BiggerPockets Money Podcast - 135: Building Wealth through Real Estate... without Tenants or Toilets! with Seth Williams

Episode Date: July 27, 2020

Seth Williams invests in real estate in a way you may have never heard of before. He buys and sells land. And no, he’s not a developer. He literally buys a piece of blank dirt, and then sells it—frequently within days of buying it—for fairly high margins. And he does this without taking out loans for the purchase. How? He’s paying hundreds of dollars for this land, as opposed to hundreds of thousands of dollars for a piece of land with a house on top of it. He turns around and sells it quickly, frequently realizing a 300% profit—or more! Even better? Deals are EVERYWHERE! Land is literally everywhere, and deals can be found very easily. (We discuss several ways to find absentee vacant landowners, many of whom just want to be rid of the property!) Seth shares what to look out for in a deal so you minimize your chances of getting burned and what makes a deal great. He shares different ways to find these deals and even gives guidance for doing your homework so you know exactly what you’re buying. If you’d like to get started in real estate but may not have the funds or simply don’t have the time or desire to run a flip, land may be your way in. In This Episode We Cover: Seth's money journey His first land deal The reason why people buy land How to get into your first deal buying land What you should know about title insurance Dealing with mistakes All about title searches Tax implications of buying land The best and worst type of land for those just starting out And SO much more! Links from the Show BiggerPockets Money Facebook Group Dave Ramsey's Envelope System The title search article/video Land Flipping Lifecycle How to Juggle Your Real Estate Business with a Full-Time Job Six Months After Quitting My Job, Here Are My Honest Thoughts Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, show number 135, where we interview Seth Williams from our E-Tipster and hear how he is growing his wealth by investing in a slightly different form of real estate. Unlike houses, land is, I don't want to say zero competition anymore. That's how it used to be, but it's very, very low competition. Like when I make an offer to somebody, most of the time, there is no other offer on the table. It's not like they have 10 other people lined up behind me who are willing to pay more. So it works. And it's a lot easier than most other types of real estate. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my grounded co-host, Scott Trench. These introductions are just landing every single time, Mindy thing. Great, great job. Scott and I are here to make financial independence less scary, less just for somebody else, and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of

the way so you can lead your best life. That's right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or invest in an asset class like land, raw land, will help you build a position capable of launching yourself towards those dreams. Scott, I'm super pumped to have Seth on the show today because we are going to talk about a way to invest in real estate that doesn't involve tenants and toilets or flipping houses or anything like that. It is the investment in raw land, just blank dirt. And there's a lot of actual advantages to investing in land. Most notably, you're not spending a lot of money on your investment. We both live in the Denver area and here the median home price is what,

like $400,000. Seth is buying properties for a little bit less than that. That's right. Yeah, It's a good way to plot your first journey towards real estate investing. If you don't have, all right, I'm going to stop with the ridiculous land and plot puds for a minute here. But no, this is an interesting new way to approach real estate investing with these raw land deals. And I think Seth has a really good approach. It's obviously been very, very profitable for him. And it's all grounded in this sense that this is an inefficient market. There's a lot of, it's more difficult to value, I think, raw.

land in a lot of cases, for example, an undeveloped plot of land in a subdivision than it is for houses, which I think a lot of people are much more comfortable with the specific value of. And so I think Seth has some really good ideas that I'll get you going on how to kind of begin approaching that and how he used that to kind of begin his own journey to financial independence, starting with a modest full-time job in his 20s. Yeah, and as I alluded to, he's paying significantly less than what you're paying for an actual already developed property. And why that makes this such a great investment vehicle is because if you make a mistake

when you are buying a rental property or buying a house to rehab and then sell quickly, you're putting in a lot of money. If he makes a mistake, he spent $300. It's a lot easier to lose $300 than $3,000 or $300,000 or, you know, any number of there in between. It's not exciting to lose 300, but it's not devastating to lose 300. So it's an easier way to kind of test the waters. And I found this concept fascinating. And I hope that you, the listener, will too. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole

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Seth Williams from re-tipster.com. Welcome to the Bigger Pockets Money podcast. I'm so excited to have you on the show today because you are going to talk about a kind of little-known way to invest in real estate that isn't super cash-intensive, which is kind of a great way to get started investing in real estate. So, you know, I think that's super exciting. And I don't know anything about it.

So I'm going to really, really grill you. I hope you're ready. Absolutely. Yeah, anytime. So before we talk about that, I want to hear where your money story started, how you got started investing in land. Oh, spoiler alert. We're going to talk about investing in land in a little bit.

But that's like, that's really interesting. I would love to own land. What is that quote, buy land? They're not making any more of it. Yeah, that's true. I mean, that's just super cool. So tell me about your money journey. You know, growing up, I had a good family life, two parents at home in terms of high school and college. For me, my parents worked really hard and they covered my college tuition. And I know that's not a common thing, but I was very, very privileged in that sense. So I was able to finish college

with no debt. Same here. Yeah. Yeah, I know. It's very lucky. Yep. It's an awesome, awesome gift. Parents can give to their kids if they're able to. And, you know, when I was in college, I started learning about this whole idea of financial freedom and getting your money to work for you, that kind of thing. And I realized when I was reading that stuff that, like, I didn't really know a whole lot of people growing up that were doing that. Like, I didn't see a whole lot of that in my family. I mean, really, even my extended family, even my friends, like, nobody was doing that. Everybody just took this approach of, you know, you get your W-2 job and, you know, just the conventional saving for retirement and that kind of thing.

And so I sort of assumed that was just how my life had to be. And so initially, when I was in college, I was trying to find, think of, you know, what could I do that's going to make me tons of money in the sense of having a conventional job? Like, at one point, I wanted to be a dentist or a doctor or something like that. And truth was like, that's not who I was. Did you say tooth was? I just kidding. The truth was.

The truth was, I'm not a doctor. That's not really what I love to do. Honestly, don't even think I'm smart enough to get through the school it takes to do that. It was really just about the money. And I didn't realize that, like, there are ways to make the money without having to do something you don't want to do. You can really make it doing what you love. And, I mean, what better combination is there than doing what you love and actually getting paid well for it? Did these realizations hit you in college?

Is that where you able to kind of figure that out, like, kind of largely in undergraduate? I think so. It was not immediately. It was when I started reading, you know, the typical rich dead, poor dead books. My eyes were kind of opened in realizing that, you know, having a typical job was not necessarily a requirement to get where I wanted to go. So it wasn't obvious to me. Like, okay, well, what do I do then? Like, what is the right career path for me? I just realized, like, there's something here that I wasn't told that I need to explore further. And it actually It took like several years of exploring it to figure that out. But I did know in terms of like, okay, what am I trying to major in college?

Like what should my first job or step be? And so understanding kind of just the general path I was trying to go down, I decided to get into the banking world. Because one would have an argument that if you're in banking, you're going to figure out how money works. And you know how financing works and all these things that many other careers probably won't inherently teach you. So that was kind of the path I took. And I got employed with a small business financing company doing SBA 504 loans. And I mean, in terms of jobs and how jobs go, it was not a bad job. I mean, it was good hours and all that. And I did get exposed to all kinds of stuff, all kinds of small businesses in my area. I was able to close hundreds of loans, underwrite hundreds of loans,

really understand, like, what makes this business tick? And what makes them do well and what kinds of things would make them not do well or not credit worthy. And man, there's just, depending on the business, there's so many rabbit trails you can go down and so many things you can really learn about how different types of businesses work. And it was very, very eye-opening. So I really owe a lot to that particular career path just in terms of learning how money works. In that kind of career, it doesn't necessarily teach you how to build like personal wealth

or anything. That's not like the point of it, but you'll just pick up lots of helpful insights in the process of working in that kind of job. So I think it's really important to note that you figured this out in college. What do I want, what job can I do that will pay me a lot of money? I think a lot of people are told, you know, from knee high, oh, you can be anything you want to be. Follow your dreams. Pursue your passions. Well, sometimes your passions pay like crap. So that's not necessarily the best advice. What job will pay me the most that I could stand to do, too? I mean, don't go be a dentist if people's teeth gross you out because that's going to be a bad choice.

And that's going to cost you a lot of money to learn that it's a bad choice. I could not be a doctor. My mom is a nurse and I could not be in the medical field because I don't really want to look at blood. And there's a lot of that when you go to the doctor and, you know, plus just even becoming a doctor, you have to look at bodies and like, that's just gross to me. So that's not a path that I was going to follow either. I did not have the same foresight that you did, and I chose the wrong path for me. And, you know, I wonder if there's something that kids could study while they are waiting to figure out their path. I mean, your general education courses will

take you, what, two years at least, just to get the basics that you have to graduate with anyway. and then you can kind of start to pick a major. But if you're not sure what you want to do, you know, go with business. Go with a general kind of degree to get, at least be more employable than fashion designer. It's kind of crazy when you think about like how many huge life-altering decisions we all have to make when we're like 18. I'm like, it's insane. And like, I don't know how else it's supposed to work because that's just when you have to make those decisions. But when you think about like where do you go to college, if you go to college, if you go to college,

And that affects who you're going to meet. It could potentially affect who your spouse is going to be, what career path you're going to take. And you're doing all this stuff. Like, I think back to who I was when I was 17, 18 years old. Like, I was kind of dumb, honestly. Like, there was so much I didn't know about anything. It's almost like rolling the dice and just hoping it turns out well. It is exactly like rolling the dice.

Yeah. Why do people allow their kids to choose majors that maybe aren't so great? You know, I can't blame my parents. I am really pig-headed and I would not have listened to them when they tried to steer me towards business or, you know, some other degree. I really wanted to do this at that time. But that's, you know, it's almost unfair to your future self to force you to make these decisions when you're 18. I think that parents, we as parents have to do better. You have kids, right, Seth?

Yeah. Yeah. Yeah. We as parents have to do better in encouraging our kids to study something. more marketable or just don't go to college. I mean, when I was growing up, after high school, you went to college, just like you breathe air, the sky is blue, grass is green, you go to college, that's the way it is. And college is not the choice for everybody.

Yeah. We're going down a tangent that we don't know. This is just me talking about how many like of these big decisions are influenced by the silliest things like so-and-so said, this is a good school or this is a good profession? and you don't even necessarily like or respect so-and-so. But that's in the back of your mind when choosing these things. Those kinds of things pile up, I think, for folks there as well, impacting decisions down the line, to your point.

Yeah. Yeah. And that is interesting because I think what it boils down to is I don't know the answer, but there's a lot of people who go really far despite where they go to college. Like the college is like, you know, it's not obviously helpful, but that's not like what determines the trajectory of your life. necessarily. I mean, some people can go to the best Ivy League school and kind of just flounder around for the rest of the lives and other people like become president, you know? So it's,

it's hard to know how, like how vital that is or where you end up going. Well, let's get back to your story here. So you graduate, you go to this, this banking job in financing for a few years. Walk us through that journey. What does your money story look like there? Are you a big saver? Are you an investor. What are you doing with the money as you earn it? And how are you kind of beginning to, you know, you said it took a couple of years earlier for all of the rich dad, poor dad, financial freedom stuff to kind of really digest and sink in. Did that kind of hit at some point during your career or in college? Walk us through all that. Please. Yeah. Yeah. So I mean, the high level idea of, you know, just the financial intelligence thing, like I realized before I even got my

first job, like that's a thing. And I need to actually consciously pursue that and figure that out. But it took a long time to get to the bottom of that. I probably still am not really to the bottom of it, per se, but just the general awareness of that was there pretty early on. And in terms of like how my money life worked, I mean, my income was not a lot. I mean, it was like your typical entry level job out of college, like a white collar kind of career. And, you know, I don't know that I was like a super huge saver, but I wasn't a massive spender either. I just kind of lived within my means, but I did it with the knowledge that, like, something else has to come from this job. Like, this job is going to be a springboard to something much better. This is not,

this is not the final destination for the next 30 or 40 years. Like, it can't be. Like, I just, it wasn't that I disliked my job at all. It was just that it wasn't my heart's deepest desire. It was, it was a means to an ad, really. And I picked that. that career path because I knew I'd probably get some insight from that in terms of figuring out what does the next step look like outside of this job? How can't I figure out this puzzle of money and really understand how to grow a business? How does cash flow work? What makes a good or bad investment? And I did figure a lot of that out to do that job. But I knew pretty early on that real estate was probably going to play some part in this. And I liked a lot of what real estate

had to offer. And so I spent a lot of time trying to find opportunities on the MLS and that kind of thing. I had a really hard time doing that in the open market. It sounds like this job and your financial position, it sounds like you're able to accumulate something meaningful on an annual basis throughout your years at this job, but that it wasn't really a primary factor in driving you forward, except for in the knowledge that you gained from the job about how to and how to apply that to your own business. Is that fair? Yeah. Yeah, honestly, like, I don't know that, I mean, I probably saved up in maybe like $5,000 to $10,000 total from this job. I wasn't making that much. In terms of the banking profession as a whole, my pay was at the lower end of that

spectrum because I wasn't working for a traditional bank per se. I was working for a small company that was essentially doing outsource work from the SBA, because we were doing SBA 504 loans. So I wasn't employed by SBA, but SBA gave their work to us, and we did it. We were called a certified development company. So anyway, my income was not huge from this job. And that was part of the problem with wanting to do real estate is that you kind of do need some cash. I mean, maybe not always, but a lot of times, it helps to have a slush fund to work with. And I didn't have a whole lot.

And that was a big part of how LAND specifically came into the picture. and also how to go about finding those opportunities because I don't know of many other ways that I could have done it outside of land specifically, because I was able to use the few thousand bucks I had in my bank account to find a deal, buy it and own it free and clear for a very, very cheap price, and then sell it out of profit. And that's something that, again, I don't want to say it's impossible. Never say never, never, but with the vast majority of real estate investing strategies out there, it's just not a thing. It's just not how it works. When people think about investing in real estate, most frequently they think about becoming a landlord of a single family home or maybe like a small multifamily, but mostly it's a single family home. So you're thinking residential. When you think, especially when you're first getting into it, you're not thinking of owning a 400 unit apartment complex because how could I afford that? I only have $5 or $10,000 in my bank account. Nobody's going to sell me this giant complex. So I think a lot of people like the idea of real estate, but then stop because it's so expensive. I live in a very expensive part of the world. I can't buy a $30,000 house. I guess I could a couple of hours away, but it's like across the street from the prison. You know, so that's not really necessarily my dream investment.

No, that was my same train of thought. I mean, I, the conversation sort of was just cut off early on in my head because it's like, well, I need 10 or 20 grand to even think about doing this, and I don't. So I guess I'm stuck. And I know there's stuff like wholesaling houses and there's, you know, other bird dogging strategies and stuff like that. And that stuff is easy to say, but there's a lot of obstacles to that as well. Lots of other battles you have to fight that I wasn't necessarily going to be good at fighting. So, yeah, I get it. Well, let's jump back to this.

So you're talking about, hey, look, you're a couple years into your job. How many years into your job before you buy your first land deal? Oh, man, I think it was a year and a half, I think, approximately. Okay, so a year and a half in. And you're like, hey, I've got a few thousand bucks at most in my bank account. that I've been able to save up. And real estate's just not an option for me in a traditional sense because I can't put down 15%.

It's probably almost even difficult to house hack, given your situation and the few thousand bucks at the time. So you're like, hey, land is an option for me. How do you go about conceptualizing land as an investment concept and then acting on it within just a couple of years or starting your career? Yeah. I actually wanted to do the house hacking thing long before.

It was called that. But my wife wasn't really on board. She wasn't like, oh, yeah, I want to go have tenants living upstairs and that kind of thing. She just sort of wanted a normal, normal house, normal living situation. So I relented and we didn't do that. But yeah, so like there's more than one way to skin a cap. But the thing with land was that there's a couple different things that come into play here. It's not just buying land.

It's buying it really, really cheap, like way cheaper than anybody would think possible. And it's very possible to do that. in order to do that, you have to be talking to the right people and find motivated sellers who are very, very likely to say yes to that. And there's several different ways you can do this. The way that I've done it really, I guess, ever since I started, has been direct mail. I also have a website where I can get people that way as well. But with direct mail, it's all about finding a list very specifically of vacant landowners and finding other ways to drill down and increase the likelihood that they're going to be highly motivated to sell. One way

is to make sure the vacant landowners don't live in the same state where their property is located or maybe live maybe in the same state but in a different county. So they're sort of out of sight, out of mind. You can also do this with like a delinquent tax list. This was how I did it for years. And that's certainly a feasible way. That's basically where you contact the county and you say, hey, I need a list of all the people in your county that are currently delinquent on their property taxes. So, and this is not a tax deed list or a tax auction list or anything like that, the people still own their property, but if they don't pay their taxes soon, they're going to lose it in tax foreclosure. And it certainly works, but that particular approach also has its own drawbacks. Like, the list is kind of a huge pain to get and usually it's a total mess to work with.

So there's other battles you have to fight if you go that direction. But the idea is just to find a list of vacant landowners and you send them a mail piece. And there's a couple ways to do this as well. One way is to send them either a letter or a postcard and just saying, hey, I see your own land in this county and I'm looking to buy land. If you want to sell it, you may call or visit my website or shoot me an email. And they will do that and you can go back and forth and make them a really, really low offer. And the thing about using the right list of motivated sellers is that,

and especially with land in particular, is that land is a very unemotion. kind of property for a motivated seller because it's not the roof over anybody's head. Usually it's something they bought like 20 years ago and they just had a change of plans and they don't think about it or see it anymore. It's just a tax bill they have to pay. Other times it's something that they inherited. So it was never really theirs in the first place. And it's easy to make an offer to people like that, especially if they've been paying taxes for 20 years and they just don't want the thing. Especially if they've not been paying taxes.

Yeah, especially that, especially if they're literally about to lose it in a couple months. It's like, hey, you can get nothing or you can let me pay you a couple hundred bucks. What do you want to do? And you're giving them a big easy button. And it's actually not uncommon at all where I'll make a really low offer to somebody. And they say no, they think it's worth more. They think they can sell it for more. And honestly, they probably can.

And I don't tell them otherwise. It's just, hey, this is our offer, you know. And if you can do better, I wish you all the best. but many, many times people will try to sell their land the way that they think it can be done and they just come back a few months later realizing, yeah, I actually can't do this. I don't know how to do it. So, okay, I'll take your offer. So there's lots of people out there who own land that they're more than happy to part with if you just make it easy for them. And unlike houses, land is, I don't want to say zero competition anymore. That's how it used to be, but it's very, very low competition.

Like when I make an offer to somebody, most of the time, there is no other offer on the table. It's not like they have 10 other people lined up behind me. We're willing to pay more. So it's, I don't know, it's just, it works. And it's a lot easier than most other types of real estate. So can you walk us through one of your very first purchases? How did you, what did you do? What was the deal?

You gave us some frameworks here. Which one did you apply in your first deal? And, you know, all the mess that comes along with the first of anything in a career like this. Yeah, well, on my first deal, I was using a delinquent tax list, which I actually don't use a lot of anymore, just because they take more time to sort through. So how did you get this list? Yeah, I got it by calling the county, and it was a county just to the north of me, and I just said, hey, I'm looking for a list of all the property owners in this county

who are currently delinquent on the property taxes. Can you send that to me? And I specified that I needed it in an Excel file with not only the property owner's mailing address in their name, but also the property owner's mailing address in their name, but also the property itself. Who did you contact? The county treasurer. The county treasurer, okay.

Yeah, and that's not always the person who can end up giving it to you. Sometimes they won't know what you're talking about. That's actually not uncommon at all. If you're working in a new county, they'll just misunderstand the question, give you the wrong thing, or just say, nope, we don't have it.

But the thing is, every county has it because every county has to, you know, keep track of who is current on their property taxes. If they track that, then they have to have this list somewhere. And so sometimes you'll have to go down a different path, maybe contacting the county IT department, because maybe they have the ability to generate this list, but the treasure does not.

Ultimately, you're their ally, right? Because these are delinquent property taxes, and if you buy that property, then by definition, they're going to get their property taxes collected on them. Or are they going to at least begin to collect them again? Yeah. That's really the cool thing is that if you're working, with the right people. And if you're able to communicate well enough, you really like doing everybody

a favor along the way. I mean, you're doing the county a favor. You're doing the seller of favor because they're, and a lot of times they're just going to lose their property and get nothing. And the future person who buys the property from you, you're doing them a huge favor because they're getting a huge discount from market value. So it's pretty cool. So I like how you said that it's not an emotional transaction. You're not taking the roof from somebody. Yeah. And, I, A lot of times, like, emotions are actually the reason why people buy land, because usually they have this idea that, you know, I'll have my cottage there someday, or, you know, I can go park my RV there. They have these grand ideas of what they'll do with it. But, like, logically, they're not

actually going to do it. And then that's when I come in and buy it from them. So, yeah, it's, when they originally buy it, it's emotional. But when they sell it, it's much less emotional. That's when logic comes into the picture. And they're like, okay, maybe this wasn't the smartest thing. let's just get out of it. So, okay, so you call the county treasurer. You get this list. And how do you go about actually getting this first deal? So yeah, I just sent out, in this case, postcards, these yellow postcards, and a bunch of people responded.

And don't get me wrong, some people, when they respond, are not going to be happy with you. Like, even if you don't make them an offer, they're just going to be like, don't ever call me again. I hate you, all this stuff. And that's, I don't know, there's just a lot of crazy people out there. but the way that I have my system set up is when they call me, they don't actually talk to me. I have a two-minute-long voicemail message that I actually explain in the mail piece. I talk about, hey, you know, I set up a recorded voicemail message because I don't want to miss your call. So call me anytime.

And when they listen to the voicemail, it explains the whole context of why I contacted them and what I can do. You know, I say that, you know, I'm trying to buy properties at a discount. So I'm not hiding that from them. it's not like they think they're going to get full market value. And sometimes they leave a voicemail. Sometimes they don't. But usually when somebody does leave a voicemail, that tells me, yes. Like this person is officially motivated.

And they do want to play ball and call them back. And we have a conversation. And I'll make an offer right after that. And a lot of times they say no, but you just need a handful of people to say yes from every campaign. On your first deal, did you have this system set up? Yep, I did. Yeah. Okay.

So I knew from, and some people actually are happy to talk to people when they call in because they like talking to people. I'm not one of those people. Like I did that for a little bit, but I realized pretty quickly, like, I just have other things to do. And I don't need to hear everybody's life story. So it's kind of a way of screening out a lot of the people who probably aren't going to work with you anyway. But yeah, so one of the people who called was they were from Long Beach, California. It was an old man. I don't know what his story was, but he had bought the property decades earlier.

and I made him an offer for $331. And he also had some taxes I had to pay off, not much. But he was like, yeah, let's do it. And so we go ahead. We filled out the purchase agreement. He sent me the deed. I sent him a cashier's check for the amount and paid off the taxes. And I owned the property free and clear.

And it was a half acre buildable parcel, kind of like in a rural podunk town. And I ended up listing it on Craigslist. and I sold it 11 days later for $1,900 cash. And when I got through that whole process and realized, like, I didn't have to take out any loans for this. Like, this is pretty easy.

Like, this was not a hard thing. I didn't have to pay a realtor to list or sell this thing. I just did it myself. And it wasn't huge money or anything, but, you know, it was money. And I realized, hey, if I did this a lot more or if I did much bigger versions of this, like again with no debt like that's kind of a big deal i could do a lot more of this and uh and that's

kind of what i've done and i will say like these days the approach has changed quite a bit i don't work with uh delinquent tax list and nearly it's must just because they're a hassle to work with i think it's it's not a bad way to get started just because if you have time and if you're willing to wait through those issues it can totally work and there's also a different way of sending out offers which is some people call blind offers where you're basically figuring out what are these properties most likely worth on a per acre basis? And literally the first piece of mail you send them is an offer. And I think the nice thing about that is that you don't have to have these back and forth

conversations nearly as much because from the first point of contact, they know what the offer is. And they want to do it, they will. If they don't, they won't, or they can at least call back and there's sort of no way you're coming from. Let me just kind of make a couple of observations here and get your feedback on them. So you bought this place for $331, plus some delinquent taxes. It sounds like dollars, maybe, tens of dollars, something like that.

Okay. And then you also invested a number of hours, I imagine, into figuring out the basic way to begin approaching this business, that concept of going to the county treasurer and getting the list, bailing the postcards, dealing with all of the calls inbound as fun as you, you've made that sound, all of that kind of good stuff. So how would you kind of articulate that overall investment and maybe time and money in order to get that first deal?

And then it's down, and then I'm getting very excited for how this is going to snowball from here and how you parlayed that into a much bigger business over time. Yeah, well, in terms of, like, how would I articulate it? It just means like how much time it took or? Yeah, like how much time did you, how much time did you invest self-educating, learning, figuring it out, you know, and then actually operating to get that first deal done.

Yeah, well, as you mentioned earlier, like the first time through anything, like, it's just kind of a mess, and there are definitely issues. I don't know how many hours exactly, but it was a lot of hours. I mean, it was probably weeks, really. I'm just figuring out from a high level, like, how does this work?

Like, what sequence of steps do I have to go through? Even, like, getting the voicemail system set up and getting my own separate, you know, business phone number. And I also have a, like a P.O. box type address on the mailers that go out in like a business name. And it's like there is a lot of groundwork to lay, especially that first year, just tons of infrastructure to set up and just going to the process several times really to get your arms around it. Yeah, I mean, I would be prepared for weeks, really, at least is what it took. 50 to 100 hours-ish kind of? Yeah, it could be.

Yeah, that's not a crazy amount to think. But the thing about that is, though, in terms of snowballing, like it gets way easier the second and third and fourth time. Like everything's already set up. The systems are there. Like, you know what to do. You know what to say. You know how to identify.

Okay, this person's probably motivated or no, they're not. Sometimes you might just not even bother sending them an offer because it's obvious. They're not interested. So, yeah, it gets significantly faster. Okay. Coming from the residential side, when I buy a house, I get title insurance, which protects the interests of me and the interest of my lender because my house is not $331. Do you have to get any sort of title insurance or do any sort of homework on the deed itself?

Because just because you contacted this guy from Long Beach doesn't mean he actually owns it or has the ability to sell it to you. On the other hand, let's say it was a complete fraud, you are out $331. You're not out $300,000. So how much due diligence do you do? And what are the pitfalls? What can happen when you don't do that? That's actually something a lot of people don't think about. But yeah, absolutely.

So you still want to do a title search at the very least. Make sure you understand, like, the person who is selling me this property, do they actually own the property? Are they just saying that? It's something that's actually pretty common, especially with inheritance situations, is, you know, John Smith bought the property.

Now they died in their son, Joe Smith. They think they own it because they've been paying the property taxes, but the paperwork was never put together to actually give him ownership or he doesn't have the authority to sell it on behalf of his father's estate. And it's basically called a Cloudon Title

or a gap in the chain of title. And if that's there, you definitely want to know about it. Sometimes there's things you can do to get that fixed. Other times not, in which case you could either walk away from the deal or you can do what's called a quiet title action later on down the road, which is, you know, usually costs a couple thousand bucks and take some time to do that. But yeah, so I think the question you want to ask yourself is depending on how much you're paying for a property, like for example, when I'm paying $331, you know, the cost of hiring a title company or a closing attorney to handle that one

closing could be like $500 to $1,000, depending on the state and the title company. So like, does it make sense being three times more just to close the thing versus, you know, paying the seller off? I think what it ultimately depends on is what is the thing worth? Like, how much can you sell it for in the end? Because if the profit margin is there to cover the cost of the closing agent, it's usually the right way to go because they know what they're doing, they do it all day long, they can find issues. They're probably not as efficient as I could be if I was closing it myself, but even then, like, it takes a ton of work off my plate if a title company can do that. However, like if it's just a cheap deal, like for example, if I'm selling it for

$1,900 bucks like I did, like the economics just don't make sense. Like the profit isn't there. And in those cases, it's just a matter of understanding how does one do a title search and what kind of deed do I need to get from this seller? And those answers are actually pretty straightforward. And in terms of how to do a title search, I've actually made a few videos just showing flat out how that works. But it's just a matter of getting the title paperwork from the county and understanding what does a clear chain of title look like? Like, what am I looking for in these deeds that I got from the county? And you can also, there's also services out there that can do this stuff for you and, you know, get the paperwork, compile it. And they'll just like point out so you don't have to wonder, like, yep, there's a problem right here. You know, get this fixed. And those obviously cost a little bit more. But the cost of just doing your own title search, in most cases for me, it's depending on where I get the stuff, could be anywhere from 75 to 150 bucks. And if you hire one of these services, it's more like a couple hundred bucks to do that. But yeah, it's definitely, something you want to look into. You don't want to just go in blind and assume the person is,

you know, the rightful owner. You want to verify that stuff. Okay. And at what price point do you think it's worth going with a title company to do the title search? I mean, I could imagine when you said Long Beach, California, I'm like, you bought a property in Long Beach for 300 bucks. But, you know, if you have a property in Long Beach, that probably will be worth more than, you know. Yeah. And that's situation, the seller was from Long Beach, but the property was in Michigan. But that's a, but that's like a classic example of somebody who lives a long ways away from the property itself. So like they're disinterested. They don't care. They just want their money and they want to stop paying taxes. Yeah, in terms of like how much should be there, there's no,

that's not like one right answer, but usually if the property value or if like my total profit in the deal is like maybe $5,000 or higher, that's when I'll start looking at just using a title company, but it also depends on how much they cost. I know, like, in several states, like, you literally have to have a real estate attorney involved in closing the deal. And just by nature of that, the closings are going to cost twice as much, you know, like a thousand bucks per closing. So a thousand bucks when you buy it, a thousand more bucks when you sell it. So in those cases, maybe like 10,000 or higher might make sense. Okay. But, I mean, another way to do this, though, was like if you don't want to mess around with closing it yourself, which, you know, is a worthy

aspiration because it's kind of a hassle, honestly, to close it yourself. And it takes time. You could just try to target properties that are worth more. So the profit margin is always there to pay for that. Well, it sounds like when you were starting out, this was a several hundred an hour activity that was highly economical for you when you started out. And that became uneconomical as your business scaled and you became more successful and more seasoned with this practice and you kind of make those tradeoffs over time. So it seems like a very worthwhile DIY skill for a listener to consider if they're thinking about trying to repeat some of what you're talking about today. And some people, I think one of the benefits I had was being in the

banking world and like my job was actually to close deals. So like I did this all day long. I understood what I was doing. And some people are are pretty, you know, left-brained and analytical and they know how to really pick apart details and find issues. Other people, that's not their strength. Like, that's not something they should be doing. Like, don't even try to do it because you're probably going to miss stuff. So it sort of comes down to, like, understanding yourself in what you're good at. And I don't want to say I'm like an expert at the details, but I can do it.

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Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free. So I knew that if I had to do what I could. Okay. So let's talk about the tax implications. of this. You bought a property for $331. You sold it for $1900. So you made, let's call it, $1,500 in profit. That was a short-term capital gain. So you would pay your regular short-term capital gains are taxed at your current employment tax bracket. It seems like it's almost inventory at that point, right? You have it on your books for 10 days and you sell it.

That's going to be just regular straight up income in that case. Yeah, with land, there's not a whole lot of tax advantages with land. Like I'll say that. And again, I'm not a CPA. I'm not a tax experts. I don't quote me on this stuff. But I know that's something that is generally like not that fun around tax time every year. He's just seeing like, oh, gosh, like I've got to pay a lot of money in taxes.

So I guess that's one of the drawbacks, if you will. but they honestly like the the profit margins that exist in the lack of competition and all the other things that land has going for it. Like, still a pretty compelling case. I mean, it's, I think long term, I think any land investor should probably try to eventually work their way up into some more long-term buy and hold assets that do have those advantages. It's almost not even, maybe I'll get beat up for this. So I'll just put it out there. But it's almost not even really investing. You know that the property is worth multiple times the $300 that you paid for it, and you sell it immediately.

You're simply just arbitraging a really low price that you're able to buy it for and apply your sophistication in that local market to sell it at a significant premium. Well, and are you selling it right away? Yeah, I mean, for me, the goal is to immediately sell it. I mean, if I could sell it the same day I buy it, that would be a perfect situation. It rarely works out that way sometimes. But, I mean, I don't really see how it's not investing because, like, I'm literally taking title to it. And I'm, you know, putting my money into an asset that I expect will, you know, be worth more. And that's exactly what I'm doing.

So it's really just easier, I think. It's easier and faster. You're flipping it. It's to say, you're not holding it. Yeah. Yeah. Investing is to broad a term. It's, you're not holding it.

You're flipping it. You're flipping it right away as soon as you can. Have you ever considered to Mindy's tax point holding the price? properties for a period of two years, living them season, and then selling them at the end of that to kind of move it into a long-term capital gains situation and increase your profits that way. Yeah, I mean, I don't think I would change the strategy. I mean, the point is still to get the thing sold and keep the money moving and go on to the next deal because that's the velocity of money kind of thing. There are times when, in my mind, it would mean that I did something wrong

if I held the property for more than like a year. It's like, okay, I probably paid too much, or I bought the wrong property, or I'm asking too high of a price or something. But that can't happen. And when that happens, then maybe you might get lucky and save some money on taxes,

but still, like, it's one of those things. My objective is not to, like, mess with the formula just for the sake of paying less taxes. It's just to keep the machine working and keep the money moving. Okay. I think there are some situations,

were like, you know, I was actually looking at a deal a couple months ago where there was a property right on a highway and I could have bought the thing and potentially put a outdoor advertising billboard on it. So like even though the original intent was to buy the thing to flip it, sometimes you might decide to just keep it because there is potential to, you know, maybe lease it out to a farmer or maybe even build something on it. So it's not that you could never do that. But, you know, really the, and that's one of the things about, this direct mail strategy is you don't really get the luxury of picking which motivated sellers are going to respond to you. Like you just take what comes. The main point is just that the value of

the property is worth a lot more than what you can buy it for. And if it happens to fall into a really good location and you have a use for it, you could potentially hold a longer term. Okay, well, let's talk about buying the wrong property. What is the wrong property? Yeah, I mean, if my objective is to get the thing sold as soon as I can and, you know, double or triple my money along the way, the wrong property is really anything that doesn't or can't do that. And it's not that common that happens, but if and when it does happen, usually the reason is because I somehow messed up my due diligence. Either I didn't do enough of it or I somehow got the wrong answer in the research that I was doing. And there's, depending on what on what part of the country you're buying land in. There's certain hot topic items that can be a more common issue than others. Like, for example, on the East Coast, it's much more likely you could find a property with wetlands in it

or in a flood zone or in some way the property is not buildable. Sometimes there's a lot higher regulations on zoning and what properties can be used for and things like that. So, you know, you want to make sure you understand what can the property be used for. Does it have access? Are there any hidden issues that, even though it is technically zoned right, and on paper it says it's buildable, you still can't really build on it because there's wetlands on there and you can't disturb the wetlands? So those are things that come up a lot in certain parts of the

country. But in other parts of the country, like out west in the desert, like you're not going to find a wetlands there. So you don't have to spend a whole lot of time researching, uh-oh, are that wetlands here? However, there could be other issues like, you know, lack of road access or, you know, maybe there's a lack of water altogether. Like, you can't get water there or water rights. And, you know, there's all kinds of stuff that can come up. It's just important to understand in the market where you're working, like, coming up with a valid, realistic checklist of like, these are the things I need to make sure I understand

before I buy this thing. Because really, like, chances are your future buyer is probably going to be doing that research as well. So if there's a problem, you want to make sure you understand it before you become the owner. And yeah, I mean, any examples I can think of where that's come back to bite me has been another issue that can come up is whenever there's a homeowners association involved, it can be a really a mess sometimes. Because sometimes it's hard to verify if there even is an HOA.

And then when there is, you have to figure out from that HOA, okay, what other restrictions are there? What else can't I do with this property? and sometimes that's pretty clear cut. Other times it's like, you know, little landmines hidden all over the place. So if you're working in an HOA area, just make sure you're aware of that and figure out what the issues are.

And also, like, what does it cost to own a property in an HOA? Because that's another issue you've got to watch out for. But assuming you do all your due diligence and your homework and you understand what you're buying and you can account for all that stuff when you make your offer, it's kind of hard to get hurt,

mainly because, like, again, you're buying it for like almost nothing, really. And it's like if you were to invest in anything that has a certain amount of value, and if you buy it way down here, you know, in the basement price range, even if you end up being wrong about something, even if you valued it wrong, or you missed a, you know, crucial piece of information, even then, still it's kind of hard to get hurt. I mean, at worst case scenario, you might break even. So, yeah. Okay.

You said you're making offers at like 10 to 30% of what you think it will be worth when you go to sell it. Is that where you are still making offers? Is that where you're still suggesting people make offers? And would you suggest sticking closer to home when you're first starting out? Because I don't know anything about the wetlands. I live in the desertlands. So I know a lot about that. And I know that if there's no water available, you've got a big piece of dirt that nobody wants.

Yeah. So is sticking closer to home so you know. what's going on? I mean, I can tell you that was what I did when I got started. I was almost like this mental obstacle of like, I need to be able to drive and see it in order to be comfortable. Like if something goes wrong, maybe I need to go, I don't know, maybe something on the property. And so yeah, so for my first few years, that was what I did. I only worked in Michigan and I literally drove out and saw every property before I bought it and took pictures myself. And you can do that, But what I found is that Michigan is, when you look at all the states in the U.S., Michigan is kind of like, it's not the best place to do this, but it's not the worst either.

Like it has things to offer, but it's, there's better places. And, you know, when I did my first deal, when I bought and sold the thing and made like 40,000 bucks, and I, to this day, I've still never seen this property. And when I got all the way through that and realized like, hey, I didn't have to drive up there. So like, why don't I just do this anywhere in the U.S.? Because a lot of the information you need to get, you can get from a lot of free resources like Google Earth. There's paid data services you can use for a lot of this info. You can even hire local boots on the ground to drive to your property and take pictures for you. I just did that last week.

There's tons of people like Craigslist who are happy to do that for you. So to answer your question, you can start local, but I would just know in your head you don't have to limit yourself to that. I did that for years, but it didn't really help me that much in the local. long run. It kind of just slowed me up, I think. Okay, that's fair. So you've said a couple of different kinds of land. You had the buildable property, kind of in the boonies, and then you had an HOA property. What's the best type of land to buy for somebody who's just starting out? The type of property that there is by far the most of is like smaller residential lots. Like there's a ton of those out there. And a lot of them, you know, I think part of the reason why

there's so many motivated sellers for those is because people buy them without really thinking it through maybe. And the properties, they don't produce cash flow for the people that own them. And they just kind of end up being a drag on their budget and they're just not really serving a purpose. And I think just in terms of quantity, there's a lot more of them out there. So if you're looking for like lowest barrier to entry in terms of just cost, I mean, that was what I started with. There's still lots of deals like that out there that I do. And yeah, it's just, it's generally not that hard to find those. It's like the lowest hanging fruit. If you wanted to go into like the higher-end properties, though, that make more and just have a bigger

profit margin, there's fewer of them to go around and they're harder to find, but really just focusing on properties that have a larger acreage, maybe with some special features nearby, maybe if it's by a lake or a mountain or a city that lots of people are flocking to, things like that. But again, like you got to be ready to put more money into those bigger ones, obviously. Okay, and on the flip side, what is the worst type of property to buy when you're just starting out? Probably a property that, well, I'll just explain like one of my bad experiences. There haven't been a lot of them. So like whenever I talk about these, there's just a couple to choose from really. But there was a property that I bought in my first year where it was this tiny little triangle-shaped property right by a highway.

and because of the size and shape of it and the required building setbacks in that township, you literally couldn't do anything with it. Like, you can't build anything. So, like, it did have road access, but other than that, like it was truly a pointless property that nobody could use for anything

except for maybe the person that lived right next to it. They could buy it and add on to their yard. So I had paid $327 for this, I think it was. And after trying to sell it, you know, having a hard time, obviously, because why would somebody buy this thing? I ended up contacting that neighbor and just said, hey, I want this property. I give it to you, and I just gave it to them for free. But that's an example of, like, failure to do proper due diligence and just going too fast

and not knowing what I was doing. But I would say any kind of property like that where, you know, say if the size of it is, I don't know, 0.1 acres or smaller, it's highly unlikely, unless you're like in Chicago, in properties are super tiny and they can fit, you know, row houses on them in most rural areas. That's not going to be a very high demand type of property. So there's actually ways if you use a data service to get your direct mail list, you can actually tell the service like, hey, only give me properties that are in this size range

in these zip codes and this county. So you can get really specific about it if you are using one of those data services. Because I think it's helpful and instructive kind of understanding your framework from another angle, basically what's happening here is you go in, you say, per acre, property in this area is worth about this with these specifications. And this property you bought, you said was worth probably $2,000, given its size. But because of its shape and location, none of the, that did not apply, which is what caused you'll lose money on that particular deal. And that's kind of the roadblock that a newer investor entering your space could fall into, or the trap, I guess, that they could fall into.

Yeah, and that, I don't know that there's any way to guarantee that you'll never get any of those bad properties on your list. Sometimes it just happens. But I think when you get calls back on those or when somebody does accept your offer in the mail, say if you were doing blind offers, just understand like, okay, this is not a done deal. I still need to do my homework and make sure this actually fits in the box and is going to be usable for something. And part of that I think you just get from experience. Like there's different oddities that can come up in different markets. like there may be some issue in Florida that I just don't ever have to deal with in the markets that I work in.

So it's just kind of a matter of understanding what to scan the horizon for. And I think you can really only get a clear picture on that by just working in those markets and acknowledging that there will probably be some mishaps along the way. But if you just follow the best practices, you'll probably avoid the vast majority of those. Last question before we kind of move on here. Could you give us a kind of a quick overview of the volume that your business kind of grew by? Like the first year, you did that first deal. How many deals did you that first year? And then how did that kind of progress to the present?

Yeah. So first year, I think it was about like 30 deals. And that was mostly like really small stuff, like rinketing lots that were like I was just sending offers on everything I could get. And, you know, I had a really small budget. So that kind of slowed me up as well. but the following year it was probably like, I can't have the exact count, but it probably progressed up to maybe like 50-ish deals per year.

But then when I started doing a few of the bigger ones, and I realized like, you know, it takes about as much time to do this huge deal as it did to do this deal that made me a thousand bucks. So like, maybe I should just focus on the bigger ones. So these days I'm doing, you know, far less volume, like usually six to 12 deals a year. But I'm focusing on only those bigger deals.

so that my time is well spent. And really, it's something that I can do, I don't have to spend every hour of my week doing that. Like I'm able to kind of cherry pick and use a sniper rifle to pick out the ones that I want and not chase after everything. And I think it sort of depends on your goals. Like if you want to make like millions doing this,

it's going to be hard to do that. You sort of do have to go after everything that's out there. But if it's something that you want to do on a part-time basis and not have it controlled, every hour of your day, then you're free to do that. And so that's kind of the route that I've gone. So do you still have a job? No.

Well, I guess it depends how you define a job. I mean, I work for myself, but... Yeah, do you work for the man or you work for yourself? Do you work for yourself? So you have your self-employed. Yep. Which means you can do what you want. I'm the man.

You are the man. So you do work for the man. Yep. Just a quick note in Florida. you want to make sure there are no gopher tortoises on your land. And it's like $40,000 to move a threatened gopher tortoise. Or maybe like, I don't. Is it like an endangered species or something?

Yes, they're threatened. And they are. You know what? I know enough to be dangerous. I just know that if you are finding a property with a gopher tortoise on it, don't buy that property in Florida. Sounds like you'll need a shell company to invest there. All right, let's move on to the financial scan now.

Did everybody catch that? Just make sure that everybody caught Scots little joke. So we have added a new segment to the show recently called The Financial Scan. We want to know what you're investing in. Where are you planting your money so that it grows for your retirement? And while there is no one right answer, we all know that it will take forever to become a millionaire based solely on your W-2 job. So to improve our chances of success, we invest in stocks, in bonds, in real estate. state or in other opportunities.

Seth, where are you planting your money besides the land? Yeah. Well, it's probably like 70%-ish tied up in various real estate projects and that kind of thing. And I think it's just by nature of what I do. And that's kind of what I like, what I like to spend my time on. And I do have some stocks and that kind of thing. I've got sort of a cross between Roth IRAs and traditional IRAs and probably 20

20% of my stuff is tied up in that. And, you know, the other 20%, I guess, would just be kind of cash in the bank, which actually, like, I don't think that's smart, especially right now. I want to move that cash to something that isn't U.S. currency, just given where the economy and value of the dollar is probably going. But it's been kind of my next goal is to plug some money into a longer term buy and hold, like maybe a self-storage facility or something like that. I've actually spent the past year trying to figure that business out and trying to find deals, but it's like it's hard right now. Like people want just insane prices for their facilities in my area anyway.

But hopefully I can find some place to park that cash. It isn't just cash. Yeah. Interesting thing on the cash, given the nature of your business, do you think that that's just kind of an inevitability? Because you never know when that next huge deal could come along and you've got to be well capitalized or have the cash or at least access to financing to go get it. Yeah, it's something that like I don't necessarily want as much cash there as I currently do, but you're absolutely right.

I mean, you don't want to totally drain your bank account either because that'll just kind of cripple me if like an awesome deal comes up and I'm just stuck because I don't have the cash anymore. So, yeah, it's a great point. It just sounds to me like you regularly mint three, four, five hundred percent returns on these land deals and these types of situations. And so the return on your cash is astronomical compared to what it might be for me, for example, and having a cash position.

It's just an observation. Yeah. That's accurate. Okay. It is time for the famous four. These are the same four questions we ask of all of our guests. Seth, are you ready? I'm ready.

Fire away. I'm going to guess what your favorite finance book is. Rich Dad Port-Dette? That's a great guess. I don't know why I picked that. You know, I'm always torn on that because I feel like everybody says that, and I want to be different. I want to have something else to talk about. So I was actually thinking about this.

There's a couple books that I just think are very helpful to read and be aware of. One of them is Profit First by Mike McCallowitz. You guys familiar with that book? I have heard that book mentioned several times. Not on this show, but just. in general. I'm sorry, Scott, did you say you've never read it or you have? I have never read it either. Yeah. It's worth checking out for sure. It's kind of like I've heard it explained as like the Dave Ramsey envelope system but for business. So, you know, basically

when you make, whenever you make any revenue in a business, you want to have places where automatically goes, like a portion of it goes to your tax account, a portion of it goes to your profit account is one of the problems with just the way accounting works at the end of the year, you'll see, hey, I've made X amount of profit. But that's actually a historical picture of what has already happened. A lot of times that profit is already spent. But if you set up this kind of system where the money is automatically funneled into the right place and you don't touch it, you don't see it. Like you can actually send it to a different bank altogether. When you look at that profit number, you actually have the money because you haven't spent it on another.

stuff. So it kind of helps you do, sort of like forces you to be more disciplined, I guess. But there's a lot of very, very helpful takeaways from that book that is intended for like the entrepreneur, like the business scenario. But a lot of it really applies to personal finances too. You know, I think that's really a great thing to think about is your tax burden going forward. Like you said, oh, it's no fun at the end of the year. Oh, I have to pay all these taxes. well, you have to pay all those taxes because you made all that money. It's not like they're just taxing you because you're breathing. But I read a story about Bitcoin.

Somebody bought really low, sold high, went and bought something else which completely tanked. And then he had like a $100,000 tax bill that he couldn't pay because he lost all his money in the next thing. That's a really great point. Especially I think it ties in with what we've been talking about. you made $1,500. Oh, okay, in the course of life, you're probably going to pay more to the IRS than that $1,500 profit would generate in taxes.

But if you do that 50 times, maybe, you know, and then you spend it all, you are going to find yourself in the same Bitcoin hole that this other guy did. So, you know, paying your taxes, making sure you pay, you're putting aside for taxes is, I think, a really important thing

that I don't want to get glossed over before we go to Scott's next question. Yeah, it's very, very easy to just like, it's kind of like when you're driving down the road, you know, like it's very easy to just let go with the wheel. Like things just happen. You don't really pay attention. You don't know where your money's going and having some kind of a metric for making sure the money goes where it needs to so that it's there when you need it. You're not like grasping at straws when the time comes. It's a huge deal. It takes a lot of stress off your plate too because the money's just there. Yeah. Don't invest your tax. accounts, accounts payable in something that could possibly really go down in any form, right? That's the place to store it in the high-yield savings account if any, if, you know, whatever.

So, no, love it. And a big mistake that I think a lot of people who make a, earn a W-2 income are not likely to make, but there's a risk because of the fact that your employer just pays those taxes for you, not by withholding them from every paycheck for you. Yeah. So, all right, great. What was your biggest money mistake? I think for me, and this is something I still kind of wrestle with to this day, is being too careful. And I guess if I had to have a problem, it's not the worst one to have, but still, like,

it's kind of held me back from a lot in life. You know, obviously we're talking about this in the context of, like, business and finances and stuff, but just in general, like, I'm one who likes to have all the information before I do anything. And unfortunately, that's just not how life works. Like, there's always unknowns. There's always times when you have to kind of roll the dice. Ken McElroy, I think he has a quote where he says he moves when he has 70% of the information.

So, like, it doesn't have it all, but enough to, like, be reasonably confident about what's going on. And I don't know, I have trouble with that sometimes, whether it's a new direction for a business or a new deal. And especially in land, like there's actually things like appraising the land and understanding what it's worth. It's a hard thing to do. It's much harder than doing that with houses. And that's a big drawback that I think it makes me stumble sometimes and slows up my process. So it's probably just being too careful and being able to just move without having 100% certainty. Sounds like opportunity cost, which is, I think, a really good, one of the biggest and best ways to articulate your mistakes.

So everyone's got those. What is your best piece of advice for people who are just starting out? You know, this is something that I've actually spent a bunch of time this past year. getting into, and I wish I would have done it a lot sooner. And this is not necessarily like a land business thing. This is more just anybody who wants to go into business for themselves or, you know, build financial freedom is to like figure out what your strengths are and do things that align with them. And I think why I kind of struggle with this is because I just sort of assumed I knew myself like I thought I knew what I was good at. But I don't know, I didn't really. I didn't really.

realize that there's things I can do that a lot of other people can't do and vice versa. There's certain things like I'm always going to be terrible at if I try to do them. Even if I spend tons of time trying to perfect myself, I'm still going to struggle there. And I was able to figure out a lot of that stuff with different tests like the aneagram test. I don't know if you guys are familiar with that. Colby Index A. Perry Marshall has a marketing DNA test and the disc test. There's all kinds of stuff like that.

People can start a nerd out about that. and for the longest time, I didn't really get into it. But when I started hiring people and having them take those tests, and then I took the test and figured out, okay, you should probably be doing this because you're really good at that. And I probably shouldn't touch it because I'm not that good at it. If I had known this from day one, like it could have saved me a lot of grief.

I could have just focused on the stuff where I'm naturally inclined to do better. So I wouldn't, I think for any individual, it's hard to see outside of your own mind. And it's the things that we're all good at, we don't feel like experts at it because it just comes naturally to us, but we all have these superpowers in us, and it's good to understand and articulate what those are.

What's your favorite joke to tell at parties? So something that sometimes I'll say, whenever I'm talking to a group of people and there's a low on the conversation, I'll just break the silence and say, well, as usual, I'm trying not to think about Harrison Ford's earring. Harrison Ford has an earring and it looks very weird.

Oh, I haven't seen this. I'll have to take a look. If you've ever seen it, you will be scared for life. But, you know, in saying that, I basically have forced people to think about it. Oh, my God. What is this thing? Scott looked it up. It's just so unnatural.

It's just a little black dot. Yeah. Okay. Fair enough. You know, one other thing I've also learned is that if you ever want to get somebody's attention when you're sending them a text, it really helps if you start the message just by saying, I trusted you. And that's all.

I found that's very effective. You'll always get a reply to yourself. Hey, what happened? Ooh, I'm going to do that. Okay, I have a joke. I saw this on Twitter over the weekend. Why don't ants get sick? That's that?

Because they've got little ant. eye bodies. Fantastic. And you've got with love it. That really bugs me. All right. All right, Seth, where could people find out more about you?

And where could people find out more about investing in land generally? Yeah. So the blog where I've sort of been chronicling my journey for years now, R.E.Tipster.com. It's not just about land, but there's a lot of land-related stuff there. and if anybody wants to just figure out more about just the basics of how this business model works, I sort of have like, I don't know, I'm going to call it a course exactly,

but lots of information that took me years to compile in a blog post, and you can find it at landflippinglifficle.com, and that'll forward you to the blog post. So, get free to check it out if you're interested. Awesome, and we will include links to this and your regular blog, at biggerpockets.com slash money show 135. Seth, this was super fun. I am now excited to contact my county

and other counties close to me and see what sort of land deals I can flip and make a 300% profit on. Yeah, and remember, it works well, but it's not the only way. So if you get hung up on that, and if you're like, I hate this, I don't want to do that, let me know.

I can show you some other avenues you can go to find the list that's kind of lower, lower barrier to entry. Oh, cool. Yeah. I might take you up on that. It sounds like this is just a very inefficient market that there's a lot of opportunity in for the person who's willing to kind of really know their numbers, know what property values are,

and do the work to source the deals. Yeah. Thank you. Yeah, absolutely. Okay, we will talk to you soon. Okay, that was Seth Williams from R. E. Tipsster. Scott, what did you think? I think that Seth is really kind, again, and I've said this is the third time, I'll state this today, but it's, I think what he's really pointing out here is an

incredibly inefficient market where there's a lot of variation between the pricing and the ability to connect buyers and sellers in a meaningful way. I almost got this crazy impression on his first deal, the guy from Long Beach selling the $300 plot of land in Michigan. I almost got a kind of similar vibe to like yard sale or something like that or a garage sale, right, where that guy clearly didn't really want that land anymore. And Seth was more than happy to take it off his hands and resell it the market for multiple times that value. And that guy, you know, was perfectly happy and content with that outcome. And so I think that it's kind of just like that at a good potential profit center for some folks that are willing to put in the work, find, figure out what

properties are worth in various markets, and then go about finding the folks who own them and see if they want to unload those properties and take them off their hands. You know, and compared to traditional real estate investing, if you have to hold your land deal for an entire year, if you have to, you know, something comes up in your life and you just don't have time to deal with it, it's not a huge chunk of change that you have sunk into this property. And you're not paying a lot in, you know, mortgage costs and taxes. And, you know, the taxes on undeveloped land are practically nothing. So should your life change, you're not out a whole lot. You're not constantly sinking more money into this deal until you can deal with it. It seems like a really great way to get involved and test it out without having to have a lot of capital to deploy without having to really think a lot about it.

You know, definitely do your due diligence. Definitely make sure that what you're buying is what you think you're buying. but it seems like a great way to even be a part-time investor. You know, do it when you have the opportunity to do it. Because we're all busy. We all have all these obligations. And sometimes you really have to force an investment, especially if you're flipping. You have to force the time to flip the house.

This is just really exciting to me. I can't wait to go check out some of these text delinquent lists and see what's going on and see if there's something I can get into for a smaller amount of money. than my median priced home. Yeah, I'm actually really intrigued by it, and we'll have to see if I go down that path and if I have some free time the next couple of weeks and think about finding a list of my own there.

Yeah, well, I'll let you know how wealthy I become, and maybe you'll follow in my footsteps too. Sounds good. I look forward to hearing you. We'll have you on this little podcast I've got going. Oh, can I come on the show? Okay, should we get out of here, Scott? Let's do it.

From episode 135 of the Bigger Pockets Money podcast, he is Scott Trench, and I am Mindy Jensen, and we are saying, peace out, Girl Scout.