Epic Real Estate Investing - New Passive Income Idea with Joe McCall | 254

Episode Date: April 3, 2017

Epic Real Estate Investing is joined by skilled investor and fellow podcaster Joe McCall sharing a new passive income idea for diversifying your portfolio. Find renewed focus on your investment strategy and put some of these fresh methods for building your investment business. Joe McCall is more proof that consistency and focus, paired with simple messages and sound strategies, brings great success. Unlock your next achievement with the help of Joe McCall at http://www.realestateinvestingmastery.com/   ______   The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? • E.ducation • P.roperties • I.ncome • C.oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Okay, hello, and welcome to Epic Real Estate Investing. This is the place where I show people how to escape the rat race using real estate. And if you're just getting started and or you're looking for new and creative ways of making money in real estate, I've put together a free course just for you, including a checklist on how to do you. how to find motivated sellers. That's the key to this whole business,

is finding deals. These are property owners that are willing and able to sell you their property at a discount and to access that free course. Go to free real estate investing course.com. Free real estate investing course.com.

All right, you got a great show for you today. A great guest on the line. But real quick, mark your calendars May 24th, 25th, and 26th. The next Epic Intensive, it's officially on the calendar, the theme, weapons of mass, I'm going to give you all the potent tools and methods that every real estate investor can use to find

motivated sellers, find motivated buyers and lenders and investors in as little as 60 seconds. No joke. I've got a few strategies I'm going to show you that can generate leads just like that, even if you think you've heard it all before. So with these weapons of mass production at your disposal, you're going to find more deals. You're going to cash more checks and you're going to finally start calling the shots in your life. All righty. So I'm going to show you how to find more motivated sellers, buyers, and lenders and really and just fill up your whole database in 30 days without throwing away good money after bad, even if you've never made a dime in real estate. All righty.

So that's May 24th, 25th, 26th. Earlybird pricing is in full effect. Epicintensive.com. Pricing will increase as the capacity increases. I've only got room for 100 people. It's going to be small. It's going to be intimate. It's going to be impactful.

And it's going to be epic. Go to epicintensive.com. All righty. So on the show today, I've got a way to be. on the phone very patiently. Great friend of the show, great friend of mine, fellow podcaster, the ultimate real estate investing podcast. No, real estate investing mastery. I don't even know if there is an ultimate real estate investing podcast. That's that other guy down the street. But please help me welcome to epic real estate investing, Mr. Joe McCall. Joe, welcome to the show.

Matt, I am really glad to be here. It's an honor. It really is. I was looking online here on your website, And last time I was on was in November of 2015, I believe. Okay. Yeah, way overdue. It feels like it was just yesterday. And you know what? That's so crazy. I was thinking the same thing.

It does. I was in Europe, I believe. Or I had just gotten back, right? Yes. And the one before that, you were actually in Prague, I think. That's right. Yeah. So you, Matt, have the honor of having me on the show more than any of any of you.

other show except mine. Well, there you go. That's something for a fun fact, right? You still in a... I don't. You still in St. Louis, Joe? Yes, I am. We are here.

We haven't really gone on a big trip for about a year and a half. We're thinking about going for a month, maybe rent an RV, go to New England. This fall, we've been talking about that. But, yeah, we're kind of settling down. Our kids are getting older. It's getting a little more difficult to travel. but we're in St. Louis. We like it here.

Super. Yeah, and I love it there. As we're recording this, I'm heading there tomorrow, so maybe we'll catch up, hopefully. Our paths will cross, looking forward to it. Yeah, for sure. Regarding the market, I mean, a lot of things are changing right now, and, you know, what are you noticing in the market, and how is it changing the way you're doing business? So funny.

Just the other day, Matt, I go through these things where, like, I'm super excited, I'm passionate about the market. It's so awesome, so easy to do deals. And then I'm like, oh, it's hard. Like, what's going on? There's so much competition. Direct mail response rates have fallen and blah, blah, blah, blah, you know? And all of a sudden, it's just like I'm hearing students having tremendous crazy awesome success.

And then I get back from a mastermind, you know, a big high-level mastermind. And you hear these guys in there that are crushing it right now. And it is hard. But they're still doing as many deals as they were before. And it's like, wow, I guess that is cool. People still are doing deals. So for me personally, we're still, I'm averaging about two to three wholesale deals a month. The way we do it, I just, my assistant sends out a bunch of direct mail.

I have a local wholesaler that I work with that takes the calls. Well, I have a VA that takes the calls and prescreens them, puts them into podium. and then the good leads go to my local wholesaler, my local wholesaler, gets them under contract, sells them, and we split profits 50-50, and we split the marketing expense as well. So I'm still doing those. Occasionally, we'll do a lease option,

and those are my favorite deals, even though I'm not doing as many of them as I used to. And then we're doing land flips. We're flipping lots, vacant lots in the middle of nowhere, Colorado, Oregon, New Mexico, different areas, flipping these vacant lots. and we do about four of those a month. The average profit on those are about five grand.

Nice. And that's been going to, all the easiest deals that we're doing right now are the land deals. For me, because I'm partnering with some people. I don't know if my partners would say they're the easiest deals, but they're loving it. They're,

they're, so when I look at the market, to answer your question, I'm more optimistic than ever right now. I think there are still a gazillion deals out there. And it's easy. One of the things, Matt, you know, we both are coach people, right? And sometimes the only people we talk to are the ones that are struggling.

And that's why they hired us, right? Like, they want help. And the ones that are actually doing deals and crushing it, they're just out there, you know, figuring it out. and they don't really call us anymore. And so sometimes as a coach, the people you talk to the most are the ones who are just beginning or just getting started and they're struggling or they may have been at it and they want to make a change. Well, that's cool. I still love helping them, right?

But my point is this. Sometimes we don't get to hear about all of the exciting things going on unless one of our students gives us a testimonial or, you know, post something on Facebook. But the testimonials I am seeing when I see them, man, I get so excited. That student did have flipped a deal, made $38,000 a week ago, and you did another one a week later. He made $15,000. I've got students in super competitive markets in Florida that are doing deals. And I've got, we just launched a product last week or the week before about using auto. dialers to dial people, right? And I'm talking to people that have been using this for a while,

and they're docked like, oh, wow, somebody's coming out with a product and teaching this stuff, and they're sharing with us how well they've been doing with it because they've been using it now for a while. I've got guys in Phoenix right now that are using our auto dialer and doing four to five deals a month in super expensive, I mean, competitive markets. And they're not doing any direct mail. No, no direct mail at all. They're getting all their deals from just picking. up the phone and calling folks. So I'm excited about the market. There's still a lot of people out there doing deals, you know?

Totally. We do a thing inside of our private Facebook group called Follow Through Friday. And every Friday, you post your wins for the week. And these last six to eight weeks, I mean, there's always three or four wins every week from someone in the community. But these, I mean, it's just, it's, I don't know, something's in the air because the checks are getting bigger, the posts are getting more frequent. The diversity in the people that are posting is expanding.

I agree. There are people singing the blues, and I've noticed the same thing about a direct mail. Well, one thing I noticed about my direct mail is, you know, four weeks ago I sent out a really large mailing, and I said, I'm just going to do it all at once this time instead of divided up every week. And I did it, and I got a 0.05% response rate. And I was just like, this, I've never even experienced anything less than one. Anything really less than two is pretty rare. Was this in a Midwest market or where? This was in Florida.

and we went ahead and mail the, I just, just, I always, whenever something doesn't go right, I say, okay, if I was my student, what would I tell myself? You know, and I was like, load up and do it again. That's what I would do. Or that's what I'd tell myself. So it's exactly what I did. And we got a 6% response rate within two days of it landing. And it's, yeah, I just, I don't know.

It almost makes me wonder if the mailman even delivered the postcards. But, yeah, it's a living, breathing organism at every. and flows, it comes and goes. Sometimes it's good. Sometimes it's not so good. But consistency wins the race, right? You all, man, totally. I was on a text message thread with seven other investors the other day, and you would

recognize most of the guys on there, Matt. And somebody started the discussion and said, hey, guys, what's working for you right now? What's the best way to find sellers? It's working best for you. And every single person responded back, direct mail. direct mail still working and then they started sharing with each other the direct mail that's working and i was looking at this mail i was like wow that's still working like that's what we're raising that's and so there's no there's no secret magic trick you know there's no secret little red pill

that everybody's looking at this they want to know what they want to you know have the uh uh be one up on their competition or something like that but this basic stuff still works yeah I wrote a book called Brilliant at the Basics, right? And we wrote that like three years ago. And guess what? That stuff is still works. The direct mail still works. And there's new little things that you can do, new little tactics, new little marketing

strategies maybe that will help improve your marketing. But man, those ugly handwritten postcards still really work. Go figure. Right. Yeah, you're so right. And like you, you and I are both. big consumers of other people's information. I buy so many courses, so many audio books. I attend seminars. You know, you and I do that a lot. And I'm always just looking for what's the next thing.

And every time, I mean, people are so good at selling their stuff. I'm like, I'm going to go get the goods this time. And it's direct mail. It's banded signs and it's classified ads almost every single time. Sometimes they got some little twist on it, but it's the basics. It's the same thing. You got to put your message out there, put it in front of the right people, and then interact with those people, attract them to call you, and convert that, put it under contract, then go exercise your extra strategy. It doesn't change. And how about the old-fashioned telephone?

Remember that thing? I do. Right? Treat it like a cactus. We're afraid of it. Right. But we're having some of the best success right now, and so are our students, by just picking up the phone and calling old leads, your old leads, other wholesalers old leads.

We hired a VA for a hundred bucks. we had her scrape 2,000 phone numbers in one of our markets off of Craigslist and Zillow, all the landlords and for sale by owners, all the rentals and Fisbo's, right? And we got like 2,000 phone numbers. Now, that was including duplicates. I think we narrow, after removing the duplicate numbers, we brought it down to maybe 1,200 or something like that. And that is, and what if you started doing that every week, right? But just, that's a lot of numbers to dial so you could do something like an auto dialer,

like Mojo sells or something, but that is about as old school as it gets, practically, picking up the phone and calling people. I've always said the fastest way to a deal is through the phone. And if you were to drop me off in a city that I've never been to with no money, and I couldn't even do direct mail or bandit signs because I couldn't afford to buy the pen to write on the bandit sign or whatever. I couldn't before the plastic for the sign. I would do that.

I would get on the phone and I would make 100, 200 phone calls a day, and I would just start calling everybody I could find online on Craigslist, on Zillow, et cetera. So don't forget the phone. People listening to this, you know, you may be petrified of that thing, but that sales is the million dollar skill. And if you can learn how to be good at sales, you can make money in this business in any kind of market condition. Amen. Yeah, it's a people business and you have to talk to people. At some point, you're just going to have to talk to a lot of people. And, yeah, I know. The basics work.

I love that title, too. Brilliant. There's a friend of mine who coaches, and he actually, I don't agree with this. I don't like it, but he does it. He makes his students get a pre-foreclosure list and a expired list. He makes him, maybe it's expired. I'm not sure. He makes him get a list of addresses, and he makes them go knock on their doors.

Still today. He made him do that. Is that Mike Ferry? No. Oh. It's a real estate investor, coach. I can't believe how much money that guy is made by getting people to cold call. He's a pretty genius.

Yeah, it works, though. It may be hard. Totally. You know, you work the numbers and it absolutely works. Absolutely. Yes. Maybe there's easier ways to do this, right? Like, I'm right now, Matt, trying to crack the code on Facebook ads.

Let me ask you something. Have you figured out how Facebook ads yet for find motivated sellers? We're getting close. Getting close. Maybe we need to talk when you're here in St. Louis because I got some really ninja to share with you. And I can't talk about it on a live on a podcast. It's like...

Boo. I can hear it out there in the audience right now. You're getting booed right now. But the reason why I can't talk about it is because I don't know if it works yet. I found a way to get a list of highly, motivated sellers, upload them into Facebook and get a custom audience with an 80% match. Okay, so we're on the same track then. So we've done something very similar.

Ooh. So now what? I got a list of highly motivated targeted sellers. I don't know if they're motivated or not. Okay. And I can get about 80% match. Dude, like, do you put like, hey, we buy houses on Facebook or? use, you know, I don't know.

So that's what I'm trying to figure out now. Even though we're talking about keeping it simple, sticking with the base, what works, but, you know, we're also looking for new ways to find targeted, motivated sellers. Totally. I mean, and Facebook's where the eyeballs are at. And, you know, whether they are distressed or not distressed, the eyeballs are still there. The whole world is on Facebook. So it's a logical place to look.

I'll tell you, we've done something almost exactly as you're describing. We're testing probably 10 different images right now with 10 different messages. And what we're doing is we're making the, we're keeping the appearance consistent. So we're mailing to those people as well with the same thing that we're advertising within our display ad. So that's what we're working. Okay. That's what we're working on right now. And then we're-

So what does your Facebook ad say? I've tried a few things. we've tried let's see let's see what it said we did one that says honest investor pays cash

call me first that's one of them um what's another one I don't know exactly which one's winning right now the other one was what are realtors

what are realtors doing do you know I don't know I mean it seems it's always listing or brand oriented you know yeah surely sells houses in the South Bay.

I was like, it's a call me for a great listing presentation. Now, and then we need to sell your house fast. Call here and get a quick offer in 24 hours. Like we've just kind of taken all the basic stuff, seeing which one, what people get response. And we probably get a leader to, in fact, this morning, this morning. It's not a super motivated seller, but we did lock it up under contract. It's got a little bit of equity.

We're going to throw it on the MLS and just sell it that way. But that actually, that actually, That actually did come today. But we gave about two or three leads a week from our efforts on Facebook right now. I've heard from other people that are doing it. And from what I've heard, it's not any better yet than Google pay per click. When you look at a dollar per motivated lead, still kind of like nobody's really figured it out or cracked the code. And if they have, well, they're not telling anybody about it.

But, man, I'm just, I'm thinking there's got to be some way. Maybe it's not. You know, I don't know. You know, logically, I could have swore that I was like, okay, I have got it. Boy, no one has ever said this. I thought of this all by myself. I'm going to go do this. And what I thought was going to be key was loading up a motivated seller list and then being

able to create a lookalike audience in any market in the country is what I was ultimately going for. And so like I said, we're just, it's just a few leads a week. We don't have a massive budget. It's just test budgets. But once we hit it, then, but you're right. Our PPC is, it produces about the same number of leads. I think our PPC people are still higher quality leads.

Yeah. But, yeah, it's about the same number. So you created a custom audience from a direct mail list in Facebook? Yep. then created the look-alike and then took that look-alike audience and then geographically targeted it somewhere else. Well, maybe somebody listening to this podcast, Matt, has got to feed it out. Yes. And we could roll it out as a surface because I know that would be highly in demand when someone does figure that out.

But I think we've made massive amounts of progress on what we're doing. So we're going in the right direction. I just wouldn't say it's like aha, eurea, eureka yet. Interesting. Yep. Hmm. Okay, well, there you go. Please let me know.

And I will let you know if somebody lets me know. Okay, good. I did not plan on spilling all those beans, but the lightning hasn't quite struck yet. So I don't know how many beans I actually did spill or helpful that actually was. But that's the logic behind the whole thing. Cool. Very cool. Yeah.

So we're talking, you're in, you're still doing your wholesale deals. And you are got a lease option here and there. and you're doing this land thing. Gosh, well, what is there left to talk about that we've never talked about before, Joe? I can't, we've had so many conversations. Sometimes it's recording, sometimes it's not, and I'm having a tough time differentiating when was what.

Well, I'm just, I'm looking forward to seeing you here in St. Louis. You've been here, like, many times in the past. You don't call me to say, hey, Joe, I'm in town. coffee or beer so it's pretty rotten my feelings are a little that's pretty rotten my feelings are a little hurt yeah i get it i can i won't make that mistake again joe it's typically it's such a turnaround event for me that i've got like 17 things to do in 24 hours and i'm out but um i get it yeah but we've made a point we'll connect uh tomorrow night and uh hang out or friday night so let's let's talk about um let's talk about land don't talk about land yeah let's talk about land we had jack bosh on the show a while

back and i was i mean the first time i had him on my show i was like yeah yeah land land whatever um i'm all about houses and then uh i don't know i just i was a different person a year later when i had him on the show again and i just heard it differently and i actually found it pretty exciting so um yeah i was like hmm i'm gonna go ahead i'm thinking about doing this so it's like i was sharing with you before we started recording. I've got it, I think, is number two or three on the to-do list as far as next system to implement. But you've already started. So tell me, what are you doing? How's it working? Let me just be real clear to everybody who's listening to this, okay? This is not, if we have a lot of shiny object listeners. Let me be very clear, because focus will make you

rich in this business, right? Focus will make you rich and shiny objects will make you go blind. So if I wouldn't suggest to anybody looking at land until you already have your wholesaling business or your buy and hold business like running on all four cylinders and just humming along, okay? Because like if you're trying to wholesale deals, the worst thing you can do is try to get distracted by something else. And the reason why I got into land because we're already kind of wholesaling stuff that's going on without much of my involvement. and I had two students of mine, friends, that were wholesaling deals. They didn't want to do any wholesaling anymore. And I said to them, hey, I've been interested in this land stuff. Why don't I buy some courses?

You go through them and let's partner together on this. And they were all excited about it. And they said, yeah, that's great. So the only reason I'm doing land is because I got somebody else to do it for me. And I know, Matt, you said the same thing, Matt. You're going to hire an assistant or something like that. that right to run this for you. Yeah, I mean, we've already got a pretty much,

we got two rock star virtual assistants that we have just, we just create a system for them. We go deep with that system, we get it up and running. And once it's going and everybody's comfortable with it and everyone's proficient and efficient with it, then we introduce another system. And so it's a very duplicatable way or scalable way to grow. And so that's what we're doing.

So we've got, I don't know, they're running four or five different strategies for us that just generate leads force around the clock. And land is like the third one in line that's up next. So I don't know if we'll even get to it this year. But it's a system that I was like, I think that could work and we could do that virtually very easily. Yes.

And I love it. I am super excited. In fact, if I'm looking right here at one of your podcast, episode 249, it says we're guaranteeing success here today and it has an offer letter envelope in it. Mm-hmm. So I don't know if that's what we do. And for land is we send offers.

Right. Are we talking about something different on this podcast here? Mm-hmm. Okay, anyway. No, no, no. Yeah. What were we talking about there? The guaranteeing success.

I think it was just being, shoot, there's so many different ways to guarantee success, and we already talked about at the beginning of this, was really just consistency. I think that episode was all about consistency, and that will guarantee your success. But go ahead. So for our land deals, all we're doing is we're sending offer letters.

we because some guys teach how to you know you go out and you get a list of tax delinquent landowners and you send them a letter we are going in we pick a county and we figure out what okay we say all right we're going to go after landowners in this county and we pick counties that are hour two hours away from a major city okay and we go anywhere from like one to 20 acres and And these are rural areas. So, like, these lots don't sell for, like, any more than 40, 50 grand, maybe on the high end. Most of these lots sell for $20,000 or something. Mm-hmm. So we'll go in and say, okay, let's look at five to seven acres, and we find out what five to seven acres sell for in that area, in that county. Mm-hmm. And we look at the lowest number.

So we look at comps by active. We get comps by looking at active listings. Okay. And, you know, there's landwatch.com and Zillow or real. A lot of times you can get good land listings on those sites. Land and Farm.com. So we figure out what they're selling for, and we will go and make blind offers to everybody who owns land that size in that county.

And so we don't worry about getting special lists from the county of Tax DeLincolns. We'll just get a list from list source or from RealQuest of all the vacant landowners in that county and that size. and we'll just send them a blind offer for 15 cents on the dollar, one five. Mm-hmm. And we are averaging about one offer accepted out of every about 300 letters. It goes up or down. So if we send 300 offer letters, we'll get one accepted.

Are you sending an actual purchase agreement, or are you just sending the price inside of a letter? It is a purchase agreement. Okay. A cover letter and a purchase agreement, right? Mm-hmm. And then if they sign it, I don't know, maybe 25, 35%, percent of the offer of the deals we do they'll actually sign it and just send it back to us that's when our due diligence starts or they'll call us yell at us or they'll say you know i

can't do 1500 but i can do 1700 so whatever we we will then do it that's when we start real quick joe why do people call back to yell why do people call back angry i don't understand that part uh you know i'm just way too busy to do that for anything you know it's like because we get those calls every once in a while? Well, that's a sign that you're doing something right. Right, right. I think as Dan Kennedy said, if you haven't pissed somebody off by 12 o'clock, you're not marketing hard enough every day.

There you go. So I had a student send me a message the other day. It was so funny on Voxcher. He said, achievement unlocked in asterix, you know. Like in a game, I got my first angry caller today or my first angry letter back. And he was so happy. I was like, yes, he gets it. Achievement unlocked.

He's got his first angry response to his letters. But I don't know why people do that, but, you know, they do. And for me, that's a good sign. It means I am doing my job. I'm doing enough marketing. So I don't know why, but we just apologize. Sometimes they'll say, oh, I'm sorry. Like, oh, that must have been a typo.

Just throw it away. Never mind. But we're sending, like, ridiculous. ridiculously low offers. And guess what? I don't know. It works. So maybe we need to keep on doing it. 15 cents on the dollar. We get them accepted. Sometimes they call back, but one out of every 300. Let's say it was one out of 500. One out of a thousand. That's better than most people are seeing with houses. Oh, absolutely. As far as that's rates right now. Absolutely. So we get them accepted. That's when our due diligence starts. We look to make sure that the person who signed it is the real legitimate

owner on record. A lot of times there's, it gets a little tricky because sometimes the person on title is dead or deceased. And so we need to figure out like, okay, do you have the right stuff that we can fix that? And then we do our due diligence. We will look to make sure the taxes are paid. We'll go to Google Earth, you know, look to make sure that it's not, you know, it's accessible. Yeah, that it's accessible.

Like, you can actually get a, you can get to it. And if it all passes that little pre-screening due diligence tests, then we'll just stick it on our website and start marketing the property. Sometimes we'll buy it with cash and then sell it. If it's a smoking hot deal, we know it's going to be a good deal. We'll just buy it with cash. We'll get a mobile notary to meet the seller somewhere and give them a cashier's check in exchange for the signed deed. So we do the deeds ourselves. We don't use a title company.

So there's a little learning curve there on figuring that stuff out. But then we start advertising the property. We'll advertise it on different websites. And again, we're getting them so cheap, so we'll advertise them for cash, half of what everybody else is selling them for. So when someone goes to landwatch.com

and they search for land, they sort it from low to high, and we're going to be right there at the top. And maybe we'll do a sponsored listing. We also build buyers lists, people looking for land on our website. And we'll sell. sell these things, these lots pretty quick.

You know, if their price right, we'll sell fast. And we're just pretty soon we're going to start selling them with owner financing on terms. That's where the real monies can be made. The higher ROI, it's either fast nickel or slow dime. So we were, I wanted to, I was very intentional. I wanted to flip our first 10, 20 deals with cash for cash. So we could use the reserves, the profits to buy new lots to sell with owner financing, to sell on terms.

And that's what we're starting to do now. And it's going really well. And my business partners, they're kind of doing everything. They're running with it. We have a certain split that we do. My assistant runs or sends the direct mail. And we provide VA to help with certain stuff. And then my business partners, they will take the calls from the sellers, put them on the website,

advertise the property, do all the due diligence, and take the calls from the buyers. Yeah, I could see this. If I wanted to, I could focus, if I focused on it 100% and stopped doing everything else, I know we could be doing very, very well with it. And being conservative, I know we could get to over 10 grand a month in income in six months. If we really, if I really wanted to focus on it. 10 grand a month in passive income, not like from flips. Right, right.

I was going to say, Lee. I said, well, that doesn't sound like a good business. $10,000 a month. But passive is great. Hey, okay, so you are, first of all, you're writing 15% of what's active. So that's a really deep discount. How did you come up with 15%? The guy in the core said to do that.

So I said, okay, I'll do what he says. Perfect. I don't think it's going to work, but I trust him. I'm going to do it anyway. I accept that answer. Second, I think one of the, you know, we can never forget that we are problem solvers as real estate investors. That's where the real deals come from is when you can give somebody some peace of mind and give you some equity in exchange. So what is the story behind, what is the problem that these people have that has them discounting their properties in such a way?

It's like you go to garage sales, right, and you see somebody selling this treadmill. They paid $2,000 for it, right? They look, every time they walk past that thing, they feel the pang of guilt. Their wife is pissed at them, that they bought that thing and that they've never used it and reminds them of how fat and overweight they are. And they're like, I want to get rid of this stupid thing. They'll put it in a garage sale and sell it for $15, right? Why?

They spent $2,000 for that thing. It still works. Why don't they use it? Why don't they sell it for like a thousand bucks? You know, they, it's just they want to get rid of it. They're sick and tired of it. It reminds them of how much they are overweight, and it reminds them of like, they fight about it.

You know, it's just like, get rid of. So that's what people do. They're like, I'm tired of paying the taxes on this thing. I don't remember why my husband bought it. You know, he would just want to get rid of it. And they don't care. They don't, they just don't care. And so you, in some ways, you see that more with land than you do with houses.

Because it's like a lot of these people, they live, they've never been to the property, they've never seen it, they have no idea what it is. They didn't even, they forgot they bought it. It's just like they bought it for a few thousand bucks 20 years ago. And they're hoping that maybe someday they would build a, you know, a cabin on there, but they never did. So it's just that's the way it is. So it's just human beings being human beings.

Yes. Got it. Okay. Yeah, I mean, I was just, there was something the other day. What was it? I had something. I was super motivated and I wanted to sell it and I paid a lot of money for it. I forget what it was, but it was a perfect example.

And yeah, I just, oh, what was it? I forget. But I just wanted to get rid of it because I would have paid somebody to take it away from me. Yeah. You know? Yeah. I remember I paid for, we have a thing called when I was an agent. I had a super key. And I guess they still use, they still use those things. And, you know, someone here in the office has got their license. And they, they asked, hey, do you want the super key? And it's like, no, you can have. And he goes, well, how much you want for us? You can have it. Take it. I don't want the thing. And, you know, saved him 250 bucks and he got it for free. So those are expensive. Yeah, totally. So I get it. All right. I just didn't know if there was anything.

specific about people with land and stuff like that. So some of the things I'm thinking about in due diligence, okay, you got traditional due diligence of taxes and you want to make sure it's there and anything that you have to do as far as research on, you know, geological stuff or hazardous waste or something like that, weird easements that inhibit the use of the land or anything like that. Sometimes it's a good idea to maybe call the county and say, hey, do you know anything? because if you're friendly and nice to the people at the county, usually they're helpful.

They're like, well, they'll tell you what they know. That ain't L.A. County. No, it's not. No, this is Midwest. You got to remember. Where people are nice. Yes. So these are people like if you,

you want to say something funny. You go to some of these counties and go to their websites. And sometimes they'll show you like pictures of the people who work at the county. That's horrible. Sorry, I should not be making fun of them. But there's been some counties, you're like, wow, really. All right, sorry. I want to show you. I want to show, I'm looking up something here on due diligence.

Okay, here it is. I feel so bad about making fun of them. I don't mean to make fun of them, but like, they're like, I was wondering the other day. I was wondering what, What happened to sticks and stones? You know what I mean? Those will break my bones and names will ever hurt me.

I think they don't seem like names are hurting everybody these days. Yeah, you know, you still have to be careful. You do. I'm telling you, if I were to show you, if I were to show you some pictures of some of these websites and the people that work there, you know, wow. Okay, so there's one of the things I learned from one of the courses. And this, I got this from the guys at Land Academy, all right? There's four things you want to look at in due diligence.

Access, you want to make sure that there's access. If it's like on the side of a hill, if it's on the side of a mountain and there's no road to it, that might be harder to sell. But you never know. Like, I would still get it under contract. I just wouldn't close on it until I had a buyer. There's sometimes there's buyers who want something that's hard to access because they're afraid the zombie apocalypse is going to happen and the government's going to come after them

and they want a place where they can hide all their guns. And the harder it is to get to, the easier it is for them to defend them. So you just never know. So if it's like if it doesn't meet all of these criteria, then you can get it under an option contract, right? So access is the first one. You got to make sure there's good access as best you can. You got to make sure there's acreage. I mean, the more acreage, the better. You got to look at attributes. Attributes are things like, you know, is it close to power? Are you allowed to put septic tanks systems in there? Are you allowed to drill for water? And is it affordable? So those four A's access, acreage attributes and affordability. The better things that are you allowed to put septic tanks, systems in there. Are you allowed to drill for water? And is it affordableable. So those four A's, access, access, accruits, you have of those four things that easier it is for that property to sell. And the one thing that is like probably the most important of that is access. So it's just going to be harder to sell a property. It might just be best to pass on the deal if it does not have good access. But, you know, it's got to be affordable. There's a lot of people out there. They say in land, the saying goes, there's a pig for every farm. Barn. There's a pig for every barn. And you'll

be surprised, you know. There you go with the names again, Joe. You may think, like, who on Earth would want this property? But somebody would. They're looking for property in that area where they can grow their organic crops. Sure. They can have their solar farm. They can grow their pot. There's sometimes I've heard stories of people buying land because they're really into rattlesnakes.

And there's a high population of rattlesnakes in that area. and they want to own land so they can get rattlesnakes to get their venom and whatever. You're right. No, I got it. That makes sense. I mean, I get it. There's, you know, every man's trash is another man's treasure, right? Yes.

And that's a cool thing about land because let's say you make a mistake and you buy a property at 15 cents on the dollar, right? And it's a bad lot. Well, chances are really, really good that you can sell it and at least break even and get your money back. Right. Right. You can't do that with houses many times. True. So just some basic.

And if there's a question, you know, you just, you get it under an option contract. And you don't exercise your option until you have somebody you can actually sell it to. Right. That makes sense. Totally. Totally. So you get under contract for 15% of what you saw it on Landwatch for. So you got a great discount.

And then you sell it. I think, I don't know if you said this now or before we were recording, but 50% to 60%. Yes. Okay. For cash. I sell it for cash at 50, 60 cents on the dollar. Okay. And I sell it with over financing at like 90 cents to 100 cents on the dollar.

Right, right. Okay. But that's still the lowest price on the website, right? So causing a quick sale. Or the best terms on the website. I want to be the best deal on. Totally. Somebody's looking for five to seven acres in this county.

I want to be the best deal on there. Mm-hmm. Yeah. And again, Matt, it's just like houses, you know, you tell students like, okay, you use the 70% Mayo formula, right? 70% of ARV minus repairs minus your wholesale fee, and that's what you offer. And every student that gets into this business is like, nobody's going to accept that. That's like, I'm so embarrassed. Nobody's going to take that offer.

Are you crazy? But no, you do it. Okay, I'll do it. And guess what? It happens. You get a seller that says, yeah, okay, fine, whatever. I don't want it any way. I'm sick of it.

Just take it away. So just do what you're told. Just do it. And it'll work. Sweet. All right. So you've got this property under contract. Whether you close or not, you find a buyer.

And does that go through like a traditional escrow? Do you need a closing attorney for land? No, we just, some of them, like in our bigger deals, we will use an attorney. I mean, a title company that's local there, right? Most of them, we're closing them ourselves. You can do that. We'll prepare the deal. Because I've never done it before.

All right. Yep, yep, you sure can. And so we also have a guarantee to our buyers. Let me tell them, listen, if there's any problem within 30, 60 days or whatever, just let us know we'll refund your money and we'll just take it back. Okay. Got it. Yeah. So easy and so shiny.

Right? It is a shiny object. Okay, let me ask you this, though, Joe. Could you increase your performance? if say you start offering 25% and selling at 75%. Do you think it would be just you could increase your volume and still make a decent profit with the same amount of work? I don't think you will get more offers accepted.

No. If you offered it at 25%, no, I don't think you would. I mean, if they're going to take it at 25% offer, they would have taken an offer at 15%. You know what I'm saying? No, I do. I mean, that's why I'm asking. I mean, I understand what you're saying. Yeah.

If that's a, you're the one with the head start and the experience on this. How long have you been doing it? We've been doing it probably, like seriously, about six months. Six months? Yeah, we started dabbling in it about a year ago. And seriously, but when I say seriously, we're still only spending maybe 10 to 20 hours a week in it. We're also only spending, if you're selling out, you know, just, a thousand letters or so.

I mean, you only spent four or five hundred bucks on these letters, right? Yeah, total we've probably have spent only about five grand in market.

Okay. And our total profit to date is about, let's see, I can tell you here. Our total profit to date is by $31,000. Mm-hmm.

And how many deals as that? That's probably, six, seven deals. So that's a pretty good ROI. It's a little better than houses. But it's, you know, like we have a mutual friend, Jack Bosch, and you're talking about him before. And he is actually, I've talked to him recently, he's actually getting back more heavily and

seriously into land himself. He's always done land for years, but he's, you know, he'll go into different focuses where he'll buy some commercial properties like apartments and stuff, and then he'll get focused on his coaching business. But now he's getting back heavily into land like he used to be five, 10 years ago because, you know, the market's coming back. There's a high demand for these properties. People are paying more for them. Now, let me, there is one caveat. Because there's nothing that's completely risk-free. When you start selling these properties with owner financing, There is the default rate is higher with land than it is with houses, okay?

But everybody I've talked to, and I've talked to at least three or four different guys that do land full-time and have been doing it for a long time, and they've been through the high markets and the low markets. The worst it ever got for them was a default rate of about 25-30 percent. Okay. But again, remember this. They own that land free and clear. Right. It's not like they own it. They don't have any mortgages on.

that property. It's not like they're having to pay. Their only expenses are the property taxes, which on these lots are, you know, maybe a couple hundred bucks a year for each lot. So it's not that much money. Their default rates are about 25, 30 percent. So there is that, you know, so you'll lose income, but you won't be losing money. Right, right. You know, I mean, even at 25, 30 percent, if that's like the peak, if that's the height, that's not that much risk, in my opinion the way I'm seeing it. Oh. Yeah.

No, I don't think so either. Totally. Now, where you might run into problems is when you buy the land for too much. Totally. And when you buy land and if you're selling it with owner financing, you should be break-even within six months. If you're not, you're buying it too high. So within three to six months, you should be break-even.

And then everything after that is just pure cash flow profit. Sweet. I love it. Yeah. Well, dude, it's been a pleasure once again. Do you got one more, one more gold to drop? Go ahead. Well, no, I was just going to say when you compare it, well, I think you need to have a good mix.

If you're looking at building a retirement portfolio, you can't have all your eggs in one basket. I think it's wise to, you still need to have houses because the demand for houses are always going to be higher than the demand for land. Yep. You're going to see higher appreciation. there's more tax benefits with houses. You can't depreciate land. And the cash flow is going to be better with houses. So I don't want to discourage people from,

it's not a question of land or houses. I think you need to look at it as both. Because in many ways, you look at the numbers, houses can make more sense because people are always going to need a roof over their head. And if you look at the population growth, what they're projecting in the United States, I think I heard somewhere by the year 2050, because that's in 33 years, 43 years or whatever, the population of the U.S. could potentially double.

What does that mean? We need a lot more houses. Yeah, no kidding. We need to be seriously thinking about, like, in the long term, houses have a long, we're at the bottom. Like, I mean, it's going to go up. We will have ups and downs in the future, but housing will always go up. people always need a roof over their heads. Does that make sense?

Yeah, totally. So that trend goes out of fashion, but yeah, just kidding. Yeah. And also, I mean, just the fact that let's not count immigration at all right now, 60% of the population in the United States right now is under the age of 30. And so they are going to grow up and they're going to need someplace to live. And that's more housing than we have available right now. And to that point, talking about like which.

strategy is the best. You absolutely need houses. I mean, you know, when you and I met Joe, I had almost 300 units and that was what I'm four years ago. And I'm down to about a hundred, but I'm holding on to a bunch. Yeah, what I've done is I've sold off all of the stuff that just gave me a management headache. And then I converted those and either bought nicer homes or paid down the debt on my nicer homes. And then and or what I've been, and or what I've been doing recently is that I don't know if the market is going to shift or not. I mean, if you'd have to be an idiot to think we're going to be like this forever. But something's around the corner. We're hitting that eight, nine year cycle, which typically says something's

going to make an adjustment or a reset. So I've been liquidating even more on seller financing and locking in my profits and charging extreme interest rates. But still, to the person that takes on the property, they're still about $100, $200, $200 lower than what they would pay on a monthly rent. So it's creating a win-win situation. And land is just would be the third asset class that I'm contemplating going into, not in replaceive, not, yeah, not instead of, that's a good point. That's what I, yeah, no, so you brought a good point. That's a real good point. Because you don't, you don't want to avoid houses or ignore houses. That's where always my heart and bread and butter will be. Yep, yep. So I've got, I've got houses.

I've got notes and now I'm thinking about this land thing. That would be just kind of, but don't do that, don't do that. Don't shift until you've got those other two, I think, in place, right? Yes, yes. I still, man, when I, I have to be real careful on my podcast talking about land, Matt, because I get students and the listeners that will call me and say, hey, should I start doing land instead? And I was like, no, I mean, like, you should look at it, but, you know, you got to,

and here's the other thing I'll tell people is you have to decide, 100% one way or the other. You can't like try to do both sometimes. Like you can start looking at land if you have your systems in place where you're doing your house deals on autopilot. And then that is possible. You can't do it. So yeah, it's, uh, I have to be real careful when I talked about it.

Right. Totally. No, I mean, I'm always conscious of that too of, of the message that's coming across. Uh, because I've made a ton of mistakes. And, and I'm sure you've made one or two. And, uh, you know, if we can. prevent that from happening to other people. That's the whole intent of us kind of disclosing like this.

Right on. Right. So speaking of your podcast, since I completely butchered that at the beginning of the show, what is the proper name of your real estate podcast there, Joe? Real estate investing mastery. Fantastic. All right, man. Well, it's been a pleasure.

Let's do it again. The best to you and yours. And I'm going to see you soon. Yeah, Matt. Sounds good. Thanks a lot, man. All right, Joe. Take care, man.

And that's it for today. I'll see you next week on another episode of Epic Real Estate Investing. God bless and to your success. I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing. with Matt Terry O. This podcast is a part of the C-suite radio network. For more top business podcasts,

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