mean people talk about 10 year cycles and you know, we could talk all day long about, you know, the manipulated cycles of what's going on today and how they're, you know, and I wouldn't say, you know, purposely manipulated but at some level I do believe that. But like we talk about mortgage, mortgage backed securities being purchased by the Fed, you know, that, that pushes rates down. So in effect that sort of manipulates the market indirectly. And so with this land he could have sold it and he could have made a huge profit and he decided against it. And so he's been sitting for almost 30, oh no, over 30 years now on this property. And I've been trying to help him. He's, he's in his 80s and he just wants to move it. But he's, he's getting, he's getting a lot of offers now and I've been helping him market it.

But yeah, let Me ask you, how are you marketing that property? Are you using a realtor? Are you doing Facebook? I mean, how are you doing that?

Facebook, Craigslist Land and Farm Land. Watch several websites and just, and all the leads that we generate. So he's gotten. Because they're broken up now. It's a great, it's a great term property. Right, right. He can sell one parcel for, you know, 40 to 50,000, and then maybe on the lake he sells it for 80 grand. But you get, you give him 500 bucks down and 7, 6, 700 bucks a month, depending on how much the Property is. Maybe 300 bucks a month if it's off the lake. And, but there are CC and Rs in place, so you have to abide by the, you know, the rules and regs that are, that are, you know, on the property, which I think is like a minimum 2,000 square foot house. So if you're going to build, you have to build, right?

Wait, Drake, why don't you just focus on selling to builders? Local builders in Spokane tried that.

We tried that. So it was, it's just been, you know, it's not in the heart of spokane. It's about 20 minutes away. Right. But I think that the dilemma is there's a lot of property like Spokane. If you got, you know, you know, look at, if you look at a Spokane auction, there's property everywhere. So now lakefront is a different story. I mean, this is legitimately lakefront property.

So that's interesting because I would think if I was a builder, I could sell lakefront lots. Custom.

Trust me, I've called, I've called probably 7 or 8 myself and talked to them. And you have to remember, the market.

Was so depressed, nobody wanted to build anything for a while.

Yeah, exactly, exactly. So, yeah, And I think that's the idea. Like, you could, you know, creatively, you could joint venture with it with a builder and take some risk with the builder and, you know, hopefully maybe, you know, flip a home. But again, you're talking about, you know, it's really speculative. You're, you're 20 minutes outside the city. You know, what are the homes going to sell for? What, what are building costs? So you look at all those numbers. You know, homes are very speculative. I mean, how many times have people built homes and lost money? So, and that's the scary part.

Right, right. But historically they haven't been that speculative. I mean, historically they, they've increased in value, what, about 1% a year? Is that right?

I think on average, the average is 3% a year.

3% of the year. Really? Maybe California.

I think nationally the national appreciation average yearly of real estate is 3% per year. I don't know if you look at the last. That's been a thought. That's what's always been talked about sort of like the 10 year cycles. But I do know that 3% has always sort of been that rule of thumb with appreciation. So now of course if you look at it over the last 12, 12 months and, or maybe 18 months in Southern California, appreciation is up like 25%. So that makes up, that makes that fall the down years.

Yeah. I mean you can make an argument we're in almost another housing bubble.

We are, we are. It's not an argument. We are in a housing, we are.

In a housing bubble.

There's no, not, not nationally though.

Just pockets.

Yeah, no, there are pockets. So the demand, the high demand pockets are definitely, you know, people. I had a long, I had a dinner last night with a couple of people and we sort of just discussed the market about where, where's the market, you know, from single family homes. What, what, where are we gonna, where are we gonna be out in a year from now or two years from now? And, and my thought is we are literally at the tipping point of sustainability. I mean I don't, I don't know how like in Southern California, I don't know how people, half these people afford their homes. I don't get it. You know putting, putting $200,000 down on a million dollar home and still having a 5 to $6,000 mortgage payment with property taxes. HOA. I mean these people are, I don't get it. I don't know how many. And there are, there are tens of thousands of million dollar homes in San Diego and I don't know how people can afford it. I just don't get it.

So they're millionaires.

There are people that have.

Where's their house? Poor.

Exactly. And I think that's kind of where we're back to that 2006, 2007 bubble where people, people just want all about buying the big house and buying the nice fancy cars. We're right back there again, which is sad. But the good thing goes to people that are in this business of buying and selling land. Like Mark and I have never been in that bubble of like, we want these amazing homes and these amazing cars. We just wanted to focus on land because we knew that land was a safe investment. Right.

Well, you know, the problem is, is that we're not going to Get a return anywhere else that we're getting on land. And especially when you. When you think about your time. I mean, I did a house flip back in the day, I think in 2006. Very top the market. Made a hundred thousand dollars on it in Carefree. But I was. I was up there every other day.

Yeah.

Meeting this, the subcontractors and watering the plants. And when I factored in my time, it was miserable. I could have been doing more land deals and made probably just as much money.

Yeah, no, I think. And in reality, that's the hard part. Right. It's the management aspect. It's the contractors. I did a flip about seven, eight years ago, nine years ago, of a condo down in San Diego, and it was right next to a really, really beautiful school. And I thought, gosh, should we sell the house? Should we flip it? Anyway, we put money into. We flipped it and. And it was just a nightmare. I mean, the contractor skipped town like, three times. You know, I had to bring him back. It's just, you know, managing, you know, those type of people can sometimes be a challenge.

And I'm not a construction guy. Do you know construction at all?

I do a little bit.

You do? See, I don't know it at all. And, you know, these. These contractors could have done the worst work ever. And I wouldn't know. I wouldn't know if it was shoddy. I wouldn't know if it was good, you know, at that point, because I was flipping it, I was just looking at, okay, what's the cheapest price I can get to get these cabinets refaced? Or, you know, this low ceiling fan and just kind of updating it now, it worked, but at the end of the day, to do that continually would just be miserable.

Yeah. You know, I think one of the interesting things about that is, like, we've talked before, I love educating myself on these. These type of situations. Right. Like, I want to know more about contracting and how they do their job so that I can sort of manage them. And I don't want to micromanage them, but I want to go in and manage the process and know, hey, that's a. That's a really bad job. Or you need to fix that, or you change that because. Because those are things that they'll come up along, you know, several times in your life, whether you like it or not. So it's good just to know that stuff. So I've always sort of been in. I've installed hardwood floors. I've done a lot of different things just To. For nothing more than just to learn.

That's great. That's great.

Yeah.

I'm always afraid it's gonna cost me twice as much.

You don't look like a guy that likes to put in Harvard floors, though.

No, I'm definitely not. I pay. I pay for everything. I pay for everything, Duran. I do nothing myself.

Wow. I like it.

Yeah. But that's where my, you know, where's my time more valuable?

Right here on camera. Land, right?

Yeah, right. Yeah, exactly. Land. Geek and land investing. I'm losing money installing hardwood floors.

Yeah, exactly. So, yeah, that's again, you know, going back. Going back to what you said earlier, just, land is a very, very safe investment. And, well, you know, it's safe the.

Way that we do it.

Yeah.

The outside world looks at land and says, oh, that's highly speculative and that's a terrible asset class. It's only for the most professional of investors.

Which is totally untrue.

Which is. Well, exactly. I mean, not the way that we do it.

Yeah, but you can. You can be professional by going through your program pretty quickly and understanding just. Just the basic aspects of due diligence.

Right, right. But, you know, typically when people think of land investing, they think of going vertical, going through the entitlement process, planning out a subdivision, selling it to a builder, talking about, you know, putting an infrastructure, doing things. Phase one, phase two, environmental. And that is not what we're doing.

Yeah. There's four words that I like to share with people. Don't be a developer. Yeah.

80% of developers go under. Right.

Yeah. It's a very, very challenge. Now, granted, there are times when development's good. Right. My mining project, we're developing this project, but it's such a. It's such a different type of business that it makes things very challenging. And there's a lot of risk involved.

Tons of risk. Tons and tons of risk. Most developers run out of money. Yep.

I mean, just the permitting process alone, like going to a local county and trying, because you're not going to know everyone and how to get things done. So it's always going to be a challenge because, you know, the powers that be in the counties, they sort of control what you do, and if they don't want it there, it's not going to be there.

Yeah, yeah, exactly. You ever get the grass is greener syndrome and you look at what other people are doing and think, oh, maybe I should be doing that instead. That looks more lucrative. That looks more fun. Did you ever get that?

Only when I've got 19 projects that I'm managing and realize it focusing on one could be a lot more lucrative than 19.

That's right. I was talking to somebody about you. I'm like, yeah, Duran's got business add. You're in everything.

Yeah, you know what, you're right. But here's the really cool part is like you, a lot of the things that I'm involved with aren't things that take my time. They're not day to day things that I need to be involved with, you know, like certain aspects of the magazine, you know, which I don't talk about very often. But it's a really cool magazine that's doing very well. I've been involved in several aspects of the process, but I'll spend an hour or two here and there. I'll write an article for the magazine, I'll call up a few people. I've got contacts that are in the industry that I can chat about some national advertising campaigns for the magazine, like, just different things that, like, I sort of use my network to kind of help. And that goes, you know, that it goes for the surf company that I'm invested in, that goes for the headphone company I'm invested in. It goes for a couple of software companies I'm invested in. So a lot of the things that I do, I'm not the CEO, I'm basically an advisor helping build that brand by my network and connection. So, yeah, it sounds like I've got a lot going on the binding project. I've got my. I am spending a lot of time on, and I have over the years, and it's a risky project, but there's a big reward at the end of the tunnel if I can, and no pun intended, tunnel, but if I can get there. So.

Right. Yeah, that's. Yeah, that's interesting. I mean, but when you go to bed at night, do you ever feel like, oh my Gosh, there were 10 things in my to do list that I wanted to get done, I couldn't get done. You ever feel, you ever feel like there's just. You've so much on your plate, you've so many different areas of focus. Do you ever feel like that? Like you didn't get enough done?

Occasionally I do, but for the most part, again, because I'm so structured and regimented with what I do on a daily basis, I think that I've got myself in a position where I'll push things off my plate. Like if things are moving too slow or something very big fell on my lap. A Couple of weeks ago here locally in San Diego, and a couple of big businessmen that I ran into with some deep pockets came and asked me to help on a big project. It's probably a 200 million dollar project that could be something very. Now when I say 200 million, not for me, but for the city of San Diego or for the county of San Diego, could be. And it's a game changer. But do I want to take my time and focus on that entirely? No, because it takes away from what I'm currently making money. But it's something that. And I have to assess the project. Right? Is that. If I assess the project, is it something I can see myself spending three or four hours a day on for the next month and a half or two months or five months to make this thing come to fruition? Does that make sense? I don't ever feel like. I don't ever go to bed going, gosh, I forgot to do this or that. Because I'm very like, my inbox is clean every single day.

No, it's not.

I promise you, Mark Duran.

How's that possible?

Dude, I should send you a snapshot. It's clean every day, Mark.

You know what? I want to see that snapshot I'll put up on my website.

Okay?

You don't do it right now. Okay. Don't multitask.

Did I not.

We just did a coffee talk on that.

So anyway, I think we're about that time. Mark, I know you've got something very special for the listeners, so why don't you go ahead and tell me what is your tip of the week?

How many times do we have to go over this? How many times do we have to talk about this?

What's the problem?

It's the Land Geek podcast. You are my guest. I put you on the spot and I say, Duran, we're at that time. What's your tip of the week? Now you're. Now you're. Now you're being me.

I thought this was a Land Freak website.

Yeah, that's. That's what you call me, off air.

No, I'm the Land Freak. You're the Land Geek.

Oh, that's right. Land. Yeah. You're like the doppelganger. You should set the Land Freak podcast that competes with the Land Geek podcast.

That's funny.

Come on, man. What's your tip of the week?

My tip of the week is a wonderful little website. It's called swiftly.com.

I'Ve heard of that. Let me check it out.

S w I f tly.com swiftly is basically a spin off from a company that we've talked about in the past called 99designs.com and basically I think you can get stuff done and like a couple like 30 minutes is the average turnaround. So if you need changes and the average cost is, I think it's 19 bucks to do it. So photo retouching, logo changes, business card changes, vectorization, banner ad updates, and a lot of other things all can be done on swiftly.com.

Oh, this is great. Let me ask you, is this better than Fiverr?

You know what, it's a little bit more advanced than Fiverr.

What? What?

You're dealing with people that are real graphic designers. Fiverr. There are a couple of ones that are and they'll have the, you know, the add on packages that you pay 10 or 15 or 20 bucks more. And that's who you're dealing with here. So you're dealing with kind of like these are like the add on packages at Fiverr, if that makes sense.

Okay, so let me ask you, you know, for 19 bucks they say they do it in less than an hour. You can request revisions until you're completely happy with the work. Then do they charge you more?

No.

Huh. Interesting. I wonder if they'll help with landing pages. If I have the copy, would they go in and make it look better? Sure, for 19 bucks, possibly.

So check this out. For 25 tasks. For 25 tasks you can pay 275. That's only $11 a task. So if you go.

Yeah, but what would you do with this? Update your Facebook cover photo, I mean, your logo, business cards, all sorts of.

I'm just saying you can buy in bulk too, which is pretty cool.

That is cool.

So you can buy like, you know, you could, you know, five tasks are 16 bucks a task. Ten tasks are, you know, 14 bucks a task. But again, it's kind of like a fiber on steroids a little bit.

This is cool. Great tip. You're on fire with your tips.

You both have a good one.

For me, I'm have a good one. Mine is I'm really enjoying this new 18 minutes to focus book that I'm reading and implementing into my life and having these five areas of focus for the year and then having to do lists and putting them on my calendar. But one of the ways that I'm making to do lists is I'm using an app and it's also a web app and it's free. It's wonderlist.com and I'll spell that for You w u not w o like the bread w u N-E-R l I s t dot com. Check it out. Wonderlist.com it syncs among all your devices and it's free and it's great. I'm really enjoying it. And then I make my my. For my to do lists. I have my five areas of focus and I have to DOS for each part of the focus. And then I just put those things in my calendar in the morning and it keeps me focused and energized throughout the day. So that end of the day, I feel like, oh, I got a lot done and I had really good control of my calendar.

You know what, Mark? I'm just going to say this. I have to break it out there for all the listeners. Mark actually brought this up on like podcast number 10. I don't know.

I didn't bring up Wonderlist.

Yes, you did.

I was productive.

You know.

It'S.

Now you're French on me. Come on, dude. I'm just trying to tell you that you've definitely brought this up before. I've heard it.

Wonder list.

Yeah, you're. You need to step it up a little bit because I've been here giving these listeners something really good to go play with and you give them wonder. I mean, come on. Come on.

I'm sorry.

I'm just kidding. No, this isn't bad. I actually like it.

You're so graphic. You know what? We had graphic river and now swiftly. Come on, man. You know what? Next week I've got a great due diligence tip. I'm not telling you. Listen, everybody, listen to the podcast next week because I've got an amazing due diligence tip. But I'm not going to give it out yet because I still have to test it. But it's something that might be able to replace my other due diligence site that we use. So if you want more tips, tricks, techniques on how to make an incredible income actively and passively buying and selling raw land, please visit www.thelandgeek.com. download the Passive Income blueprint, get the ebook how to Avoid the three Fatal Land Buying Mistakes. And of course, get this amazing, engaging, informative podcast delivered each week to your email inbox. And if you want to acquire some wholesale land, check out Reserveland.com. if Durand doesn't have anything you want, check out FrontierPropertiesUSA.com subscribe to my VIP list, get some shekels off your first piece of property. And of course, visit landhub.com so, Duran, are we good? Anything else you want to discuss before we close?

No, I think we got it. We had a pretty, you know, we didn't really argue too much day, which kind of bums me out.

We can argue if you want about something.

We'll do it off. We'll do it offline.

Offline. Hey, you know what? Thanks, everybody, for listening. Duran, I really appreciate you taking time out of your extremely hectic, busy, crazy, chaotic schedule. Thanks, buddy. So we'll see everybody next week. Have a good one.

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.