Epic Real Estate Investing - Seth Williams - Land Flipping | 440

Episode Date: August 9, 2018

Matt Theriault is joined by Seth Williams on today's episode of Thought Leader Thursday! Seth is an accomplished land investor with a detailed blog and brand new podcast. Learn the two main reasons Seth became involved in land flipping, how he avoided getting burned at the beginning of his real estate investing journey (including purchasing a deal for only $331?!), the direct mail tactics he uses to stand out in mailboxes, and much, much more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. I think the downside with land that I've experienced, like it may be a lot easier to find deals. Like, that's almost never been a challenge for me. But getting them sold is where most people kind of hit a bottleneck. Hello, I'm Matt Terrio of Epic Real Estate Investing. And this is Thought Leader Thursday. So today I'm joined by a real estate investing entrepreneur who I've followed from a distance for quite a while. And from what I've noticed, based on the detail that he's put into his website, the detail that he puts into his work, I can tell it, you know, he really loves and cares about his real estate investing and his business pursuits and that he just seems like one of the good guys. So I invited him on the show today so that I could get to know him better. And so you could do. So please help me welcome to the show, Mr. Seth, William, Seth. Welcome to Epic Real Estate Investing.

Hey, Matt. Thanks a lot for having me, man. I appreciate it. Been a long-term fan and it's an honor to talk to you. Yeah, it looks like I'm becoming a fan of yours, so we're exchanging this mutual respect, and it's a pleasure to meet you finally. You know, before we get into what you're up to today in your real estate investing, what were you doing just prior to getting involved in real estate? Yeah, well, from what I've heard of your story, mine is kind of similar. When I was in college, I read the book, Rich Dad, Poor Dad, as a lot of real estate investors did. and it just kind of, you know, got me interested in the whole real estate thing, but it doesn't get too specific about what to do exactly. So, you know, I just sort of was aimlessly looking around for a long time trying to find

real estate deals. And I was having a really hard time. I could never find anything that cash flowed all the while. I was working a day job. I worked in the commercial banking industry. I was basically like a glorified credit analyst. And I looked at deals. and I got to crunch the numbers.

So I was able to get familiar with how to analyze cash flow and how to look at what makes a good deal and a bad deal. And yeah, so it was really just several years of working that job and a few years of struggling to find deals before I kind of figured out what niche to go after. So what was it that had you even looking at real estate in the first place? It was really the idea of generating, you know, multiple streams of passive income, that whole concept.

that you talk about her a lot of people talk about that as kind of like a rich dad poor dad philosophy in a way just diverse income that came in whether or not it was working and uh you know i knew the real estate could be a huge part of that for me uh for me it was just the struggle of like how do you find those opportunities because i mean i knew people were doing it and they were succeeding in it but i was just hitting wall after wall when i was trying to figure that out so got it so So, yeah, like so many of us, we all started with that same book, and it somewhat rendered us certifiably unemployable. But you're right. It left a lot to be desired with regards to the details and the steps of what do you do next?

Like, this is a great concept. I'm all in, but now how? So where did that actual breakthrough come for you and where you're like, okay, boom, I got it figured out. I can do this. Yeah. Yeah, absolutely. Well, for me, the big light bulb moment was around the 2008 time frame when I, you know, after trying to look at house flipping and rental properties and taking out huge loans and you own into debt and a lot of things that just like the numbers just never worked for me, I discovered the idea of land investing. And I learned about it from a homesteading course at the time.

and it was an amazing opportunity. Like it just, it, I think the key, the reason why it worked better than anything I'd ever tried before, it's kind of twofold. You know, the first part, just being land. It was a very simple type of property. There wasn't a lot that could go wrong with it. For a lot of reasons, I was able to get comfortable, not having to deal with tenants and things like that. But I think for me, the more important part was my ability to find and get deals for cheap, like a very, very, very cheap.

Like a few hundred dollars cheap. Like so cheap that loans were not part of the picture. I could use what little money I had in my bank account and buy and own something free and clear. And like that was a game changing for me, knowing exactly where and how to find really an unlimited number of those kinds of deals. What does a few hundred dollar deal look like? Yeah. Yeah.

Well, those are the kind of deals that I started off with in the beginning, mainly because I didn't have a lot of money and I was kind of scared. I didn't know what I was doing exactly. I was still learning the ropes. But yeah, my first deal that I ever bought was a half acre property and I paid $331 for it. Holy smokes. Yeah. Yeah. Where was that? Timbuktu? I guess it depends on how you define Timbuktu, but it was definitely rural, but it was about It was about an hour away from the city where I lived in Grand Rapids. So it wasn't like terribly far away, but definitely not anywhere near a big city. But yeah, it was essentially just a half acre residential, buildable lot.

And the person that sold it to me, they had bought it like 20 years earlier. And they lived in Long Beach, California, I remember. It's kind of thing where they just hadn't seen it in forever. And all they knew is that they were paying this tax bill every year and it was getting really annoying and they wanted to be done with it. And at the time they had had delinquent taxes and their option was they could just ignore the problem and lose the property and lose everything. Or, you know, they could try to sell it, which is for the average person who's not like in the land business, it can be kind of hard to know where and how to sell land. It's just kind of a confusing thing. but when you're in the business like I was,

you know, I sort of was geared up with the information I needed and I knew what to do. And I was giving them a big thing. Here you go. I'll give you cash if you give me the deed to your property and you can be done with it. And, you know,

I don't want to make you think that, you know, everybody's going to say yes to this kind of offer because many, many people will not. But it's all about finding that small segment of society where the people have the property and they just don't care about it. You know, their plans changed.

Maybe they inherited the property. property. There's always these people out there and they're never going to put a for sale sign in the yard and they're never going to hire a realtor to work for them. Like if you don't go out and find them, it will never be found. And I had learned how to do that and it worked really, really well. So, yeah. So that was the first deal. That was back 2008, 2009 is what you're saying? Yeah. Okay. So fast forward here a decade. What does your business look like today? Yeah. Yeah. Well, you know, But the first few years, I worked pretty much exclusively in my home state because I thought I had to. And there are some benefits to doing that, but it's totally not a requirement in the land business.

Because it's a pretty simple type of property. And you can usually get the information you need without being on site to look at it. And most of the deals that I was doing back then were the kinds that you bought for a few hundred dollars and then sold for a few thousand dollars. And those can totally work. And I think when you're getting started, those are great ones to work on because any mistakes you made, they end up being very, very small mistakes and they don't really burn you. But after doing at the time, I think it was 2011, I did a deal that may pay about $44,000. And in the whole process, it took me five months to find the deal, to sell the deal.

And to this day, I've never seen the property. So like I never went. It was about four hours away. It was just too far. I didn't want to go and like visited or anything. And after I made that kind of money from a deal without ever seeing it, I realized a couple of things. First of all, this big deal took about the same amount of work as a small deal did.

So maybe I should start focusing on bigger deals. And also, you know, I really didn't need to be there on site, which means like if I don't need to be there, why don't I just do this like on the other side of the country to pick the best state and start working there. So that's kind of the way that I've morphed things. I've also changed up my direct mail approach quite a bit. But yeah, essentially now my goal is to do like anywhere from six to 12 deals per year, but having them all be like much larger deals.

Like I'd say the bread and butter type of deal that I do makes about, you know, $20,000 to $30,000. Sometimes it's a little bit less. Sometimes it's more, but that's kind of like what I'm shooting for. So those are, you know, based on the size range and the values and the markets that I'm choosing. Those are the kinds of properties that I'm specifically targeting when I try to find motivated sellers. And yeah, it's kind of thing where you have to do a lot of cherry picking. And I think with bigger properties like that, you have to search a little harder like you hear a lot more nose from people.

Because most people, you know, when you look at all motivated land sellers, like people who own a property that's like a quarter of an acre and it's worth a few thousand. bucks, that's pretty easy to walk away from. But if you've got a property that's worth like $50,000, most people are going to want a little bit more before they just let that kind of thing go. So there are definitely some challenges with going that approach, but ultimately, especially with just time constraints and different things I've got going on, that seems to be a pretty good strategy for the time being. Right. Sounds like it.

A lot of similarities between land and houses, it sounds like. You know, you're still looking for people with problems. You're looking for a small sector of the society. I like how you said the houses that you buy, they don't have signs in front of the yard, so you have to go find them, right? Direct mail is how you're finding them, right? Yeah. There's a lot of conversation right now about direct mail.

And I don't know exactly when this episode is going to air, but I don't imagine that it's going to change too soon what people are talking about direct mail where people are really kind of complaining about their responses and what it used to be and they're going broke on their marketing campaigns and stuff like that. So you said you made some changes to your direct mail and how you approach it. Significly, what are you doing to stand out in people's mailboxes? Yeah. Yeah, one thing that, and again, I've done direct mail campaigns for houses before,

but it's been few and far between. That's not where most of my experience is. And I'm familiar with, you know, getting deals on houses for 500 bucks. You know, like that can totally happen. and I've experienced that. In my experiences with other, or my conversations with other like household sailors in different markets around the country, though,

it seems that direct mail for houses, it takes a lot more mail to get the same number of accepted deals when you're comparing that with land. And I think it's because my theories are that, you know, with houses, there's a lot more competition. Most people are thinking along those lines. Like when you think of investing in real estate, most people think of a house, you know, or a multi-family property.

They're not thinking about vacant land and dirt. And vacant land has always been, I used to say zero competition, but now I'd say low competition. I think there have been a couple of occasions I've run into other competitors out there. And it hasn't hurt me, but there are other people out there, more people doing it these days. But even then, it's like, man, I want to say like 5% the amount of competition that I think there is in houses. So it doesn't take, like I've heard some of the numbers run by other people in the land business. And it's kind of like if it takes, I don't know, 250 mailers to get one acceptance in land, it's like five times that amount for houses, maybe even more.

At least that's what they experienced with their different split testing. So it kind of gives you an idea of like the difference in competition. And I think the downside with land that I've experienced, like, it may be a lot easier to find deals. Like, that's almost never been a challenge for me. But getting them sold is where most people kind of hit a bottleneck. It's sometimes properties sell like that. Other times, it can take you three or six or nine or 12 months. And that can be very frustrating, especially when you see, you know, the demand for houses that can sell much, much faster.

And you know, you can build a buyer's list and there's just tons of people on the list right away and they're all like interested and active and land is just a different animal. It doesn't quite work that way. And there's usually, there's usually more control than you think you have. Like if you're willing to pick up the phone called builders, call different people in the area, try to figure out where the buyers are. You can usually do a lot to move a property faster. But most people don't think about that. I feel like they're stuck with Craigslist and Zillow and that's all the control they have. Got it. Yeah, there's pros and cons to every investment strategy. We have a mutual friend that was really trying to convince me that the land thing is the perfect strategy, but there's cons to it too, right? So you're saying it's not as liquid as houses and even houses aren't that liquid. It depends on the market and the market conditions, I guess, but it's less. liquid than houses. You lose out on the tax benefits. You can't depreciate the land.

Absolutely. Difficult to capitalize on any sort of leverage that you get with houses. Right. Yep. But then again, it has its pros and you don't have any tenants. You don't have the termites calling you. And it's been a long time since I got a termite phone call. But you don't have that. Then, you know, the deals, you can find them a little bit easier, a little less marketing expense, it gets a little lower barrier to entry. So yeah, I think there's there's room for everything inside of a diversified portfolio. So you're doing six to 12 a year. What does that look like time-wise for you? Like how much time per week I'm spending on that? Yeah, like how much, is this a full-time business for you to do six to 12 deals or is this something just on the side?

No, I mean, honestly, it's pretty much always been a part-time thing for me. And that was part of why I started the blog back in the day was that, you know, I didn't have 40 hours a week to dedicate to this. I was working a job. I mean, I, when I was getting started, it was, it was not easy. I was torn between a lot of different things. And that was one of the reasons the blog, I'm sorry, the land business works so well for me is because I think in the beginning, I was probably spending upwards of like 20 hours a week doing this on like nights and weekends. and there was a lot of inefficiencies in things I was doing that was just, you know, consuming a lot more time than it needed to. These days, I would say on the typical week, I'm spending maybe five hours a week on it.

If it's really, really busy, maybe 10 hours, like if there's tons of deals coming in and transactions happening, but that's about the extent of it. And honestly, even that, you know, I've always sort of struggled to find the best like CRM system that would really streamline things. automate the heck out of things. Like I definitely, you know, for example, when I'm doing a direct mail campaign, like I'm never licking stamps and doing all that stuff myself. Like there's certain things that you just sort of have to learn to do efficiently. So I'm definitely doing that, but, you know, I think it's totally feasible to spend even less time per week if I was being smarter about how to spend my time. So, right. Yeah. Got it. All right. So it's a part-time land business. You've got probably I think that the nicest real estate investing blog that I've ever seen.

I mean, I think it's the nicest one out there. It's just amazing how much detail you've put into it. What a resource it is. It's R.E.tipster.com. Yep, RETipster.com. You got it. I always type in R-E-I-Tipster in my thing when I'm looking for you. I actually bought that domain and had it redirected to mine because you're not the only... There's a lot of people who do it. Got it. Okay, good. So, RETipster.com, a fantastic resource.

And you've got a new podcast as well, right? Yeah. Yeah, I'm pretty new to the game. I don't have nearly the experience at this that you have. But yeah, I just started a few months ago, and it's been going good so far. It's been kind of a new thing that I have to learn to hone and do better at. But, yeah, yeah, it's been a lot of fun. I've got to have you on the show sometime.

That'd be really cool. Yeah, no, I'd love to. I'm curious, because I teach. as far as a part of lead generation, there's so many different ways you can generate leads. And, you know, once you've kind of got the foundation and the basics that are going to bring in an abundance of leads and bring those inconsistently, you know, I start recommending things like a YouTube channel or things like a blog

and even things like a podcast. Like you don't have to be a podcast celebrity for a podcast to, you know, work wonders for you. And I'm just curious, what has your blog and now your podcast, like, what are you getting from that? Is it just personal enjoyment and personal fulfillment, or is it generating any business for you? Yeah. Yeah, it's a good question.

I'm trying to think of, I mean, for sure, a huge part of it is enjoyment. Like if I didn't really, really love doing it, there's no way I would have survived this long. I don't know what your experience was like when you started getting into the education space, but for me it was like probably at least 18 months of just like nobody caring about anything I was saying. It was like I was just hitting publish and nobody was reading it. And that's a hard thing to do month after month after month. But because I really, really liked it and I really enjoyed the few comments I was getting, it was a lot of fun for me. And I kept doing it. And part of it was also like there were a lot of unanswered questions that I had when I was starting in the business

and things that just nobody was going to hold my hand or teach me how to do it. I just had to like struggle through it and figure it out and bumping the walls along the way. And, you know, I knew how hard that was for me and I wanted to like connect dots for other people. So that was really, you know, part of the idea behind that. I was just making it as easy as I could for other people who were in my situation. Yeah, but there are definitely ways that I monetize the site. I know I run ads on it. I've got a YouTube channel that, you know, I, for the most,

part, I use it because videos a really good way to show people how to do things and explain things to them. I prefer to watch videos over reading blog posts. So, you know, for the people like me out there, I try to want to serve them to. Yeah, occasionally I'll like, you know, promote other things that I've tried out, like services that I think are helpful. So I do that kind of thing. In terms of like using it specifically for the land business, a lot of the people that reach out to me because of that, like, want my help. Like, they want me to, like, hold their hand and show them how to do. And I did a lot of that for a while.

I still do occasionally. But honestly, like, I just don't have a ton of time for it anymore. And I, the one-on-one coaching, you know, I've enjoyed my time doing it, but it's, I don't think it's where my time is best spent, honestly. So I haven't really thrown myself into that a lot. but I thought about doing some like group coaching calls or something like that but haven't gotten into that yet so is that answer? Yeah, definitely.

The now that you just changed my question. I was going to ask you, you know, now that you've, you've done, have the blog, you have the podcast, you know, what that tends to do is when you start getting into an educational space or any new space or niche, it fires off your reticular activator and you start noticing everybody else that's like you or similar to you or is doing the same thing,

trying to do the same thing. You go and you buy a new car that you thought you were the first one on the block to get, and then you get it home and you notice three more in the driveways on the way home. That's what I'm talking about.

So, you know, is there one piece, now that you're kind of in that space, is there one piece of bad advice you hear from educators is that just really kind of gets under your skin. Yeah, man, there's all. You don't have to name any names.

Just like, what's that bad advice? I think there's a lot of bad advice out there. And there's bad advice doled out by people with pretty large platforms. And I don't know, it irks me. It's a little pet peeve of mine. Yeah, I mean, I totally get that. It's, I think there's kind of like two different types of, at least two different types. Maybe there's more, but just off the top of my head.

one is specifically as it relates to land investing. A lot of times I'll hear this in like forums where somebody, somebody will say, hey guys, I want to get into land investing. Like, what suggestions do you have? And the people that respond are like,

you know, land investing is stupid. It doesn't make sense because of this and because of that. And what's going on there is like the people who are giving that kind of negative feedback, like they have no idea what business models are even talking about. Like, land is stupid. If you're going to pay full price for it and lose money on it, yeah. But if you know how to find good deals and do direct mail, it's actually pretty brilliant.

And so just given like this half-baked advice from people who don't really even understand what they're addressing is really, really frustrating. The other part is, you know, there's other people who do direct mail, you know, other people in MySpace that, you know, they have alternative ways of doing things. And I totally respect that. I think. that's cool. I think it can work for them. But they kind of like present it in such a way that's like, this is the only way. Like you are stupid if you do anything other than what I'm saying. Like for lack of better words, that's basically what they're saying. And I've always been, I don't know, I try to be to the extent that I can, I try to be humble with what I say in terms of

like this is what I have done and this is what has worked for me and this is why I think it's worked but you know there are other ways to do this too and that's okay but this is the way that I do it so like I'm not the kind of get it's going to get in your face and like tell you you're moron if you don't you know believe everything that I do I'm basically I'm I try to be like a giant case study just being as transparent as I can about what has worked and what has failed and when I do fail like I don't want to hide that like I don't want to just just say that like I have all the answers and you know I'm the ultimate authority on everything like I'm totally human I make mistakes I continue to make them today and here's what they are

that kind of thing right right yeah it's it's funny how you just answered both of those questions this is this is why I indirectly and you know virtually have connected with you is because I'm I come from very much the same school it's really amazing on how convicted people can be or how strong with their opinions they can be with something they know so little about. I know. Right? Yeah. I've got this, I've got a couple videos on my YouTube channel that just, it brings out

just the worst of the worst from the YouTuber. And it's all about the 401K and how, and it's just, it's just funny. Like, I can tell by the way that they, first, first two things I can tell is the way that they respond is first thing is that they didn't even watch the whole video because what they're saying what they're commenting on like i didn't even say that in that video and the second thing is you know it's the only way and they're so closed off to any sort of alternative because they're so emotional about it you know and and yeah very much i've talked about a lot of my failures on my show and and i think there's a learning experience it's it's an opportunity to really share with people

this is what you watch out for and don't make this mistake because i already made it for you. It was very expensive and you probably don't want to pay that ticket. So, yeah, definitely. I think that's why I'm like, this is one of the good guys. This is our first time meeting. I was like, I like this guy. Yeah. So let's finish on an up note now. Sure. Let's not talk about pet peeves and negativity. What's the best book you've read in the last 12 months and how did it impact you? Oh, man, that's a great question. I wasn't prepared for that. I have, I'm going to open to my audible app here. I've got a bunch of of books that I've been reading. One that I really enjoyed, this might have been a little over a year ago,

but it was called Pitch Anything. Have you read that book? Yeah, definitely. That guy's name's Seth, I think, right? The author? Um, I don't know. I feel like I would remember that if it was, for some reason. Yeah. Orrin cloth. Orin. Yeah. Orrin, Seth, pretty close. Four little words. But, yeah, I really enjoyed that one. I thought it, honestly, I don't think I've ever been like a master at sales. Like to this day, I don't think I really am. There's a lot of, I don't know, like, if I'm supposed to like sell somebody on something, I do horrible at it.

I just don't know what I'm doing. And that's part of why like on my blog, like I generally don't. Like I'm never telling you to buy something. The way I approach it is like, this is what I use. This is how it works. This is the good and bad of it. There you go. If that sounds interesting to you, there it is.

I'm not good at that, but I thought that book did a really, really good job of helping me sort of like understand how to frame things and psychologically what's going on in a person's mind when they object and how to get past that. And it's pretty brilliant advice in that book. It's a great book, good one. There's one of my favorites. I've never had that answer, though. I mean, no one has ever, I haven't.

See there again, kindred spirits. So what's in the future right now for you, Seth, that's got you really excited? Yeah, man, a lot of stuff, I guess. Excited to see where the podcast is going to go. Again, that's a pretty new thing. Still kind of getting my bearings and figuring out how to do it well. What's the name of the podcast? It's a pretty original name.

It's the RE-Tipscher podcast. Fantastic. Actually. Hours thinking about that one. Actually, I don't know that that's the best name because most people are going to be searching for like real estate investing and that's why they find, you know, your show because it's awesome and, you know, it's been around for a long time. But they're probably not going to find that when they search for our, you know,

are you tips. Yeah, you have to think about the keywords on iTunes. Yeah. The blog also, I've actually got a team right now working on kind of redesigning it and trying to make it look better. And so that's a lot of fun. The land business, it's actually been a long time since I've worked in my home state. It's been several years, but I'm diving back into that pretty close to where I live.

And so I'm actually really, really interested to see how this goes. And because last time I was working in my home state, it was like 2011, 2012. Real estate market was completely different than what it is now. And I'm just interested to see like with the difference of values and the difference in motivation and demand for real estate, how that's going to change things up where I'm from. So yeah, these are some of the things I've got going on. Perfect. Yeah. I can just, I just know how humans are wired.

And anyone that is a fan of my show, I think will become a fan of you as well. If they wanted to reach out to you, what is the best way for them to do that? Yeah, sure. Well, I've got a contact page on the blog at re-tipster.com. I think it's currently in the top navigation bar. When I redesign the set, it'll be at the bottom. So you might have to look around for it. But yeah, I'm also on, you know, Facebook and Twitter and LinkedIn and all that.

People can feel free to reach out. and I rarely say no when people send me a friend requests. All right. Sweet. Well, it's been a pleasure, Seth. Let's do this again. Yeah, absolutely. The best of luck to you and it was a pleasure meeting you.

Absolutely. Thanks a lot, man. Appreciate it. You bet. You bet. All righty. So thanks for tuning in to Epic Real Estate Investing today. God bless to your success.

I'm Matt Terrio and I'll see you next week on another episode of Thought Leader Thursday. Take care. This podcast is a part of the C Suite Radio Network. For more top business podcasts, visit c-sweetradio.com.