The Land Geek Podcast #73

Welcome to the Land Geek Podcast, your resource for information and tips to making money by buying and selling money. 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 Podolski, the Land Geek from your family favorite niche real estate website, www.thelandgeek.com. and today I'm really pumped up and it's not just because I'm wired on caffeine. I am joined by a guy that he's kind of a big deal now and he's not doing land and he has nothing to sell except just help people. This guy is really phenomenal and really paying it forward. Kevin Bupp. Let me explain Kevin Bupp to you. He's been investing in real estate for 15 years. He started when he was 19 in college. He started out in single family homes, progressed into commercial. He's a true entrepreneur at heart. He's owned other numerous businesses in industries other than real estate which I'm going to grill him about. He's very involved in multiple local charities. I told you, he pays it forward. He's the host of the real estate Investing for Cash Flow podcast which is a phenomenal resource. And he put this in his bio, which I thought was really sweet. Married to the most incredible lady and has 11 month old son, Land Geek Nation. Please welcome Kevin Buff. Kevin, how are you?

I'm doing awesome, Mark. Thanks for having me on the show today. I'm real excited to be here.

I'm psyched you're here man. So let's just get right into it, not even do any fluff. How did you get into real estate? What made you start investing in college? I mean, you're real young.

Well, I can tell you that I had absolutely no direction in life when I was 19 years old before I started investing in real estate. And I got lucky, I really did. I was just taking general college courses. In fact, I didn't even go away to a university. I went to a community college because I didn't want to waste my parents money because I wasn't ready for life yet or I didn't really know what direction I wanted to go. But I started dating a girl and her mother had just been through a divorce and she started dating a guy, became friends with him. I saw him around the house during the day a lot when I was obviously in between classes and just really wondered what the heck he was doing? Shouldn't he be at a 9 to 5 or shouldn't he have a job? And chatted with him one day, found out that he was a real estate investor, owned some single family rentals and multifamily apartment buildings in the city I lived in. It was very intriguing to me that he had the lifestyle where he literally, on a Wednesday afternoon he was hanging out, watching movies or just hanging out in his home office. So it piqued my interest and I grilled him about it for a few months. And once he realized that I actually, that I was kind of digging for more and more information, we became friends along that period of time. And he actually invited me to a Ron LeGrand boot camp in Philadelphia. It's like a three day boot camp. And for those of you that don't know who Ron LeGrand is, he's kind of one of the old school gurus that, you know, does a whole bunch of sales pitches and, you know, sells you on how to wholesale houses and, you know, rehab and flip houses. But anyway, so I went to this thing with him, was super excited, didn't know what the heck I was getting myself into. I think I tried to read a couple real estate books before I went, but it was just over my head. You know, it was all brand new to me. I was a bartender. I mean, I was a bartender and I was going to community college, so went to this boot camp three days, and after the first day, it just, I got it, like, it just, it made sense to me. Things were going in my brain and they were making sense. And I started looking around the room, started hearing some testimonials from people that were in the class that were actively investing. And some of them didn't seem so bright. So I was like, gosh, man, these guys are. A lot of these people aren't very. They don't look sharp to me. They don't look any smarter than what I am. Sure if they can do it, I can do it. I mean, so I went home with that attitude. I was super pumped up and gung ho like most people are. And they leave one of those boot camps and you know, rah, rah, rah, and started hitting the ground running and felt like my wheels were spinning a little bit. And David, who's the gentleman that took me to this boot camp, he kind of let me fumble around a little bit for about a month before he looked at me and said, you know what, I wanted you to fumble around for a month, but you really need A mentor. That's the only way you'll ever be successful in life in general is if you have a mentor to kind of show you the rope. So he's like, what I'll offer to you is, do you want to follow me around for six months? That means come, come to my meetings with me, talk to realtors, go look at houses, look at the projects I'm working on, collect rent from tenants. You can follow me around in between your classes whenever you have free time to spend it with me. I took the next semester off school and literally went to his house every day, pretty much every day during the week, and sat in his office with him and became really close friends. Listen to him on the phone, listen to the deals he was doing, have him explain to me why he was doing what he was doing, and just really learn the business inside and out. Watching how he interacted with sellers, how he interacted with buyers, real estate agents, brokers, things like that. And I guess it took about a year before I was ready to do my first deal. Probably a little bit less than that.

So you're 20 years old doing your first deal?

Yeah, 20 years old. I put a. There was a bunch of row, like inner city Harrisburg, where I grew up in Pennsylvania, wasn't a really nice area. In fact, there's still some really rough areas there now. But the area where I bought my first house, it was a bank owned property. It was a dilapidated row home. I think it was built in the 1940s. I mean, I didn't know what the heck I was doing, but I knew how to figure out what the after repair value was based on the classes I had taken and also the information David gave me. So I figured out the after repaired value, made a lowball offer on it and it was accepted. I think I paid 29, actually $26,000 for the house. It was worth probably like 65 or so now.

Tevin, where did you get the money? You're 20 years old.

Yeah, actually I had some of my own money. I had about five or six grand that I had saved up. I actually made really good money bartending the job I had, but obviously I didn't have enough money to pay cash for this thing. And that's where David came into play. He had a lot of relationships with private investors and private lenders. And he introduced me to one of his private lenders and I ran him through the deal, told him what I was going to do with it, told him what my intentions were. He knew obviously David had my back in Terms of, you know, coaching me through the process if I hit any road bumps. And I borrowed, I guess I borrowed 21,000. Actually, no, I guess I borrowed about 30. I don't remember all these numbers. This is so long ago. I think I borrowed about 30 grand from them. Put, you know, put 5,000 or 6,000, whatever I had as my own skin into the game and turned around and sold that property for $59,000. I think probably about, you know, four or five months, you know, later. It took us about two months to rehab it and then it sat on the market for a few months before he had a good qualified buyer. So, you know, walked away with 20 or so thousand dollars in my pocket, which was about what I was making working as a part time bartender and going to school. And that got me super excited. I mean, the level of confidence that gave me after I did my first deal was just, I can't even describe it in words. I mean, it just put this, instilled me with this confidence that no one could take away, no one could strip this away from me. And I was like, you know what, I did it once and it didn't seem that hard. I made some mistakes. I probably spent some more money than what I should have on the rehab, but I'm going to do this again anyway. Did some more deals in Pennsylvania. I partnered on some stuff with David, continued going to school and actually finished my four year degree at the local community college and decided I wanted to get into real estate full time, but I didn't want to stay in Pennsylvania. Just not enough action there for me. It's a town that really doesn't progress. When I go back now, the people I knew 15 years ago are still doing what they were doing when I left. I mean, literally going to the same places, you know, hanging out with the same people, you know, just. It doesn't, doesn't. It hasn't evolved that much, but. Which isn't a bad thing, but not for me. So I moved to Florida back in, I guess 2002 and you know, just really took, took some time down here to get involved in real estate, you know, started learning the market, you know, what was happening, who the players were. Attended a whole bunch of real estate investment club meetings and just, you know, dove in feet first and started doing deals, I guess six to eight months after I was living here and focused primarily on single family homes.

So what was like your sweet spot? I mean, were you looking at the lower end of the market?

Yeah, we were low. I was low income. I Mean I basically did what was my comfort zone. So I was looking at lower end type stuff which is similar to what I was doing in Pennsylvania. So your first time home buyer stuff, stuff that was priced under $100,000.

Both.

You know, we did a lot of marketing. You know, we made, we made a lot of offers through realtors on bank owned property. We made a lot of offers through realtors owned properties that were just privately owned. And then we did a whole bunch of other outside marketing, you know, like we did, you know, bandit signs, like we buy houses, we did direct mail campaigns, you know, networked at investor meetings. I bought a lot of properties from wholesalers that were flipping them. So every which way you could think of, we bought deals. You have to put a whole bunch of tentacles out there in order to fill your pipeline on a regular basis. So I did whatever I could do to fill our pipeline and started doing a lot of deals. Actually, I guess within a few years had done 20 or 30 homes and then partnered up with a group based out of Sarasota, Florida which is about an hour south of where I was living in Tampa. This group was huge. They had bought and sold about 600 single family homes in Denver, Colorado before they came to Florida. They came to Florida in I think 2000 and became really good friends with them. I bought some property from them, we did some deals together and just really built a relationship. It was two brothers and their family and started partnering with them on deals. At the time they had owned about 300 single family homes in Florida on the west coast. And I started buying with them. We started partnering on deals and I.

Ended up, were they flipping or doing tenants?

90% of it was long term hold strategy. You know, we would sell deals when we needed to just to, you know, build up more capital reserves. But primarily it was buying them, you know, for, you know, most of the time. We had a really strict rule of thumb. We never pay more than 65 cents on the dollar, you know, with all repairs and everything like that factored in. So we always had a big buffer zone there. And throughout a period of a few years I ended up acquiring my own portfolio. Over 100 single family homes along with some multi family properties as well. I've had a bunch of duplexes and fourplexes and 12 units. I think I had a 24 unit, an 18 unit. I think the biggest one I had was we had a 76 unit. So nothing really bigger than that in terms of multifamily. But we were primarily single family home guys that Was what? That was our comfort zone. That's what got us excited. We were just buying them like crazy, like hotcakes.

Sure.

And then 2007, 2008 hit.

Florida got hit so hard.

I mean the music stopped even though we bought these things. Right. It wasn't just the values that got crushed down here. The rental market got crushed. And what I mean by that is there was a ton of speculative builders that were building these homes in areas that were only supported really by the real estate market. I mean you got construction workers, title agents, realtors, and I mean they're literally building for that market only. I mean, that's what they're in. They're intending those people and buying them or investors out of state flipping them. It was just like this is hot potato. Whoever gets stuck with it is shame on you type thing. So what happened is these developers that were building these spec homes, they started renting them out for less than what we were renting our 25 and 30 year old homes for. And with single family homes, if you're cash flowing 250 bucks a month, a lot of people say that's great, but that's number one, it's difficult because $250 a month, that gets eaten up very quickly if you have any turnover. So if you have a tenant that leaves after 12 months, if you need to clean carpets, replace carpets, paint, do some drywall work, minor things, that cash flow gets eaten up very quickly. But number two, a speculative builder start renting new homes for less than what you're renting yours for. That means you got to drop your rate very quickly. We basically went from a cash flow standpoint to a negative cash flow standpoint to where we were basically funding our own demise.

How did you handle that, Kevin? How did you pivot?

When we realized what the market was doing, it happened so quick. I say that I was new, I was new. You could say I was new. I had only been investing for five, six years.

Yeah, you'd never been through a full real estate cycle.

But the guys I was investing with had been through multiple cycles. These guys were like 20 years my senior. And there's a lot of guys that were way smarter than I was that were getting hit as well. So I just think it hit so much faster than anyone anticipated. We started trying to fire sale our properties. I mean we like marked them down to like 80% and then like, you know, a month later 70% and we were selling some, but I mean it was crashing faster than us lowering them 10% per month. I mean, it was just ridiculous. So it got to the point where we were like, shit, I mean, we're in a bad position. What do we do? It's either we take the money that we have, we all had our own savings and things like that. We either keep feeding this animal, which was massive checks each month to make up for the negative cash flow, or we just make the executive decision to let the ones go that are killing us. And that was a big portion of our properties. And ended up giving. Me personally ended up giving about 90% of at least my single family homes back to the banks. There was no way to salvage it. I'm glad I made the split decision to do it. We didn't wait for a year. We didn't wait for 18 months. We made that decision within probably about seven or eight months of things going very bad. I'm glad I did because it obviously didn't turn around quick at all. I would have been completely broke if I would have waited. In a very short period of time, I would have been completely broke, Savings wiped out, and I would have been in a really rough position. Obviously it was pretty bad because my credit was completely smashed. And obviously I was in a lot of legal suits with banks. As of today, I literally only have one property that's still in default. And it's only because bank of America just can't get their crap together. I've been trying to give this property back to him. But anyway, what I did is it was very damaging to my ego. And this come 2000, mid 2008, I really didn't know what I wanted to do. I know that I didn't. I was over real estate at that point in time. I mean, the market was sterile and saying, oh, how this is so bad, terrible. We lost everything we own and you get stuck in your local bubble in Florida's really bad. So all I heard was negativity coming from every angle. All my friends that were investors are all losing money and it's just kind of like, oh, the world's gonna end. So the last thing I wanted to think about was investing in real estate and putting my money into another losing proposition. So took a little bit of time, self time to focus and spend some time with my wife and just try to think of what our next step in life would be. We're big runners, we're very into fitness. We do a ton of cycling. We actually have a bunch of charity events that we host running charity events. We had an idea when we were running Chicago marathon. I think I think it was 2008 Chicago Marathon and had an idea for a printing company. It was kind of a novelty printing company. I knew nothing about printing. I didn't know about business, but I didn't know anything about the printing world. It was like wide format printing and didn't know anything about apparel or anything like that. Spent a couple months, hired a team of virtual assistants in the Philippines, built a team of web designers, graphic designers and learned about the printing business. Bought some printing equipment and started a website. I wanted to do something that I enjoyed in terms of. I wanted to do something that I had a passion, or at least that was attached to a passion I had. And running was a passion of mine.

Sure.

Anyway, did that and still have that business today. We call it our ATM machine because we don't put a lot of effort into it, but it runs itself basically and gives us cash each month. I got sick of that after about two years and realized that I didn't have the passion to build it into something big. So it's still a small business. We have like five employees. And so I wanted to get back into real estate and took a dive back in. I guess it's what's today. So probably 2011. I made the decision that I really wanted to get back in. But I took my time and I really did some research and did some soul searching as to what happened in 2008 and how that wasn't going to happen again to me. And the only thing I looked at that was factual data that I could support my decisions on was the fact that our multifamily properties were the only things that survived this whole crash in 2008. I thought to myself, why the heck didn't I just put more focus on those? Because they survived the storm. I mean, they just, they had, they kind of had a buffer built into them. I mean, you've got less management intensive property. You got multiple units underneath one roof. It just made sense to me. So I decided that I was only going to buy multifamily properties and I started looking at the different types of properties.

When you say multifamily, are you looking at duplexes? Are you looking at apartment buildings?

Well, I wanted to do bigger deals. It's really hard to build a ton of wealth on doing small deals like that. I wanted to only invest for passive cash flow. I considered at that point in time, appreciation is funny. Money appreciation is not necessarily spendable. Look at it as monopoly money. I didn't want to look at the monopoly money side of things. I Only wanted to buy properties that had passive cash flow opportunities. And if they appreciated, if I could force the equity in them, then that would be icing on the cake. But I wanted deals that cash flowed from day one and had the ability to support themselves. This meant it had to be bigger properties. Typically what that means, at least from an apartment standpoint, that's like 24 units plus in size. And we like mobile home parks and we look at deals that are basically 40 units plus in size. That's kind of our niche. I was attracted to mobile home parks for multiple different reasons. They've got some very unique barriers to entry for the particular asset class. Whereas there's no new mobile home parks being built in the US they're only going away because the developers are tearing them down and building malls or shopping centers or retail centers, whatever it may be, and no local municipalities or governments like them. So they don't issue, they don't issue permits for them to be built.

Yeah, I never knew how big that market was either. I mean, it's a big market.

Yeah, it's very competitive now. It wasn't probably 10 years ago, but there's a lot of, there's some really big REITs that are involved in this space and there's some recent articles that were written by Wall Street Journal, New York Times, and I think there's another big. I think maybe it was Forbes actually had articles where they just touted the benefits or the investment benefits of owning mobile home parks in terms of, I think one of them was labeled like double digit returns via mobile home parks or something like that. That grabs a lot of attention from investors that are looking for a good place to put their money. Either way back 2011 we started focusing on mobile home parks. That's all we do today. That's literally what we put 100% of our energy into are buying mobile home parks and I guess about 20 different markets throughout the US primarily on the east coast here.

Now, when you say we. Tell me about your team.

Well, my partnership is primary. Like the principals of our company, there's two individuals. It's myself and another business partner. He's I guess about 20 years my senior. He's a CCIM guy, so he's. I say he's more sophisticated than I am, but he's our numbers guy on the team. He loves spreadsheets. I get them all excited. And he loves evaluating properties. I'm more of the marketing side. I'm really good at finding deals. I'm really good at building systems, getting deals. Filling the pipeline. Then we've got a bunch of other guys. We've got a full time researcher that all he does is build our database out. He does research on properties in the markets we're looking. He digs up contact information for property owners, phone numbers, mailing addresses. He helps us manage our direct mail campaign and our cold calling campaign. Then we've got a guy that all he does full time picks up the phone and cold calls. Then we got an admin person as well. That kind of helps pull all the pieces together. So we're a small team. We're not huge. We've got five people that are on our team. We've got a couple other investors that we partner with on deals here and there. Guys that are, they've been in the business a little bit longer than us. They've done a lot more deals in the mobile home park space. So if there's a deal that we can't take down on our own, we've got a few guys that we kind of team up with to make those deals happen. Guys that are a little bit more advanced in their knowledge of the mobile home park space. But just five of us, that's our primary team and we do pretty well with it.

That's fantastic. Tell me, when did you make the transition from full time investor and you've got your printing business and say, you know what, I want to just help people learn about what I'm doing and start the podcast.

Yeah. So I've been wanting the podcast for, for a long time. My initial intention with podcasting was to have a mobile home park specific podcast. Back when I decided that's what we wanted to invest in. What I found was I found it would have been very difficult for me to talk about mobile home parks on a weekly basis and have really good new engaging content. I thought that it would be more relevant to come up with something that was more geared towards commercial real estate investing and building a passive income portfolio via commercial real estate. I'd been wanting to do it for a while. I actually bought the equipment back in 2011 and it sat around for like a year. I mean, you know, you get busy with life, you get busy with your business.

Sure.

And my wife, actually, actually, no, I'm sorry. I bought it in 2012 and my wife, she came to me one day, she said, what the heck are you going to do with that equipment? You built a studio. I literally built a studio. I mean, I put all the sound stuff up and bought the equipment. I mean, I kind of, I jumped the gun with a lot of stuff that's just my nature. That's me. The new, you know, shiny new objects.

Sure.

She's like, what are you going to do with that? Either sell it or start this podcast. I'm like, you know what? That's a jumpstart. I needed, I needed that kick in the butt. So I vowed to myself that, you know, come the first of 2014, I just set a date. I said I'm going to have it launched. The first episode is going to be live, I think it was the 6th of January, the first one.

Who was your first guest?

Frank Rolfe, who is now he's the sixth largest private owner of mobile home parks in the U.S. i think he owns, I don't know how many parks he owns. He owns about 13,000 spaces. I think that equates to, I think he's got somewhere around 110 parks. Just big deal. And the guy, actually I met him about three years ago and at that point he only had 6,000 spaces. And he's private. It's just him and another guy. Obviously they have a team. But he just went on a buying spree when the real estate market crashed. He was cleaning up in the past couple years on bank owned REOs that were mobile home parks and they're just kicking butt. So he was my first interview.

Who's been your favorite interview so far?

Favorite interview? That's a good question. You know, I brought Frank Gallinelli on the show. I don't know if you, if you know who that is.

From Bigger Pockets, right?

Yeah, well, I, I didn't, I actually, I didn't know him. I wasn't even a member of Biggerpockets when I interviewed Frank. I became a Biggerpockets member, I guess probably about three or four months ago. One of the first books I bought when I decided to get into the commercial side of the business was what Every Real Estate Investor Needs to Know About Cash Flow. It's a book that changed my life in that it really opened up my eyes to properly how to evaluate income producing properties. It just really had the formulas of success that every real estate investor should know if they're going to be buying property to create passive wealth and income streams. It's an incredible book. It's very readable. It's easy to comprehend even for someone that's brand new to the business. He's a very sharp guy. He's just a wealth of knowledge and he was a lot of fun to have on the show. In fact, that was one of the most downloaded shows that we've had as well. People just ate it up. So it was a lot of fun. And I've had a ton of other fun guests as well. I mean, it's all across the board. I mean, I've had guys that were IRA guys, 1031 guys, apartment investors that own massive $100 million plus portfolios. Every show is different, every guest has been awesome, and I love it. I absolutely love the podcasting business. I love giving back. I mean, that's, that's really the reason why I do it. I don't really gain any benefit other than the relationships. I get to meet some awesome people and I love to give back and I love help people out.

Yeah, I mean, that's, that's pretty unique because usually when people come on a podcast, they usually like, okay, you know, I'm selling this and let's talk about, you know, this. And you don't have that, Is that right?

No, I don't have that. In fact, what I started doing, like, I guess it's been about three months now, is I started actually offering a 30 minute free consultation with me and I. I normally have about 10 people or a dozen people a week that take advantage of it. I give them a link to my calendar and they can pick a time that I'm available via my calendar and get on the phone and chat with them. Some of these people are brand new. They're trying to get their feet into the business and need a little bit of direction. Some of them have done deals and they're trying to transition into a commercial asset class and they want some feedback or some of these guys are more advanced than I am and they just want to talk shop. That's been awesome. I tell my wife this all the time, that this podcast has made me a smarter investor. That's the benefit I get out of it. It's made me smarter and I get to help others that are coming up in this business. It's a lot of fun.

I agree. I think expanding your network, there's only positive benefits to it.

Yeah, absolutely. I get to meet people like you. I didn't know anything about land investing. Now you got me all excited. You're the new shiny object in my life that I need to learn about.

Yeah, Kevin's going to be at the 2 Day Land Geek boot camp in November. I'm going to get him out there.

Yeah, I wouldn't be surprised if I showed up there, so.

Yeah. Yeah. All right. Well, this is the time of the podcast where I like to put you on the spot and ask you for your tip of the week. Now that, that book was a great tip, but do you have another tip you want to share?

I do. It's a resource that I actually came across about two or three months ago. And it's made our cold calling campaigns, the accuracy of them, which used to be about 75% of phone calls we would connect with or phone numbers that were accurate that we'd be able to find online, it's increased that to about 98 to 99% accuracy. It's a resource that allows you to easily track down cell phone numbers for property owners. It's called tlo.com. that's Tom, Larry.

Tlo calm.

Yep.

I'm gonna check out that site.

It will blow your mind if you don't mind. If you're in this business and you're thinking about doing like a cold calling campaign, do not do it unless you actually utilize this resource because you're gonna waste your time doing your free searches on the Internet for trying to track down phone numbers of people. I mean, just, you're gonna come up with a lot of inaccurate, outdated numbers. This is a source that a lot of the debt collection agencies use and repo companies use to track down people that are in default. So it's very accurate. It's got access to all the different cell phone providers. And we found it to be absolutely incredible in our business.

I love it. I love it. Now, my tip of the week is going to be social analytics. Right? So everyone keep hearing about market on Facebook, market on Twitter, Instagram. But how do you. How do you know if it's being effective or not? You've got to have your analytics. So this site is called Socialite IO Socialite, like light social. And then L I G H T IO it's in beta right now, but I think it's. I think it's free because I don't see any pricing on it. And it's going to help you with your campaigns, your marketing campaigns and know if they're effective and get your analytics and help you with the marketing. So there you go. Anyways, Kevin, I really appreciate you taking time out of your busy, busy schedule and share with us all your knowledge and your story with the Lane geek podcast community. Thanks so much. Yeah.

Well, I appreciate you having me on the show, Mark. It's been a lot of fun.

Well, I hope you come back.

Yeah. Anytime you invite me, you just have to invite me. I don't show up unannounced.

All right. Fantastic. And I've been hazing. Kevin, come to Scottsdale for the two day Land Geek Boot Camp. And I'm going to remind everybody. Look, book your calendars now. Contact the office, email us, start getting ready for the two day all intensive Lane Geek Boot Camp November 7th and 8th. Duran's gonna be there, I'm gonna be there. We're gonna talk about all things land investing. We're gonna network, there's gonna be prizes. It's gonna be great and I hope you all can be there. I want to thank everybody for taking time out of their busy schedules as well to even listen to the podcast and Again, go to www.thelanegeek.com. download for free the Passive Income Blueprint, get the ebook how to Avoid the three Fatal Land Buying Mistakes. And of course, get this always informative and engaging podcast delivered each week to your email inbox. Kevin, thanks again and thanks everybody. We'll see everyone 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.